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 Chemicals Agency for the financial year 2008

THE EUROPEAN PARLIAMENT,

having regard to the final annual accounts of the European Chemicals Agency for the financial year 2008,

having regard to the Court of Auditors’ report on the annual accounts of the European Chemicals Agency for the financial year 2008, together with the Agency’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 Regulation (EC) No 1907/2006 of the European Parliament and of the Council [3] establishing a European Chemicals Agency, and in particular Article 97 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 the Environment, Public Health and Food Safety (A7-0089/2010),

A. whereas the Court of Auditors states that it has obtained reasonable assurances that the annual accounts for the financial year 2008 are reliable and that the underlying transactions are legal and regular,

B. whereas 2008 was the Agency’s first year in operation,

1. Notes that the Agency was financed in 2008 by a Community subsidy of EUR 62200000 in accordance with Article 185 of the general Financial Regulation, and to a minor extent by fees paid by industry for registrations of chemical substances in accordance with the REACH Regulation (Regulation (EC) No 1907/2006 of the European Parliament and the Council of 18 December 2006 concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH), establishing a European Chemicals Agency);

Performance

2. Believes that the Agency is performing a role that the Commission is not in a position to take on, that the Agency is fully aligned with the Union’s strategic priorities and that its activities are complementary to those of other agencies;

3. Notes the remarks made in the external evaluation of the EU decentralised agencies commissioned by the Commission in 2009, in which it is stated that the objectives and activities of the multiannual work programme are consistent with the Agency’s mandate and that the outputs are timely, useful and of high quality;

4. Underlines, however, that the Agency would benefit from developing feedback procedures and from developing a stronger customer focus;

5. Expresses its satisfaction with the first successful year of operation of the European Chemicals Agency (ECHA), the Commission (DG Enterprise and Industry) having been responsible for the budgetary management of the Agency in 2007; emphasises, in particular, that the smooth and quite rapid establishment of the Agency is mainly due to the effective support provided by its parent directorate-general, exchanges of experience with other similar agencies and the provision of strong support by the host country;

6. Notes that Regulation (EC) No 1907/2006, under which the Agency was established, stipulates that it is subject to review every 10 years;

Budgetary and financial management

7. Notes that the Court of Auditors highlights delays in the operational activities caused by difficulties in implementing the IT system and a lack of qualified staff; notes, in particular, that 41 % of the commitment appropriations for operational activities were carried over and 37,5 % were cancelled; stresses that this situation is at odds with the annuality principle and indicates weaknesses in the planning of the Agency’s activities; calls, therefore, on the Agency to take steps to improve the planning and monitoring of its resources;

8. Calls on the Agency also to improve its procedures for monitoring the use of its appropriations; notes, in this connection, that the Court of Auditors found that, in respect of a significant number of transactions, totalling more than EUR 400000, the expenditure was not covered by a budget commitment and as such was irregular; nonetheless notes the Agency’s reply to the effect that in 2009 it put adequate staff in place and reviewed and consolidated its financial and internal control procedures;

9. Notes that the Agency’s accounts for the financial year 2008 show income from interest in the amount of EUR 643007,40; concludes from the annual closure of accounts and the amount of interest payments that the Agency maintains enormously high cash reserves over long periods; notes that as of 31 December 2008 the Agency’s cash reserves amounted to EUR 18747210,75; calls on the Commission to examine ways of ensuring that the principle of needs-based cash management, as laid down in Article 15(5) of Regulation (EC, Euratom) No 2343/2002, is implemented in full and what changes in approach are needed to ensure that the Agency’s cash reserves are kept as low as possible on a long-term basis;

Human resources

10. Notes that the total number of posts in the establishment plan has more than doubled during the first year of independent operation of the Agency; welcomes the fact that at the end of the year the Agency had achieved 95 % execution of the establishment plan; recalls in this context the need for careful implementation of the recruitment procedure;

11. Deplores the shortcomings found by the Court of Auditors in the documentation summarising the deliberations of selection boards; notes, furthermore, the Court of Auditors’ finding that in 14 recruitment procedures the independence of the members of the selection board (temporary staff members coming under the authority of the Agency’s Director) was not guaranteed, owing to the fact that the Director himself chaired the board; commends the Agency, nonetheless, for deciding that the Director will no longer take part in the deliberations of selection boards;

12. Is aware that the large-scale rotation in key positions in the Agency entails a business continuity risk; asks the Agency therefore to put in place well-defined handover procedures in order to ensure a smooth transition of functions and a consistent handover of relevant activities, files or procedures;

Internal audit

13. Acknowledges that 2008 was the first year of intervention by the Internal Audit Service (IAS) in the Agency and that a risk assessment exercise was conducted in July 2008 in order to determine the audit priorities and the IAS audit plan for the next three years;

14. Notes that the IAS made 12 recommendations, four of which are rated as "very important" and concern the Agency’s business continuity and its recruitment procedures; acknowledges that most of those recommendations were already implemented in 2008 and that the remaining actions were concluded by 31 December 2009;

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

[1] OJ C 304, 15.12.2009, p. 33.

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

[3] OJ L 396, 30.12.2006, p. 1.

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

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

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