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DECISION OF THE EUROPEAN PARLIAMENT

of 7 April 1987

granting a discharge to the Commission in respect of the financial management of the fifth European Development Fund in the financial year 1985

(87/283/EEC)

THE EUROPEAN PARLIAMENT,

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

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

- having regard to the balance sheets and revenue and expenditure accounts of the third, fourth and fifth European Development Funds for the financial year 1985 (2),

- having regard to the report of the Court of Auditors concerning the financial year 1985, accompanied by the replies of the Institutions (3),

- having regard to the Council recommendation concerning the granting of this discharge (Doc. C 2-13/87),

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

- having regard to the report of the Committee on Budgetary Control and the opinion of the Committee on Development and Cooperation (Doc. A 2-9/87),

1. Hereby grants a discharge to the Commission in respect of the financial management of the fifth European Development Fund in the financial year 1985 on the basis of the following amounts:

1.2 // Revenue: // 697 304 353,78 ECU, // Payments: // 586 293 595,07 ECU;

2. Presents its comments in the resolution accompanying this Decision;

3. Instructs its President to forward this Decision and the resolution containing its comments to the Commission, the Council, the Court of Auditors and the European Investment Bank, and to arrange for their publication in the Official Journal of the European Communities (L series).

Done at Strasbourg, 7 April 1987.

The President

Sir Henry PLUMB

(1) OJ No L 347, 22. 12. 1980.

(2) COM(86) 177 final.

(3) OJ No C 321, 15. 12. 1986.

RESOLUTION

containing the comments accompanying the Decisions granting a discharge in respect of the financial management of the third, fourth and fifth European Development Funds in the financial year 1985

THE EUROPEAN PARLIAMENT,

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

- having regard to Articles 67 and 70 respectively of the financial regulations applicable to the fourth and fifth European Development Funds, under the terms of which the Commission is required to adopt all appropriate measures to act on the comments accompanying the discharge decision,

- noting that these same Articles also require the Commission to report, at the request of the European Parliament, on the measures it has adopted in response to Parliament's comments and, in particular, on the instructions it has given to the services responsible for the management of the European Development Funds,

- deciding to present the comments specified in the abovementioned Articles 67 and 70 in this resolution, which covers all the discharge decisions relating to the financial management of the European Development Funds for the financial year 1985,

- also adopting this resolution in pursuance of those powers without which it cannot accomplish its task of exercising control with a view to mitigating the deficiencies perceived during its work on the discharge and ensuring that the European Development Funds (EDF) are better managed,

- having regard to the report of the Committee on Budgetary Control and the opinion of the Committee on Development and Cooperation (Doc. A 2-9/87),

Third EDF

1. Notes that the Commission took financing decisions under the third EDF in 1985, thereby delaying its closure;

2. Notes that on 10 September 1986 the Commission decided to transfer the balance of the third EDF (+ 15,95 million ECU) to the fifth EDF;

Fourth EDF

3. Calls on the Commission to act on the comments of the Court of Auditors and submit proposals for the allocation of certain unused resources of the fourth EDF;

Rate of utilization

4. Notes that Parliament has not received a report from the Commission containing a satisfactory analysis of the poor utilization rate for EDF resources in relation to the rates achieved by the main international development aid organizations, as requested in the 1983 discharge resolution;

5. Notes that, at 31 December 1985, 76,6 % of programmable aid under the fifth EDF had been committed (as against 64,8 % in 1984), while the payments rate stood at 34,7 % (as against 22,1 % in 1984);

Accounting procedures

6. Calls on the Commission to act on the comments in the Court of Auditors' 1985 report and in previous annual reports on the excessive level of its calls for contributions from the Member States, the late payment of those contributions by certain Member States and its inadequate accounting records concerning EDF bank balances;

7. Notes that, as the Commission points out in its comments on the Court of Auditors' report, staffing levels in the Directorate-General for Development need to be increased; draws attention in this context to its resolution of 16 April 1985 forming part of the 1983 discharge decision;

Role of the ACP States in defining aid

8. Calls on the Commission to comply with Articles 110 and 153 of the Second Convention of Lomé (fifth EDF) and to make sufficient allowance for the constraints imposed on the recipient States, notably as regards the joint financing and maintenance of projects and foreign currency payments;

9. Notes that the constraints mentioned in paragraph 8 - and even the problem of foreign exchange shortages - can be more fully taken into account under the Third Convention of Lomé;

10. Criticizes the failure to observe the principle of the complementarity of Community and national efforts, as noted by the Court of Auditors in the case of some projects;

Arbitration procedures for disputes

11. Hopes that the Commission will fulfil the undertakings given in the replies to the Court of Auditor's report on the 1985 discharge and that it will bring into operation a computerized system to record the main disputes over the execution of public works contracts brought before national administrative and judicial bodies, bearing in mind that such disputes often have financial consequences for the EDF; Ex post facto evaluation

12. Reiterates its request to the Commission to carry out more exhaustive ex post facto evaluations, and criticizes the absence of a data base encompassing financial data on financial and technical cooperation under the EDF and the experience gained during the execution of projects and the ex post facto evaluation process, as requested by Parliament in its resolution on the 1983 discharge;

European Investment Bank

13. Reiterates its request to the Commission and the European Investment Bank regularly to provide the Court of Auditors with sufficient information on projects receiving Community development aid and managed by the Bank, in accordance with the principles established by Parliament's resolution of 22 October 1985 (1);

14. Strongly criticizes the Commission's negative reaction to an analysis by the Court of Auditors of the EIB's revenue and expenditure in the development field, as requested by Parliament in its resolution of 22 October 1985 in the light of the extent of the audit powers conferred on the Court by the Treaty which created it;

15. Calls for an opinion from Pariament's legal services on the extent of the Court of Auditors' powers in relation to the funds managed by the European Investment Bank, which might serve as a basis for possible legal action before the Court of Justice of the European Communities;

Budgetization of the EDF

16. Reaffirms its determination to take whatever action it can, including legal action, to secure the budgetization of the EDF between now and 1990/91, as recommended by the Commission for the seventh EDF in its report to the Council and the European Parliament on the financing of the Community budget (2).

(1) OJ No C 343, 31. 12. 1985, p. 27.

(2) COM(87) 101 final.