EUROPEAN PARLIAMENT DECISION of 10 April 1997 giving discharge to the Commission in respect of the implementation of the general budget of the European Union for the 1995 financial year as regards Sections I - Parliament, II - Council, III - Commission, IV - Court of Justice, V - Court of Auditors and VI - Economic and Social Committee/Committee of the Regions (97/382/ECSC, EC, Euratom)

THE EUROPEAN PARLIAMENT,

- Having regard to the ECSC Treaty and in particular Article 78g thereof,

- Having regard to the EC Treaty, and in particular Article 206 thereof,

- Having regard to the EAEC Treaty, and in particular Article 180b thereof,

- Having regard to the budget for the 1995 financial year,

- Having regard to the revenue and expenditure accounts and the financial statement of the European Union for the 1995 financial year (SEC(96) 0421 - C4-0280/96, SEC(96) 0422 - C4-0281/96, SEC(96) 0423 - C4-0282/96, SEC(96) 0424 - C4-0283/96),

- Having regard to the report of the Court of Auditors for the 1995 financial year and the replies of the institutions (C4-0585/96) (1), and the Court of Auditors' special reports,

- Having regard to the Statement of Assurance presented by the Court of Auditors concerning activities financed from the general budget for the 1995 financial year and the special report on this matter (C4-0110/97) (2), and the Council Statement thereto (C4-0137/97),

- Having regard to the Council recommendation of 17 March 1997 (C4-0133/97),

- Having regard to the report of the Committee on Budgetary Control and the opinions of the Committees on Economic and Monetary Affairs and Industrial Policy, on External Economic Relations, on Research, Technological Development and Energy, on Employment and Social Affairs, on Regional Policy, on Transport and Tourism, on the Environment, Public Health and Consumer Protection, on Development and Cooperation, on Civil Liberties and Internal Affairs, on Fisheries, on Women's Rights and on Culture, Youth, Education and the Media (A4-0120/97),

1. Notes that the authorized revenue and expenditure for the 1995 financial year amounted to:

>TABLE>

2. Gives the Commission discharge in respect of the implementation of the following amounts:

>TABLE>

3. Accepts that final checks still have to be made of EAGGF expenditure reported by the Member States and that corrections to the figures may yet have to be made;

4. Reserves, therefore, the right to re-examine the amounts above in so far as they relate to expenditure in the EAGGF Guarantee Section in the light of the clearance of accounts decision for the 1995 financial year, which shall be forwarded to the European Parliament for a decision complementary to this discharge decision;

5. Records its comments in the resolution which forms an integral part of this decision;

6. Instructs its President to forward this decision and the resolution containing its comments to the Commission, the Council, the Court of Justice, the Court of Auditors, the Economic and Social Committee, the Committee of the Regions and the European Investment Bank and to have them published in the Official Journal of the European Communities (L series).

The Secretary-General

Julian PRIESTLEY

The President

José María GIL-ROBLES

(1) OJ No C 340, 12. 11. 1996.

(2) OJ No C 395, 31. 12. 1996.

RESOLUTION containing the comments which form part of the Decision giving discharge to the Commission in respect of the implementation of the general budget of the European Union for the financial year 1995

THE EUROPEAN PARLIAMENT,

- Having regard to Article 206 of the Treaty establishing the European Community,

- Having regard to Article 89 of the Financial Regulation applicable to the general budget of the European Communities, under which the Commission and the other Institutions are required to take all appropriate steps to take account of the European Parliament's comments on the implementation of expenditure,

- Whereas, under the same Article, the institutions are also required to report, at Parliament's request, on the measures taken in the light of these comments and, in particular, on the instructions given to those of their departments which are responsible for the implementation of the budget,

- Having regard to the Council recommendation of 17 March 1997 (C4-0133/97),

- Having regard to the report of the Committee on Budgetary Control and the other documents referred to in the discharge decision (A4-0120/97),

General comments

1. Welcomes the spirit of constructive cooperation between the Commission and the Court of Auditors which has again been visible in the discharge procedure for 1995 and which can only have a beneficial effect on the implementation of the Union budget;

