7. 9. 79 Official  Journal  of the  European  Communities No C 225/3 
II 
(Prepa  ratory  A cts) 
COURT  OF AUDITORS 
Opinion  of the  Court  of Auditors  on  the  draft  Council  Regulation  (ECSC,  EEC, 
Euratom)  amending  the  Financial  Regulation  of 21 December  1977  applicable  to the 
general  budget  of the  European  Communities 
THE  COURT  OF AUDITORS  OF THE  EUROPEAN 
COMMUNITIES, 
Having  regard  to  the  draft  Council  Regulation 
(ECSC,  EEC,  Euratom)  amending  the Financial  Regu-
lation  of 21 December  1977  applicable  to the  general 
budget  of the  European  Communities,  as contained  in 
document  COM(79)  202  final  of 23 April  1979, 
Having  regard  to the  letter  of the  Secretary-General 
of the  Council  of 4 May  1979  forwarding  to the 
Court  the  abovementioned  text  and  containing  the 
request  of the Council  for consultation, 
Having  regard  to  Article  78  (h)  of  the  Treaty 
establishing  the  European  Coal  and  Steel 
Community,  Article  209  of the Treaty  establishing  the 
European  Economic  Community  and  Article  183  of 
the Treaty  establishing  the  European  Atomic  Energy 
Community, 
Having  regard  to the  opinion  delivered  by the  Court 
on 27 July  1978  on a Commission  proposal  to amend 
in particular  Article  6 (3) of the  Financial  Regulation 
relating  to non-automatic  carry-overs, 
Whereas  the  text  proposed  to the  Council  by  the 
Commission  is mainly  designed  to adjust  the  time 
limits  for  the  rendering  and  auditing  of accounts  by 
extending  by two  months  the date  for  drawing  up the 
revenue  and  expenditure  account  and  by one  month 
the date  for  transmitting  the  observations  of the 
Court  to the institutions; Whereas  the  following  are  not  amended  by this  text: 
neither  the  date  on which  the  institutions  send  their 
replies  to the  Court,  nor  the  date  on which  the  Court 
forwards  its  annual  report  to  the  authorities 
responsible  for discharge  and  to the other  institutions; 
Whereas  the  changes  of date  proposed  are  obtained 
by reducing  the  supplementary  period  during  which 
the expenditure  chargeable  to the  EAGGF  Guarantee 
Section  may  be  entered  into  the  accounts  as 
commitments  and  payments; 
Whereas  this  reduction  entails  considerable 
amendments  to Title  VIII  of the  Financial  Regulation 
containing  the  special  provisions  applicable  to the 
EAGGF  Guarantee  Section  by  reference  to Regu-
lation  (EEC)  No  729/70  relating  to the  financing  of 
the common  policy; 
Whereas,  in particular: 
1. the  advantage  of this  adjustment  of the  time 
limits  for  rendering  and  auditing  the  accounts  should 
be considered  in the  light  of the  principal  objective, 
which  consists  in drawing  up the  budgetary  accounts 
of the  Community  on the  basis  of the  most  precise 
and the  most  up-to-date  information,  so that  the 
revenue  and  expenditure  account  and  the  annual 
report  of the  Court  of Auditors  may  be submitted 
within  a suitable  time  limit  to the  budgetary  authority 
and to the discharge  authority; 
2. the  advantage  of this  adjustment  should  be 
considered  in the  light  of the  time  available,  after  the 
drawing  up of the  revenue  and  expenditure  account, 
firstly  to the  Court  to draft  its observations,  secondly 
to the  Commission  and  the  other  institutions  to reply, 
and thirdly  to the  Court  to forward  the  final  text  of 
its annual  report  by 30 November  at the latest; 
No C 225/4 Official  Journal  of the  European  Communities 7. 9. 79 
3. this  objective  can  only  be achieved  if the  new 
provisions  applicable  to the budgetary  implementation 
of the  expenditure  of the  EAGGF  Guarantee  Section 
allow  the  audit  of the  Court  to be  carried  out 
normally  on the  basis  of the  figures  contained  in the 
revenue  and  expenditure  account; 
4. this  is not  the  case  with  the  Commission 
proposal  in so far as: 
— the  expenditure  corresponding  to November  and 
