3. European Parliament resolution of 24 April 2007 with observations forming an integral part of the decision on the discharge for the implementation of the budget of the European Medicines Agency for the financial year 2005 (C6-0394/2006 - 2006/2161(DEC))
Date: 2007-04-24
Institutions: Committee on Budgetary Control, European Parliament
Subjects: European Medicines Agency, budgetary discharge, financial year, implementation of the budget

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Revenue and expenditure account for the financial years 2004 and 2005

Tuesday 24 April 2007

(in 1 000 EUR)

Expenditure

Staff expenditure

Administrative expenditure

Operating expenditure

Depreciation

Other expenses

Financial result (e)

2005

2004

40 057

17 022

41 999

5 333

104

34 333

11 224

38 573

3 650

280

Total expenditure (b)

104 515

88 060

Operating result (c = a−b)

Economic outturn (f = c+e)

2 121

2 257

4 378

8 353

1 160

9 513

Source: The Agency's data — This table summarises the data provided by the Agency in its annual accounts.

2.

Approves closing the accounts of the European Medicines Agency for the financial year 2005;

3.
Instructs its President to forward this decision to the executive director of the European Medicines
Agency, the Council, the Commission and the Court of Auditors, and to arrange for its publication in the
Official Journal of the European Union (L series).

European Parliament resolution of 24 April 2007 with observations forming an integral part of the
decision on the discharge for the implementation of the budget of the European Medicines Agency
for the financial year 2005 (C6-0394/2006 — 2006/2161(DEC))

3.

The European Parliament,

— having regard to the final annual accounts of the European Medicines Agency for the financial year

2005 (1),

— having regard to the Court of Auditors' report on the final annual accounts of the European Medicines

Agency for the financial year 2005, together with the Agency's replies (2),

— having regard to the Council's recommendation of 27 February 2007 (5711/2007 — C6-0080/2007),

— having regard to the EC Treaty, and in particular Article 276 thereof,

— having regard to Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial
the European Communities (3), and in particular

Regulation applicable to the general budget of
Article 185 thereof,

— having regard to Regulation (EC) No 726/2004 of the European Parliament and of the Council of
31 March 2004 laying down Community procedures for the authorisation and supervision of medicinal
products for human and veterinary use and establishing a European Medicines Agency (4), and in par-
ticular Article 68 thereof,

(1) OJ C 266, 31.10.2006, p. 4.
(2) OJ C 312, 19.12.2006, p. 12.
(3) OJ L 248, 16.9.2002, p. 1. Regulation as amended by Regulation (EC, Euratom) No 1995/2006 (OJ L 390,

30.12.2006, p. 1).

(4) OJ L 136, 30.4.2004, p. 1. Regulation as amended by Regulation (EC) No 1901/2006 (OJ L 378, 27.12.2006, p. 1).

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— having regard to Commission Regulation (EC, Euratom) No 2343/2002 of 19 November 2002 on the
framework Financial Regulation for the bodies referred to in Article 185 of Council Regulation (EC,
Euratom) No 1605/2002 (1), and in particular Article 94 thereof,

— 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 and the opinion of the Committee

on the Environment, Public Health and Food Safety (A6-0099/2007),

A. whereas the Court of Auditors stated that it obtained reasonable assurance that the annual accounts for
the financial year ended 31 December 2005 were reliable and that the underlying transactions, taken as
a whole, were legal and regular,

B. whereas on 27 April 2006 Parliament gave discharge to the director in respect of the implementation
of the Agency's budget for the 2004 financial year (2) and in the resolution accompanying the discharge
decision Parliament, inter alia,

— noted the Court of Auditor's finding that contracts concluded with banks had been in force for
over five years, in contravention of the Agency's financial regulation implementing rules, which
require a new invitation to tender at least every five years; noted the Agency's reply, explaining
the reasons for the delay in launching a call for tendering, and setting out the benefits achieved
through direct negotiation with the bank, and will bear this in mind when considering revisions to
the Financial Regulation;

— pointed out that the new pharmaceuticals legislation, which was adopted in 2004, had a consider-

able impact on the Agency's work and management structures;

General points concerning the majority of EU Agencies requiring individual discharge

1.
Considers that the ever-growing number of Community Agencies and the activities of certain of them
do not seem to form part of an overall policy framework, and that the remits of some Agencies do not
always reflect the real needs of the Union or the expectations of its citizens, and notes that in general terms
the Agencies do not always have a good image or a good press;

2.
Invites the Commission therefore to define an overall policy framework for the setting up of new
Community Agencies and to present a cost-benefit study before the setting up of any new agency, while
being careful to avoid any overlap of activities between Agencies or with the remits of other European
organisations;

Calls on the Court of Auditors to give its opinion on the cost-benefit study before Parliament takes its

3.
decision;

4.
Invites the Commission to present every five years a study on the added value of every existing
Agency; invites all relevant institutions in the case of a negative evaluation of the added value of an Agency
to take the necessary steps by reformulating the mandate of that Agency or by closing it;

5.
Considers it regrettable, given the growing number of regulatory agencies, that the negotiations on the
draft interinstitutional agreement on the operating framework for the European regulatory agencies have not
yet been concluded, and calls on the relevant departments of the Commission, in consultation with the
Court of Auditors, to do their utmost to ensure that the agreement is brought to a rapid conclusion;

(1) OJ L 357, 31.12.2002, p. 72.
(2) OJ L 340, 6.12.2006, p. 107.