2. Deplores the fact that the Council adopted its recommendation only on 17 March 1997, thus rendering impossible any constructive dialogue with Parliament and its competent committees on discharge-related matters;

3. Reaffirms its support for the Commission's efforts under the SEM 2000 initiative to carry through a new finance and management culture; realizes that this process did not get underway until the financial year 1995 and the results can be evaluated only in the light of experience in subsequent financial years;

4. Recalls that 80 % of Community funding (basically agricultural expenditure and Structural Funds) is managed on a decentralized basis in the Member States and that the latter therefore bear particular responsibility, in the light of Article 209 (a) of the Treaty, for ensuring that the funding is utilized as effectively and as prudently as possible;

5. Points out, however, that this does not release the Commission from its obligation to take every possible step to make certain that the Member States spend funding properly and to ensure that errors are corrected;

6. Calls on the Member States to inform the Commission of the measures they have taken in the light of the observations by the Court of Auditors so that the Commission can incorporate them in its report on the action taken following the discharge;

7. Calls on the Commission in future to forward its report on the action taken following the discharge to Parliament at the latest six months following the latter's discharge decision;

8. Stresses that the Council's recommendation on the discharge to be given to the Commission in respect of the implementation of the general budget of the European Union for the financial year 1995 does not form part of the discharge decision until such time as it has been approved by Parliament;

Statement of Assurance (DAS)

9. Welcomes the fact that the Court could obtain a reasonable assurance that the operations underlying the commitments and the revenue entered in the accounts were legal and regular;

10. Welcomes the fact that the Court's audit revealed that improvements had been made since the financial year 1994 to the consolidated revenue and expenditure account;

11. Notes that the handling of payment appropriations again gave rise to too high a number of formal and substantial errors;

12. Welcomes the fact that the Court has started to comment in greater detail on specific fields of expenditure thus providing important help to tackle the problems detected by the DAS audit;

13. Points out that it would prefer the Court to make even more in-depth analyses of specific sectors and to give serious consideration to the possibility of drawing up statements of assurance on expenditure in individual Member States and of cooperating closely with the national audit institutions in connection with those analyses; recognizing the limitations of current resources, invites the Court to discuss with Parliament how best to achieve this;

14. Expects the Court to continue, in consultation with the Commission, its efforts to develop the methodology and presentation of the DAS with a view to increasing its usefulness in the context of actions aimed at improving the management and control of Community expenditure;

15. Calls on the Court of Auditors, with a view to achieving greater consistency and greater transparency, to present the results of its work in connection with the DAS in the form of an additional chapter in its annual report;

Own resources

16. Calls on the Commission to propose regulatory and administrative measures aimed at strengthening accounting controls and checks on the national control and management systems with regard to traditional own resources;

17. Requests the Commission to publish, in an annex to the annual balance sheet (revenue and expenditure account) the position, for each Member State, with regard to debts to the Community not recovered or written off, with explanations for each situation;

18. Notes the complexity of customs arrangements described in the Court of Auditors' report and the report of the Temporary Committee of Inquiry into the Community Transit System; asks its relevant committees, in the light of the conclusions and recommendations drawn up by the Temporary Committee of Inquiry, to investigate how these arrangements can be simplified in order to be better monitored and controlled;

19. Asks its relevant committees to consider the effects on own resources of future Customs Union agreements in the light of the Court of Auditors' findings with regard to the application of the EEC-Turkey agreement;

20. Calls on the Court of Auditors to apply itself, as a matter of priority, to checking the reliability and exhaustiveness of the VAT own resource assessment base;

21. Calls on the Commission to develop an appropriate statistical and mathematical tool with a view to contributing to measuring the reliability of the GNP aggregates of the Member States, whose data are the basis for the Community's finances; calls on Eurostat to clarify its role in that development process;

22. Calls on the Commission to submit to Parliament and the Council a proposal for a Regulation with a view to establishing an action programme designed to improve, in a manner consistent with the powers of the Member States, the effectiveness of the administrations of the Member States in collecting or recovering sums of all kinds due to the Community budget; hopes that this programme will foster the reorganization measures which the Member States regard as essential to make their efforts more cohesive and will encourage the Member States to increase the number of staff responsible for recovery and to improve their professional training;

