A4-0040/98

Resolution on the Court of Auditors' Special Report No 3/96 on tourist policy and the promotion of tourism, together with the Commission's replies (C4-0050/97)

The European Parliament,

- having regard to the Court of Auditors' Special Report No 3/96 ((OJ C 17, 16.1.1997, p. 1.)) (C4-0050/97),

- 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 the opinion of the Committee on Transport and Tourism (A4-0040/98),

A. whereas the undoubted importance of tourism in the context of Community policies calls for management of a standard that ensures the legality and effectiveness of that policy,

B. noting that such management has been lacking over a considerable period, with the result that a long series of irregularities occurred, in some cases seriously implicating Commission officials, and the continuation of the policy itself was called into question,

C. whereas the Commission has already taken action systematically to investigate irregularities, but whereas such action, although an essential prerequisite, is not sufficient to redress the situation,

D. whereas it is surprising that UCLAF was not informed until July 1994,

E. whereas, moreover, there is an urgent and overriding need to identify the management failings which gave rise to irregularities and compromised the effectiveness of the measures, and to introduce concrete measures to resolve the current crisis,

F. whereas the failings that have been identified are due to the disorganized system of management, responsibility for which cannot but be ascribed to particular individuals,

G. whereas, however, this chronic mismanagement was also facilitated by administrative management mechanisms (or failings), in relation to which it must be possible to take action,

H. whereas the Commission was extremely reluctant to forward the conclusions of the inquiries carried out by DG XXIII and UCLAF; concerned that such an attitude might appear to justify serious doubts regarding not only the transparency but also the reliability of the statements made by the Commission throughout the process of parliamentary scrutiny,

I. whereas direct subsidies constitute a high-risk financial instrument, which was used extensively in the period on which suspicions of irregularity centre (1990-1993); noting, however, that there has been a considerable decline in the use of that instrument in the subsequent period,

J. whereas the problematic contracts concluded in 1993 accounted for more than 40% of the tourism budget available for that year,

K. whereas, further, the shortcomings and irregularities recorded by the Court of Auditors with respect to 1992 had still not been fully eliminated in 1995, which disrupted the implementation of the action plan in favour of tourism,

L. whereas the selection of contractors must be carried out in accordance with precise criteria which are consistent with the objectives of the measure and the rules on the admissibility of expenditure; acknowledging that the Commission has already produced more specific calls for tenders and calls for proposals, but emphasizing that there are still significant shortcomings with regard to the composition of selection committees and the procedure followed,

M. whereas various factors have adversely affected the calibre of staff and, consequently, the quality of the proposals selected (notably the inadequate number of permanent officials, particularly those responsible for financial administration; high turn-over; inadequate training); whereas, however, the setting up of a financial unit within DG XXIII has resulted in enhanced staff specialization,

N. taking the view that the frequency with which powers were sub-delegated to different authorizing officers added to the general confusion,

O. taking the view that the belated intervention of the financial controller was partly due to the system of spot checks, which prevented the scale of the problem from being discovered more quickly; noting, moreover, that the recommendations contained in the financial controller's audit were followed up to a limited extent only,

P. emphasizing that ample scope for abuse was created by the vagueness of contracts with regard to admissible expenditure and contractors' obligations, and by the widespread use of subcontracts which were not subject to monitoring,

Q. whereas the task force set up by the Commission has completed its work and divided the cases involved into those where the rules were applied, those where rules were breached and those where there is a presumption of overpayment,

R. drawing attention to the difficulties involved in recovering undue payments in those cases in which overpayment is suspected, because of the absence of supporting documents; noting that the prescribed period for which such documents must be kept has now elapsed; regarding this as one of the most serious aspects of the culpable mismanagement that occurred,

S. whereas the criteria for the recovery of undue payments must be examined,

T. noting that previous evaluations of the policy on tourism have had a purely descriptive character, due to a lack of human resources and the insufficiently clear definition of objectives,

U. whereas tourism policy may take the form of direct measures, but also of measures connected with other policies which have a bearing on tourism and whereas consequently, coordination is necessary,

