88/337/ECSC, EEC, Euratom: Decision of the European Parliament of 13 April 1988 granting a discharge to the Commission in respect of the implementation of the budget of the European Communities for the financial year 1986 concerning Sections I - Parliament, II - Council, III - Commission IV - Court of Justice and V - Court of Auditors
Date: 1988-04-13
Institutions: European Parliament
Subjects: EU institution, financial year, fund (EU), implementation of the budget













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31988D0337

88/337/ECSC, EEC, Euratom: Decision of the European Parliament of 13 April 1988 granting a discharge to the Commission in respect of the implementation of the budget of the European Communities for the financial year 1986 concerning Sections I - Parliament, II - Council, III - Commission IV - Court of Justice and V - Court of Auditors  


Official Journal L 156 , 23/06/1988 P. 0054 - 0059 





*****DECISION  OF THE EUROPEAN PARLIAMENT  of 13 April 1988  granting a discharge to the Commission in respect of the implementation of the budget of the European Communities for the financial year 1986 concerning Sections I - Parliament, II - Council, III - Commission IV - Court of Justice and V - Court of Auditors  (88/337/ECSC, EEC, Euratom)  THE EUROPEAN PARLIAMENT,  - having regard to the Treaty establishing the ECSC and in particular Article 78g thereof,  - having regard to the Treaty establishing the EEC and in particular Article 206b thereof,  - having regard to the Treaty establishing the EAEC and in particular Article 180b thereof,  - having regard to the budget for the financial year 1986,  - having regard to the revenue and expenditure account and the balance sheet relating to the financial year 1986,  - having regard to the report of the Court of Auditors concerning the financial year 1986 accompanied by the replies of the Institutions (Doc. C 2-265/87) (1),  - having regard to the recommendation of the Council (Doc. C 2-11/88),  - having regard to the report of the Committee on Budgetary Control and to the opinions of the Committee on Social Affairs and Employment and the Committee on Youth, Culture, Education, Information and Sport (Doc. A 2-19/88),  1. Notes that authorized revenue and expenditure for the financial year 1986 totalled:  1.2.3 //  // (ECU)  // (ECU)  // - Revenue   //   // 35 177 256 722   // - Appropriations for commitments:   //   //   // - Appropriations authorized in the general budget   // 36 052 214 064   //   // - Appropriations remaining from the financial year 1985 or made available as a result of cancellations of commitments in the financial year 1986   // 2 244 565 171   //  // - Appropriations corresponding to revenue from services rendered to third parties   // 1 468 648  // 38 298 247 883  // - Appropriations for payments   //   // 35 177 256 722  2. Grants discharge to the Commission in respect of the implementation of the budget on the basis of the following amounts:  1.2.3 //  // (ECU)  // (ECU)  // (a) Revenue   //   //   // - Own resources   // 32 683 368 650   //   // - Financial contributions   // 210 064 551   //   // - Surpluses available  // 431 143 290   //   // - Other revenue   // 342 610 531  //   // - Carry-overs from the financial year 1985 which have lapsed   // 355 681 498   //   // - Exchange gains   // 20 468  (1) OJ No C 336, 15. 12. 1987, p. 1.   // (b) Expenditure   //   //   // - Payments made from the appropriations of the financial year   // 33 462 056 563   //  // - Appropriations carried over to the financial year 1987  // 1 401 197 021  // 34 863 253 584  The 693 million ECU overrun in EAGGF expenditure must be regarded as payment appropriations of the financial year 1986, within the meaning of the third paragraph of Article 5 of the Financial Regulation, in respect of which appropriations were neither earmarked in 1986 nor carried forward to 1987 (1).  1.2.3 // (c) Balance for the financial year 1986   //   // 819 916 654  // - Revenue for the financial year   //   // 33 667 187 022   // - Payments made against appropriations for the financial year   // 33 462 056 563   //   // - Appropriations carried over to 1987   // 1 401 197 021  // 34 863 253 584  // Difference   //   //  1 196 066 562   // - Appropriations carried over from 1985 which have lapsed   //   // + 355 681 498   // - Exchange difference in the financial year 1986   //  // + 20 468 410  // Balance for the financial year 1986   //  //  819 916 654   // (d) Utilization of appropriations for commitments   //   // 36 379 464 864  (e) Balance sheet at 31 December 1986  1,2.3,4 //  //  // ASSETS  // LIABILITIES  //  // 1.2.3.4 // Fixed assets   // 10 262 478 968   // Fixed capital   // 10 241 085 745   // Inventories   // 28 596 666  // Current liabilities   // 3 745 695 973   // Current assets  // 1 946 223 607   // Cash accounts   // 132 541 611   // Cash accounts   // 1 938 622 509   // Accrued expenses   // 317 443 572   // Prepaid expenses   // 260 845 151   //   //   //  //   //   //   // Total  // 14 436 766 901   // Total  // 14 436 766 901   //    //   //   //  3. Records its comments in the resolution which forms part of this Decision (2);  4. Instructs its President to forward this Decision and the resolution embodying its comments to the Commission, the Council, the Court of Justice, the Court of Auditors and the European Investment Bank and to have them published in the Official Journal of the European Communities (L series).  