Agricultural spending

23. Notes that the ECU 34,5 billion of the European Agricultural Guidance and Guarantee Fund (EAGGF) Guarantee Section spending in 1995 was appreciably below the financial perspective ceiling, but at 52 % still accounted for more than half of all payments;

24. Notes that as part of the reform of the common agricultural policy in the cereals and arable crops sectors direct income support payments were progressively introduced during a transitional period from 1992 to 1996 in order to compensate for the fall in institutional prices in these sectors and that a temporary increase in expenditure was inevitable as a result of the adjustment of the system; notes further that in spite of the increase in expenditure in the 1995 financial year spending was well below the agricultural guideline and actual agricultural expenditure in the EAGGF Guarantee Section was 11 % below the amount budgeted; reaffirms that the commitments arising from the decisions of the Edinburgh European Council in 1992 must be discharged in full and that the agricultural guideline must also be complied with in future;

25. Establishes that the Commission and the Member States have made scant progress in improving application of the rules governing the common organization of the market (COM) in olive oil; urges the Commission, therefore, to apply immediately all the controls made available by the legislation in force instead of deferring resolution of the problem to a future reform of the COM, the initial outline of which, moreover, does not afford sufficient guarantee that expenditure will be controlled;

26. Recalls its resolution of 21 April 1993 containing the comments which form part of the decision giving discharge to the Commission in respect of the implementation of the general budget of the European Communities for the 1991 financial year (1), in which it called upon the Commission to suspend payments in respect of olive oil if satisfactory controls were not guaranteed by the Member States within a reasonable timescale;

Integrated control system

27. Notes that, even after the EP granted a one-year extension to the time limit, the integrated control system for the payment of premiums for livestock and land areas, which originally was to have been introduced in all Member States by the end of 1995, is still not fully operational in some Member States; calls therefore on the Commission to establish, in connection with the clearance of accounts process, the resulting loss risk for the Community budget and to make financial corrections at an appropriate level vis-à-vis the Member States concerned;

28. Asks the Court of Auditors to investigate as soon as possible the effectiveness of the integrated control system; calls on the Commission, where appropriate, to make proposals for improvements;

29. Points out that the Court of Auditors has found that there is currently no satisfactory system for the identification of sheep and goats, and, in the light of the volume of premiums disbursed (approximately ECU 2 billion), calls on the Commission to submit a proposal by the end of the year, modelled on the proposal for a Council Regulation for the identification of bovine animals, for a Council Regulation for the marking of sheep and goats too;

Clearance of accounts

30. Notes that the correction amounts to be set by the Commission in connection with the clearance of accounts should be geared exclusively to the level of actual losses to the Community budget or, as the case may be, to the level of the loss risk and must not be negotiable on the basis of other criteria;

31. Believes that the fact that the EAGGF Guarantee Section still accounts for 36 % of the substantial errors detected by the Statement of Assurance, involving an amount in excess of ECU 1,5 billion, cannot be ignored and draws attention to the fact that, unlike in other sectors, this involves undue payments already made, and thus, recovery of these amounts for the EU budget is problematic;

32. Asks the Commission to forward as soon as possible the results of the enquiry about the legality and regularity of refund claims on the export of feta cheese from Denmark in order to establish the amount which will be disallowed from Community financing;

33. Calls on the Commission to check, in connection with the clearance of accounts procedure, that EAGGF appropriations directly or indirectly earmarked for the prevention and treatment of BSE over the last five years have been utilized correctly;

Miscellaneous

34. Asks the Commission to inform Parliament on action taken against those responsible for the widespread abuse of the aid system for cotton, on the amounts of unduly paid aid recovered and on the effectiveness of the new measures for monitoring and control of the common market organization for cotton;

35. Believes that intensive pig producers should contribute in greater degree towards the measures to combat classical swine fever; therefore asks the Commission to bring forward a review of the Regulations in force;