1. Underlines the importance of tourism policy and the need to safeguard it by taking rapid remedial action to identify management failings and adopt the requisite measures;

2. Notes that the Commission has conducted a systematic investigation of the cases involving irregularities, with a view to restoring sound management and introducing initial measures to remedy the situation, while regretting the delay in its reaction to the alarm raised by Parliament and the Court of Auditors;

3. Considers that more radical regulatory and administrative reforms are required, and calls on the Commission to take the following initiatives at once:

I. ad hoc subsidies:

a) the Commission should abandon this instrument entirely, or at least inform the financial controller, the Court of Auditors and the discharge authority of its reasons should it resort to that instrument as an exceptional measure;

b) the SEM 2000 programme should examine the possibility of prohibiting or restricting the use of that instrument for all directly funded actions;

II. selection of projects in competition:

a) the impartiality of the selection board should be increased by including outside experts and officials from other directorates-general concerned;

b) the selection of bids should be based solely on the information contained in the initial proposal, and there should be no possibility of providing additional information which might jeopardize the transparency of the call for tenders;

III. staff:

a) the setting up of the financial unit should be accompanied, by means of redeployment within the establishment plan laid down for the Commission, by an increase in the number of permanent staff and improved training in financial and monitoring tasks;

IV. delegation of powers:

a) any sub-delegation of tasks by the principal authorizing officer to whom powers have been delegated (the director-general) should be exceptional and justified, and the scope of such arrangements must be clearly defined;

V. financial control:

a) random checking must make it possible to identify the sectors at risk; systematic monitoring should be introduced in such sectors;

b) any recommendations accompanying the financial controller's audit should be legally binding and prompt action must be taken to ascertain whether they have been implemented;

VI. preventing irregularities:

a) the SEM 2000 programme should lay down guidelines for the introduction of legal instruments to prevent irregularities arising in the tourism policy, but also in other sectors where direct funding is involved:

- greater concentration of measures;

- the drawing up of standard contracts containing more precise provisions as to admissible expenditure and the monitoring of contractors;

- restrictions on subcontracts, which must in any event be subject to monitoring under the terms of the contract;

4. Notes that the Commission has completed the task of reconstructing the cases and examining their regularity, but calls on it to:

a) complete its examination of those cases where documentary evidence is unavailable by means of on-the-spot checks;

b) begin and continue systematically recovering undue payments, regardless of considerations of cost-effectiveness, as the exemplary character of its efforts to redress the situation should override all purely financial considerations;

5. Considers that the irregularities that occurred in the management of tourism policy cannot be attributed solely to the general disorder, lack of adequate procedures and disorganized management within DG XXIII, but that precise individual responsibilities are involved aside from the legal proceedings now under way, and therefore:

- calls on the Commission to punish those responsible and demand the necessary financial compensation, at all levels, by means of the disciplinary and financial compensation procedures provided for under Articles 73 and 76 of the Financial Regulation, if there is no evidence to support the more serious hypothesis that a criminal offence has occurred;

- reserves the option of delivering its opinion on the question of criminal liability and internal Commission procedures with regard, inter alia, to the circumstances surrounding the request for the lifting of immunity prior to the opening of legal proceedings;

6. Calls on the Commission to initiate the necessary disciplinary measures against the officials responsible, together with recovery measures;

7. Calls on the Commission to produce a more thorough evaluation of measures in the tourism sector, defining clearly the qualitative and quantitative (physical and financial) objectives in the programmes, the calls for tender and the contracts, which task should be entrusted to outside experts;

8. Calls on the Commission to devise binding procedures to ensure that direct measures in the field of tourism are coordinated with the other policies affecting that sector;

9. Calls on the Commission to submit to it, within three months, a progress report on the recovery of undue payments and on the measures adopted to follow up this resolution; notes that the Commission can be granted a discharge in respect of the implementation of the 1996 budget only when such a report is available;

10. Instructs its President to forward this resolution to the Commission, the Council and the Group of personal representatives of the Ministers of Finance responsible for cooperating with the Commission in the context of the SEM 2000 programme.