NoL145/30 OfficialJournaloftheEuropeanCommunities 2.6.73
EUROPEAN PARLIAMENT
DECISION OFTHEEUROPEAN PARLIAMENT
of9May1973
onthegivingofadischargetotheCommissioninrespectoftheimplementation ofthe
EuropeanCommunities 'budgetforthefinancialyear1970andontheReportofthe
AuditBoard
(73/116/ECSC,EEC,Euratom)
THEEUROPEANPARLIAMENT ,
Havingregardtotheaccountsandstatementsforthefinancialyear1970andthe
accountsoftheEuratomSupplyAgency(Doc.163/71-11andIV);
HavingregardtotheReportoftheCommitteeonBudgets(Doc.38/73);
HavingregardtotheCouncilDecisionof20February1973(*)onthegivingofa
dischargetotheCommission ,andtothereservationscontinuedintheAnnextothe
CouncilDecisionwhichitendorses;
HavingregardtotheReportoftheAuditBoardontheaccountsforthefinancialyear
1970andtheanswersoftheinstitutionstothatReport(Doc.163/71-111AandB);
I
Decisiononadischarge
1.EstablishesthetotaloftheCommunities 'expenditureforthefinancialyear1970
at2521275009-61u.a.,madeupasfollows:
—Administrative expenditure 117466553-89u.a.
—EuropeanSocialFund 37041700-72u.a.
—EAGGF 2366766755-00u.a.
2.DccidestogivetheCommissionafinaldischargeinrespectoftheimplementation
ofthe1970budgetandreferstothefollowingcriticalremarks:
n
TheaccountingproceduresoftheFunds,oftheadministrative budgetandofthe
researchandinvestmentbudget
(a)EAGGF
3.Notesagainwithgreatregretthatthelargestsingleexpenditureheadingofthe
EuropeanBudget,namelytheexpenditureofthe'Guarantee'sectionoftheAgricultural
Fund,isnotsubjecttoadequateexternalcontrolandthattheAuditBoardisunableto
givetheofficialbodiesbindinginformationonthefinancialmanagementoftheFund
(Section110,paragraph7,oftheAuditReportforthefinancialyear1970);
0)Seep.23ofthisOfficialJournal.

2.6.73 OfficialJournaloftheEuropeanCommunities NoL145/31
4.RegretsonceagaintheinadequatelocalsupervisionbyEAGGFservices;this
situationmustberemediedinviewofthenewfinancialregulationsforthecommon
agriculturalpolicyandthetransitiontotheCommunities'ownresources;
5.Findsitintolerablethattherearestilldelaysinmeetingtheduedatesforclosure
oftheaccounts;asaresulttheFund'sexpenditureisonlyauditedfiveyearsafterthe
measuresinquestionareputintoeffect;
6.UrgestheCommissiontopresentanimmediatereportonthefrequentinstances
offraudwhichstilloccurintheagriculturalsector,ontheirbudgetarysignificanceand
ontheconsequencesofmeasurestakenuptonowbytheCommissionoftheEuropean
CommunitiesandbytheMemberStates,andremindstheCommissionofitsobligations
derivingfromArticle10ofRegulation (EEC)No729/70;
7.UrgestheCommissiontoconcentrateonspot-checkauditingoperationscovering
individualprojectsinalltheiraspectsonarandomsamplebasis;
8.Believes,inviewoftheconstantlyrecurringshortcomings inEAGGFfinancial
managementandthedifficultyofsupervisingthem,thattheCommissionmustmake
considerablygreatereffortstoachievesubstantialprogressinthismatter;
9.StatesthereforenowthatitcangivetheCommissionoftheEuropeanCommunities
nofurtherdischargeforfuturefinancialyears,unlessprogressismadeinthefinancial
administration andcontroloftheAgriculturalFundandtheCommissionmovescloser
totheParliament'sviewsonauditingprocedures ;
(b)EuropeanSocialFund
10.Deploresthelongdelaysevenin1970inthesubmissionandexaminationof
applicationsforassistance,theinadequatecooperationwithnationaladministrations ,
theshortageofstaffintheSocialFund,thelowrateofutilizationoffundsand,asa
result,thefactthattheyareallowedtolieunused,andthedifficultyofcontrolling
expenditurecalculatedinlumpsums;
11.Isastonishedbythedifferencesbetweentheaveragecostsofretrainingpro­
grammes,whichvarybetweenthedifferentMemberStatesinaratioof1to9,andby
theallegeddifficultyoflevellingoutthesedifferenceswithintheoverallactivitiesofthe
SocialFund;
12.BelievesthatcontrolbytheAuditBoardoughtnottoberestrictedbyCommission
procedureswhichtheAuditBoardstatedarethereasonswhyitcannolonger'
satisfactorilyperformitsdutiesinregardtotheexpenditureoftheSocialFund;
13.ConsidersthereforethattheParliament'spositivedecisiononadischargeforthe
SocialFund'saccountsforfuturefinancialyearsmustbewithheldifmattersofauditing
procedurecannotbeclarifiedwiththeCommissionandtheremarksofthebudgetary
authoritiesarenottakenintoaccount;
14.GivesthefinaldischargeinrespectoftheaccountsoftheSocialFundforthe
financialyear1969onthebasisofthejudgmenthandeddowninthemeantimebythe
CourtofJustice;
(c)TheAdministrative BudgetoftheInstitutions
15.UrgestheCommissiontotakenoteoftheobservationsoftheAuditBoard,with
particularreferenceto:
(a)theover-frequent entriesoffundsinaccountsoutsidethebudgetwhichattimes
makesubsequentauditingofcertainbudgettransactionsimpossible;

