EN Official Journal of the European Union L 286/29

DECISION OF THE EUROPEAN PARLIAMENT

of 10 May 2012

on discharge in respect of the implementation of the general budget of the European Union for the financial year 2010, Section III — Commission

(2012/546/EU, Euratom)

THE EUROPEAN PARLIAMENT,

— having regard to the general budget of the European Union for the financial year 2010 (1),

— having regard to the annual accounts of the European Union for the financial year 2010 (COM(2011) 473 – C7-0256/2011) (2),

— having regard to the Commission’s report on the follow-up to the discharge for the 2009 financial year (COM(2011) 736), and to the Commission staff working documents accompanying that report (SEC(2011) 1350 and SEC(2011) 1351),

— having regard to the Commission communication of 1 June 2011 entitled ‘Synthesis of the Commission’s management achievements in 2010’ (COM(2011) 323),

— having regard to the Commission’s annual report to the discharge authority on internal audits carried out in 2010 (COM(2011) 643), and to the Commission staff working document accompanying that report (SEC(2011) 1189),

— having regard to the Annual Report of the Court of Auditors on the implementation of the budget concerning the financial year 2010, together with the institutions’ replies (3), and to the Court of Auditors’ special reports,

— having regard to the statement of assurance (4) as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2010 pursuant to Article 287 of the Treaty on the Functioning of the European Union,

— having regard to the Council’s recommendation of 21 February 2012 on discharge to be given to the Commission in respect of the implementation of the general budget of the European Union for the financial year 2010 (06081/1/2012 – C7-0053/2012),

— having regard to Articles 317, 318 and 319 of the Treaty on the Functioning of the European Union and Article 106a of the Euratom Treaty,

— having regard to Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (5), and in particular Articles 55, 145, 146 and 147 thereof,

— having regard to Rule 76 of, and Annex VI to, its Rules of Procedure,

— having regard to the report of the Committee on Budgetary Control and the opinions of the other committees concerned (A7-0098/2012),

A. whereas under Article 17(1) of the Treaty on European Union the Commission shall execute the budget and manage programmes and shall do so, under Article 317 of the Treaty on the Functioning of the European Union in cooperation with the Member States on its own responsibility, having regard to the principle of sound financial management,

1. Grants the Commission discharge in respect of the implementation of the general budget of the European Union for the financial year 2010;

2. Sets out its observations in the resolution that forms an integral part of its Decisions on discharge in respect of the implementation of the general budget of the European Union for the financial year 2010, Section III — Commission and executive agencies, and in its resolution of 10 May 2012 on the Court of Auditors’ special reports in the context of the 2010 Commission discharge (6);

3. Instructs its President to forward this Decision, and the resolutions that form an integral part of it, to the Council, the Commission, the Court of Justice of the European Union, the Court of Auditors, and the European Investment Bank, and to arrange for their publication in the Official Journal of the European Union (L series).

The President Martin SCHULZ The Secretary-General Klaus WELLE

(1) OJ L 64, 12.3.2010.

(2) OJ C 332, 14.11.2011, p. 1.

(3) OJ C 326, 10.11.2011, p. 1.

(4) OJ C 332, 14.11.2011, p. 134.

(5) OJ L 248, 16.9.2002, p. 1.

(6) Texts adopted, P7_TA(2012)0154 (see page 68 of this Official Journal).

EN Official Journal of the European Union L 286/31

RESOLUTION OF THE EUROPEAN PARLIAMENT

of 10 May 2012

with observations forming an integral part of its Decision on discharge in respect of the implementation of the general budget of the European Union for the financial year 2010, Section III — Commission and executive agencies

THE EUROPEAN PARLIAMENT,

— having regard to the general budget of the European Union for the financial year 2010 (1),

— having regard to the annual accounts of the European Union for the financial year 2010 (COM(2011) 473 – C7-0256/2011) (2),

— having regard to the Commission’s report on the follow-up to the discharge for the 2009 financial year (COM(2011) 736), and to the Commission staff working documents accompanying that report (SEC(2011) 1350 and SEC(2011) 1351),

— having regard to the Commission communication of 1 June 2011 entitled ‘Synthesis of the Commission’s management achievements in 2010’ (COM(2011) 323),

— having regard to the Commission’s annual report to the discharge authority on internal audits carried out in 2010 (COM(2011) 643), and to the Commission staff working document accompanying that report (SEC(2011) 1189),

— having regard to the Annual Report of the Court of Auditors on the implementation of the budget concerning the financial year 2010, together with the institutions’ replies (3) (Annual Report), and to the Court of Auditors’ special reports,

— having regard to the statement of assurance (4) as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2010 pursuant to Article 287 of the Treaty on the Functioning of the European Union,

— having regard to the Council’s recommendation of 21 February 2012 on discharge to be given to the Commission in respect of the implementation of the general budget of the European Union for the financial year 2010 (06081/1/2012 – C7-0053/2012), and noting that the United Kingdom, the Netherlands and Sweden have for the first time refused to recommend approving discharge,

— having regard to the Council’s recommendation of 21 February 2012 on discharge to be given to the executive agencies in respect of the implementation of the budget for the financial year 2010 (06084/2012 – C7-0052/2012), and noting that the United Kingdom, the Netherlands and Sweden have for the first time refused to recommend approving discharge,

— having regard to Articles 317, 318 and 319 of the Treaty on the Functioning of the European Union and Article 106a of the Euratom Treaty,

— having regard to Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (5), and in particular Articles 55, 145, 146 and 147 thereof,

— having regard to Council Regulation (EC) No 58/2003 of 19 December 2002 laying down the statute for executive agencies to be entrusted with certain tasks in the management of Community programmes (6), and in particular Article 14(2) and (3) thereof,

— having regard to Rule 76 of, and Annex VI to, its Rules of Procedure,

— having regard to the report of the Committee on Budgetary Control and the opinions of the other committees concerned (A7-0098/2012),

A. whereas Europe is faced with a severe budgetary and financial crisis which can lead to a crisis of confidence in the Union and whereas it is vitally important that the Union is a leading example for good public management, through the Commission, which implements the Union budget; whereas good public management is necessary in order for the Union to maintain its AAA rating, which is important, in particular if it is to honour its commitment to provide EUR 60 000 000 000 in guarantees for the European Financial Stabilisation Mechanism,

B. whereas 2010 was the first full financial year to come under the Lisbon Treaty provisions, with new budget procedures and the establishment of the European External Action Service (EEAS), together with the European Council Presidency alongside the rotating Council Presidency; whereas it was also the first year in the new Europe 2020 strategy,

C. whereas good governance implies that political goals are set before legal instruments reaching those goals are passed and whereas existing legal instruments not fully in harmony with the political goals should be modified,

D. whereas there shall be adequate arrangements for transparency, public accountability and public audit where public funds are at stake, whereas for the seventeenth consecutive year the Court of Auditors has not been able to issue a positive declaration of assurance on the Union budget,

E. whereas Article 287(1), second subparagraph of the Treaty on the Functioning of the European Union (TFEU) requires the Court of Auditors to provide Parliament and the Council with a statement of assurance as to the reliability of the accounts and the legality and regularity of the underlying transactions, and also provides that that statement may be supplemented by specific assessments for each major area of Union activity,

F. whereas more than 90 % of all errors are identified outside the Commission at the level of Member States’ authorities and the level of final beneficiaries (Annual Report, point 1.22),

G. whereas in the majority of cases where errors were identified in the Cohesion area Member States’ authorities had sufficient information to have detected and corrected errors prior to certifying the expenditure to the Commission (Annual Report, point 4.25),

H. whereas it is necessary to differentiate between national authorities having established well functioning supervisory and control systems and national authorities bearing responsibility for only partially effective systems in order to avoid additional burdens to all Member States,

I. whereas Member States’ lack of serious interest in the discharge procedure could be due to the Commission’s insufficient efforts in identifying publicly, clearly, unequivocally and in a substantiated way which Member States, regions and programmes are underperforming in managing Union funds,

J. whereas mandatory national management declarations issued and signed at ministerial level and duly audited by an independent auditor are a necessary mean to counter some national authorities’ lack of responsibility as regards the use and management of Union money,

K. whereas the increased use of pre-financing by the Commission has implications for the Court of Auditors’ audit approach and whereas the Court of Auditors could adapt its methodology to the new circumstances in order to ensure the usefulness of the Court of Auditors’ information to the discharge authority,

L. whereas the Union more than ever needs a strong, independent and efficient truly external body of auditors, which naturally — and out of respect for taxpayers — means that the Members of the Court of Auditors should never be appointed on a political but only on a professional basis,

M. whereas the use of innovative and complex financial instruments must be counter balanced by full transparency, including the publication of comprehensive data of all final beneficiaries, and clear rules on reporting in order to avoid any risk to the Union’s budget and reputation,

N. whereas the Member States shall cooperate with the Commission to ensure that the appropriations are used in accordance with the principles of sound financial management,

O. whereas Member States, even if their structure is federal, bear responsibility to the outside world and the Union,

P. whereas both compliance and performance issues must be better addressed in order to reinforce the legitimacy of the Union,

Q. whereas the continuous development of the Court of Auditors’ statement of assurance over the years has been instrumental in identifying areas where Member States’ and Commission’s management needs to be improved,

R. whereas the Court of Auditors has yet again been unable to give a positive statement of assurance regarding the legality and regularity of the payments, which is deplorable,

