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 budget of the European Railway Agency for the financial year 2010  
THE EUROPEAN PARLIAMENT,  
— having regard to the final annual accounts of the European Railway Agency for the financial year 2010,  
— having regard to the Court of Auditors’ report on the annual accounts of the European Railway Agency 
for the financial year 2010, together with the Agency’s replies (  1 ), 
— having regard to the Council’s recommendation of 21 February 2012 (06083/2012 – C7-0051/2012),  
— having regard to 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 Regulation (EC) No 881/2004 of the European Parliament and of the Council of 
29 April 2004 establishing a European Railway Agency (  3 ), and in particular Article 39 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 Council Regulation 
(EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the 
European Communities (  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 Transport and Tourism (A7-0118/2012),  
A. whereas the Court of Auditors stated that it has obtained reasonable assurances that the annual accounts 
for the financial year 2010 are reliable and that the underlying transactions are legal and regular,  
B. whereas on 10 May 2011 Parliament granted the Executive Director of the European Railway Agency 
discharge for implementation of the Agency’s budget for the financial year 2009 (  5 ), and in its resolution 
accompanying the discharge, inter alia:  
— called on the Agency to address the problem of appropriations being carried forward from one year 
to the next. The carry-over of 41 % of Title II represents a serious breach of the budgetary principle 
of annuality,  
— noted that the Court of Auditors highlighted cancellations and delays in procurement procedures, 
recurrent delays in the execution of payments and significant changes made to the work programme 
during the year,EN L 286/230 Official Journal of the European Union 17.10.2012  
( 1 ) OJ C 366, 15.12.2011, p. 100.  
( 2 ) OJ L 248, 16.9.2002, p. 1.  
( 3 ) OJ L 164, 30.4.2004, p. 1.  
( 4 ) OJ L 357, 31.12.2002, p. 72.  
( 5 ) OJ L 250, 27.9.2011, p. 191.
— urged the Agency to create a consolidated recruitment procedure to be used as a manual for all staff 
involved in new recruitment,  
C. whereas the overall budget for the Agency for the year 2010 was EUR 24 147 240, which is an increase 
of 14,9 % compared to 2009; whereas the initial contribution of the European Union to the budget of 
the Agency for 2010 was EUR 23 260 000 compared to EUR 16 060 000 in 2009, which represents an 
increase of 44,83 %,  
Budget and financial management  
1. Recalls that the initial Union contribution to the Agency for 2010 amounted to EUR 23 260 000; 
notes however that EUR 214 000, coming from the recovery of surplus, was added to it which, as a 
result, makes a total Union contribution of EUR 23 474 000 for 2010;  
2. Notes from the Agency’s Annual Activity Report (AAR) that 99 % of appropriations were committed 
and 77 % have been used for payments; notes in particular that:  
— under Title I, the total committed appropriations amounted to EUR 14 507 149 from which 99 % 
has been used for payment execution while 77 % of the appropriations carried over to 2010 has 
been used for payment execution,  
— under Title II, nearly 100 % of the appropriations have been committed and 62 % has been used for 
payment execution while 92 % of the appropriations carried over to 2010 have been used for 
payment execution,  
— under Title III, nearly 100 % of the appropriations have been committed from which 62 % has been 
consumed with payments while 95 % of the appropriations carried over to 2010 have been used for 
payment execution,  
appreciates the fact that the Agency provides information on the use of the appropriations carried 
forward from 2009 to 2010;  
3. Takes the view that it is extremely important to optimise the use of budgetary resources at a time of 
financial crisis and urges the Commission and the Agency to analyse and establish the real budgetary 
requirements in order for the Agency to be able to carry out all the tasks assigned to it;  
Transfers  
4. Acknowledges from the Agency’s Report on Budgetary and Financial Management Information (RBFMI) 
that in December 2009 the Agency realised that Chapter 11 (staff expenditure) was not correctly 
forecasted for the 2010 budget since Title I was underestimated by approximately EUR 1 500 000; 
understands from the Agency that the situation was due to:  
— a systemic miscalculation of the forecasts for the staff expenditure, since the calculation of the 
forecasts was based on the 2007 basic salaries grid, three annual indexations were therefore missing,  
— the increase in the number of contract agents resulting from the cut in the new permanent posts 
requested by the Agency;  
5. Takes note of the Agency’s decision to transfer an amount of EUR 500 000 from Title II to Title I and 
to transfer an amount of EUR 500 000 from Title III to Title I; notes from the Agency that the decision 
has been approved by the Administrative Board and the Commission;EN 17.10.2012 Official Journal of the European Union L 286/231
6. Notes moreover that to cover the remaining gap the Agency implemented complementary measures to 
reduce expenditure under Title I; notes from the Agency that these measures allowed for an extra saving 
of less than EUR 300 000; takes note that this amount has been transferred back to Title II;  
7. Regrets that the errors in budgetary forecasts resulted in the cancellation or delay of certain invest ­
ments; urges the Agency to inform immediately the discharge authority of the measures implemented 
in order to allow for better expenditure forecasts;  
8. Is concerned that the situation was not reported by the Court of Auditors in its report on the annual 
accounts of the Agency for the financial year 2010; calls on the Court of Auditors to explain this 
omission to the discharge authority;  
Carry-over of appropriations  
9. Acknowledges from the Court of Auditors that the appropriations carried forward to 2011 amounted 