NoL145/32 OfficialJournaloftheEuropeanCommunities 2.6.73
(b)theannuallyrecurringover-spending andtransferoffundsundercertainbudget
headingswhichfalsifytheappropriations authorizedbythebudgetauthorities;
(c)thestrictapplicationoftheprincipleofseparationofthepowerofauthorization
fromaccounting;
(d)thecriticismthatdepositedandcashholdingsinsecuritiesandfundscannotbe
supervised;
(e)thelackofopportunitytodeterminetheresultsofinvestigationsandsurveysandthe
usetowhichtheycanbeput;
(f)theavailabilityofrealisticrevenueaccounts;
16.DemandsanimmediatereportfromtheCommissiononthecorrectionofthe
shortcomingsintheLuxembourgcomputercentre,which,accordingtotheAuditBoard,
appeartobeinstrikingcontrasttotherequirementsofsoundfinancialmanagement ;
17.Isthereforesettingupaninvestigatingcommitteewithintheframeworkofthe
CommitteeonBudgetswiththetaskofworkingoutaconstructivesolutionwiththe
Commission ;
(d)Theresearchandinvestmentbudget
18.UrgestheCommissiontoensurethatthedepartmentsresponsiblefortheresearch
andinvestmentbudgetsubmittotheAuditBoardorpreparethedocumentswhichthe
latterregardsasnecessaryfortheperformanceofitsduties;thisappliesinparticularto:
(a)thecheckingoftheclassificationofexpenditureaccordingtodifferentprogramme
measuresforwhichonlymaterialaccuracyofthecalculationscouldbedetermined
andnottheaccuracyofthecontent;
(b)thelistofcodenumbersforpaymentorders;althoughthesewerechangedduring
thefinancialyear,theauditboardwaseithernotinformedofthisorinformedonly
subsequently ;
(c)theentryofalargenumberoftransactionsinaccountsotherthanthenormalones;
(d)thelackofdocumentation ontheprogressofresearchworkandtheexecutionof
contracts(theAuditBoardhadraisedthesemattersinits1965Report);
19.Notesthatinfringements oftheprinciplethatthebudgetisrestrictedtooneyear
arecontrarytotheexistingrulesandbypassthedecisionsofthebudgetauthorities ;
20.UrgestheCommission ,whenpresentingtheoperationalbudget,topreparefull
detailsontheadministration ofthevariousfunds,anessentialpreconditionformaking
anevaluation;
III
EuropeanDevelopmentFund
21.UrgestheCounciltogivetheCommission adischargeinrespectofthe
implementation ofthe1970budgetafteragreeingtotheremarksandreservations
containedhereinafter;

2.6.73 OfficialJournaloftheEuropeanCommunities NoL145/33
22.Expressesitsearnestdesirethat,inharmonywiththeevolutionoftherightto
auditandgivedischargesinrespectoftheimplementation ofthegeneralbudgetasa
resultoftheTreatyof22April1970,itwillalsobeauthorizedtogivedischargesin
respectofthebudgetarymeasuresoftheEDF;
23.Welcomestherecentspeedingupoftheallocationoftheresourcesofthethird
EuropeanDevelopmentFund;
24.Appreciatesthefactthatallrecordsofadministrative accountsandbalancesare
beingkeptoncardssothataccountscanbebalancedeverymonth,thusfacilitatingthe
taskofauditing;
25.Considersthat,ifcertainerrorsandomissionstowhichattentionwasdrawnin
theAuditBoard'sReportfor1970aretobeavoided:
(a)theCommissionoftheEuropeanCommunitiesshouldensurepainstakingandstrict
applicationoftheregulationsgoverningtheworkingprocedureoftheDevelopment
Fundandalsoofitsfinancialregulations,bothofwhichhavealreadybeen
supplemented andimprovedbytheCommission ;
(b)amoreprecisedefinitionofthetermsofreferenceanddivisionofresponsibilities
ofthevariousauditors,authorizingofficers,accountingofficers,bookkeepersand
officialsempoweredtoauthorizeadvances,wouldhelptocreatethebestpossible
conditionsforfinancingandadministeringCommunityaid;
(c)itisessential,pursuanttoArticle49oftheFinancialRegulations,fornormal
conditionsofcompetitiontobeensuredwhencontractsareawarded;
(d)thechoiceofconsultancyofficestoassistwithtechnicalaidrelatedtoinvestments
andwiththegeneraltechnicalcooperationforwhichtheCommissionisresponsible,
shouldbemadeunderconditionswhichallowofaminimumofcompetition,and
iftheprojectsarenotcarriedoutornotcompletedbytheagreedtimelimitfinancial
penaltiesshouldbelaiddown;
(e)thepresentpercentagefigureforover-spending duetotechnicaldifficultiesandto
theuseofquantitiesofsuppliesexceedingthoseestimatedfortheexecutionof
projectsmustbelowered;
26.Isconvincedthatgreatervigilanceandstringencyinapplyingthecurrent
regulationswouldhaveenabledmanyoftheproblemsencounteredinthefinancingof
thethreeprogrammesforthetrainingofsupervisorystafffortheoperationand
managementofOTRACOtobeavoided;regretsthattheseprojectsweremarredby
severaloftheproblemsreferredtoabove,butrecognizesthattheCommissiondidtry
toremedythesituation;
27.RequeststheCommissiontoremedythedelayswhichhaveoccurredinsubmitting
theaccountsoftheEuropeanCooperationAssociationandalsotoimprovethe
provisionsforthepaymentofscholarshipfunds.
DoneatStrasbourg,9May1973.
FortheEuropeanParliament
MauriceDEWULF
Vice-President