Resolution of the European Parliament containing the comments which form part of the decision on the discharge for implementing the general budget of the European Union for the financial year 2003, Section VII — Committee of the Regions
Date: 2005-04-12
Institutions: European Parliament
Subjects: European Committee of the Regions, budgetary discharge, financial year, general budget (EU), implementation of the budget

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Official Journal of the European Union

27.7.2005

RESOLUTION OF THE EUROPEAN PARLIAMENT

containing the comments which form part of the decision on the discharge for implementing the
general budget of the European Union for the financial year 2003, Section VII — Committee of the
Regions

THE EUROPEAN PARLIAMENT,

— having regard to the general budget of the European Union for the financial year 2003 (1),

— having regard to the revenue and expenditure account and balance sheet for the 2003 financial year

(C6-0020/2005),

— having regard to the Annual Report of the European Court of Auditors concerning the financial year

2003, together with the institutions’ replies (2),

— having regard to the Statement of Assurance as to the reliability of the accounts and the legality and
regularity of the underlying transactions, provided by the Court of Auditors pursuant to Article 248 of
the EC Treaty (3),

— having regard to Articles 272(10), 275 and 276 of the EC Treaty,

— 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 (4), in particular Articles 50,
86(4), 145, 146 and 147 thereof,

— having regard to the Financial Regulation of 21 December 1977 applicable to the general budget of the

European Communities (5),

— having regard to Rule 71 of and Annex V to its Rules of Procedure,

— having regard to the report of the Committee on Budgetary Control (A6-0066/2005),

The European Court of Auditors’ Annual Report

1.

2.

3.

Notes that the Committee of the Regions (CoR) administered a budget of EUR 38 999 436, of which
97,29 % (EUR 37 942 172,12) had been committed and 86,58 % (EUR 32 851 597) spent by
31 December 2003;

Welcomes the fact that the Court of Auditors, for the first time, has evaluated the control envir-
onment of all institutions individually and has published their observations in a separate part;

Notes that the CoR did not comply with a number of rules concerning the supervisory system and
controls:

— no charter for accountants was adopted,

— no minimum control standards were adopted,

— no risk analysis was performed in order to introduce the most appropriate control procedures,

— the follow-up of entitlements of officials and other staff to the various allowances and benefits

under the Staff Regulations was inadequate;

notes, however, that the CoR’s internal financial rules were adopted on 29 January 2003 and the
charter of accountants in May 2004;

(1) OJ L 54, 28.2.2003, p. 1.
(2) OJ C 293, 30.11.2004, p. 1.
(3) OJ C 294, 30.11.2004, p. 99.
(4) OJ L 248, 16.9.2002, p. 1.
(5) OJ L 356, 31.12.1977, p. 1.

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4.

5.

6.

7.

8.

Acknowledges that some delays in implementing the financial regulation can be explained by the fact
that the CoR’s financial service assisted the European Anti-Fraud Office (OLAF)
in an internal
investigation in 2003;

Points out that the CoR only gained financial and budgetary autonomy under the Amsterdam Treaty
in the year 2000;

Recognises that the CoR adopted some control standards in 2003; stresses however that a compre-
hensive document outlining the system of minimum control standards is still missing; asks to receive
a copy of the document when it has been adopted;

Calls on the CoR to systematically verify the entitlements of officials;

Notes that the CoR has published contracts awarded on its website;

Follow-up to the 2002 discharge procedure

9.

10.

11.

12.

‘(…) there is evidence of systemic
Points to the following observations in the 2001 discharge:
incompetence and disregard for the essential rules of tendering procedures and financial management,
including elements of fraud and fake offers’ (1);

Notes that the new Secretary-General initiated an administrative inquiry following the results of an
OLAF investigation, although its results were not communicated to the Committee on Budgetary
Control in time for the 2002 discharge; ‘(…) in his report the Secretary-General concluded that the
enquiry had identified individual failings and lack of professionalism as well as (…) administrative
weaknesses. However (…), none of these individual failings could be regarded (…) as serious enough
to justify the opening of disciplinary procedures against any of the officials concerned’ (2); takes note
that none of the officials who were the subject of the administrative inquiry has been promoted since
the completion of the report;

Notes that the former Secretary-General was initially granted unpaid leave and subsequently early
retirement with effect from September 2004, against the express wish of the European Parliament;

Emphasises again its support for the Internal Auditor, who drew the attention of the Committee on
Budgetary Control to irregularities which occurred in the CoR, and also its confidence in his personal
and professional integrity; is satisfied that this view is shared by the CoR, as recorded in a letter from
the CoR President to the Internal Auditor of 26 November 2003: ‘I am therefore pleased to learn that
the acting Secretary-General has assured his predisposition to assist you to carry out your functions
professionally and appropriately as Internal Auditor with the full support and cooperation of both
CoR members and staff.’; in addition, the CoR Secretary-General stressed in a written communication
to the rapporteur ‘(…) the positive role that (the Internal Auditor) has played by highlighting certain
weaknesses in the CoR’s administration. This was the starting point for the process of administrative
reform that the CoR commenced in the last months of 2003 in order to remedy the weaknesses
identified, in particular in the area of financial management.’;

13.

Acknowledges that the CoR, under the new Secretary-General, has made strenuous efforts to bring its
administration up to speed, by initiating an administrative overhaul, and that Parliament has been
kept informed about progress achieved on a regular basis; recognises with satisfaction the under-
takings given so far;

Annual activity report of the authorising officer and annual report of the internal auditor

14.

15.

Points out that the CoR has spent EUR 117 693 on five external studies; welcomes the additional
information on the use of the studies for committee work;

Notices that it has received neither the CoR report pursuant to Article 86(4) of the Financial
Regulation, nor the Internal Auditor’s annual report; notes that the position of internal auditor
was not occupied during the latter half of 2004 and was eventually advertised in a vacancy
notice on two occasions; asks to be informed about the outcome of this recruitment procedure;

(1) OJ L 57, 25.2.2004, p. 8.
(2) Letter from the CoR President to the Chairman and Rapporteur of the Committee on Budgetary Control of 6 May

2004.

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Other remarks

16. Welcomes the fact that the CoR regularly evaluates the impact of its political work; asks to also

receive the annual impact reports in the context of the discharge procedures;

17.

Remains concerned about the system of political control in the CoR; asks the CoR:

— to look into the possibility of formally setting up a Conference of (Group) Presidents, as the

political steering committee,

— to evaluate the effectiveness of the Bureau (of more than 50 members),

— to continue working towards greater effectiveness of the Commission for Financial and Admin-
istrative Affairs, noting that the streamlined format represents a significant improvement on the
original format, and to report back to Parliament’s competent committee in time for the 2004
discharge procedure;

18.

19.

Congratulates the CoR on the comprehensive preparatory work undertaken in 2003 to prepare for
enlargement; will follow up the measures taken in its 2004 discharge report;

Asks the CoR to evaluate the implications of the new Financial Regulation for its administrative and
political work in time for its review in 2005/2006 and to report its findings to the European
Parliament.