European Parliament resolution on reform of budgetary control procedures and institutions (2000/2008(INI))
Date: 2000-12-13
Institutions: European Parliament
Subjects: EU institution, budgetary control, budgetary discharge, budgetary procedure, management audit

C 232/194

Official Journal of the European Communities

EN

17.8.2001

Wednesday 13 December 2000

With a view to the establishment of a European Public Prosecutor’s Office:

(f) proposals, pursuant to the procedure laid down in Article 251 of the EC Treaty, concerning the con-
ditions governing the performance of the European Public Prosecutor’s duties, the definition of
offences and penalties, procedural rules, rules of evidence and judicial review of the Prosecutor’s
actions;

(g)

the appointment of an independent European Public Prosecutor assisted by Deputy European Public
Prosecutors in each Member State, which would provide the structure of a European Public Prosecu-
tor’s Office as advocated in the ‘Corpus Juris’ expert report, to which should be added a European
body responsible for overseeing the work of the Prosecutor’s Office and taking committal decisions,
in accordance with the judicial safeguard principle;

(h) a special mechanism needed to govern relations between OLAF and the European Public Prosecutor;

Calls for Member States which have not yet ratified the 1995 Convention on the Protection of

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Financial Interests (Belgium, Ireland, Luxembourg and the Netherlands) to do so as soon as possible;

Regrets very deeply that the Nice European Council did not decide on any practical measures with
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regard to the protection of the European Union’s financial interests and, in particular, that the Commission
proposal that an Article 280a providing for the establishment of a European Public Prosecutor be incor-
porated into the Treaty was not accepted, especially as the 1995 Convention on the protection of the
Communities’ financial interests has not yet been ratified by all Member States and therefore still cannot
be applied and is now inadequate;

Expects that every effort will now be made to ensure that effective and full protection of the
interests with the help of a European Public Prosecutor becomes a reality when the

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Union’s financial
next occasion arises;

Instructs its President to forward this resolution to the Council, the Commission and the Heads of

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Government or State meeting within the framework of the Intergovernmental Conference.

15. Reform of budgetary control procedures

A5-0383/2000

European Parliament resolution on reform of budgetary control procedures and institutions (2000/
2008(INI))

The European Parliament,

@ having regard to Rule 163 of its Rules of Procedure,

@ having regard to Rule 93 and Annex V of its Rules of Procedure,

@ having regard to the report of the Committee on Budgetary Control (A5-0383/2000),

A. whereas, pursuant to Article 274 of the EC Treaty, the Commission bears responsibility for imple-
menting the budget in accordance with the principles of sound financial management, notwithstand-
ing the fact that around 85 % of the budget is implemented by national authorities,

B. whereas, pursuant to Article 276 of the EC Treaty, Parliament is required to give a discharge to the
Commission in respect of implementation of the budget and thereby assumes responsibility for ensur-
ing that the Commission meets its Treaty obligations in full,

C. whereas Parliament is thus accountable to the citizens of the Union for ensuring that their money is
spent as economically and efficiently as possible and that the institutions of the Union do everything
in their power to reduce the number of errors in the implementation of the budget and to secure
maximum protection against fraud, corruption and organised crime,

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D. whereas, in accordance with the Treaty and the Financial Regulation, the discharge procedure is essen-
tially a legal act whereby the accounts of a specific financial year are signed off; whereas the procedure
thereby offers the political authorities an opportunity to assess the management of the financial
resources of the European Union, to propose measures for its improvement and to express an overall
political judgement on its quality,

E. whereas the point of the discharge is, on the basis of specific cases and events, to identify the pro-
blems which lead to mismanagement and a deficit of financial control; whereas, in addition, the dis-
charge procedure must ensure that the Commission takes the necessary steps to put a lasting end to
the shortcomings and omissions established; whereas, lastly, the discharge procedure must ensure that
unduly paid or uncollected amounts are recovered;

The Court of Auditors

1.
Underlines that, in setting its priorities for the year, the Court of Auditors’ work programme should,
within the boundaries of statutory requirement, pay particular attention to spending areas where the risk is
very high and most real, but at the same time it should continue to ensure that all spending areas are
subject to an audit at reasonable intervals;

Notes that in the past the structure of the annual report of the Court of Auditors has reflected the
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general budget, which was divided according to the headings of the Financial Perspective and notes that
with the introduction of activity-based budgeting and annual activity reports for each directorate-general, a
fresh approach to the presentation of the annual report will be needed and therefore calls upon the Court
of Auditors to reorganise its annual report so that in future it will appraise the activities of each directo-
rate-general individually;

3.