Done at Strasbourg, 13 April 1988.  1.2.3 // The Secretary-General   //   // The President  // Enrico VINCI   //   // PLUMB 410  // 34 043 336 930  (1) If this sum had not been carried over to the financial year 1987, the 1986 deficit of 819, 9 million ECU, set out in (c), would have been correspondingly higher.  (2) See page 56 of this Official Journal.  RESOLUTION  embodying the comments on the Decision granting a discharge in respect of the implementation of the budget of the European Communities for the financial year 1986  THE EUROPEAN PARLIAMENT,  - having regard to Article 206b of the Treaty establishing the European Economic Community,  - whereas, pursuant to Article 85 of the Financial Regulation of 21 December 1977, the institutions of the Community shall take all appropriate steps to take action on the comments appearing in the Decisions giving discharge,  - whereas, pursuant to the Financial Regulation Article referred to, the institutions shall report, at the request of the European Parliament, on the measures taken in the light of the comments and, in particular, on the instructions given to those of their departments which are responsible for the implementation of the budget,  - having regard to the recommendation of the Council (Doc. C 2-11/88),  - having regard to the report of the Committee on Budgetary Control and to the other documents referred to in the Decision granting discharge (Doc. A 2-19/88),  Undesirable trends up to the financial year 1986  1. Notes that owing to the inadequate decision-taking machinery available to the Community, and its inability to ensure that the Member States recognized where the Community's genuine interests lay, the position in 1986 was as follows:  - 14 053,4 million ECU in accumulated legally binding liabilities, at the end of 1986, to be honoured in the next few years, plus 8 501,7 million ECU of unavoidable expenditure on agricultural-stock disposal and some 13 400 million ECU of potential payment appropriations relating to policy-based programmes,  - compromised financial autonomy, a budget not in balance, makeshift solutions provided for in neither the Treaties of Rome nor the Financial Regulation, and the continued use of national financial contributions,  - agricultural spending spiralling out of control, a degree of inefficiency and irregularity in disbursements, and defrauding of the Community budget,  - structural expenditure not consistent with the principle of cost-efficiency;  2. Notes, however, that the Commission has put in hand the necessary process of reform and that the decision taken at the European Council meeting of 11/12 February 1988 will enable a fresh start to be made on a more solid basis, though they are not fully consonant with Parliament's position; cautions against any attempt to depart from these decisions or to implement a watered-down version thereof;  Improvements required as regards own resources  3. Recommends that the fact that revenue is likely to be secured should be exploited to eliminate the shortcomings of the own-resources system, which has been in operation since 1970;  4. Recommends that the Commission consolidate its proposals on the establishment, paying over and verification of own resources, which have been before the Council for years, into a single proposal taking into consideration the shortcomings in the system and the corrective action called for by Parliament, with a view to establishing a more coherent own-resources system and obtaining, at last, the powers which it requires to discharge its administrative and supervisory responsibilities;  5. Calls upon the Commission to exploit its powers extensively, until the new Regulation enters into force, and, where necessary, to take legal action to enforce Community law in all respects, particularly as regards the establishment and making available of own resources revenue;  Compliance with budgetary principles and implementation of the budget  6. Condemns the violation of budgetary principles in the financial year 1986 (concealed deficit, improper netting-out between revenue and expenditure, and carrying-over of expenditure relating to the financial year 1986 to the following financial year) as a result of the manner in which entries were made in the accounts and the accounts rendered; calls upon the Commission to give top priority at all times to ensuring that budgetary principles are complied with;  7. Notes that, in the revenue and expenditure account for 1986, the Commission described how 693 million ECU of EAGGF Guarantee Section expenditure was carried forward to the financial year 1987; insists that this be properly presented by the Commission when the accounts for the financial year 1987 are rendered;  8. Calls upon the Commission, with a veiw to rationalizing budgetary planning and implementation, to submit proposals to curb expenditure on the basis of