Priority actions for the Commission

1. Invites the Commission to present to Parliament an Action Plan for the achievement of the following priority actions: — close monitoring of the use of Financial Engineering Instruments (FEIs), as described in point 21 of this resolution, — improvement and strengthening of the reliability of the accountability chain, as described in point 36 of this resolution, — reconsidering the increased use of pre-financing, as described in point 56 of this resolution, — creation of an effective sanctioning mechanism in the area of Cohesion policy, as described in point 124 of this resolution;

The Court of Auditors’ statement of assurance

Accounts — clean opinion

2. Notes that the annual accounts of the Union for the financial year 2010 present fairly in all material respects the position of the Union as of 31 December 2010, and the results of its operations and its cash flows for the then completed year;

3. Notes the emphasis of matter in relation to a change in the Commission’s accounting policy with regard to financial engineering instruments (FEIs), which shows that risks of material misstatements remain, although the accounts have received an unmodified opinion since 2007; calls on the Commission to review annually whether the new treatment adopted reflects fairly the underlying reality;

Legality and regularity of revenue — clean opinion

4. Notes with satisfaction that revenue underlying the accounts for the year ended 31 December 2010 is legal and regular in all material respects;

Legality and regularity of commitments — clean opinion

5. Notes with satisfaction that commitments underlying the accounts for the year ended 31 December 2010 are legal and regular in all material respects;

Legality and regularity of payments — adverse opinion

6. Regrets deeply that payments remain materially affected by error;

7. Understands that the basis for the adverse opinion of the Court of Auditors is the observation that supervisory and control systems are only partially effective and — as a result — payments are affected by an error rate which is estimated to be most likely 3,7 %;

8. Recalls that the most likely error rate for payments in the financial year 2009 was estimated to be 3,3 %;

9. Is worried about this increase because it reverses the positive trend observed in the past few years; calls on the Commission to achieve a trend that shows a consistent decrease in the error rate as demanded in previous discharge reports;

10. Attributes this development mainly to the increase of the most likely error rate in the area of Cohesion, Energy and Transport, which marked a significant increase to 7,7 %;

Horizontal issues

Financial Engineering Instruments (FEIs)

11. Recalls that the Commission promotes an increased use of FEIs for the next multiannual financial framework (7) despite the fact that the Commission itself considers FEIs to be of high risk (8); understands that FEIs complement rather than replace existing grant funding and have the potential benefit of being able to be used more than once;

12. Is deeply concerned about the lack of information on the implementation of current FEIs which appears to affect all policy areas (Annual Report, points 1.31 and 1.33);

13. Deplores the absence of formal reporting requirements and acknowledges the Commission’s efforts in receiving information on the current use of FEIs from the Member States in the context of the European Regional Development Fund (ERDF); welcomes the synthesis report of the information gathered by the Commission on ‘Financial Engineering Instruments Implemented by Member States with ERDF Contributions — situation as at 31 December 2010’ (Synthesis Report on FEIs) as submitted to Parliament’s Committee on Budgetary Control; notes that FEIs with a total commitment of approximately EUR 8 100 000 000 have been created and have received payments of approximately EUR 5 200 000 000 from 2007-2013 operational programmes by the end of 2010 (Annual Report, point 4.32);

14. Deplores the fact that the Commission received information only on approximately 75 % of the total contributions committed to FEIs for enterprises (9); is worried that the information received from Member States differed in terms of completeness and accuracy and that a limited number of Member States or regions did not provide feedback or did not complete the monitoring reporting templates; understands that this makes it impossible for the Commission to cover all FEIs as at 31 December 2010;

15. Underlines that: — the exact number and size of specific funds established (the Commission estimates that some 92 specific funds in France and Italy, for which no monitoring reports were received or only insufficient information was available, are implemented in addition to almost 300 specific funds for which information was available (10)), — indicators with target levels on the effectiveness of FEIs (for example, number of investments in small and medium enterprises, jobs created or safeguarded, additional resources mobilised at enterprise level or specific fund level (11)), and — indicators on the efficiency and economy of FEIs (for example, management costs and whether they provide incentives to make best use of the money, information on exits and returns to funds, information on the legacy of the funds after the programming period (12)), are important and indispensable elements for an evaluation of the use of FEIs and regrets deeply that this information is not yet fully available;

16. Notes and deplores the Court of Auditors’ observations mainly in the Cohesion area such as excessive endowments to FEIs resulting in circumventing the n + 2 rule (Annual Report, example 4.4(a)), delays and slow implementation of the FEIs (Annual Report, example 4.4(b)), irregular winding-up requirements (Annual Report, example 4.4(c)), financial contributions paid as advances as soon as the legal structure of the FEI has been set up (Annual Report, point 4.34) and problems in performing adequate audits on FEIs (Annual Report, points 4.35 and 4.36);

17. Believes that those observations are rooted in a deficient legal basis for FEIs; is concerned that the rules applicable to FEIs do not set appropriate incentives to make effective use of FEIs; is also worried that they leave too much room for flexibility for Member States; welcomes, however, recent improvements in developing a legal basis for FEIs; highlights the following most important deficiencies of the legal basis which was at the time a Council Regulation (13): — insufficient provisions to stimulate rapid implementation of FEIs, — insufficient provisions on leverage and revolving requirements for FEIs, — insufficient provisions to prevent excessive endowments, — insufficient provisions to put in place management fee structures giving incentives to make use of FEIs in the most efficient way, — insufficient provisions on the legacy of the funds at the end of the programming period, — unclear eligibility conditions for working capital, — possibility for unjustified recourse to preferential private sector treatment;

18. Agrees with the Court of Auditors’ opinion that resources returned to and revenues earned by the financial instruments should not be re-directed elsewhere before the closure of the operational programme, but should return to the relevant financial instruments (Court of Auditors, Opinion No 7/2011 (14), page 11); expects that this recommendation will be seriously considered during the legislative procedure concerning the proposal for a regulation of the European Parliament and of the Council laying down common provisions on the structural instruments COM(2011) 615 – 2011/0276(COD));

19. Is pleased that Articles 130 and 131 of the proposal for a regulation of the European Parliament and of the Council on the financial rules applicable to the annual budget of the Union (COM(2010) 815 - 2010/0395(COD)) will make it possible to stipulate the duration of financial instruments; asks the Commission for a summary of the measures which might prevent risks to the Union budget arising from the FEIs;

20. Notes that FEIs are present in other policy areas, too; sees the risk of overlapping and inconsistent implementation of these instruments without adequate coordination; invites the Court of Auditors, therefore, to audit FEIs horizontally over all policy areas;

21. Invites the Commission to consider it a priority action to closely monitor the use of FEIs, inter alia, by: — evaluating objectively and critically the experiences with FEIs in the Cohesion policy for the programming period 2007-2013 so far, in particular with regard to the Court of Auditors’ observations, including lessons learned and consequences drawn and to report to Parliament on the results of the evaluation, — providing a risk assessment considering different FEIs separately as well as taking into account the risk structure of the beneficiary of the FEIs, — completing the process of gathering information from Member States on issues not yet fully covered, such as the exact number and size of specific funds and relevant indicators on the effectiveness, efficiency and economy of FEIs; developing mechanisms to enforce the reporting obligations by Member States, — reporting annually to Parliament, in the context of the discharge procedure, on the use of FEIs in Member States, including indicators on the effectiveness, the efficiency and the economy of FEIs as well as on how the Commission coordinates, ensures consistency and mitigates the risk of overlaps across policy areas;

Responsibility of the Commission and its management representations

22. Recalls that, pursuant to Article 317 of the TFEU, the Commission implements the Union’s budget on its own responsibility; underlines that where the Commission implements the budget by shared management, implementation tasks are to be delegated to Member States, in accordance with Article 53b of the Financial Regulation;

23. Stresses once again (15) that the Commission therefore has the primary responsibility in the management of the Union funds concerned and that, as a consequence, the Commission has the obligation to take measures that are aimed at ensuring legality and regularity as well as sound financial management;

24. Stresses that it is not possible for the Commission to transfer its financial responsibility to the Member States, even in cases where a managerial weakness or irregularity has been identified at the level of a Member State;

25. Considers that meaningful use of the term ‘shared management’ must be based on the fundamental principle that the Union delegates some of its powers to the Member States and that the Member States are obliged to carry out their part of the work in accordance with the legal acts of the Union; calls on the full implementation of point 44 of the Interinstitutional Agreement of 17 May 2006 between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management (16); believes that annual summaries of the audits and declarations available, must be public so as to make a contribution towards improving management of the Union budget;

26. Notes the close link between the Commission’s ultimate responsibility for implementing the budget and the significance of the discharge procedure; stresses that the Commission’s final responsibility regarding the implementation of the budget also covers weaknesses in Member States’ management and control systems;

27. Stresses that financial responsibility is and shall remain indivisible and recalls Article 53b(4) of the Financial Regulation, which provides that ‘in order to ensure that the funds are used in accordance with the applicable rules, the Commission shall apply clearance-of-accounts procedures or financial correction mechanisms which enable it to assume final responsibility for the implementation of the budget’ (emphasis added);

28. Underlines in this context the importance of the Commission’s management representations; notes, however, the Court of Auditors’ general observations on the Commission’s Annual Activity Reports (AARs) that there was no guidance on the calculation of the residual error rate or residual risk; notes further that these elements have gained importance for the question whether a reservation is necessary (Annual Report, points 1.19 and 1.20); is worried that this results in inconsistencies in application between the Directorates-General;

