Resolution of the European Parliament

of 5 May 2010

with observations forming an integral part of its Decision on discharge in respect of the implementation of the budget of the European Police College for the financial year 2008

THE EUROPEAN PARLIAMENT,

having regard to the final annual accounts of the European Police College for the financial year 2008,

having regard to the Court of Auditors’ report on the annual accounts of the European Police College for the financial year 2008, together with the College’s replies [1],

having regard to the Council’s recommendation of 16 February 2010 (5827/2010 — C7-0061/2010),

having regard to Article 276 of the EC Treaty and Article 319 of the Treaty on the Functioning of the European Union,

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 [2], and in particular Article 185 thereof,

having regard to Council Decision 2005/681/JHA of 20 September 2005 establishing the European Police College (CEPOL) [3], and in particular Article 16 thereof,

having regard to Commission Regulation (EC, Euratom) No 2343/2002 of 19 November 2002 on the framework Financial Regulation for the bodies referred to in Article 185 of Regulation (EC, Euratom) No 1605/2002 [4], and in particular Article 94 thereof,

having regard to Rule 77 of, and Annex VI to, its Rules of Procedure,

having regard to the report of the Committee on Budgetary Control and the opinion of the Committee on Civil Liberties, Justice and Home Affairs (A7-0075/2010),

A. whereas the College was set up in 2001 and, with effect from 1 January 2006, was transformed into a Community body within the meaning of Article 185 of the Financial Regulation, thus coming under the provisions of the framework Financial Regulation for agencies,

B. whereas the Court of Auditors in its report on the annual accounts of the College for the financial year 2006, qualified its opinion with regard to the legality and regularity of the underlying transactions on the grounds that the procurement procedures did not comply with the provisions of the Financial Regulation,

C. whereas the Court of Auditors, in its report on the annual accounts of the College for the financial year 2007, qualified its opinion on the reliability of the accounts and the legality and regularity of the underlying transactions,

D. whereas on 23 April 2009 Parliament granted the Director of the European Police College discharge for implementation of the College’s budget for the financial year 2007 [5], and in its resolution accompanying the discharge decision, inter alia:

- expressed deep concern at the fact that the Court of Auditors had identified cases where appropriations were used to finance the private expenditure of College staff members,

- called on the College to adopt detailed implementing rules, including rules ensuring the transparency of its procurement procedures, in accordance with the Financial Regulation,

- asked the Commission to closely supervise the implementation of the College’s budget,

- noted that the European Anti-Fraud Office (OLAF) had opened an internal investigation concerning the College,

E. whereas the Court of Auditors, in its report on the annual accounts of the College for the financial year 2008, added a rider to its opinion on the reliability of the accounts, without expressly qualifying it, and qualified its opinion on the legality and regularity of the underlying transactions,

1. Considers that, overall, the College’s replies to the Court of Auditors’ remarks are once again inadequate and the remedial measures it puts forward are too vague and non-specific to enable the discharge authority adequately to determine whether the College is capable of improving in future;

Structural problems

2. Considers that the small size of the College calls into question its capacity to handle effectively the complexities of the EU’s financial and staff regulations;

3. Notes that the College secretariat’s location, in Bramshill, some 70 kilometres from London, is a disadvantage, inter alia as regards recruitment and public transport links;

4. Questions whether the College’s new Director will be able to address these structural problems;

5. Wonders whether consideration should not be given to attaching the College to Europol;

College governance and transparency

6. Finds the College’s governance costs to be not insignificant, given that, while employing only 24 staff, the College has a 27-member Governing Board (figures as at the start of the 2008 financial year);

7. Notes that the College does not publish information about its governing boards on its website; therefore recommends, as a means of increasing transparency, that a list of board members be placed on the website of the College, with full contact details for all board members;

Reliability of the accounts

8. Voices deep concern at the fact that the adjustments relating to the period during which a manual accounting system was used between the discontinuation of the College’s old accounting system ( 23 May 2008) and the introduction of the new ABAC system ( 14 July 2008) were not all made in good time and that the financial information concerning the carry-overs from the previous year, the use of assigned revenue and the link with certain figures in the balance sheet for 2007 was insufficiently clear;