realistic and compelling measures to match more closely the rate at which appropriations are committed and utilized; 9. Stresses again the Commission's mandate to implement the budget, once it has been adopted, and, in this regard, recalls the fact that Parliament has repeatedly called for progress reports on implementation;  10. Instructs its Committee on Budgetary Control to undertake on-going control of budget implementation in accordance with the decisions taken at the Brussels European Council of 11 to 13 February 1988 and on the basis of more precise and up-to-date information from the Commission;  Managaement of the EAGGF Guarantee Section  11. Calls upon the Commission to give priority to what is an important issue as regards the general budget and agricultural-market management - the utilization of surpluses - and to take Parliament's views into account in the process, particularly as regards marketing drives benefiting the consumer on the Community's internal market; considers that it is imperative to write down book values as early as possible in order to cut costs; criticizes the fact that the Commission has not acted in good time to curb the production and storage of agricultural products which cannot be marketed and disapproves in particular of the uneconomic distillation measures in the wine sector;  12. Recommends that the Commission give priority  to the clearance-of-accounts procedure by introducing  systematic controls along the lines suggested by the Court of Auditors, with a view to the uniform application of farming regulations in all Member States and to ensuring as far as possible that the financial management is sound and proper, while not neglecting physical inspections, which are necessary;  Management of the EAGGF Guidance Section  13. Notes with concern that the appropriations made available to the EAGGF Guidance Section in recent years have fallen alarmingly, even in nominal terms, that, contrary to expectations, the accession of Spain and Portugal had no impact on the fund's financial capacity during 1986, and that, as a result of the continual financial blockage of the fund, the accumulated deficit is now well in excess of the annual budget allocation;  14. Considers that restoring the fund to a sound financial footing is vital if the reform of its aims and operating procedures is to be successful;  15. Stresses that the establishment of a system to monitor results, which would make it possible to assess the economic impact and effectiveness of operations, is a vital aspect of the reform of the structural funds; calls therefore on the Commission to include in its annual financial report or in special reports an analysis of the economic impact and effectiveness of the operations;  Management of the structural funds  16. Notes that, because of the serious shortcomings accounting for the cancellation of Social Fund commitments on such a vast scale, a persuasive strategy on selection criteria, management, verification and assessment should be presented when the structural funds are expanded;  17. Takes the view that, in future, the organization and operation of the structural funds must be explicitly linked to a Community policy and that appropriate arrangements to select projects, verify cost-efficiency and perform ex post facto assessments will have to contribute to eliminating any undesirable trends;  18. Calls upon the Commission to include in its proposals for structural fund regulations a provision requiring the Member States to scrutinize the implementation of projects and programmes financed under these funds and to report to the Commission - as well as to Parliament and the Council - on the outcome of this process;  Joint Research Centre (JRC) activities at ISPRA  19. Insists that the inefficient working methods found at the JRC establishment at Ispra be rectified by rationalizing personnel management, improving budgetary management and evaluating research findings as early as possible, with due regard for the objectives set at the financial- and operational-planning stages;  20. Instructs the Commission to utilize the facilities at the JRC establishment at Ispra to analyse the samples taken to verify compliance with Community farming regulations;  Development and cooperation  21. Requests the Court of Auditors, in view of the poor management of what is a considerable volume of budget funding, to draw up a report on the utilization of appropriations relating to cooperation with the developing countries in Latin America and Asia;  22. Expects the Commission to fill the remaining five posts created in the 1986 budget for an in-house evaluation unit without further delay, bearing in mind the improvements in the quality of Community aid, which can be achieved by systematic evaluation of completed projects; Combating fraud and irregularities  23. Notes that the Commission's dereliction of duty as regards inspections - the failure to allocate properly the staff occupying the posts authorized by the budgetary authority, among other omissions - would itself justify refusal to grant discharge;  24. Notes that, a little more than 16 years after the entry into force of the own