36. Notes that it must check whether it is still justifiable to maintain some ECU 40 million of EU grants for whisky makers each year; points out that there must be clarification in this connection as to whether abolition of the aids really would conflict with Protocol No 19 to the Treaty concerning the Accession of the United Kingdom to the European Communities;

Common fisheries policy

37. Asks its relevant committees to examine whether the considerable funding which the Community has made available for stepping up the monitoring of fishing activities actually has led to enhanced effectiveness of controls;

38. Disapproves of the fact that Community aids have been used to assist the construction or modernization of processing plants which subsequently have not been usable because provision had not been made for the requisite disposal infrastructure or because there was no guarantee of regular fish supplies; calls on the Commission not simply, in future, to accept all formally correct projects, but, rather, to try to obtain reasonable assurance that there will be a return on the assisted investment;

Structural Funds

39. Is concerned at the degree of utilization of the available funding, which, in some respects, is most unsatisfactory; instructs its relevant committees to examine the extent and implications of the problem more closely and to draw up recommendations;

40. Is concerned at the Court of Auditors' finding that the rate of substantial errors in respect of the Structural Funds is significantly higher than the average for budget payments as a whole;

41. Asks the Commission to propose a solution for the programming problems, including the need for ex-ante and ex-post evaluation;

42. Asks the Commission to present its accounting records in such a way that it will be possible for Parliament to:

- identify the statutory framework to which commitments and payments relate,

- determine whether payments have actually been effected,

- be kept/stay informed on the backlog in commitments and payments and the amount of outstanding commitments;

43. Asks the Commission, once again, to make a proposal for Article 24 of Council Regulation (EEC) No 4253/88 (2) to be changed in such a way that effective corrective action, leading to recovery where this is due, will be possible and compulsory:

- when there is suspicion that any irregularity (ineligibility, breach of any Community provision, non-compliance with the reporting obligations, non-implementation of compensatory measures, etc.) occurred, money for that project/programme should be frozen for a certain period, during which the Commission should carry out an investigation,

- after the investigation corrections by the final beneficiary and/or the Member State will take place within a fixed period, failing which the sums already paid out will be considered to have been unduly paid;

44. Awaits the draft Regulation promised by the Commission on Article 23 of Regulation (EEC) No 4253/88; expects this proposal to contain amongst others obligations of the Member States with regard to communication of information at all stages and down to the level of individual projects;

45. Calls on the Commission to introduce a system for the clearance of accounts which would enable flat-rate corrections to be made, where these appeared justified in the light of shortcomings in Member States' systems for selection, management, monitoring and control;

Internal policy areas

46. Reiterates its request that the Court of Auditors incorporate in its annual report a chapter covering the Union's internal policies as a whole and also dealing with issues that are common to the various activities financed by heading 3 of the financial perspective;

Research and technological development (RTD)

47. Calls on the Commission to establish a coordinated audit system and to provide sufficient staff for checking the RTD contracts;

48. Calls on the Commission to exclude participants in the RTD programmes who do not fulfil their financial obligations or who offend considerably against rules of an RTD contract from any further contract with Commission services;

49. Asks the Court of Auditors to carry out for 1996 and subsequent years a precise evaluation of the administrative costs of specific research programmes under the fourth framework programme incurred not only by the Commission and its external consultants but also by those in receipt of appropriations;

Pacte and Recite

50. Notes that the decentralized structure in the management of the regional programmes Pacte and Recite has led to lack of control, mismanagement and substantial delays in payment from the Commission to the regional partners; calls on the Commission to introduce technical and legal instruments to ensure a better management structure;

Advanced television services

51. Notes the Court of Auditors' suggestion that permanent financing of advanced television services from the Community budget should be avoided; therefore instructs its relevant committees to discuss thoroughly the future of the action plan for advanced television services before the first reading of the 1998 budget;

European Vocational Training Policy

52. Supports the Court of Auditors, with regard to the Community Action Programme for a European Vocational Training Policy, in advocating the establishment of a single selection procedure under the direct responsibility of the Commission; calls on the latter to make proposals for a change in its forthcoming interim report on the implementation of the programme with the aim of simplifying the application procedures;

Justice and home affairs

53. Regrets the improvised and disparate nature of the projects accepted by the Council in the area of justice and home affairs;