29. Notes furthermore, the Court of Auditors’ observations on the following individual AARs: — the reservation regarding rural development measures under axis 2 should not have been lifted (Annual Report, point 3.53), the calculation of the residual error rates for aid schemes is affected by various deficiencies (Annual Report, point 3.54), — the estimated amount at risk as presented in the AARs of Directorate-General for Regional Policy (DG REGIO) and Directorate-General for Employment, Social Affairs and Inclusion (DG EMPL) may be underestimated (Annual Report, Annex 4.3), — the calculation of the residual error rate presented in the AAR of Directorate-General for Enlargement is limited to 30 % of the payments carried out (Annual Report, point 5.33), — the AAR of EuropeAid gives only a partially fair assessment of financial management in relation to regularity (Annual Report, point 5.34), — the reservation regarding Framework Programme 6 in the AAR of Directorate-General for Information Society and Media should have been maintained (Annual Report, point 6.47);

30. Reminds the Commission that all reservations are included as an annex to the Commission’s Synthesis Report and underlines that by adopting the Synthesis Report the Commission ‘takes overall political responsibility for the management by its Directors-General and Heads of Service, on the basis of the assurances and reservations made by them in their Annual Activity Reports (AAR)’ (17);

31. Underlines that the College and the Commissioners thereby take the final responsibility for the reliability and completeness of the reservations made by the Directors-General and Heads of Units acting as ‘Authorising Officers by Delegation’ and stresses that the act of delegation in no way takes away final responsibility from the College and the Commissioners;

32. Notes the observations made by the Court of Auditors concerning the Internal Auditor’s overall opinion; believes that without a substantial revisit addressing the Court of Auditors’ concerns, the usefulness of the overall opinion will remain limited;

33. Is worried about the Court of Auditors’ observations with regard to the AARs and the Synthesis Report (Annual Report, points 1.17-1.25); believes that those observations need to be addressed without delay in order to safeguard the value of those documents as accountability instruments; recognises, however, that the calculation of a residual error rate is only one of the methods used by the Commission for estimating the amount at risk; calls on the Commission to provide consistent guidelines to be implemented by all Directorates-General;

34. Notes the Commission’s Green Paper on the EU corporate governance framework (18) for the private sector; further notes that the Commission has made great progress as regards adequate corporate governance within the Commission following the events leading to the resignation of the Santer Commission in 1999;

35. Notes the Commission’s Governance statement adopted on 30 May 2007, which covers the internal functioning of the Commission and explains the way it is directed and controlled and the way it relates with its stakeholders; encourages the Commission to further improve its corporate governance and to inform the discharge authority of actions and measures taken by: — incorporating those elements of corporate governance required or proposed by Union company law relevant for Union institutions, — taking measures allowing the President to sign the accounts and to present together with the accounts: (i) a description of the risks and uncertainties which could affect the achievement of the policy objectives as well as a statement in which the President, together with the College of Commissioners, accepts responsibility for risk management; and (ii) a formal Corporate Governance declaration clearly showing which international standards for corporate governance the Commission is adhering to as well as objective and complete explanations if there is a need to depart from the corporate governance code’s recommendation (the ‘comply or explain’ principle);

36. Invites the Commission to consider it a priority action to improve and strengthen the accountability chain, inter alia, by: — providing the Committee on Budgetary Control full insight into the Member States annual summaries; deplores the fact that the Commission until now has not given any information on the annual summaries, as without any knowledge of the content of annual summaries they cannot be regarded as national management declarations, — delivering a political declaration in which it accepts its final and overall responsibility for the implementation of the budget, including the part of the budget which is implemented under shared management, — adding the responsible Commissioner’s signature to the AAR, — establishing the AARs in accordance with the principle of objectivity, avoiding optimistic estimations, — providing mandatory, complete and relevant guidance to the Directorates-General, in particular regarding the way residual error rates and residual risks are estimated in accordance with the principle of prudence, — providing in each AAR a complete and reliable explanation of the relationship between the residual risk or the residual error rate and the Court of Auditors’ error rate; calls on the Commission, in close cooperation with the Court of Auditors, to explore possibilities to align its methodology of calculating the residual error rate with the Court of Auditors’ most likely error rate methodology, — revisiting the methodology for the overall audit opinion of the Internal Auditor and addressing the weaknesses identified by the Court of Auditors, — analysing whether the Commission’s corporate governance arrangements could be further improved taking into account the abovementioned Commission Green Paper on the EU corporate governance framework for the private sector;

European Schools

37. Regrets that, despite the considerable budgetary means foreseen for the European schools, the latter continue to fail in the fulfilment of their main task, which is to provide for sufficient places in the required languages and in the vicinity of officials’ places of work and residence, but instead have expanded their activities to include other fields of education;

38. Recognises that an essential problem lies within the decision-making and financing structures of the Convention on the European Schools; therefore demands the Commission to explore with the Member States a revision of that Convention and to report by 31 December 2012 on the progress made; in the meantime, calls on the Commission to push for more efforts to achieve the aforementioned targets, by way of more appropriate use of the budgetary means provided;

Commission’s administration

39. Calls on the Commission to clarify its relocation plans, the costs this will entail, how much office space will become available and how much will be added, and the number of staff in each Directorate-General who will be affected;

40. Calls on the Commission to complete, without delay, the reclassification scheme for all the temporary staff of the European Anti-Fraud Office on open-ended contracts, as announced by Commissioner Šefčovič in reply to written questions in preparation for this discharge (19);

41. Points out that in 2010, during the procedure to approve flexitime and compensatory leave as a voluntary benefit, the Commission approved around 90 000 additional days of leave for its staff, which is the equivalent of some 445 posts — even though Article 56 of the Staff Regulations states that overtime worked by AD 5/AST 5 staff shall not be compensated; asks for clarification of the total cost to the taxpayer of compensatory leave;

Responsibility of Member States

42. Recalls that pursuant to Article 317 of the TFEU the Commission implements the Union budget on its own responsibility but also in cooperation with Member States;

43. Underlines that the two policy areas prone to the highest error rates (‘Cohesion, transport and energy’ and ‘Agriculture and natural resources’) are implemented under shared management, and deplores the fact that the estimated most likely error rates amount to 7,7 % and 2,3 %, respectively;

44. Welcomes in this context the Commission’s analysis of the errors reported by the Court of Auditors for the financial years 2006-2009, which highlights for the first time the fact that, for ERDF and Cohesion Fund, three Member States (Spain, Italy and the UK) have contributed 59 % to the cumulative quantifiable errors identified during this period and that for the ESF four Member States (Spain, Portugal, the UK and Germany) have contributed 68 % to the cumulative quantifiable errors identified during this period in the area of Cohesion policy (20); notes that, for ERDF and Cohesion Fund, most errors found in Italy came from the regions Calabria, Campania and Puglia and that in Spain a small number of operational programmes in the regions Andalucía, Valencia and Castilla-La Mancha contributed 75 % to the errors detected in Spain (21); understands, furthermore, that Spain and Italy have also contributed significantly to the error rate for the financial year 2010;

45. Notes that problems in Italy with regard to the ERDF ‘relate to systemic weaknesses identified at the level of audit and managing authorities’, and to ‘the application of public procurement rules and selection of projects, including the eligibility of retrospective projects’ (22); notes further that in Spain the source of the problems is rooted in a complex management and control system which ‘may lead in practice to an unclear division of responsibilities as well as a lack of effective supervision on the part of the managing authority’ (23);

46. Recalls that the finance ministers of Greece, Italy and Spain were invited to an exchange of views in Parliament’s Committee on Budgetary Control; regrets that none of the invited finance ministers appeared to discuss with members of that committee the Court of Auditors’ results with a view to improving the management of Structural Funds and eventually the legal basis; calls on its President to address, at the next meeting of the Heads of State, the refusal by those finance ministers to discuss these important matters in public with Parliament’s responsible committee;

47. Recalls its repeated invitations to the Commission to present a proposal for the introduction of mandatory national management declarations (NMDs) issued, made public and duly audited by the responsible audit authority, as part of the Commission’s final and overall responsibility for the implementation of the Union budget; notes that NMDs should contain full information about the use of Union funds;

48. Proposes that the substance of national declarations signed at Directorate-General level should comply with international auditing standards and that those declarations should be used by the Court of Auditors in its audit work and based on, among other things, the declarations by authorities to which management power is delegated;

49. Points to the existence of significant differences in Member States’ administrative performance in the field of revenue and expenditure in shared management, especially related to detecting irregularities, fraud and errors and financial follow-up in both the customs field and spending of Union funds; is of the opinion that if all Member States would show a correct performance, in the customs field alone, an additional (net) revenue of at least EUR 100 000 000 could be envisaged by the Union budget; notes that the Commission so far monitors administrative performance in a reactive way and on case level and thus not performs sufficient trend analysis to identify fields of risk; calls on the Commission to apply the method of trend analysis to identify financial risks and to take measures to improve Member States’ administrative performance;