resources system, the Council has still not granted the Commission the powers it requires under that system to obtain accurate information on the practices followed in the Member States and to carry out on-the-spot checks when it deems them to be useful and necessary;  25. Notes, in the light of the decision taken by athe European Council on 12 February 1988 on the financing of the Community up until 1993, that it is now essential for the Council to provide the Commission with the means to obtain information and carry out checks in the Member States as regards own resources whenever the Commission deems it useful and necessary to do so;  26. Notes that several Member States are in breach of Council Regulation (EEC) No 2891/77 (1) insofar as they only pay over to the Community the own resources collected by their authorities rather than the total volume of own resources established;  27. Notes that several Member States are in breach of Community law insofar as they have waived, and hence not made available to the Community, considerable amounts in VAT resources;  28. Instructs the Commission to call on the Member States to apply Regulation (EEC) No 2891/77 properly and to claim retroactively the own resources which have been established by Member State authorities but not yet made available to the Community;  29. Notes that several Member States have violated Community law insofar as in 1986, they either did not inform the Commission of frauds committed in the EAGGF Guarantee Section or provided belated or incomplete information;  30. Notes that the information supplied by the Member States to the Commission since 1971 concerning frauds committed in the EAGGF Guarantee Section has frequently been vague and therefore useless for the purposes of further, detailed investigation;  31. Calls upon the Commission to bring proceedings, pursuant to Article 169 of the EEC Treaty, against a Member State which fails to supply by the specified time-limit, the information requested;  32. Notes that, pursuant to Article 5 of the EEC Treaty, the Member States are obliged to take interim protective measures in cases of fraud and irregularities;  33. Calls on the Commission to act as co-plaintiff in proceedings brought in the Member States, in respect of fraud and irregularities, where this is permissible under the criminal law of the Member State concerned;  34. Calls on the Commission to consider whether debtors found guilty by a court of last instance of fraud or irregularities can be obliged under Community law to offer additional bank guarantees;  35. Calls on the Commission to submit proposals for Community rules obliging the Member States to publish the names of natural or legal persons found guilty by a court of last instance of fraud or irregularities;  36. Regrets that the Council has hitherto refused to adopt the legislation necessary to enable fraud and irregularities to be combated effectively at Community level;  37. Calls upon the Commission to give priority to combating fraud and irregularities, since such activities are detrimental to the Community's reputation and are a constant and serious threat to sound financial management; calls upon the Commission to involve Parliament in the process of refining the relevant strategies and, in particular, of expanding the role of the recently established anti-fraud unit; insists that the Commission take account of the importance of controls and penalties in draft legislation;  38. Calls upon the Commission to discharge its duty to coordinate and monitor national controls more conscientiously and forcefully; recommends the Commission examine to what extent national administrations' readiness to bring proceeding in respect of fraud and irregularities can be heightened;  Management of the Community budget grant for the European Schools  39. Is unable to approve the financial management in respect of the European Schools, after noting the special report of the Court of Auditors for the financial years, 1985 and 1986 and, while not arrogating to itself the right to grant discharge, expresses the most serious reservations as to the manner in which the grant from the Community budget is managed;  How fraud should be approached in the accounts and in legislation  40. Calls on the Commission to add data on the following aspects to the revenue and expenditure account and balance sheet:  - own resources established but, contrary to Community law, not made available to the Community,  - recovery of advances on European Social Fund commitments subsequently cancelled,  - amounts to be recovered in connection with cases of EAGGF Guarantee Section fraud notified by the Member States;  41. Calls on the Commission to propose an amendment to Regulation (EEC) No 2892/77 (1) on own resources accruing from VAT so as to enable the amounts waived by the Member States to be incorporated into the basis of assessment;  42. Instructs the Commission to report annually to Parliament on the making available to the Community of own resources established but not paid over and on recovery of amounts paid in breach of Community law.  (1) OJ No L 336, 27. 12. 1977, p. 1.  (1) OJ No L 336, 27. 12. 1977, p. 8.