Resolution of the European Parliament with comments forming an integral part of the decision on the discharge for implementation of the European Union general budget for the financial year 2004, Section V — Court of Auditors
Date: 2006-04-27
Institutions: European Parliament
Subjects: European Court of Auditors, budgetary discharge, financial year, general budget (EU), implementation of the budget

6.12.2006

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Official Journal of the European Union

L 340/37

RESOLUTION OF THE EUROPEAN PARLIAMENT

with comments forming an integral part of the decision on the discharge for implementation of
the European Union general budget for the financial year 2004, Section V — Court of Auditors

THE EUROPEAN PARLIAMENT,

— having regard to the general budget of the European Union for the financial year 2004 (1),

— having regard to the final annual accounts of the European Communities for the financial year 2004,

Volume III (N6-0027/2005 — C6-0361/2005),

— having regard to the Court of Auditors' annual report for the financial year 2004, accompanied by the

replies of the institutions audited (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 the Council's recommendation of 14 March 2006 (5971/2006 — C6-0092/2006),

— 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), and in particular Arti-
cles 50, 86, 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 (A6-0113/2006),

1.

2.

Notes that
96 925 410, with a utilisation rate of 81,5 %;

in 2004 the European Court of Auditors (ECA) administered a budget of EUR

Recalls that the 2004 accounts of the ECA were audited by an external firm, KPMG (6), which
concluded that

‘[i]n our opinion the (…) accounting data and financial statements give a true and fair view, in
accordance with the Financial Regulation, the implementing rules, generally accepted accounting
principles and the European Court of Auditor's Internal Rules, of the assets and the financial posi-
tion of the European Court of Auditors at 31 December 2004 and of the economic result and the
revenue and expenditure for the financial year then ended.’;

3.

Notes with interest the terms of the certificate (7) issued by ECA's auditors, KPMG drawing attention
for the first time:

‘to the information given in note 1 of the Annex to the financial statements, to the effect that, in
accordance with accounting standard No 12 (Employee benefits), which was adopted on
28 December 2004 by a decision of the Commission's accounting officer pursuant to Article 133 of
the Financial Regulation applicable to the general budget of
the European Communities on
31 December 2004 for the first time the Court recorded a provision for its Members' pensions
combined with a long-term claim on the Member States to the value of EUR 43 689 621. The
amount of the provision was calculated on the basis of an actuarial analysis carried out by the Euro-
pean Commission.’;

(1) OJ L 53, 23.2.2004.
(2) OJ C 301, 30.11.2005, p. 1.
(3) OJ C 301, 30.11.2005, p. 9.
(4) OJ L 248, 16.9.2002, p. 1.
(5) OJ L 356, 31.12.1977, p. 1.
(6) Report by the external auditor on the Court of Auditor's accounts for the financial year 2004 (OJ C 299,

29.11.2005, p. 1).

(7) Report by the external auditor on the Court of Auditor's accounts for the financial year 2004 (OJ C 299,

29.11.2005, p. 1).

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Official Journal of the European Union

6.12.2006

4.

5.

6.

7.

Notes that the extension to the ECA's headquarters building in Luxembourg, under construction
since 2001, was occupied in October 2003, ahead of the scheduled date of June 2004; notes also
that the accounts for the project are in the process of being closed and that a full report will be
provided to the budgetary authority in due course;

Notes further a reference in the KPMG report under off-balance sheet commitments to an under-
taking by the ECA to acquire land for a further extension (the K3 project); notes that the K3 project
is intended to meet the ECA's expected needs arising from the future accession of Bulgaria, Romania
and one other country at an estimated cost of EUR 26 450 000 (April 2003 prices) (1); notes the
ECA's wish ‘to distribute the risks associated with such a project more widely, so that these are not
ultimately borne to such a large degree by the European taxpayer’; asks to be informed about how
this aim will be achieved, with special reference to financial liability for cost overruns;

Approves the holding at regular intervals of calls for tender for the appointment of an external firm
to audit the ECA's accounts, while expressing concern at the dominant position occupied by a small
number of large accountancy practices in Luxembourg and elsewhere; calls for a tender procedure
for the appointment of external auditors that is transparent, fair and intelligible to Parliament;

Notes that following the latest enlargement in 2004 and its expansion to 25 Members, the ECA has
reorganised its structure into four audit groups and a coordination group; queries whether a struc-
ture involving 25 Members and their cabinets is the most effective one possible; calls on the ECA to
examine the possibility of reducing the number of Members to one third of the number of Member
States;

8.

Recalls the view expressed by the House of Lords Select Committee on the European Union in rela-
tion to the negotiations over the Convention on the future of Europe that

‘[t]he ECA's present structure of 15 members of equal status, one from each Member State, who act
as a college, is in need of change and, come enlargement, will have to change. A Court with over 20
full-time executive members would be unwieldy, sluggish and ineffective. The proposal for a system
of “chambers”, a concept now incorporated by the Nice Treaty, appears to be merely a mechanism
to absorb members without improving efficiency and is not radical enough to solve this problem.’;

Recalls that Mr Weber, President of the ECA, in a speech in Strasbourg on 14 November 2005 told
the Committee on Budgetary Control that the ECA was carrying out a self-assessment of its organi-
sation and methods to be followed by a ‘peer review’; hopes that it will be possible to devise a more
rational structure for the ECA before the next enlargement;

Suggests that this review of the ECA's working methods could include as one of the possible options
the proposal by the House of Lords to replace the current structure by ‘a highly qualified chief
executive supported by a strong auditing staff, and reporting to a part-time, non-executive board of
representatives from each of the Member States’;

9.

10.

11. Welcomes the forwarding to the discharge authority of the annual activity report together with the

signed declaration by the authorising officer by delegation;

12.

13.

Is grateful for the transmission to the discharge authority of the annual report on the internal audit
function but regrets that despite the request contained in paragraph 15 of its resolution of 12 April
2005 (2) this one-page report still does not provide a clear picture of the current control environ-
ment;

Recalls, as regards official cars for use by ECA Members, that its resolution of 27 October 2005 (3)
calls on the ECA to amend by 1 November 2005 its administrative decision of 15 June 2004 in
such a way as to rule out the private use of official cars;

(1) Source: The buildings policy of the ECA, overview and state of play, September 2003.
(2) OJ L 196, 27.7.2005, p. 47.
(3) Texts Adopted, P6_TA(2005)0410.

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14.

15.

Invites the ECA to consider publishing Members' declarations of financial interests on its website,
thereby contributing to the greater transparency of the institutions; believes that it would improve
transparency if greater publicity were given to Council Regulation (EEC, Euratom, ECSC)
No 2290/77 determining the emoluments of the Members of the Court of Auditors (1), possibly by
publishing it on the ECA's website;

Recalls that, following an investigation by OLAF, legal proceedings against a former Member of the
ECA have been pending before the courts of the Grand-Duchy of Luxembourg for some consider-
able time; regrets that all too often final case reports forwarded by OLAF to the Member States'
authorities are simply filed without further action; believes that judicial delay is not an acceptable
response to a potentially embarrassing dossier; will follow attentively the Luxembourg judicial
authorities' hearing of the above case.

(1) OJ L 268, 20.10.1977, p. 1. Regulation as last amended by Regulation (EC, Euratom) No 1293/2004 (OJ L 243,

15.7.2004, p. 26).