December  would  be entered  in the  revenue  and 
expenditure  account  as estimated  commitments 
and would  give  rise  to automatic  carry-overs 
which  could  be  effected  until  30  June  of the 
following  year, 
— the  statements  of the  Member  States  relating  to 
the corrections  at the  close  of the  financial  year 
laid down  by  Regulation  (EEC)  No  380/78  as 
20 January  for  all  of  the  expenditure  and 
20 February  for  the  intervention  expenditure  on 
public  storage  of  stocks  (category  II 
'Expenditure')  would  themselves  only  be entered 
into the accounts  as estimates, 
— the  appropriations  themselves  could  still  be 
transferred  from  one  chapter  to another  and  from 
one article  to another  within  the  framework  of the 
following  financial  year  until  30 June  thereof; 
5. the  adjustments  at the close  of the  financial  year 
could  include,  for  example*  some  450  million  EUA  in 
1978,  (decision  taken  on 9 April  1979)  taking  into 
account  the  budgetary  effect  of the  depreciation  of 
the stocks  by application  of Regulation  (EEC)  No 
1883/78  and  that  disparities  of the  same  magnitude 
would  not  fail  to recur  in future  years; 
6. a  result  of the  proposal  would  be that  the  final 
figures  concerning  the  determination  and  utilization 
of the  appropriations  available  in a given  financial 
year  would  not  be contained  in the  revenue  and 
expenditure  account  relating  to that  financial  year 
and that  in consequence  the  Court's  audit  of the 
expenditure  of the  EAGGF  Guarantee  Section  could 
not be carried  out  on a valid  basis  within  the  new 
time  limit  prescribed, 
IS OF THE  OPINION: 
(a) that  the  objective  of  harmonizing  the  rules 
governing  the  budgetary  management  of  the 
EAGGF  Guarantee  Section  with  those  applicable 
to the  general  budget  is only  of advantage  in so 
far as  it  results  in  an  improvement  in 
management,  the  rendering  of the  accounts  and 
thus  in the  audit  of this  sector,  which  represents 
almost  three-quarters  of budgetary  expenditure; (b) that  in this  respect,  the  reduction  to 31 January 
of the  special  supplementary  period  which  at 
present  runs  until  31 March  entails  more  disad-
vantages  than  advantages  seeing  that  the 
provisions  of  Regulation  (EEC)  No  380/78 
setting  20  February  for  the  statements  of 
expenditure  by  the  Member  States  remain 
unaltered.  These  statements  could  therefore  only 
be entered  in  the  revenue  and  expenditure 
account  as estimates  although  they  are  normally 
entered  within  the  framework  of the  present  sup-
plementary  period  until  31 March  and  could  a 
fortiori  be  entered  at any  subsequent  date; 
(c) that  the  new  liberty  accorded  the  Commission  by 
the proposal,  to effect  transfers  from  one  chapter 
to another  within  the  Guarantee  Section  by 
following  the procedure  under  Article  13 of Regu-
lation  (EEC)  No  729/70,  and  within  a longer 
period  than  the  current  supplementary  period, 
constitutes  in itself  a significant  relaxation  of the 
budgetary  rules  in favour  of the  administrator  of 
the appropriations; 
(d) that  on the  other  hand  it is essential  that  these 
transfers  be made  within  the  framework  of the 
financial  year  rather  than  of the  following  year, 
so that  they  may  be included  in the  revenue  and 
expenditure  account  in their  final  form  and  thus 
enable  the  audit  to be carried  out  under  normal 
conditions,  for  the  sake  of improved  budgetary 
clarity; 
(e) that  this  result  may  be obtained  by extending  the 
supplementary  period  of the  EAGGF  Guarantee 
Section  from  31  March  to  30  April,  while 
bringing  forward  to 1 May  the  date  for  the 
drawing  up  of  the  revenue  and  expenditure 
account,  at present  1 June; 
(f) that  it would  consequently  be possible  to extend 
by two  weeks  the  time  available  to the  Court  to 
draw  up  its  observations  on  the  revenue  and 