9. Expresses concern at the fact that, owing to the simultaneous use of two fixed-asset management systems in 2008, the College sometimes recorded the same assets twice and no labels or unique inventory numbers were used;

10. Regrets that, as the Court of Auditors points out in its comments, an ex post control by an external company was not launched even in mid-2009 (following the Court of Auditors’ findings in the 2007 financial year report that there were cases of appropriations which were used to finance private expenditure); calls on the College to take all the steps needed to ensure that such a control is carried out as speedily as possible so that this shortcoming does not feature again in the report on the College’s annual accounts for 2009;

Weaknesses in procurement procedures

11. Notes the irregularities in the procedure used for a public supply contract worth the equivalent of some 2 % of operational expenditure; notes, in particular, that the supply contract was based on types of framework contract intended to be used exclusively for training contracts; notes, furthermore, that the contractual provisions allow the College to renew or extend the contract without limitation;

12. Stresses as in previous years the need for the College to strictly comply with the Financial Regulation and EC public procurement legislation and to improve its financial management;

Failure to comply with the rules governing expenditure on courses

13. Voices concern at the fact that the Court of Auditors identified a large number of cases in which the administrative and financial rules governing expenditure on the organisation of courses and seminars, which accounts for a major proportion (64 %) of the College’s operational expenditure, were not followed; notes that the main irregularities concerned: failure to submit supporting documents in respect of the costs incurred, failure to provide confirmation of attendance and to supply original invoices and documents necessary for the reimbursement of accommodation expenses, and failure to query travel costs for experts; considers the College’s replies to the Court of Auditors’ remarks and the rapporteur’s questions on this matter to be excessively vague and thus unacceptable to the discharge authority; calls on the College to take steps to improve this situation;

Carry-over of appropriations

14. Notes that the Court of Auditors points out that more than EUR 2700000 (representing 31 % of the College’s total budget) had to be carried over; is consequently concerned that this situation is at odds with the principle of annuality and shows weaknesses in the programming and subsequent implementation of the College’s budget;

15. Calls on the College to introduce a system of differentiated appropriations in future budgets for grants, so as to obviate the need for cancellations;

Other irregularities

16. Notes that the Court of Auditors flagged up the absence of:

- a legal commitment in three cases covering a total of EUR 39500,

- a budgetary commitment preceding the legal commitment in nine cases covering a total of EUR 244200,

and calls, therefore, on the College to take steps to improve this situation and then inform the discharge authority of what it has done;

17. Notes that in the coming years the discharge for the implementation of the budget for the College should be further based on the College’s performance throughout the year;

Ongoing OLAF investigation

18. Notes that, in 2008, OLAF opened an internal investigation concerning the College, in response to the findings of the Court of Auditors and the Internal Audit Service (IAS) that members of the College’s staff had used public money for private purposes; notes that the information provided by the College at Parliament’s request in 2009 concerned the use of mobile phones, the provision of furniture for the accommodation of staff and free shuttle services for staff members to airports and train stations; notes that, according to the College, the amounts involved and the state of play as regards recovery were as follows:

- use of mobile phones by staff: GBP 3405 for the period April - December 2007; all costs recovered,

- use of pool cars by staff: GBP 1157 for the period July - December 2007; all costs recovered; the cars have since been sold,

- furniture: GBP 6625 for furniture purchased in 2007; the furniture has since been sold,

- free shuttle service for staff to airports and train stations: cost established at GBP 9508 for 2007; the recovery process has been initiated;

19. Calls on the College and the Commission to communicate the findings of the OLAF investigation to the discharge authority without delay;

Human resources

20. Is concerned that, until now, temporary staff have been employed for financial work; notes that it was not until 2009 that the College issued a vacancy notice for the recruitment of an Internal Control Standards Coordinator and that the interviews for that post were then scheduled for early 2010;

Internal audit

21. Acknowledges that, in its audit report, the IAS listed 13 recommendations (2 of them critical and 9 very important); notes that these mainly relate to: compliance with the financial regulation on public procurement; management assurance; fixed assets (inventory system); management of delegations (delegations must be fully documented and regularly reviewed); budgetary management; compliance with accounting rules and principles; and the checklist ensuring consistency and documentation of the financial controls;

