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DECISION OF THE EUROPEAN PARLIAMENT

of 13 April 1988

granting a discharge to the Commission in respect of the financial management of the sixth European Development Fund during the 1986 financial year

(88/336/EEC)

THE EUROPEAN PARLIAMENT,

- having regard to the Treaty establishing the European Economic Community,

- having regard to the third ACP-EEC Lomé Convention (1),

- having regard to the balance sheets and accounts of the third, fourth, fifth and sixth European Development Funds for the 1986 financial year (COM(87) 192 final),

- having regard to the report of the Court of Auditors concerning the 1986 financial year, accompanied by the replies of the Institutions (2),

- having regard to the Council recommendation relating to the granting of this discharge (Doc. C 2-8/88),

- whereas the Treaty of 22 July 1975 authorizes the European Parliament to grant a discharge in respect of the Community's financial activities,

- having regard to the report of the Committee on Budgetary Control and the opinion of the Committee on Development and Cooperation (Doc. A 2-6/88),

1. Grants a discharge to the Commission in respect of the financial management of the sixth European Development Fund during the 1986 financial year on the basis of the following figures:

- payments: 116 736 332,83 ECU;

2. Records its observations in the resolution (3) accompanying this Decision;

3. Instructs its President to forward this Decision and the resolution containing its observations to the Commission, the Council, the Court of Auditors and the European Investment Bank and to ensure that they are published in the Official Journal of the European Communities (L series).

Done at Strasbourg, 13 April 1988.

1.2.3 // The Secretary-General Enrico VINCI // // The President PLUMB

(1) OJ No L 86, 31. 3. 1986, p. 1.

(2) OJ No C 336, 15. 12. 1987, p. 1.

(3) See page 52 of this Official Journal.

RESOLUTION

containing the observations accompanying the Decisions granting a discharge in respect of the financial management of the third, fourth, fifth and sixth European Development Funds during the 1986 financial year

THE EUROPEAN PARLIAMENT,

- having regard to Articles 137 and 206b of the Treaty establishing the Treaty establishing the European Economic Community,

- having regard to Articles 67, 70 and 73, respectively, of the Financial Regulations applicable to the fourth, fifth and sixth European Development Funds, pursuant to which the Commission must take all appropriate steps to act on the observations appearing in the discharge Decison,

- whereas the same Articles also require the Commission to report, at the request of the European Parliament, on the measures taken in the light of Parliament's observations and, in particular, on the instructions given to those of its departments responsible for the management of the European Development Funds,

- deciding to make the observations referred to in the above Articles 67, 70 and 73 in the form of this resolution which accompanies each discharge Decision relating to the financial management of the European Development Funds for the 1986 financial year,

- adopting this resolution at the same time through the exercise of the powers essential to the performance of its control function with a view to remedying the shortcomings noted during the examination prior to the discharge and to improving the management of the European Development Funds,

- having regard to the report of the Committee on Budgetary Control and the opinion of the Committee on Development and Cooperation (Doc. A 2-6/88),

The third EDF

1. Notes that the Commission has delayed closing the third EDF by taking financing decisions relating to this fund in 1986;

2. Notes that, during 1986, the Commission decided to transfer 19,7 million ECU (representing outstanding balances available from closed projects) from the third to the fifth EDF;

The fourth EDF

3. Welcomes the fact that the Commission has begun to use a large proportion of non-allocated resources to finances a rehabilitation and recovery plan to assist the most severely drought-stricken African countries;

Rate of utilization

4. Notes that, at 31 December 1986, 84,7 % of the aid available for programmes under the fifth EDF had been committed (as against 76,6 % in 1985) with payments running at 46,1 % (as against 34,7 % in 1985);

5. Notes the increasingly slow rate of implementation of the fifth EDF, which has not even been able to maintain the rate of implementation of the preceding funds, and criticizes the failure to comply with the principle of regular timing in the allocation of the sums to be committed under the indicative programme;

6. Notes once again that the Commission has failed to forward to Parliament a report containing a satisfactory analysis of the reasons for the low rate of implementation of EDF appropriations compared with the major international organizations responsible for development aid, as called for in the 1983 and 1985 discharge resolutions;

Shortcomings in financial management

7. Asks the Commission to comply with the observations of the Court of Auditors in its 1986 annual report on the recording and control over the use of advance funds in the EDF accounts in order to improve the transparency of management and the monitoring of advances that remain to be cleared;

8. Asks the Commission again, when approving the financial conditions for construction work contracts, to ensure compliance with the principle of annuality in the clearance of advances granted on the basis of estimates, particularly where the provisions concerning compensation for price variations are concerned;

Linking of training schemes with development projects

9. Notes that the funds earmarked for on-the-spot training of middle management and technical staff in direct connection with programmes and projects financed by the Community have been under-utilized and that this shortcoming has been accentuated by the small number of training experts in the Commission delegations;

10. Asks the Commission to make good the shortcomings noted by the Court of Auditors in the administration of awards for study and training courses by managing bodies in the Member States and calls on the Commission to establish a new computerized monitoring system for award programmes as well as other means of verification in connection with ex-post appraisal in order to gauge the cost-benefit effectiveness of EDF activities in the training sector;

Trade promotion programmes

11. Notes that, at the conclusion of the period during which the first two Lomé Conventions were implemented, the results obtained in the area of export promotion did not match up to legitimate expectations;

12. Asks the Commission to take account of the Court's observations in order to improve the effectiveness of this kind of measure by adopting first of all an integrated approach towards trade promotion programmes, by making wider use of the various means of action included in the legal framework of the Conventions and by encouraging private-sector involvement;

The sixth EDF

13. Notes the entry into force of the third Lomé Convention (sixth EDF) as well as the low volume of expenditure committed on account of the long time limits necessitated by the rate at which the indicative programmes were signed;

14. Notes that, in keeping with the new principles, the planning of Community aid, which is the first stage in the implementation of Lomé III, was practically completed in 1986 and asks the Commission, when implementing the indicative programmes, to take adequate account of the recommendations made by the Court of Auditors in its annual reports for 1986 and preceding years;

European Investment Bank

15. Notes that, as is clear from the opinion of Parliament's Legal Service on the extent of the Court of Auditors' powers in relation to the funds managed by the EIB, the Court of Auditors is entitled to ask for and obtain all the information enabling it to assess and monitor the administration of venture-capital financing managed by the EIB on a mandate from the Commission and to verify whether, in the case of loans benefiting from interest rebates, the aim of such rebates has been met;

16. Asks the Commission and the EIB to reach agreement with the Court of Auditors on the information to be supplied by the EIB concerning projects under its management that benefit from Community development aid;

EDF budgetization

17. Regrets the fact that, at the recent Brussels Summit, the European Council decided to leave the EDF outside the Community budget despite the proposals put forward by the Commission and reaffirms its determination to use all the means at its disposal, including legal remedies, to budgetize the EDF;

18. Asks the Commission to report on the measures taken to act on the observations accompanying the discharge Decisions.