expenditure  account  and  by two  weeks  the  time 
for the  finalization  of the  annual  report  without 
causing  a reduction  in the  time  available  to the 
institutions  for their  replies; 
Recalls  its previous  opinion  according  to which  the 
time  limits  laid  down  in Article  6 (3)  for  the  non-
automatic  carry-overs  of  appropriations  should 
continue  to accord  with  the  date  of drawing  up the 
revenue  and  expenditure  account,  so that  no decision 
to carry  over,  whether  implicit  or not,  could  be made 
after  this  date; 
Recalls  its previous  observations  to the  effect  that  the 
time  limit  of one  year  for  final  clearance  of accounts 
laid down  by  Regulations  (EEC)  No  729/70  and 
(EEC)  No  249/77  should  accord  with  the  date  pre-
scribed  by the  Financial  Regulation  for  the,budgetary 
7. 9. 79 Official  Journal  of the  European  Communities No C 225/5 
authority  to give  discharge  to the  Commission  (30 
April  of the  second  year  following  the financial  year 
concerned); 
Considers  that  the  budgetary  consequences  of final 
clearance  of accounts,  charged  as over-  or under-
expenditure  to  the  financial  year  in which  the 
accounts  were  cleared,  should  be shown  separately  in 
the revenue  and  expenditure  account,  while 
respecting  the  specificity  of expenditure,  and  should 
therefore  be allocated  under  a specific  article  of each 
chapter; 
consequently  proposes  that  the  text  of the  Financial 
Regulation  be amended  as follows: 
Article  6 (3): 
'3. In  the  case  of the  appropriations  referred  to 
in paragraph  1 (b),  the  Commission  shall  submit 
to the Council  and  shall  forward  to the European 
Parliament,  not  later  than  21 March,  the  requests 
to carry  over  appropriations,  duly  substantiated, 
made  by the  European  Parliament,  the  Council, 
the Court  of Justice,  the  Court  of Auditors  and 
the Commission  itself. 
On receipt  of the  request  to carry  over  appro-
priations,  the  Council  shall  consult  the  European 
Parliament  which  shall  deliver  its opinion  in good 
time,  i.e. within  a time  limit  which  normally  may 
not exceed  four  weeks  from  the date  upon  which 
the request  of the  Council  for  an opinion  was 
received. 
Unless  the Council,  acting  by a qualified  majority, 
decides  otherwise  by 30 April  at the  latest,  the 
carry-over  of these  appropriations  shall  be deemed 
to have  been  approved.' 
Article  73: 
'The  Commission  shall  draw  up,  not  later  than 
1 May  of the following  year  . . 
Article  74: 
'Each  institution  shall,  not  later  than  15  March, 
forward  to the Commission  the information  . . .' 
Article  77: 
'The  Commission  shall  forward  the  revenue  and 
expenditure  account,  the financial  analysis  and  the 
balance  sheet  to the  European  Parliament,  the 
Council  and  the  Court  of Auditors  by 1 May  at 
the latest  . . .' 
Article  83 (J): 
'I. The  Court  of Auditors  shall  transmit  to the 
Commission  and  the  institutions  concerned,  by 
/ July  at the  latest,  any  comments  . . . Each institution  shall  address  its reply  to the  Court  of 
Auditors  by 15 Octobers  the  latest.' 
Article  97 (new): 
'1. Expenditure  shall  be taken  into  account  for 
a financial  year  on the basis  of payments  made  up 
to 31 December  by the  authorities  and  bodies 
referred  to in Article  4 of Regulation  (EEC)  No 
729/70,  provided  that  their  commitment  and  auth-
orization  have  reached  the  accounting  officer  not 
later  than  30 April  of the following  year. 
2. Expenditure  effected  by  authorities  and 
bodies  under  Article  4 of Regulation  (EEC)  No 
729/70  shall  be the  subject  of a commitment  by 
chapter,  article  and  item,  and  shall  also  be 
charged  as a payment,  after  examination  of the 
statements  forwarded  by the  Member  States  in 
accordance  with  the  provisions  laid  down 
pursuant  to Article  5 (3) of the  said  Regulation, 
and after  the approval  of the financial  controller. 