to EUR 5 500 000, of which EUR 4 300 000 (78 %) are related to goods and services that were to be 
provided in 2011;  
10. Recalls that the Agency already carried over a substantial amount of appropriations in the financial 
years 2008 and 2009 to the financial year 2010; considers that these serious breaches of the budgetary 
principle of annuality can no longer be accepted in the future and that discharge should be refused on 
the next occasion, in the event that there is a further breach of that budgetary principle; calls on the 
Agency to take the measures required to remedy the situation without delay;  
11. Is of the opinion that the Agency did not adequately address the problem of appropriations being 
carried forward from one year to the next; recalls the importance of the budgetary principle of 
annuality; calls on the Agency to inform the discharge authority about actions taken to improve the 
annual budget implementation and to decrease the carry-overs of budget appropriations;  
12. Notes nevertheless the Agency’s reply which argues that it is analysing the possibility to conclude 
framework contracts for studies much sooner after the adoption of the budget; notes also that the 
Agency committed, for the years 2011 and 2012, to review its budget forecasts to better align them to 
its real needs and to optimise the use of its budgetary resources;  
13. Calls on the Agency to inform the discharge authority when the report to be attached to each year’s 
budget on the unspent appropriations carried over from previous years, will be ready; reminds the 
Agency that this request was already made during the previous discharge procedure;  
Public procurement  
14. Notes that in the Annual Work Programme (AWP) the Agency, in order to facilitate annual 
procurement planning, will introduce ABAC Contract to support the decentralised contract 
management;  
15. Observes from the Agency’s AAR that 21 procurement procedures (negotiated and opened) were 
launched in 2010 and 12 were completed in 2010;  
Accounting system  
16. Observes from the Agency’s AAR that the Agency updated its Manual for Financial procedures in line 
with the modules of ABAC Workflow and ABAC assets;  
17. Welcomes the Agency’s implementation, as of 1 September 2010, of a centralised system for regis ­
tration of incoming invoices; stresses that this measure is necessary to ensure the timely recording of all 
invoices and contributes to avoiding delays in processing payments;EN L 286/232 Official Journal of the European Union 17.10.2012
Human resources  
18. Notes from the Agency’s RBFMI that on 31 December 2010 the Agency employed 133 temporary 
agents (TAs) and 9 contract agents (CAs); takes also note that recruitment procedures are still ongoing 
in order to reach the 139 TAs foreseen in the 2010 establishment plan and subsequently the 144 TAs 
foreseen in 2011;  
19. Notes from the RBFMI that the Agency included 6 seconded national experts in 2010;  
20. Acknowledges from the Agency that it has developed a consolidated manual on different rules, 
instructions and guidelines governing staff recruitment; stresses that it is important to process and 
manage individual recruitment without compromising the principle of equal treatment of candidates;  
Performance  
AWP and strategic planning  
21. Calls on the Agency to include in its AWP clearer information on the global budgetary envelope 
reserved for procurements and the indicative number and types of contracts envisaged; notes in fact 
that Article 60(3) of the Agency’s Financial Regulation requires so when stating that ‘the work 
programme of the Agency shall be equivalent to a financing decision for the activities it covers, 
provided that they are clearly identified and the underlying criteria are spelled out precisely’;  
22. Urges moreover the Agency to create a Multi-Annual Plan translating long-term objectives into multi- 
annual tasks and associated Key Performance Indicators; underlines that this would better provide 
stakeholders with information on the objectives/activities, strategic priorities and resource allocation;  
23. Notes from the AAR that the Agency’s business planning and budget structure was reviewed in 2010 
with a view to introducing activity based planning from 2012;  
Two locations  
24. Considers that using two locations (Lille and Valenciennes) for carrying out its activities exposes the 
Agency to additional costs; notes, also, that this observation has been made since 2006 and that no 
action has been taken by the Council to change the Decision 2004/97/EC, Euratom (  1 ) obliging the 
Agency to have a double seat;  
Internal audit  
25. Acknowledges from the Agency that the Internal Audit Service (IAS) carried out an audit on the 
planning and budgeting processes in 2010 in order to provide reasonable assurance on the internal 
control system of the Agency as regards its planning and budgeting processes; notes that the IAS 
recommendations concern the strategic planning, the coherence and accuracy of the draft estimate 
revenue and expenditure, the AWP as financing decision and mid-term IT strategy; calls therefore on 
the Agency to implement the necessary measures to fulfil these IAS recommendations;  
26. Calls on the Agency to implement the IAS recommendations related to the audit on Human Resources 
(HR) management undertaken by the IAS in 2009; notes that the implementation of three of these 
recommendations (on HR management in annual planning, on compliance with rules and principles of 
transparency in staff appraisal, on the disclosure of an exception to the staff regulation) have 
experienced a delay of 6-12 months; calls on the Agency to inform the discharge authority about 
the progress of implementation of these IAS recommendations;EN 17.10.2012 Official Journal of the European Union L 286/233  
( 1 ) Decision 2004/97/EC, Euratom taken by common agreement between the Representatives of the Member States, 
meeting at Head of State or Government level, of 13 December 2003, on the location of the seats of certain offices 
and agencies of the European Union (OJ L 29, 3.2.2004, p. 15). See Article 1(f) thereof.