Invites the Court of Auditors to

@ keep special reports as succinct as possible @ if necessary focusing on more restricted subject matter

@ with clear recommendations,

@ provide an approximate timetable for each special report,

@ discuss the timing of the various special reports with the Committee on Budgetary Control;

Requests that special reports be released as they are completed so that the Committee on Budgetary

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Control and specialised committees have time to give them the full attention and priority they deserve;

5.
Points out that, pursuant to Article 248(2) of the EC Treaty, the Court of Auditors is required to
report on any cases of irregularity; asks the Court of Auditors to list in future, in an annex to its annual
report and under country headings, the cases it has established as well as the specific problems identified
in the Member States and to indicate the amounts involved in each instance; asks, moreover, that the
amounts paid by each Member State in recoveries in the year in question be included in an additional
annex;

Asks that, whenever the Court of Auditors makes comments on specific actors, including individual
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Member States, specific government bodies or agencies within the Member States, private enterprises and
any other relevant actors, it identifies them as precisely as possible; believes that, in the interests of trans-
parency, general references to those responsible, such as ‘a few Member States’ are not acceptable;

Requests the Court of Auditors to have its annual report accompanied by a statement of assurance

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for each expenditure heading of the Financial Perspective;

8.
Underlines that the contradictory procedure is an expression of the fundamental principle of the
right of reply; requests that the Court of Auditors and the Commission, as well as the Member States,
intensify that part of the procedure which occurs during the course of the audit through the replies to
the sector letters; considers that such an intensification should enable the period for the formal contra-
dictory procedure on the draft Court report to be reduced; emphasises that the purpose of the contra-
dictory procedure should be solely to establish points of fact and their correct interpretation and presenta-
tion;

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Wednesday 13 December 2000

Asks the Court of Auditors to shorten its internal procedure in order to be able to publish its report

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as soon as possible after the completion of the inquiries on which it is based;

Points out that Rule 39 of its Rules of Procedure provides for the possibility of inviting the Presi-
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dent of the Court of Auditors to take the floor in plenary in the context of the discharge procedure or
Parliament’s activities in connection with budgetary control; considers it necessary for use also to be made
in future of the possibility, provided for in Rule 39(2), of holding a separate debate, with the participation
of the Commission and Council, on questions raised in statements by the President of the Court of Audi-
tors, particularly where irregularities have been reported in financial management;

Requests the President and members of the Court of Auditors to present facts and refrain from

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making political statements in plenary and debates in the Committee on Budgetary Control;

12.

Encourages:

@ the specialised committees to invite the relevant member(s) of the Court of Auditors to their meetings

at least once a year,

@ at least, their discharge draftspersons to establish a dialogue with the member(s) of the Court respon-

sible in that field,

@ specialised committees to review the implementation of the budget headings relevant to their work at

last twice a year in the presence of the Commission officials responsible;

13.

Asks the Court of Auditors to ensure that the statement of assurance clearly identifies:

@ in the case of direct management: the sectors of activity, procedures and systems

@ in the case of shared management: the Member States affected by errors, and to elaborate on their

nature;

The discharge report

Asks that the discharge report(s) include as an annex a list of all documents received from the

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Commission, as well as those requested and not received;

15.
Points to the stated intention of the Commission to put greater emphasis on the accountability of
its Members and senior officials for the policy areas and management tasks assigned to them, and therefore
believes that the discharge report(s) should also contain specific references to good and poor performance
by departments responsible (without naming names); believes, furthermore, that discharge reports should
refer to the relevant generic term (eg the Commission, the administration, the agency) and preferably con-
centrate on systems requiring reform, not individuals;

16.
Declares that, if previously undetected cases of irregularities, mismanagement and fraud emerge,
which took place entirely during a financial year other than that under consideration, they should not
affect the validity of discharge decisions already taken; considers that in such cases, the Committee on
Budgetary Control, after having consulted the specialised committee(s) concerned, should consider possible
appropriate courses of action in the context of the discharge procedure under examination, without influ-
encing the final decision on it; such courses of action should take the form of one or more of the follow-
ing non-exhaustive list of options, depending on the gravity of the facts brought to light:

(i)

a recommendation to the Committee on Budgets to:

(a)

freeze or reduce the amount of appropriations intended for the headings concerned in the follow-
ing year’s budget and/or

(b) authorise no transfers of appropriations involving the headings in question, especially those that

aim to increase the amounts entered in the budget, for a certain period;

(ii) a request that the President of the Commission demand the resignation of the Commissioner(s) con-

cerned;

(iii) a request to the Commission and/or Council to have recourse to Article 213(2), third subparagraph, of

the EC Treaty with regard to the Commissioner(s) concerned;

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Believes that the discharge report should include the following:

@ a proposal for a decision to grant, postpone or refuse discharge,

@ a proposal for a decision closing the accounts of all the Community’s revenue, expenditure, assets and

liabilities,

@ a motion for resolution containing comments accompanying the discharge decision including both an
assessment of the Commission’s budgetary management over the financial year and observations relat-
ing to the implementation of expenditure for the future, or, where discharge is postponed, the condi-
tions the Commission should comply with within a strict time-limit,

@ an explanatory statement,

@ annexes containing working documents drawn up by the Committee on Budgetary Control and opi-

nions from specialised committees;

points out that reports postponing discharge pursuant to Article 89(4) of the Financial Regulation must be
confined solely to the reasons for the postponement of discharge and must point to possible ways in
which the Commission can remove these obstacles;

Calls on its President to instruct the Committee on Constitutional Affairs to draw up proposals for
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new rules of procedure concerning discharge to all Institutions and bodies in the light of the recommenda-
tions in this resolution and following consultation of the Committee on Budgetary Control; new provisions
shall include the following:

@ decisions by plenary to grant or postpone discharge shall be taken by an absolute majority of the
votes cast, pursuant to Article 198 of the EC Treaty; however, in order to underline the serious poli-
tical consequences of refusing discharge, such a decision should only be taken by an absolute majority
of the Members of Parliament;

@ following an initial decision to postpone discharge, Parliament shall, by the July part-session at the

latest, grant or refuse discharge;

@ amendments in plenary proposing the opposite to the proposal of the Committee responsible shall be

admissible;

Urges that a decision to refuse discharge be followed by a debate on the political position of the

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Commission, following a statement by the latter pursuant to Rule 37 of the Rules of Procedure;

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Underlines that contacts with the various institutions and bodies in the context of the discharge
procedure should be made at the appropriate level, as laid down in the general guidelines on the delega-
tion of the President’s powers of representation, adopted by the Conference of Presidents on 11 March
1998; with regard to the Commission in particular, points to paragraph 17 of the Framework Agreement
of 5 July 2000 on relations between the European Parliament and the Commission (1), under which Parlia-
ment and the Commission agree that, in connection with the annual discharge governed by Article 276 of
the EC Treaty, the Commission shall forward all information necessary for supervising the implementation
of the budget for the year in question which the chairperson of the parliamentary committee responsible
for the discharge procedure pursuant to Annex VI to Parliament’s Rules of Procedure requests from it;
these requests for information from the Commission should be announced by the chairperson to the com-
mittee;

Reminds the Commission of its duty to provide the Committee on Budgetary Control with all
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information (including confidential documents) deemed necessary in the context of discharge, pursuant to
Article 276 of the EC Treaty; recommends that the Commission ensure that all its officials of head-of-unit
level and above be issued with detailed instructions on providing the Committee on Budgetary Control
with the documents necessary for the exercise of its mandate and that a copy of these instructions be
sent to the latter; these documents should reach Members in good time for a meaningful debate in com-
mittee; stresses that nothing in the discharge procedure should prejudice the rights of Members of the
European Parliament to request and obtain information under Article 197(3) of the EC Treaty, including
confidential information if necessary;

(1)

‘Texts Adopted’, Item 9.

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Official Journal of the European Communities

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17.8.2001

Wednesday 13 December 2000

22.
Believes that, if the Committee on Budgetary Control considers that the Commission is withholding
information, it should specify the nature of the information in question to enable the Commission to
comply with the request; points out that, should the Commission knowingly withhold information to
which the Committee on Budgetary Control is entitled, this should lead to postponement of the discharge;

23.
Asks that specialised committees present their final opinions on the discharge by 5 February, so
that the rapporteur of the Committee on Budgetary Control can take these into consideration when writ-
ing the report; considers that these opinions should be attached to the discharge report, but the Committee
on Budgetary Control should draw general political conclusions from them;

Internal Audit Service

Notes that, under the proposed new text of Article 24 of the Financial Regulation as approved by
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Parliament on 5 October 2000 (1), the European Parliament will be required to appoint an internal auditor;
believes that the appointment of an internal auditor will greatly assist the Committee on Budgetary Control
in its work; mandates its Bureau to ensure that a fully operational internal audit service is in place by
1 January 2002;

Court of Auditors’ special reports

25.
Considers that, in the light of the high priority that should be accorded to special reports, the
relevant specialised committees should be invited to appoint a draftsperson; notes that the committees
concerned are expected to cooperate closely in the consideration of special reports and that the rappor-
teurs from the relevant specialised committees should attend those meetings of the Committee on Budget-
ary Control at which the special report concerned is being considered;

26.
Calls on the Court of Auditors, in cases where it, or the discharge authority, has identified the need
for specific remedial action on the part of the auditee (be it a Community institution/body or a Member
State), or where the auditee has undertaken to take specific remedial action, to continue its current practice
of verifying that such action has been taken with the desired results and to report to the discharge author-
ity;

27.
Expects special reports to be considered in plenary within five months of the date when they were
referred by the President to the committees concerned: once that deadline has passed, special reports can-
not be considered;

Member States

Asks that all Member States should follow the lead already taken by some and give their response
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on the Court of Auditors’ annual report to the European Parliament by January of the following year; in
this reply, they should focus on the measures taken in response to the Court’s criticisms; takes the view
that if Member States fail to respond quickly to criticisms in Court of Auditors’ reports and sector letters,
the Court should not hesitate to name them;

Follow-up to the discharge report

29.
Instructs its Committee on Budgetary Control to put follow-up of discharge recommendations on its
agenda within six months of the adoption of the discharge report; the committee should take into account
a written report from the Commission and Member States on the actions taken, followed by an opportu-
nity for the discharge rapporteur to question the Commission representative in committee;

Requests the Commission’s Audit Progress Committee to follow up the Parliament discharge recom-

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mendations that relate to its mandate;

*

*

*

Instructs its President to forward this resolution to the Council, the Commission and the Court of

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Auditors.

(1)

‘Texts Adopted’, Item 5.