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6.
Notes that the Commission's budgetary responsibility calls for closer linking of the Agencies to the
Commission; calls on the Commission and the Council to take all necessary steps to give the Commission a
blocking minority in the supervisory bodies of the regulatory Agencies by 31 December 2007 and to
provide for such a minority from the outset when new Agencies are set up;

7.
Invites the Court of Auditors to create an additional chapter in its Annual Report, devoted to all
Agencies to be discharged under the Commission's accounts in order to have a much clearer picture of
the use of EU funds by Agencies;

8.
Recalls the principle according to which all Community Agencies, whether subsidised or not, are
subject to discharge by the Parliament, even where a discharge authority exists by virtue of their constitutive
texts;

Calls on the Court of Auditors to perform performance audits for all Agencies and to report back to

9.
the relevant committees of Parliament, including the Committee on Budgetary Control;

10.
Notes that the number of Agencies is constantly increasing and that, in accordance with the Com-
mission's political responsibility for the operation of the Agencies, which goes far beyond mere logistical
support, there is an even higher need for the Directorates-General of the Commission charged with the
setting up and monitoring of Agencies to develop a common approach to the Agencies; considers that a
structure similar to the one created by the Agencies for coordination among the DGs concerned would be a
pragmatic way forward towards a common approach by the Commission on all matters relating to the
Agencies;

Invites the Commission to improve administrative and technical support to the Agencies, taking into

11.
account the growing complexity of the Community's administrative rules and technical problems;

Notes the lack of a disciplinary body in any of the Community Agencies, and calls on the Commis-

12.
sion to take the necessary steps to ensure that such a mechanism is rapidly put in place;

13. Welcomes the considerable improvements in the coordination among the Agencies, which allows
them to tackle recurring problems and makes cooperation with the Commission and Parliament more
efficient;

14.
Takes the view that the establishment by a number of Agencies of a shared support service aimed at
making their computerised financial management systems consistent with those of the Commission is a
measure that should be taken further and extended;

15.
Calls upon the Agencies to improve their cooperation and benchmarking with actors in the field;
urges the Commission and to adopt any measures it considers necessary to help the Agencies enhance their
image and raise the profile of their activities;

16.
Calls upon the Commission to come up with a proposal to harmonise the format of the annual
reporting by the Agencies and to develop performance indicators which would allow a comparison of
their efficiency;

Invites the Agencies to present at the beginning of every year performance indicators against which

17.
they could be measured;

Invites all Agencies to increasingly use SMART objectives which should lead to more realistic plan-

18.
ning and implementation of goals;

Agrees with the Court of Auditors that the Commission also bears responsibility for the (financial)
19.
management of the Agencies; therefore, urges the Commission to monitor and where necessary direct and
help the management of the different Agencies, especially in relation to the proper application of tender
procedures, transparency of recruitment procedures, sound financial management (underspending and over-
budgeting) and most importantly the proper application of the rules concerning the internal control frame-
work;

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Considers that the Agencies' work programmes should express their contributions in operational and
measurable terms and that due consideration should be given to the Commission's Internal Control Stan-
dards;

Specific points

21.
Notes that the implementation of the budget, the utilisation rates for commitment appropriations
(94 %) and payment appropriations (82 %) were on the whole high, and that for administrative expenditure
(Title II) the utilisation rate for commitment appropriations was less than 90 %, with more than 40 % of the
commitments made being carried over to the following financial year;

22.
Notes that the budget of the Agency has grown considerably between 2003 and 2005 due to the
enlargement of the European Union and new tasks; is very pleased with the increased appropriations for,
and the full implementation of, the Orphan Drugs budget line;

Invites the Agency to make sure that only staff members with delegation rights have access to the

23.
corresponding computer system;

Invites the Agency to integrate into its accounts the funds (1) collected from other Agencies and

24.
bodies to finance a common support service to develop their financial management information systems;

Demands that contract award procedures should be transparent and follow the guiding rules includ-

25.
ing in the IT area;

Invites the Agency to inform Parliament about the new call for tender concerning bank contracts

26.
according to standard rules as soon as possible;

27.
Points out that the new pharmaceuticals legislation, which was adopted in 2004, has had a consider-
able impact on the Agency's work, management structures and staff; congratulates the Agency on success-
fully adapting to the new regulatory framework, which entered into force in November 2005;

Is pleased at the launch of the ‘SME office’, providing financial and administrative assistance to micro,

28.
small and medium-sized enterprises (SMEs) pursuant to Commission Regulation (EC) No 2049/2005 (2);

29. Welcomes the efforts of the Agency to provide more scientific advice at early stages of the develop-
ment of new medicines as well as the introduction of measures to accelerate the assessment of medicines
that are of critical importance to public health; notes the work done by the Agency to facilitate a quick
assessment of vaccines in the event of an influenza pandemic;

30.
Requests that, before 1 January 2010 and every five years thereafter, the Agency commission an
independent external evaluation of its achievements on the basis of its founding Regulation and the work
programmes decided by the Management Board; requests further that the evaluation assess the working
practices and the impact of the Agency and take into account the views of the stakeholders, at both Com-
munity and national level; requests that the Management Board of the Agency examine the conclusions of
the evaluation and draft such recommendations to the Commission and Parliament as may be necessary
regarding changes in the Agency, its working practices and programmes, that the evaluation and the recom-
mendations to the Commission and Parliament shall be made public, for example on their websites, and
that the Funds needed to carry out the external evaluation shall be allocated through the budget of the
corresponding DG.

(1) Approximately EUR 400 000.
(2) Commission Regulation (EC) No 2049/2005 of 15 December 2005 laying down, pursuant to Regulation (EC)
No 726/2004 of the European Parliament and of the Council, rules regarding the payment of fees to, and the receipt
of administrative assistance from, the European Medicines Agency by micro, small and medium-sized enterprises. (OJ
L 329, 16.12.2005, p. 4).