54. Regrets the manner in which the Council, by Council Decision 95/402/JAI (3), has reduced the role of the Commission to that of a mere budgetary agent in the management of appropriations intended for cooperation in the area of justice and home affairs;

55. Regrets that of a total of 23 projects chargeable to budget Article B5-8 0 0, only five were submitted by the Commission; therefore calls on the Commission to make more use of its power of initiative in the areas covered by Article K.1 (1) to (6) of the Treaty;

Lending and borrowing

56. Calls on the Commission, in its capacity as representative of the European Community shareholding in the European Investment Fund (EIF), to ensure the introduction of transparent public audit and control arrangements providing the taxpayer-investor with the necessary assurances as to the accountability of the EIF for its use of public funds;

57. Asks the Court of Auditors and the Commission to report to Parliament at the soonest opportunity on the management and effectiveness of the Copenhagen facility, with particular reference to the functioning of the job creation criteria applied to interest rate subsidies;

58. Calls on the Commission to submit proposals to the Intergovernmental Conference specifying that the audit rights of the Court of Auditors shall extend to include the financial management systems of all organizations managing Community funds;

External policy areas

59. Is alarmed by the growing imbalance between the size and diversity of the programmes and the capacity to implement them with, as a result, a very rapid increase in outstanding commitments and considerable problems with the spending of the appropriations available;

60. Instructs its relevant committees to consider against this background whether it might be worthwhile to separate political decision-making from the task of programme management and project implementation;

61. Instructs its relevant committees to investigate how the independence and credibility of the evaluation of projects and programmes funded from the Community budget can be enhanced and how the results from the evaluation can be effectively fed back into the Community's decision-making process;

62. Calls on the Commission to harmonize procedures for procurement within the different Directorates-General in charge of external policies;

63. Asks the Court of Auditors to include in its work programme an enquiry on the adequacy and the effectiveness of the Commission's structure, procedures and allocation of human resources relating to development cooperation;

Phare

64. Deplores the lack of any clear political vision within the Commission either as to the achievements and effectiveness of Phare expenditure or as to its future role in contributing to the accession of applicant countries in central and eastern Europe to the EU; calls once again for an analysis of Phare's global impact on these countries over the last six years and a clear strategy for the next five years;

Tacis

65. Supports the Commission's intention to concentrate its activities under Tacis indicative programmes into no more than two sectors of intervention per beneficiary country: believes that, it effectively applied, this restriction should enable Tacis assistance to be used in a more focused and efficient manner; asks the Commission to report in detail on the outcome of this initiative in its follow-up report to this resolution;

66. Continues to note with concern the chronic instability of staffing within the Commission's Directorate-General with responsibility for the management of Tacis and the difficulties this causes for the efficient management of the programme; calls on the Commission, in the absence of any serious prospect of new staff becoming available, to review the deployment of staff within DG 1A and, within the context of its efforts to concentrate Tacis interventions in fewer sectors, sharply to reduce the number of projects handled;

67. Expresses its deep concern at the inordinate slowness of the commitment, contracting and disbursement process under the Tacis programme; believes that no more than a year should ever normally elapse between the commitment of Tacis funds and the signing of the relevant contract; to this end, asks the Commission to introduce automatic procedures whereby commitments lapse if not contracted within 18 months;

68. Asks the Commission to maximize, within the scope of the Tacis Regulation, its contributions to public investment projects, especially those co-financed with other donors;

69. Re-emphasizes the extreme importance it attaches to the nuclear safety programmes; feels therefore great disquiet at the inability of the Commission to implement this policy meaningfully in the context of the Phare and Tacis programmes; calls on the Commission to set up a task force with responsibility, on an inter-departmental basis, for pooling and employing more effectively Commission resources in this sphere and to give the removal of the administrative, procedural and legal obstacles to the implementation of the programme absolute political priority and to bring all appropriate pressure to bear on beneficiary countries to this end;

Development cooperation

70. Stresses the need for more expertise staff in the policy fields related to poverty eradication, including social development, gender, the environment and macro-economic policy;