Bulgaria and Romania

50. Notes with great concern the Commission’s interim report on the progress made by Bulgaria under the Cooperation and Verification Mechanism; is concerned at the continuing parlous state of the Bulgarian legal system; notes that 27 criminal proceedings are under way against 28 judges; asks for clarification regarding a series of cases of alleged fraud in connection with Union funds in Bulgaria, causing a suspension of payments in 2008 in which the public prosecutor’s office suspended the investigations, even though the investigations into similar cases based on the same facts continued in another Member State; is astonished that, in all cases of fraud involving Union funds which were brought before the courts, criminal prosecution was replaced by administrative fines, and that an important case of fraud involving Union funds has been delayed in appeal in court for over 18 months; deplores, furthermore, the disregard of the Commission’s recommendation in not authorising the National Commission for the Identification and Forfeiture of Criminal Assets (CEPACA) to undertake pro-active asset verification of senior officials and politicians; is concerned that the unified, prompt, systematic publication of substantiated judgments is not the norm in Bulgaria; calls on the Commission to put pressure on the judicial authorities to increase their efforts to reform and to implement the Commission’s recommendations as soon as possible; calls on the Commission in this context to disclose how much funding has been allocated to supporting Bulgaria’s efforts to reform and to assess the extent to which the payments have achieved the promised results; expects to see serious improvements over the coming year, with further considerations and a series of measures drawn up by the Commission in cooperation with the Bulgarian government for re-establishing the integrity of Bulgaria’s legal system;

51. Notes with concern the Commission’s interim report on the progress made by Romania under the Cooperation and Verification Mechanism; is pleased, however, to note the positive upward trend in the record of the National Integrity Agency (ANI) in pursuing cases of unjust enrichment and identifying conflicts of interest; notes that the ANI’s funding was increased with Union money; is, however, concerned that there is no uniform follow-up to ANI cases and that the follow-up is often delayed; welcomes the fact that the National Anticorruption Directorate (DNA) continued to act as an effective prosecution service in high-level corruption cases; notes the increase in 2011 in the number of indictments, court decisions and convictions and the acceleration of cases in the High Court of Cassation and Justice, which is reflected in the 85 % increase in final court decisions in DNA cases compared to 2011 (24); is concerned at the results of an analysis of court judgments in cases of high-level corruption, which shows that 60 % of sentences are suspended and the sentences are often the minimum provided by law; is surprised at the unsatisfactory practice in relation to the prompt publication of substantiated judgments, which encourages the risk of statute-barring in some cases of high-level corruption as a result of protracted substantiation caused by the long-delayed possibility of redress; calls on the Commission to disclose how much funding has been allocated to supporting Romania’s efforts to achieve judicial reform; expects to see further improvements within the coming year; calls on the Commission to increase pressure on the Romanian government to implement the Commission’s recommendations; expects the Commission to call on the Romanian government, without fail, to ensure that the Romanian government’s efforts to develop a consistent jurisprudence in public procurement trials are increased; calls on the Commission steadfastly and determinedly to insist vis-à-vis the Romanian government that the Commission’s recommendations are complied with and a clearer, more comprehensive implementation plan to prepare for implementation of the provisions of the Criminal Code and the Criminal Procedure Code is drawn up; expects increased efforts with regard to the confiscation of assets resulting from criminal activities in Romania; also expects a series of measures from the Commission, in cooperation with the Romanian government, for improving the integrity of the Romanian legal system;

Pre-financings

52. Notes that pre-financings are considered necessary in order for beneficiaries to start the agreed action;

53. Notes the Court of Auditors’ observations that the Commission has substantially increased the use of pre-financings between 2005 and 2010 (Annual Report, point 1.28); is concerned that there is a lack of clearing of pre-financings (Annual Report, point 1.29 and point 86 of Opinion No 6/2010 of the Court of Auditors);

54. Is concerned about the influence pre-financings have had mainly in the policy areas ‘External aid, Development and Enlargement’ and ‘Research and Internal Policies’; notes an increased use of pre-financings and an overall error rate below 2 % in these two policy areas; notes, furthermore, the Court of Auditor’s conclusions that pre-financings were free from material error but interim and final payments remain affected by a material level of error (Annual Report, points 5.35 and 6.48);

55. Believes that by paying high volumes of pre-financings, the Commission takes on an increased financial risk, for example in cases of insolvency of beneficiaries, as well as an increased risk to legality and regularity as acceptance of the cost declared by beneficiaries is postponed to a later date;

56. Believes that it is more efficient to prevent irregularities than to correct undue payment ex-post through recoveries; therefore invites the Commission to make it a priority action to reconsider the increased use of pre-financing as well as control and audit mechanisms by: — informing Parliament about the reasons why the Commission has made an increased use of pre-financings between 2005-2010, — adapting the level of pre-financings in the various programmes to a level that will ensure the necessary float for the beneficiary to start the project, while also safeguarding the financial interest of the Union and informing Parliament accordingly;

Outstanding budgetary commitments

57. Recalls that outstanding budgetary commitments are commitment appropriations made, but not used (i.e. paid) and that they derive mainly from multiannual programmes (e.g. Cohesion) where commitments are made in the earlier years of the programming period while the corresponding payments are made gradually during the whole programming period;

58. Notes that a high level of outstanding commitments might indicate difficulties experienced by Member States in absorbing the amounts allocated;

59. Notes that in 2010, the Court of Auditors found that those outstanding commitments increased by nearly 10 % to approximately EUR 194 000 000 000 (Annual Report, point 1.43 and Graph 1.2) which represents nearly three years of spending at the current rate;

60. Believes that, as regards the 2007-2013 programming period, there is a risk that: — the committed funds will have to be spent quicker than usual, thereby increasing the risk of error, — at the end of the 2007-2013 programming period, Member States might try to absorb all funds committed whereby they might co-finance projects already implemented and financed from national funds (so called ‘retrospective’ projects which have not passed through the Union management and control system and are as a result more prone to error);

61. Invites the Commission to provide information on the size of outstanding commitments per Member State as well as on its cooperation with the Member States to identify and address risk areas in relation to absorption and regularity;

Budgetary contribution to decentralised agencies and joint undertakings

62. Notes that the Union contribution for the financial year 2010 amounted to over EUR 620 000 000 to the decentralised Agencies and to over EUR 500 000 000 for the Joint Undertakings; notes some difficulties in finding information on the Union contribution for agencies; calls on the Commission to provide the discharge authority annually with consolidated information on the total annual funding per Agency/Joint Undertaking made from the general budget of the Union, such as: — the initial contribution of the Union entered in the budget for the Agency/Joint Undertaking, — the amount of funds coming from the recovery of surplus, — the overall contribution of the Union for the Agency/Joint Undertaking, — the amount of the European Free Trade Association (EFTA)’s contribution where this applies;

63. Expects the Commission, in such time of financial crisis, to avoid increases in the Agencies’ budgets and to even consider reducing the Union contribution to their budgets based on an assessment of its priorities;

64. Invites the Commission to draw up guidelines for templates that could be used by all Agencies/Joint Undertakings to establish their Annual Working Programmes and Annual Activity Reports, in order to ensure meaningful comparison of results against planned objectives;

65. Calls on the Commission to provide Parliament with a detailed overview of the criteria and verification mechanisms applied to avoid conflicts of interest and ‘revolving door’ cases for Agencies/Joint Undertakings;

Union budget and the financial and budgetary crisis

66. Is concerned about the continuing financial and budgetary crisis in Member States; takes the view that this crisis also entails different types of risks for the Union budget in the following ways: — financial risks in relation to loans granted to Member States, — financial risks in relation to revenue;

67. Recalls that six Member States (Greece, Hungary, Ireland, Latvia, Portugal and Romania) are currently considered to be ‘Member States in difficulties’ as they are receiving assistance in the form of balance of payments (BOP) facility loans, loans granted under the European Financial Stabilisation Mechanism (EFSM) or assistance under the Greek loan facility;

68. Notes that the Union budget guarantees loans granted under the BOP facility (loans disbursed as at 31 December 2010 amounting to approximately EUR 12 000 000 000) and the EFSM (no disbursements as at 31 December 2010) (25); notes furthermore that the maximum outstanding amount of loans possibly granted under the BOP facility and the EFSM is EUR 50 000 000 000 (Article 1(1) second subparagraph of Council Regulation (EC) No 332/2002 (26)) and EUR 60 000 000 000 (27), respectively; highlights that the total (EUR 110 000 000 000) is almost equal to an annual Union budget as total payments from the Union budget amounted to approximately EUR 122 000 000 000 in 2010 (28);

69. Is concerned about the fact that the Court of Auditors did not pay sufficient attention to these new challenges in the Union in its annual report on 2010; especially deplores the fact that the Court of Auditors did not mention these risks for the Union budget in a sufficient way; underlines that the Court of Auditors has to give the new European Stability Mechanism a prominent role in its further work;

70. Recalls that there is no guarantee fund established to protect the budget from calls on those guarantees; invites the Commission, therefore, to evaluate the potential need to set up a guarantee fund to cover for potential losses similarly to the Guarantee Fund for External Actions with the aim to protect the Union budget;

71. Stresses that the EFSM facility signed loans for EUR 48 500 000 000 of a total of EUR 60 000 000 000 as at 30 September 2011; encourages the Court of Auditors to provide a report on the EFSM operations and in particular of the control mechanisms, established by the Commission, by the end of 2012;

72. Recalls that the revenue of the Union budget consists of different sources; reiterates that without prejudice to other revenue, the budget shall be financed wholly from own resources; notes that, in particular gross national income (GNI) resources accounting for 73 % of total revenue derive from the national budgets of the Member States (29);

73. Is of the opinion that the more severe the financial situation in certain Member States becomes, the more difficult it will be for those Member States to contribute to the Union budget; believes that this puts at risk the revenue of the Union budget stemming from ‘Member States in difficulties’ which might even be prompted to take on additional government debt to finance the Union budget or national co-financing of certain aid schemes;

74. Notes that GNI resources coming from ‘Member States in difficulties’ account for roughly 6 % of total GNI resources for the financial year 2010 (30);