27. Welcomes the Agency’s initiative of having set up at the end of 2007 an Internal Audit Capability that 
is dedicated to providing support and advice to its Executive Director and management on internal 
control, risk assessment and internal audit;  
28. Draws attention to its recommendations from previous discharge reports, as set out in the Annex to 
this resolution;  
29. Draws the Agency’s attention to the Resolution of the European Parliament of 10 May 2011 on the 
2009 discharge: performance, financial management and control of EU agencies (  1 ); calls on the Agency 
to comply with it;  
30. Refers, in respect of the other observations accompanying its Decision on discharge, which are of a 
horizontal nature, to its resolution of 10 May 2012 (  2 ) on the performance, financial management and 
control of the agencies.EN L 286/234 Official Journal of the European Union 17.10.2012  
( 1 ) OJ L 250, 27.9.2011, p. 269.  
( 2 ) Texts adopted, P7_TA(2012)0164 (see page 388 of this Official Journal).
ANNEX  
EUROPEAN PARLIAMENT RECOMMENDATIONS OVER PAST YEARS  
European Railway Agency  2006  2007  2008  2009  
Performance  The Agency carries out its 
operations in two locations, 
exposing it to additional costs: the 
Agency has not yet found ways of 
offsetting the costs resulting from 
its obligation to be located in two 
cities  — The principle of sound financial 
management was not 
rigorously fulfilled: the 
Agency’s cash forecast had not 
been prepared properly 
— The Agency carries out its 
operations in two locations, 
exposing it to additional costs 
(direct posts: EUR 450 000)  — Calls on the Agency to set out a diachronic 
analysis of operations carried out in this and 
the previous years 
— Calls on the Agency to set SMART objectives 
and RACER indicators, as well as to make a 
Gannt diagram → promoting a result-oriented 
approach 
— Inefficiency led by having two locations for one 
Agency 
— The Agency carries out its operations in two 
locations, exposing it to additional costs  — Using two locations exposes the Agency to 
additions costs 
— Calls on the Agency to set out a comparison of 
the operations that were carried out during the 
year for which discharge is to be granted and 
during the previous financial year  
Carry-over of 
appropriations  The budgetary principle of 
annuality was not strictly observed: 
the Agency implemented 72 % of 
its commitment appropriations. 
The levels of carry-over for 
administrative expenditure and 
operating expenditure were 37,5 % 
and 85 % respectively  — The Agency had difficulties in 
the programming and the 
budgeting of its activities: more 
than 35 % of the final 2007 
appropriations had not been 
used during the year 
— Calls on the Agency to strive to 
increase the level of budget 
implementation  The Agency had difficulties in the programming 
and the budgeting of its activities  — Agency failed to address the problem of 
appropriations being carried forward from one 
year to the next. The carry-over of 41 % of Title 
II represents a serious breach of the budgetary 
principle of annuality 
— Requests that a report be attached to each years 
budget on the unspent appropriations carried 
over from previous years 
— Court of Auditors highlighted cancellations and 
delays in procurement procedures, recurrent 
delays in the execution of payments and 
significant changes made to the work 
programme during the yearEN 17.10.2012 Official Journal of the European Union L 286/235
European Railway Agency  2006  2007  2008  2009  
Procurement procedures  The Agency must launch 
procurement procedures for those 
areas currently covered by 
contracts which had not been the 
subject of regular procedure  — Transparency issues at the level 
of selection criteria and at the 
level of award criteria: the use 
of a negotiated procedure was 
not justified 
— Recalls on improving 
procurement management  Transparency issues at the level of selection criteria 
and at the level of award criteria  n.a. 
Human resources  n.a.  n.a.  n.a.  — Calls on the Agency to better reflect in its work 
programme and Annual Activity Report the 
planned allocation of staff resources 
— Expresses concern about the failure to follow 
Staff Regulations and their implementing rules 
retroactively 
— Urges the Agency to create consolidated 
recruitment procedure to be used as a manual 
for all staff involved in new recruitment  
Internal audit  The internal control system 
showed weaknesses: the Agency 
did not adopt implementing rules 
for its financial regulations  The Agency does not strictly 
follow the Staff Regulations  Calls on the Agency to take steps to fulfil four out 
of 36 recommendations made by the Internal 
Audit Service → i.e. to implement certain internal 
control standards to bank signatures, segregation 
of duties, sensitive posts and maintenance of 
delegation powers  Acknowledges that six out of 10 recommendations 
made by the IAS on human resources management 
still need to be implementedEN L 286/236 Official Journal of the European Union 17.10.2012