Action plan to be adopted by the Governing Board and introduced by the College’s Director by 30 June 2010

22. Expects, as a first step, the Governing Board swiftly to adopt an action plan to meet the objectives set out in the annex to this resolution; asks the College’s Director, in cooperation with the IAS and the parent directorate-general (DG), then to draft specific measures and a timetable for implementation of that plan and to submit them to the Governing Board for adoption; calls accordingly on the IAS and the parent DG to provide all the assistance required in order to identify indicators that will enable the progress made in implementing the measures taken by the College to be measured at regular intervals; expects the College to communicate the specific measures and indicators adopted to the discharge authority by 30 June 2010;

23. Calls on the Court of Auditors to deliver an opinion in letter form on the establishment of the College’s action plan to the discharge authority at the earliest opportunity;

24. Refers, for other observations accompanying its Decision on discharge, which are of a horizontal nature, to its resolution of 5 May 2010 [6] on the performance, financial management and control of the agencies.

[1] OJ C 304, 15.12.2009, p. 124.

[2] OJ L 248, 16.9.2002, p. 1.

[3] OJ L 256, 1.10.2005, p. 63.

[4] OJ L 357, 31.12.2002, p. 72.

[5] OJ L 255, 26.9.2009, p. 157.

[6] Texts adopted, P7_TA(2010)0139. See page 241 of this Official Journal.

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ANNEX

Action plan to be adopted by the Governing Board and introduced by the College’s Director by 30 June 2010

BUDGETARY PROGRAMMING

1. Objective:

Improve the College’s budgetary and operational programming and monitoring.

Action:

Director to draft a multiannual plan covering the following during his term of office:

- projected measures (results and impact),

- the related financial requirements and budgetary forecasts for each year,

- the human resources required to implement the projected measures,

- the material resources required to implement the projected measures.

INTERNAL CONTROL SYSTEMS

2. Objective:

Improve the financial management of the College’s work, including in respect of programmes funded from assigned revenue (AGIS, ISEC and MEDA).

Action:

Financial management system to be reviewed (with alterations being made to the current financial circuits), to standardise the financial management of the College’s various activities and make it more effective. This review is also intended to ensure the provision of better quality financial information by the various programme administrators.

3. Objective:

Formally validate all financial procedures and the new accounting system, in accordance with Article 43 of the framework Financial Regulation.

Action:

Authorising officer and authorising officers by delegation to formally document the systems which they have introduced with a view to supplying the Accounting Officer with the necessary financial information. Accounting Officer to validate the system descriptions, so as to ensure that he is provided with high-quality financial information for the purpose of drawing up the annual accounts.

4. Objective:

Improve the expenditure verification environment (point 14 of the Court of Auditors’ report on the financial year 2008).

Action:

Formally adopt and implement effective procedures and/or checklists ensuring that payment requests submitted by bodies organising courses on behalf of the College comply with the applicable administrative and financial rules.

STAFF

5. Objective:

Fill vacant posts until a "normal" post vacancy rate (e.g. 5 %) is achieved.

Action:

- Adopt and implement annual recruitment plans for the years covered by the multiannual plan referred to at point 1 above.

- Adopt and implement recruitment guidelines.

6. Objective:

Improve the staffing situation.

Action:

All posts currently vacant (or filled by agency staff) to be filled by temporary staff by the end of the year.

PROCUREMENT

7. Objective:

Improve the procurement control environment.

Action:

- Procurement procedures manual and checklists to be adopted and implemented in order to ensure that the correct procedures are chosen and properly implemented.

- Annual goods and services purchasing plan to be adopted and implemented.

MISCELLANEOUS

8. Objective:

Bring the matter of appropriations used to finance private expenditure to a close.

Action:

Final report to be submitted by an external auditor, setting out the following information:

- total appropriations used to finance private expenditure,

- amounts recovered to date,

- the likelihood of recovering the outstanding amounts, and the timetable for their recovery.

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