75. Notes, furthermore, that the co-financing rates for Member States in difficulties were increased for the European Agricultural Fund for Rural Development (EAFRD), the Structural Funds, the Cohesion Fund and the European Fisheries Fund; expects higher co-financing rates to allow higher investments particularly in Member States in difficulties; emphasises in this context the Commission’s increased control and supervisory responsibility;

European Financial Stability Facility (EFSF) and European Stability Mechanism (ESM)

76. Criticises the fact that the Council used Article 122 of the TFEU in 2010 for setting up the European Stability Facility (EFSF) because that Article is only applicable for natural disasters and not for economic catastrophes; is concerned that the EFSF neither contains an element of democratic control by Parliament nor gives the Court of Auditors any audit rights; strongly criticises the fact that the EFSF has not even any provision on external public audit;

77. Notes the recent signature of the ESM Treaty by the Member States; underlines its resolution of 23 March 2011 (31), in which it warns against establishing the permanent European Stability Mechanism (ESM) outside the Union’s institutional framework as this decision entails problems for the control mechanism of the institutions of the Union; shares the concerns of some Supreme Audit Institutions that the Treaty lacks sufficient provisions for ensuring effective external audit;

78. Reiterates its invitation to the Council and Member States to give due consideration to the following issues concerning the implementation of the ESM: — to ensure in the by-laws of the ESM appropriate arrangements for public external audit of legality, regularity as well as performance in line with internationally accepted auditing standards taking into account the following documents: (i) Resolution of the Contact Committee of the Supreme Audit Institutions (SAIs) of the European Union from 14 October 2011 on the Statement of SAIs of the euro area on the external audit of the ESM (CC-R-2011-01) (32); (ii) Statement of the Contact Committee of the SAIs of the European Union addressed to the European Parliament, the European Council, the European Commission and parliaments and governments of EU Member States from 14 October 2011 on the Impact of the European Semester and other recent developments in EU economic governance on the Supreme Audit Institutions of the Member States of the European Union and the European Court of Auditors (33); (iii) Letter from the President of the Dutch Court of Audit (34) on issues to be addressed in the by-laws of the ESM with regard to Article 30 of the ESM Treaty, — to establish appropriate arrangements for accountability and full transparency of the ESM, — to ensure the reliability of data and statistics, — to clarify the responsibility and reporting arrangements of all actors whose liabilities will be involved in the establishment of the mechanism, — to urge the Commission to report to Parliament and the Council twice a year on the risk that is incurred on the Union’s budget by its guarantee to the EFSM and to ask the Commission how in case of a default this money would be transferred into the Union budget and then to the EFSM;

79. Invites the Council and the Member States to define Parliament’s political scrutiny over any euro-bond issue, in general, and of the permanent crisis mechanism in particular; shares the view that Parliament should be involved at an equal basis in the mechanism;

Transparency

80. Emphasises the vital role transparency plays in ensuring accountability for the use of public funds and recalls that it is one of the main instruments in achieving legal and regular expenditure; reiterates its call for all grant payments from Union funds to be recorded in a user-friendly online database paying due regard to data protection law; believes that the payment of Union funds should be explicitly conditional on the acceptance by the beneficiaries that the basic details — including the amount, recipient’s name, and purpose — be a matter of public record;

81. Notes that the current system in the policy area Cohesion does not ensure full transparency of beneficiaries of ERDF and Cohesion Fund; notes that in the current framework, the Commission provides a portal with access to lists of beneficiaries available on national websites, which are only accessible in the respective national languages and do not follow common criteria; expects the future regulation laying down common provisions on the structural instruments (COM(2011) 615 – 2011/0276 (COD)) to ensure that Member States provide the data on final beneficiaries of ERDF and Cohesion Fund to be published on the Commission’s official website in one of the three working languages of the Commission and based on a set of common criteria to allow comparison and detection of errors; recalls its invitation to the Commission to seek inspiration from the American Recovery Accountability and Transparency Board and its website (www.recovery.gov);

82. Reiterates the judgment of the Court of Justice of 9 November 2010 in Joined Cases C-92/09 Volker and Markus Schecke GbR and C-93/09 Hartmut Eifert, which is relevant for the policy area Agriculture and Natural Resources; calls on the Commission to submit as soon as possible a proposal for a new regulation requiring Member States to publish information on legal and natural persons receiving European agricultural funds, taking that judgment into account; takes the view that information on beneficiaries should be available on the Commission’s official website in one of the three working languages of the Commission and based on a set of common criteria to allow comparison and detection of errors;

Statement of assurance methodology

83. Is aware that the Court of Auditors intends to provide Parliament with more information on the policy areas ‘agriculture and natural resources’ and ‘cohesion, energy and transport’; welcomes that intention as it would lead to greater transparency and more precise identification of problematic areas of the budget; is of the opinion that this allows the Commission, the Court of Auditors, Parliament and other stakeholders to better focus their attention and make recommendations concerning those areas in which management needs to improve; wishes, however, to highlight that it is important to ensure comparability from one year to the next;

84. Welcomes the Court of Auditors’ more in-depth assessment of the reliability of the Commission’s management representations both in Chapter 1 but also in the individual Chapters of the Annual Report 2010; recalls that management representation needs a strong second opinion by the Court of Auditors; encourages the Court of Auditors to continue strengthening its analysis of the Commission’s management representation and to report on it in a descriptive way;

85. Notes the increased use of pre-financings; believes that pre-financings are exposed to a lower level of risk to legality and regularity than interim or final payments as no justification of cost is necessary for a pre-financing; invites the Court of Auditors to consider adapting its audit approach to take into account the increased use of pre-financings in order to provide Parliament with even more useful information focussing on those transactions involving the highest risk;

86. Notes that the Court of Auditors applies a common methodology to quantify public procurement errors in the two policy areas Agriculture and natural resources and Cohesion, Energy and Transport; deplores the fact that the Commission follows different methodologies in these two areas both of which are furthermore not in line with the Court of Auditor’s methodology; is worried that different approaches in these areas could undermine the credibility of the control and audit of shared management expenditure; calls therefore on the Commission and the Court of Auditors to harmonise the treatment of public procurement errors in these two policy areas urgently and to report back to the Parliament’s competent committee on the progress made by the end of 2012;

Specific issues

The role of the Commissioner responsible for budgetary control issues

87. Notes that, in the 2004-2009 Commission, a Commissioner had full-time responsibility for budgetary control as had previously been called for by Parliament; regrets the fact that within the current Commission budgetary control issues have been merged with other responsibilities (‘taxation and customs union’); proposes that in the 2014-2019 Commission a full-time Commissioner for Budgetary Control be re-established with responsibility for matters related, inter alia, to the following areas: — internal audit, — anti-fraud, — liaison with the Court of Auditors and the relevant committee of Parliament, — contact with the relevant budgetary and audit authorities in the Member States, and the development of a comprehensive internal control framework, — overseeing and improving the utility of the annual synthesis report, including a review of the Member States’ management and control systems, — commissioning and assessing independent programme evaluations, and developing the Evaluation Report, provided for by Article 318 of the TFEU, into a valuable tool for performance improvement;

Performance: Getting results from the Union budget

88. Welcomes the new Chapter 8 on ‘Getting results from the EU budget’ in the Annual Report including the Court of Auditors’ observations on the Commission’s self-assessment of performance in its AARs;

89. Notes the Court of Auditors’ findings concerning the quality of the Commission’s reporting on performance, such as: — ‘Currently the Management Plan does not foresee objectives and indicators to measure economy and efficiency’ (Annual Report, title before point 8.17) — ‘In some areas targets [are] not sufficiently quantified or specific’ (Annual Report, title before point 8.18) — ‘Interim milestones for multiannual targets [are] not defined in some areas’ (Annual Report, title before point 8.20) — ‘Description of policy achievements provided limited information on results and impacts’ (Annual report, title before point 8.22);

90. Takes the view that those important findings illustrate that Parliament cannot fully rely on the Commission’s reporting on performance; believes that reliable data is the basis for good management, policy development and parliamentary oversight; would appreciate it if the Court of Auditors could further develop its activities in this area to include ‘certification’ of the performance data reported by the Commission on a regular basis;

91. Believes that performance is as important as legality and regularity, and invites the Court of Auditors to consider whether it would be possible to include the new insight on performance on the different policy groups in the related chapters of the Annual Report;

92. Notes that objectives, indicators and targets presented in the Management Plans are mainly focussed on effectiveness (Annual Report, point 8.15); invites the Commission to improve its reporting on performance, including indicators relating to economy and efficiency and to set appropriate targets for assessing progress towards achieving multiannual objectives;

93. Further invites the Commission in areas of shared management to define, together with the Member States, appropriate performance indicators to be applied consistently, and to verify that Member States’ reporting of achieved results is mandatory, complete, accurate and public;

94. Notes the repeated opinions of both the Court of Auditors and the Commission that the quality of management and control systems differs widely between Member States and between different programmes;

95. Calls on the Commission to systematically account for those differences in the effectiveness of control systems and to make available clear evaluations of efforts — or lack of effort — by Member States in detecting and correcting irregularities to make sure that Member States with well-functioning supervisory and control systems are not at risk of being discredited;

96. Invites the Commission to present the Evaluation Report provided for in Article 318 of the TFEU in its competent committee and Plenary at the same time as the Court of Auditors’ Annual Report is presented and invites the Court of Auditors to present its observations on the Evaluation Report at these occasions; underlines that the Evaluation Report should be published at a moment of time allowing both the Parliament and the Court of Auditors to adequately assess it;