71. Calls on the Commission to clarify whether it has financed any part of the EDF from the EU budget;

72. Calls on the Commission to clarify the objectives of budgetary aid to ensure both that it is used in social areas in ways that benefit people living in poverty, and that budgetary aid results in lager quantities of the budget of the recipient country being spent in basic social areas;

73. Believes that the budgetary authority, with the assistance of the Commission, should simplify the procedures for releasing appropriations from the humanitarian aid reserve in order to speed up the mobilization thereof and thus avoid carrying over unused appropriations by ECHO to the following year;

74. In the light of known information, directs its committees responsible to clearly investigate whether women are benefiting from the development programmes implemented by the Commission, in accordance with the Council's resolution of 20 December 1995 on gender and development;

75. Calls on the Commission to ensure that ECU 2 million is spent on sports development projects in the townships in South Africa and requests a detailed report on how this is carried out;

Common foreign and security policy

76. Considers the special reports by the Court of Auditors on the European Union administration in Mostar and election observation in Palestine as confirming its view that the common foreign and security policy (CFSP) has brought about a dangerous blurring of responsibilities between the Council and the Commission which hinders Parliament in carrying out its task of calling the Commission to account in the context of the discharge procedure;

77. Calls for the organization and supervision of all future joint actions to be placed, from the date of the initial decision onwards, under the untrammelled responsibility of the Commission so as to guarantee transparency, continuity and effectiveness;

78. Calls on the Commission to join with the Member States in setting up a preparatory group to develop, on the basis of experience of joint actions hitherto, procedures under which the organizational and financial technicalities of joint actions can be made to operate as rapidly and smoothly as possible;

Administrative expenditure

79. Calls on the Commission to report to it on the circumstances which led it, following the evacuation of the Berlaymont building, to enter into a commitment, contrary to the promises made by the Belgian Government throughout the negotiations, to pay various property taxes in respect of the rental of buildings which it does not own;

Subsidy to CERI

80. Following a delegation visit to CERI in Florence, recommends that the Committee on Budgets retain in the reserve its funding for the 1997 financial year, pending receipt of a further report from the Committee on Employment and Social Affairs;

Decentralized community agencies

81. Thanks the Court of Auditors for the service of annual reports covering part of 1994 and the 1995 year;

82. Supports the Committee on Budgets in its intention to bring the various statutes into a structure whereby the Commission exercises financial control, the European Parliament gives discharge, and income to agencies is classified as own resources;

83. Insists, despite the low staff numbers, on separation of powers between authorizing officer and accounting officer because financial control is an essential prerequisite to receive Community funds;

84. Recognizes to this end that the separation of powers is honoured as far as personnel are concerned, and looks forward to a new common accounting system which will exercise separation in the accounting function; welcomes the proposal of such an accounting system which could enable financial control to grant authorizations on an on-line basis from the Commission in Brussels;

85. Calls upon the Commission, in the meanwhile, to implement Parliament's suggestion of part-time financial controllers to assist the agencies;

SEM 2000

86. Invites the Commission to revise internal procedures for the selection, management and monitoring of measures funded directly by the Commission and for the payment of balances or recovery of incorrect payments;

87. Is of the opinion that the question of interest earned on Community monies, already touched on in connection with SEM 2000, requires in-depth consideration across the board; calls upon the Commission to draw up Regulations concerning the use or, as the case may be, recovery of interest earned on Community monies; meanwhile, instructs its Committee on Budgetary Control to draw up a report in this connection;

88. Urges the Commission to carry into effect its announcement to apply the rules on eligibility, as established in the framework of SEM 2000; asks for a review of these eligibility criteria before starting the next programming period;

89. Requests the Court of Auditors to publish a special report covering mainstreaming and measures to promote equal opportunities;

90. Reiterates its call to the Court of Auditors to publish, as part of its annual report, a list setting out all refusals of approval by the institutions' financial controllers and, where appropriate, the overrule decisions.

(1) OJ No C 150, 31. 5. 1993, p. 104.

(2) OJ No L 374, 31. 12. 1988, p. 1.

(3) OJ No L 238, 6. 10. 1995, p. 2.