A4-0286/97

Resolution on Court of Auditors Special Report No 3/97 on the decentralised system for the implementation of the Phare Programme, together with the Commission's replies (C4-0349/97)

The European Parliament,

- having regard to Court of Auditors Special Report No 3/97 (C4-0349/97) ((OJ C 175, 9.6.1997, p. 4.)),

- having regard to the 'interim evaluation¨ of the Phare Programme produced by the Evaluation Unit of Commission Directorate General 1A,

- having regard to Articles 188c(4) and 206(1) of the EC Treaty,

- having regard to the report of the Committee on Budgetary Control and to the opinion of the Committee on External Economic Relations (A4-0286/97),

1. Welcomes the Court of Auditors' special report as an objective and critical examination of the Phare decentralised implementation system (DIS); believes however, particularly in the light of the new pre-accession context, that decentralisation of financial management is an obligation rather than an option and that it must be made to operate efficiently;

2. Notes the Court's observations as to the inefficiencies in the DIS; observes that, notwithstanding the existence of the DIS, financial decision-making remains highly centralised;

3. Deplores the fact that less than half the funds committed under the Phare programme since its inception have been translated into actual payments; notes the view of the Commission's Evaluation Unit that this is due largely to poor programming and political pressure to implement the Phare budget fully;

4. Approves the Commission's new emphasis on a more focused, 'accession-driven¨ approach to Phare programming; emphasises however that, for this approach to bear fruit in terms of more effective expenditure, concrete management reforms will be required;

5. Welcomes recent declarations of intent by the Commission to tighten Phare programming, contracting and financial management procedures, including:

- a strictly enforced six-month deadline between commitment of funds and the signature of the relevant contract,

- acceleration of decision-making procedures, including the removal of some of the current steps in the project approval process,

- a 'clear out¨ of old contracts, with project closures and cancellations as appropriate, in order to reallocate funds to more fruitful activities,

- action on the results of the work of the Evaluation Unit in reforming management practices within the Phare programme,

- a programme of closures of excess and unnecessary programme management units,

- the publication of a DIS manual in September 1997, translated into all relevant languages,

- the reallocation of unused Phare funding under national programmes to horizontal support facilities for SMEs and TENs available to other Phare countries on presentation of suitable project applications,

asks the Commission to report to Parliament on progress and action taken in each of these areas by 31 December 1997;

6. Notes that Commission delegations in Phare countries remain chronically short of suitably qualified established staff; reaffirms its belief that this problem will remain unresolved as long as the Commission fails to address its need for a dedicated 'foreign service¨;

7. Calls on the Commission to ensure greater continuity of staffing in DG1A, particularly at senior management level; believes that rapid staff turnover has contributed to a discernable lack of policy direction and a structural lack of experience and institutional memory in the Phare programme;

8. Deplores the fact that, according to the Court of Auditors, technical assistance contracts are all too frequently awarded without real competitive tendering among companies; calls on the Commission to inform it of the measures taken in this connection before consideration of the 1996 discharge; calls on the Commission to publish a list of the 50 companies consulted most often in 1994, 1995 and 1996 and to state the amount of financing involved in the contracts awarded to each of these companies;

9. Welcomes the Commission's creation of an independent evaluation unit within DG1A as a constructive innovation; calls on the Commission to ensure that its independence is strengthened and that it has sufficient resources to carry out its task effectively;

10. Recommends:

(a) the full delegation, on a trial basis, of responsibility for financial management of specific Phare policy sectors to national administrations in those countries with whom accession negotiations have been opened as from the 1998 financial year;

(b) on the basis of the above experience, that at least one Phare country assume full responsibility for the implementation of its national Phare programme, in accordance with the terms of the Financial Regulation (Articles 107 and 109(4)), and subject to regular ex post checks by the the Commission, as from the 1999 financial year;

(c) that at least one Commission delegation in a Phare country with which accession negotiations have not opened assume complete responsibility for financial management of that country's national programme as from the 1999 financial year, and that the delegation concerned accordingly be afforded priority in human and material resources;

(d) that only strictly limited use is made of restricted tendering procedures;

11. Reiterates that national Phare allocations are indicative only and could be subject to reallocation in the light of beneficiary countries' records in implementing national programmes;

12. Instructs its President to forward this resolution to the Council and Commission and the Court of Auditors, and to the governments of the Phare countries.