97. Recalls that Article 318 of the TFEU requires the Commission to submit ‘an evaluation report on the Union’s finances based on the results achieved’; notes that the Commission on 17 February 2012 adopted the first Evaluation Report under Article 318 of the TFEU, relating to the financial year 2010;

98. Further recalls that Parliament, in its resolution on discharge to Commission for the financial year 2009 (35), suggested that: — the Commission should appoint a ‘performance evaluator’ in order to establish clear ownership of the evaluation report (point 199), — a clear and transparent relationship should be established between performance indicators, legal/political basis, amount of expenditure and results (point 200), — the Internal Audit Service should audit the methodology used for the production of the report as well as assess the work done (point 200), — key performance indicators used by Commission departments should be publicly available (point 200);

99. Regrets that the Commission has not been able to fully address these suggestions in the first Evaluation Report under Article 318 of the TFEU; further notes that the first Evaluation Report is a summary of existing evaluation reports in two policy areas (Education and Culture and Research); believes that the coverage and contents of the first Evaluation Report do not live up to what could be expected of an evaluation report required by the TFEU;

100. Invites the Commission to further develop the content of the Evaluation Report under Article 318 of the TFEU and, in particular, to identify the added value of this Evaluation Report compared to ‘normal’ evaluations carried out under the Financial Regulation (Article 27) and its implementing rules (Commission Regulation (EC, Euratom) No 2342/2002 (36), Article 21);

101. Fully supports the Commission’s intention to ‘work to ensure that there is increased coordination, exchange of information and coherence both within the Commission and with Member States on the programming, organisation and use of monitoring and evaluation in the next financial framework’ (37);

102. Welcomes the fact that the Court of Auditors is planning to make observations on the first Evaluation Report produced under Article 318 of the TFEU (38);

103. Reiterates its call for the Commission to review the briefing and training given to staff regarding ‘Title II: Rights and Obligations of officials’ of the Staff Regulations so as to ensure that all staff are fully conversant with its terms and particularly with the obligations under Article 22a of the Staff Regulations; requests that the Commission submit to Parliament’s competent committee by September 2012 a report on its activities in this field;

104. Requests that the Commission submit to Parliament’s competent committee by September 2012 a report on its activities to encourage whistle-blowing by the wider public;

Cohesion, energy and transport — adverse conclusion

105. Deplores the increase of the error rate to 7,7 % in the policy area ‘Cohesion, energy and transport’ despite an increased use of interruptions of payment deadlines; is deeply worried that some of the errors could have been detected and corrected for 58 % of the transactions affected by errors (Annual Report, point 4.25); is concerned that talk of a ‘stable’ situation regarding error rates betrays a growing sense of complacency;

106. Calls on the Court of Auditors to present error rates for the European Regional Development Fund, the Cohesion Fund, the European Social Fund, energy and transport separately and not on an aggregate basis;

107. Deplores the fact that, year after year, non-respect of public procurement rules accounts for a large proportion of the errors; sees the wider implications and considers this to be an indication that the functioning of the internal market is at stake; calls on the Commission to pursue the ongoing reform of public procurement taking due account of these worrying results and to follow up on infringements rigorously as the Court of Auditors has also identified cases of incorrect transposition of Union Directives into national public procurement law (Annual Report, point 4.27);

108. Reads with great concern that audit authorities are only partially effective; is deeply concerned about the fact that audit approaches of the audit authorities differ to such an extent that their results cannot be aggregated to reach an overall opinion by Fund at national level (Annual Report, point 4.41); invites the Commission to disclose how it consolidates the information received from audit authorities and how the Commission ensures consistency in order to provide reliable information to Parliament in its AARs;

109. Calls on the Court of Auditors, pursuant to the second subparagraph of Article 287(4) of the TFEU, to deliver an opinion on the independence of the national audit authorities with regard to shared management;

110. Asks the Commission to inform Parliament when it intends to rely on selected audit authorities in accordance with Article 73 of Council Regulation (EC) No 1083/2006 (39) and thereby reduce its own on-the-spot audits; invites the Court of Auditors to follow this development closely and to perform an audit on it;

111. Encourages the Court of Auditors to examine the possibility of responding to the ongoing problem of multiannuality of the implementation of funds and the annuality of the Court’s audits; stresses that during the implementation period the error rate tends to be higher than at the closure when the expenditure has undergone all levels of control;

Supervisory role of the Commission in the Cohesion policy area

112. Understands that the Commission has the option (but not the obligation) to sanction non-conforming Member States with different tools: Interruption Suspension Financial corrections accepted by Member States Financial corrections disagreed by Member States Effect Payment deadline is delayed for a maximum period of six months by the authorising officer Payment is suspended for an indefinite time by the College of Commissioners Member States are allowed to re-use the funds ‘released’ not resulting in a loss of funds for the Member State All or part of the Union contribution is cancelled (net reduction) Conditions Evidence suggests a significant deficiency in the management and control system Serious deficiency in the management and control system or expenditure declared is subject to a serious irregularity Member State accepts financial corrections stemming from audits of the Commission, the Court of Auditors or any other Union auditor Member State disagrees with financial corrections stemming from audits of the Commission, the Court of Auditors or any other Union auditor Legal basis (Regulation (EC) No 1083/2006) Article 91 Article 92 Article 98 Article 99

113. Welcomes the clarification brought by the Commission (40) regarding the distinction between ‘significant deficiency’ and ‘serious deficiency’; takes note that the assessment which leads to such qualification is based on the guidance note COCOF 08/0019/01-EN, using the key requirements provided therewith;

114. Deplores the fact that the Commission has no power to impose penalties on Member States or regions which have repeatedly failed to implement Structural Funds and the Cohesion Fund correctly;

Effectiveness of interruptions and suspensions

115. Recalls that Parliament has called for systematic activation of interruptions and suspensions independent from any political considerations (discharge resolution 2009 (41), points 194-196);

116. Notes that for 2010 the Commission has made more use of interruptions as DG REGIO has interrupted 49 payment deadlines (see AAR of DG REGIO, page 42-44) and DG EMPL has interrupted 14 payment deadlines (see AAR of DG EMPL, page 50); notes furthermore that the Commission did not suspend any payments either for the ERDF or for the Cohesion Fund in 2010, while suspending six payments of the ESF;

117. Deplores the fact that the error rate in Cohesion, and in particular in Regional Policy, has increased despite the increased use of interruptions and despite the fact that the Commission has identified the Member States and the regions which contribute most to the error rate; reminds the Commission of its action plan to strengthen the Commission’s supervisory role under shared management of structural actions (42); calls on the Commission to analyse the weaknesses in the Member States and regions affected most by high error rates and to comply with its supervisory role by enforcing measures as stated in the action plan;

118. Calls on the Commission to resume payments only if sufficient appropriate audit evidence gathered on the spot proves that weaknesses were remedied in order to make this power of sanction more effective and with a view to avoiding any risk that payments are resumed too quickly;

119. Notes that DG REGIO resumed 24 % (12 out of the 49 payments interrupted in 2010, all of which had been interrupted in October 2010 (43)) of the interrupted payments in December 2010; believes that resuming payments in December aggravates the imbalance of payments throughout the year which increases the risk of error in managing the payments and limits the time for the Court of Auditors to audit those payments; invites the Commission to inform Parliament for which of these 12 cases funding would have been lost according to the n + 2/n + 3 rule if payments had been resumed in 2011;

Effectiveness of financial corrections

120. Wishes to highlight the important difference between a financial correction implemented by a Member States which does not result in a net reduction and financial corrections implemented by the Commission by means of recovery orders which result in a net reduction; believes that financial corrections implemented by a Member State have a ‘virtual character’ with little sanctioning effect; welcomes the improvements made to Note 6 of the annual accounts of the European Union and invites the Commission to continue to improve the information provided, for example by comparing the financial corrections and recoveries to the corresponding amounts of payments;

121. Is deeply worried about the following facts: — financial corrections in 2010 resulted in a net reduction in only around 20 % of all cases (see annual accounts of the European Union, page 68) since projects identified as being ineligible may be replaced by other projects, possibly also ‘retrospective projects’ although they represent an increased risk in terms of legality and regularity and have no Union added value, — in most cases, financial corrections address weaknesses in Member States’ control systems and not individual projects, which means that the financial consequences of system weaknesses are usually borne by the national taxpayer who has already contributed to the Union budget, — the implementation rate of financial corrections for the 2000-2006 programming period has dropped from 62 % to 58 % (see annual accounts of the European Union, page 71), mainly as a result of low implementation rates in the ERDF and Cohesion Fund;

122. Is of the opinion that these facts seriously undermine the effectiveness of financial corrections; fears that the possibility of replacing ineligible expenditure puts pressure on Member States to present other, possibly retrospective projects, which could even lead to the adverse effect of increasing the risk in terms of legality and regularity to the Union budget;

Conclusions on the supervisory role of the Commission

123. Calls on the Commission, in particular DG REGIO, to make full use of existing sanctioning tools; is, however, of the opinion that the 2007-2013 legislative framework does not provide sufficient incentives for Member States to comply with the rules, nor does it provide the Commission with sufficiently effective tools to reward compliance or to sanction non-compliance;