The commitment  shall  be entered  into  within  two 
months  following  receipt  of  the  statements 
forwarded  by the Member  States.  The  charging  as 
a payment  shall,  in general,  be carried  out  within 
the same  period,  subject  to subsequent  provisions 
herein.' 
Article  98 (new): 
'The  commitments  provided  for  in Article  97 shall 
be deducted  from  the  provisional  global 
commitments  referred  to in Article  96.' 
Article  99 (new): 
'1. Appropriations  which  have  not  been 
committed  or  charged  as payments  before  30 
April  of the  following  financial  year  shall  be 
cancelled  in the  accounts  of the  original  financial 
year. 
2. A  provisional  global  amount  corresponding 
to the  appropriations  cancelled  pursuant  to 
paragraph  I shall  be committed  from  the  appro-
priations  for the current  financial  year.' 
Article  100  (new): 
'1. Articles  97  and  98  shall  apply  without 
prejudice  to the  clearance  of accounts  provided 
for in Article  5 (2) (b) of Regulation  (EEC)  No 
729/70. 
2. Any  difference  which  may  exist  between  the 
total  expenditure  charged  to the  accounts  of a 
financial  year  pursuant  to Articles  97 and  98 and 
the total  expenditure  established  by  the 
Commission  when  clearing  the  accounts  as 
provided  for  in Article  5 (2) (b)  of Regulation 
(EEC)  No  729/70  shall  be charged  under  a specific 
article  of  each  chapter  as  under-  or  over-
No C 225/6 Official  Journal  of the  European  Communities 7. 9. 79 
expenditure  to the financial  year  during  which  the 
accounts  are cleared.' 
Article  101  (new): 
'1 Appropriations  made  available  in  one 
chapter  of expenditure  may  not  be allocated  to 
another  chapter  of expenditure. 
2. Transfers  between  chapters  and  transfers 
within  a chapter  shall  be made  by decision  of the 
Commission,  taken  not  later  than  30  April,  in 
accordance  with  the  procedure  provided  for  in 
Article  13 of Regulation  (EEC)  No  729/70.' 
Article  102  (new): 
'Every  food-aid  programme  shall  as soon  as 
possible  be made  the  subject  of a proposal  for 
commitment  in accordance  with  the  procedure 
laid down  in Articles  32 to 35. The advances  paid  to Member  States  shall  be 
entered  globally  against  the  abovementioned 
commitments;  the  sum  set  aside  for  the 
commitments  may  not  be exceeded. 
Articles  97 (1) and  (2),  100  and  101  shall  apply  as 
regards  entry  as payment  of expenditure  effected 
by the  Member  States  using  the  funds  advanced 
by the  Commission  and  as regards  the  clearance 
of accounts.' 
Adopted  on 19 July  1979. 
Michael  N. MURPHY 
President 
7. 9. 79 Official  Journal  of the  European  Communities No C 225/7 
ANNEX 
Comparison  of the Financial  Regulation  of 21 December  1977 
with  alternative  proposals 
Supplementary  period 
(general_rule)  _ 
Corrected  statements 
from  the Member  States 
(2ndcategorx) 
Supplemental^  period^ 
Revenue  and 
^penditiKeaccount 
Observations +++++++ 
of the Court 
Replies 
Annua^  report 
In^lementation_o£ 
automaticJ?arry;Overs_ 
guarantee)_ Financial 
Regulation 
15.1 
20.2 
31.3 (') 
1.6: 
lVa 
15.7 + + + + + + + -
3V2 
31.10. 
30.11-
31.12 (3) Commission 
proposal 
15.1 
31.1 
1.4: 
2V2 
15.6 + + + + + + 
30.6i'U2LJl,t 
4Va 
31.10. 
30.11 4 Draft 
opinion 
15.1 
30.4 
1.5 
1.7 + + + + + + + 4*!1 
3 V2 
15.10 
lVa 
30.11 
(') Limit  of the transfers. 
(2) Limit  of the implementation  of automatic  carry-overs  (appropriations  committed  globally). 
(3) Limit  of the implementation  of automatic  carry-overs  (appropriations  committed  in detail). 
(4) The  additional  period  to 30 April  makes  any automatic  carry-over  futile.