124. Invites the Commission, therefore, to consider it a priority action to support Parliament in its efforts in the ordinary legislative procedure concerning the proposal for a regulation laying down common provisions on the structural instruments (COM(2011) 615 – 2011/0276(COD)) to create an effective sanctioning mechanisms so that the Commission can fully assume its final and overall responsibility for the implementation of the budget which should, inter alia, include the following elements: — making net reductions the rule for financial corrections imposed by the Commission and abolishing the possibility to declare retrospective projects, — obliging Member States to recover ineligible expenditure from final beneficiaries as far as possible so that final beneficiaries bear the consequences of ineligible expenditure and not the national taxpayer and forwarding to Parliament information on those recoveries by the Commission if possible, — allowing the Commission to give Member States incentives not only to comply with the rules but also to implement Cohesion policy effectively, efficiently and economically, — ensuring that a full range of sanctions (interruptions, suspensions, financial corrections, and penalties) are available for all funds with minimal scope for discretion when breaches of the rules are discovered, — allowing the Commission to impose penalties on Member States or to discontinue operational programmes in Member States or regions which have repeatedly failed to implement Structural Funds and the Cohesion Fund correctly, — bringing legal actions if Member States persistently fail to respect their obligations under Article 258 TFEU, — transmitting to the Commission all relevant data and information the Commission needs in exercising its supervisory role as regards the implementation of the funds by Member States;

Agriculture and natural resources — qualified conclusion

125. Welcomes the fact that direct payments covered by the Integrated Administrative and Control System (IACS) — which in 2010 accounted for 77 % of total expenditure under the CAP — were free from material error (Annual Report, point 3.55 and Commission’s reply to this point);

126. Welcomes the fact that the Commission has managed to keep the most likely error rate at 2,3 % (Annual Report, Annex 3.1) and encourages the Commission to continue the efforts to bring the error rate further down;

127. Recalls that IACS must ensure that correct and traceable payments are made to farmers; notes, however, that the effectiveness of IACS is adversely affected by inaccurate data in the databases, incomplete cross checks or incorrect or incomplete follow up of anomalies (Court of Auditors Annual Report, point 3.29); calls on the Commission to ensure that all databases are up to date and all anomalies are properly followed up;

128. Notes the Court of Auditors’ example of an eligibility error under the European Agricultural Guarantee Fund (EAGF) (44) in connection with a bartering arrangement using intervention stocks; further notes that the total amount borne by the Union budget for transporting the 9 894 tonnes of butter involved in the arrangement is approximately EUR 900 000 (45); is highly concerned about the sound financial management of those operations; invites the Commission to take the necessary measures to ensure that bartering arrangements if to be continued at all are transparent and cost effective;

129. Notes that rural development expenditure (approximately EUR 11 483 000 000 (46)) is particularly prone to error inasmuch as, out of 80 transactions sampled, 40 (50 %) were affected by errors and that 21 (52 %) of those transactions were affected by quantifiable errors (Annual Report, point 3.19);

130. Notes that the clearance of accounts procedure has proven generally effective in protecting the financial interests of the Union budget by excluding expenditure which has not been effected in compliance with Union rules;

131. Encourages the Commission to further reduce the duration of the conformity clearance procedure while ensuring that Member States’ right of defence is preserved; calls on the Commission to improve the link between the financial corrections imposed and the real amount of irregular payments; calls on the Member States to cooperate with the Commission by providing all necessary information in due time;

132. Welcomes the Court of Auditors’ findings in its Special Report No 8/2011 on ‘Recovery of undue payments made under the common agricultural policy’ that systems related to recoveries and financial corrections have improved in recent years; reiterates its belief that agricultural funds unduly paid have to be recovered from the final beneficiaries as much as possible to avoid the taxpayer being hit twice; invites the Commission to take further measures to eliminate the scope for interpretation and diverging practices by the Member States and to rigorously control Member States’ systems for recoveries;

133. Strongly believes that tripartite meetings between the Court of Auditors, the Commission and national authorities, should be extended to the policy area of agriculture and natural resources in order to facilitate a harmonised interpretation and application of the rules regarding the management and control of expenditure avoiding misunderstandings as much as possible;

External aid, development and enlargement — qualified conclusion

134. Notes the Court of Auditors’ conclusion that the supervisory and control systems for External aid, Development and Enlargement were only partially effective in ensuring the regularity of payments (Annual Report, point 5.36);

135. Notes that the overall most likely error estimated by the Court of Auditors is 1,7 % (Annual Report, point 5.13); regrets, however, that a material level of error was found in interim and final payments which according to Commissioner Andris Piebalgs is around 5 % (47) and would be even higher if budget support were excluded from the calculation; notes further that all quantifiable errors were found in the interim and final payments (Annual Report, point 5.13); deplores the fact that two thirds of the errors found in final payments had not been detected by Commission controls (Annual Report, point 5.16);

136. Believes that the overall most likely error rate is below the materiality threshold of 2 % due to the proportion of pre-financings and budget support within total operational expenditure; notes that this proportion has increased from 66 % in the financial year 2008 to 75 % in the financial year 2010 (48);

137. Recalls that pre-financings have a different risk profile which does not materialise in the statement of assurance audit; believes that it is more efficient to prevent irregularities than to correct undue payment ex-post through recoveries;

138. Recalls that the main risks linked to budget support (risk to effectiveness of the aid as well as risks of fraud and corruption) also do not materialise in the statement of assurance audit; invites the Commission to rigorously monitor those risks; however, considers sectoral budget support an effective measure for long-term capacity building; calls on the Commission to introduce budget support only under rigorous and well-defined conditions;

139. Welcomes the Court of Auditors’ statement that ‘EuropeAid has set up a comprehensive control strategy and continued to bring significant improvements to the design and implementation of its supervisory and control systems.’ (Annual Report, Annex 5.3);

140. Notes that the Court of Auditors considers that ‘the Director-General’s declaration and annual activity report only give a partially fair assessment of financial management in relation to regularity for the EDFs and the General Budget of the European Union’ (Annual Report, point 5.34, emphasis added);

141. Invites the Commission to encourage EuropeAid to complete as soon as possible the work on a methodology to calculate the level of ‘residual error’ which might remain after all controls have been executed and to share the results with the other external relations Directorates-General in view of achieving the necessary improvement of the Commission’s management representations for external aid, development and enlargement;

142. Calls on the Commission to allow a Deputy Head of Delegation, usually coming from a Member State, where one exists, to deputise for the Head of Delegation in his absence for all matters except the implementation of operational expenditure managed by the Union Delegation, which can only be sub-delegated to Commission staff;

143. Notes the Court of Auditors’ observations presented in example 5.3 of the Annual Report; is highly concerned about the ‘flexible interpretation of eligibility for co-financed actions’ or ‘notional approach’ with United Nations organisations which bears the risk of double financing of the same cost; believes that this also has a reducing effect on the Court of Auditors’ error rate; is also deeply worried about the ‘extended eligibility criteria’ applicable under the Financial and Administrative Framework Agreement with the United Nations Agencies (FAFA) and the Framework Partnership Agreements with the Commission’s implementing partners which also bear the risk of financing the same cost twice; calls strongly on the Commission to discontinue both practices; expects UN agencies to grant intergovernmental donor organisations similar rights to access internal audit reports as are granted to UN Member States; notes in this context that further progress is needed in order to improve reporting on the use of Union funds by providing information about results rather than actions;

144. Welcomes the revised mandate, granted by the Commission, providing budgetary guarantee to the EIB covering risks against losses under loans and guarantees for projects outside the Union; underlines the fact that the Union guarantee provided to the EIB falls undoubtedly under the scrutiny of the Court of Auditors;

145. Notes that the information on contracts awarded by EuropeAid (49) and DG ECHO (50) is not following the same template; encourages the Commission to implement a common template for the databases containing the contracts awarded by these two DGs, where the minimum information provided should be: contract number/reference, title of the contract, theme/sector of intervention, contractor’s name and nationality, country of intervention, amount, type of the contract and the duration (providing both the beginning date and the end date);

146. Calls for a detailed report from the Commission on the total cost of advertising for EU enlargement (spots in cinemas, on television, the internet and other media), a breakdown of costs by the individual media and the countries in which the spots appeared, and detailed information on the implementing companies, from production to broadcasting; also expects a report on all other advertising activities of the Commission concerned with enlargement, together with a correspondingly detailed report and breakdown of costs;

Union’s aid to Haiti

147. Recalls the earthquake in Haiti and its disastrous consequences; regrets the insufficient level of coordination of humanitarian aid and development aid (linking relief, rehabilitation and development); takes the view that provision of humanitarian aid should be based on an exit strategy; considers that the Commission should direct its efforts and funding to rehabilitation and development;

148. Regrets the insufficient coordination between the Union Delegation and the ECHO representation; supports a reinforced coordination between all Union actors in the country; therefore urges the Commission to ensure better coherence and complementarity between humanitarian aid and development aid, both at a policy level and in practice;

149. Deplores the lack of sustainability of some projects and stresses that projects should principally aim at creating employment and sustainable growth which would allow the Haitian State to increase its own revenues in order to depend less on foreign assistance; therefore requests the Commission to provide Parliament with a list of projects which have been carried out during the last 15 years in Haiti with a detailed assessment of their current situation in order to see how sustainable they are since;

150. Points to the lack of visibility of the Union aid in Haiti; takes the view that, in order to enhance visibility, not only the flag but also the name of the European Union should appear in PR documents rather than simply that of the Commission or of DG ECHO, which are much less identifiable to average Haitian citizens;

Research and other internal policies — qualified conclusion

151. Notes the Court of Auditors’ conclusion that the supervisory and control systems for Research and other Internal Policies were only partially effective in ensuring the regularity of payments (Annual Report, point 6.49);

152. Notes as a specific characteristic of this policy group that most of the operational expenditure (72 %, Annual Report, Table 6.1) is implemented by way of pre-financing — which only requires compliance with a limited number of conditions as opposed to interim and final payments — and that this specificity has a positive influence on the overall error rate;

153. Is worried, in particular, about the level of pre-financings in the lifelong learning programme which allows for pre-financings of up to 100 % of the budgeted project cost (Annual Report, point 6.9) and for which 93 % of all payments made in 2010 were pre-financings (Annual Report, Table 6.1);

154. Notes that a material level of error was found in interim and final payments to beneficiaries and that the most likely error estimated by the Court of Auditors is 1,4 % (Annual Report, point 6.12) due to the influence of pre-financing; further notes that the Court of Auditors does not publish a specific error rate for interim and final payments;

155. Understands that the Commission (51) estimates the representative error rate without pre-financings on a multiannual basis to be 3,4 % for Framework Programme 6 and the provisional representative error rate for Framework Programme 7 to be a little above 4 % on a multiannual basis; understands further that the residual error rate on a multiannual basis, which is the level of error remaining after the corrections and recoveries by the Commission services following their audits have been made, amounts to around 2,4 % for Framework Programme 6 while for Framework Programme 7 the Commission has not yet had enough time to see the full effects of recoveries and corrections on a multiannual basis;

156. Underlines the important role of the Risk-Sharing Finance Facility in the light of the current financial crisis; calls on the Commission to increase the support granted by the facility to universities and research organisations for their investments in PPP and research infrastructure projects of European interest with regards to the fulfilment of the smart public policy objectives of Europe 2020;

157. Notes that the Commission is simplifying ex ante control procedures as far as possible with a view to facilitate the processing of payments with the consequence that only administrative requirements and arithmetical checks can be made; is worried that even in the case of doubt about the eligibility of cost declared, only limited ex ante checks were carried out (Annual Report, point 6.17 and example 6.2); insists that action be taken to remedy this situation;

158. Believes that a balance has to be struck between facilitating payments and controlling the eligibility of cost declared; calls on the Commission to modify its ex ante control strategy and to apply a risk-based approach to address better specific risks of the cost statement and — in the case of a high risk — to extend the ex-ante control procedures to checks carried out on the spot;

159. Is deeply worried that audit certificates still continue to be only partially effective (Annual Report, point 6.22); recalls that audit certificates are one of the most important elements of the Commission’s ex-ante control; calls on the Commission to make it common practice to formally communicate with the external auditors by providing feedback and requesting explanations in cases of unreliable audit certificates;

160. Welcomes the fact that the Commission’s ex-post audit strategy is judged to be effective in detecting and correcting errors (Annual Report, point 6.30); welcomes, moreover, the fact that the Commission’s procedures to recover the funds unduly spent are adequate and that the Commission has made more use of the corrective measures such as early termination of the contracts and penalties;

161. Is deeply worried that the calculation of the residual error rate is based on assumptions which do not always hold true in reality such as the ‘extrapolation’ of errors found in one cost statement to other cost statements of the same beneficiary; shares the Court of Auditors’ view that limited reliance can be placed on the residual error rate (Annual Report, point 6.32); believes that this also calls into question the reliability of reservations made by the Director-Generals, as one of the main indicators used for deciding whether to make a reservation is the residual error rate;

Views from specific policy perspectives

Views from a Development Policy perspective

162. Takes the view that the ongoing budgetary and economic crisis which many Member States are facing requires the Union, more than ever, to maximise the efficiency and impact of its aid; against this backdrop, is concerned that the Court of Auditors found in its Annual Report on the implementation of the 2010 budget that in 2010 the Commission’s supervisory and control systems for external aid and development were again only partially effective in ensuring the regularity of payments and that two-thirds of the quantifiable errors were found in final payments and that those errors had not been detected by Commission controls;

163. Acknowledges, none the less, the Commission’s ongoing efforts to improve the design and implementation of its supervisory and control systems and to raise the quality of data entered in the CRIS management information system; welcomes the fact that, overall, payments for external aid and development in 2010 were free from material error, with a lower estimated error rate than in 2009; encourages the Commission to develop a coherent methodology for the external relations’ directorates to calculate the residual error rate, to further improve its external audit framework and to uphold the highest control standards possible;

164. Encourages the Commission, in particular, to improve the quality of the ex-ante control, monitoring and reporting, supervision and risk-based audit functions of Union Delegations, where most of the errors were detected, to strengthen the capacity of the Delegations’ operational and financial sections, to increase the resources available to Delegations for key monitoring activities and to systematise the monitoring framework, which includes introducing multiannual monitoring and evaluation plans and strengthening monitoring guidance;

165. Calls on the Commission to find workable solutions to the organisational challenges caused by the merger of DG DEV and DG AIDCO at the end of 2010; urges the Commission and the EEAS, which was launched in December 2010, to finalise without delay working arrangements clarifying their respective roles and responsibilities in the programming and implementation cycle of external assistance, which includes the Delegations;

166. Takes the view that the new financing instruments under the next Multiannual Financial Framework 2014-2020 must fully reflect Parliament’s enhanced legislative and scrutiny rights under the Lisbon Treaty, and that Parliament must be involved in the programming process on an equal footing with the Council;

167. Encourages the Commission to further improve the effectiveness of Union aid to the basic education sector in Sub-Saharan Africa and South Asia (52), in particular by establishing realistic indicators and targets to monitor results effectively, by ensuring that Delegations assign staff with sufficient expertise and seniority to maintain sector policy dialogue with partner governments and other donors, and by focusing more on the quality of education and the capacity of beneficiary governments to cope with increases in school enrolment;

168. Is dismayed by the large-scale fraud cases uncovered in late 2010 by the Global Fund to Fight AIDS, Tuberculosis and Malaria in Mali, Mauritania, Djibouti and Zambia, and is worried about the potential misappropriation of substantial sums of money, such as from the EU 2010 contribution to the Global Fund; encourages the Commission to work more closely with the Global Fund to support and to monitor its country-level interventions in order to avoid the recurrence of such corruption cases and to improve the Global Fund’s accountability and effectiveness;

169. Reiterates its call for the greater involvement of parliaments and consultation with civil society and local authorities in partner countries when drawing up and reviewing Development Cooperation Instrument (DCI) Country Strategy Papers and Multiannual Indicative Programmes;

Views from an Employment and Social Affairs Policy perspective

170. Notes that employment and social affairs account for 18 % of expenditure on the Union’s Cohesion Policy, with a vast majority of expenditure in this policy area (94 %) funded from the European Social Fund (ESF);

171. Welcomes, therefore, the fact that, in the context of the resources allocated to the European Social Fund (ESF), the utilisation rate for commitment appropriations was 100 % (EUR 10,8 billion) and for payment appropriations 87,9 % (EUR 7,1 billion); recognises that the lower rate for payment appropriations arose because some commitments were not made until the last quarter of the year; acknowledges the Commission’s efforts to improve financial management;

172. Takes note of the estimation by the Court of Auditors that the error rate in 2010 stood at 7,7 % with regard to spending in the fields of cohesion, energy and transport; is surprised at the Court of Auditors’ observation that Union directives were not properly transposed into national public procurement legislation; expects therefore the Commission to improve its supervision of transposition into national law and audit the admissibility of projects that receive funding; considers public procurement applies less to the ESF;

173. Acknowledges the Commission’s efforts to ensure, by means of bilateral and multilateral training exercises that the Member States provide the beneficiaries and the implementing bodies on a continuous basis with training, information, advice and guidance with a view to reducing the error rate of payments; regrets that the Member States are apparently unable to do so on their own;

174. Renews its call for the Member States to be required to report on the implementation of the funding instruments, and supports the Court of Auditors’ call for regular scrutiny by the Commission of the use of the ESF;

175. Recalls that the proper usage of funds by Member States must be ensured and that payment interruptions and suspensions are effective tools for doing so;

176. Is concerned about the large number of errors detected by the Court of Auditors in relation to financial engineering instruments;

177. Regrets that the recommendations of the Court of Auditors on the contribution of the ESF to combating early school leaving have as yet been only partially implemented by the Commission;

178. Recalls that it is for the Directorate-General for Employment, Social Affairs and Inclusion, which administers the funds, to adopt appropriate measures to prevent fraud and corruption; welcomes the close cooperation with the European Anti-Fraud Office (OLAF); calls for assurances that national judicial authorities will also continue to investigate and punish instances of fraud in the ESF;

179. Welcomes the Commission’s efforts to secure comprehensive accountability from all Member States by means of annual inspection reports from auditing bodies and annual summary reports, and considers that the Commission should extend its auditing to include a communication to Parliament on the added value of Union funding;

180. Underlines the specific needs of target groups and project leaders in the ESF; suggests that the co-financing of projects should also include voluntary activities in non-profit-making organisations and contributions in kind; calls on project leaders to furnish an updated survey by Member State and by project on the administrative costs of the ESF;

181. Highlights the fact that the Globalisation Fund has financed 21 projects so far with a total of EUR 105 million, while appropriations of up to EUR 500 million can be mobilised through transfers; welcomes the growing trend amongst Member States to develop and submit appropriate projects in this context; encourages the Commission to support Member States effectively in developing and submitting projects to the Globalisation Fund in order to help workers to find new jobs and to develop new skills when they have lost their jobs as a result of changing global trade patterns or the global financial and economic crisis;

182. Calls on the Court of Auditors to audit the other budget headings in the area of social and employment policy as well, and to determine why full use is not being made of the resources available;

183. Calls on the Court of Auditors to present