Resolution (EU) 2017/1655 of the European Parliament of 27 April 2017 with observations forming an integral part of the decision on discharge in respect of the implementation of the budget of the European Banking Authority for the financial year 2015
Date: 2017-04-27
Institutions: European Parliament
Subjects: EU office or agency, banking, budgetary discharge, financial year, general budget (EU)








L_2017252EN.01019901.xml










29.9.2017   


EN


Official Journal of the European Union


L 252/199








            RESOLUTION (EU) 2017/1655 OF THE EUROPEAN PARLIAMENT
         
of 27 April 2017
         
with observations forming an integral part of the decision on discharge in respect of the implementation of the budget of the European Banking Authority for the financial year 2015


THE EUROPEAN PARLIAMENT,






—


having regard to its decision on discharge in respect of the implementation of the budget of the European Banking Authority for the financial year 2015,










—


having regard to Rule 94 of and Annex IV to its Rules of Procedure,










—


having regard to the report of the Committee on Budgetary Control and the opinion of the Committee on Economic and Monetary Affairs (A8-0079/2017),










A.


whereas, according to its financial statements, the final budget of the European Banking Authority (the ‘Authority’) for the financial year 2015 was EUR 33 419 863, representing an decrease of 0,54 % compared to 2014, due to the Authority's recently established nature; whereas the Authority is financed by a contribution from the Union (EUR 13 367 600, representing 40 %), and contributions from Member States (EUR 20 051 400, representing 60 %),










B.


whereas the Court of Auditors (the ‘Court’), in its report on the annual accounts of the European Banking Authority for the financial year 2015 (the ‘Court's report’) has stated that it has obtained reasonable assurances that the Authority's annual accounts for the financial year 2015 are reliable and that the underlying transactions are legal and regular,










C.


whereas in the context of the discharge procedure, the discharge authority stresses the particular importance of further strengthening the democratic legitimacy of the Union institutions by improving transparency and accountability, implementing the concept of performance based budgeting, good governance of human resources;






1.   

Recalls that Parliament was a driving force behind the establishment of a new and comprehensive European System of Financial Supervision (ESFS), including the three European Supervisory Authorities (ESAs), to ensure a better financial supervision system after the financial crisis;



Follow-up of 2014 discharge









2.


Notes from the Court's report that, with regard to one comment made in the Court's 2012 report regarding the education contribution, which was marked as ‘ongoing’ in the Court's 2013 and 2014 reports, corrective actions were taken by the Authority and contracts were signed with 20 out of the 21 schools attended by children of staff;





Budget and financial management









3.


Notes, that the Court's assessment is very brief and offers few suggestions for improving the efficiency of the Authority's budget management;












4.


Acknowledges that the budget monitoring efforts during the 2015 financial year resulted in a budget implementation rate of 99,34 %, representing a decrease of 0,47 % compared with 2014, and that the rate of execution of payment appropriations was 89,70 %, representing an increase of 5,76 % compared with 2014; notes from the Authority that the high rate of execution is due both to good budget planning and monitoring and to the limited nature of the Authority's budget; notes that some elements of the Authority's work programme had to be postponed to 2016 or performed at a reduced level due to budget cuts;












5.


Notes that Parliament and the Council reduced the Authority's 2015 financial resources by 6 % compared to the previous year, despite allocating higher staffing levels; notes that, in order to implement those cuts, the Authority had to reduce its work programme and cut costs in areas such as operational missions and meetings, operational IT projects and staff training; acknowledges furthermore that the euro lost significant value against the pound sterling over the course of the year, forcing the Authority to request an amending budget of EUR 1,9 million, which was adopted in August 2015, in order to enable it to meet its financial obligations;












6.


Stresses the importance of ensuring an appropriate level of prioritisation and efficiency as regards resource allocation; considers, in this regard, that the initial budget cuts should not have been implemented by postponing the publication of standards and guidelines or by cutting attendance at Basel Committee on Banking Supervision (BCBS) working groups; emphasises that any potential increases in the Authority's means must be accompanied by adequate prioritisation measures; suggests that, as the Authority's workload is increasingly shifting from legislative tasks to supervisory convergence and enforcement, the Authority's budget and manpower should be allocated accordingly;












7.


Welcomes the fact that the Authority's 2016 budget was significantly improved, due to the Authority and Parliament and the Council taking on board the lessons learned from the previous year's process, which resulted in an increase of 20 % compared to the 2015 initial budget;





Commitments and carry-overs









8.


Notes that the Authority further reduced the overall rate of committed appropriations carried over from 15,90 % in 2014 to 9,7 % in 2015; notes that, according to the Court's report, the carry-overs of committed appropriations for Title II (administrative expenditure) were high at EUR 1 487 794, or 28 % of the total committed appropriations under this title, compared to EUR 3 431 070 or 48 % in 2014; acknowledges that those carry-overs included an unresolved issue regarding the outstanding VAT to be paid on the balancing charge of the Authority's new building, as well as an invoice concerning business rates by the UK Valuations Office;












9.


Welcomes the fact that the Authority decreased the value of carry forwards to 2016 by 40 % compared to the previous year, in the context of a decrease of 0,5 % in total budget between the two years; acknowledges that this reflects a return to more normal levels of carry forwards at the end of 2015, after the high 2014 carry forward which was driven by the Authority's move to its new premises in December 2014;





Transfers









10.


Notes from the Authority's final accounts that it executed 30 budgetary transfers during 2015; observes that the limit of 10 % referred to in Article 27 of the Authority's Financial Regulation was exceeded in only one instance; notes with satisfaction that the level and nature of transfers in the year 2015 remained within the limits of the financial rules;





Procurement and recruitment procedures









11.


Notes that the total number of the Authority's staff increased to 156 in 2015 from 146 in 2014, and consisted of 45 % females and 55 % males; notes that the total staff turnover due to resignation, non-renewal or contract expiry was 10,3 %, which was 2,6 % lower than in 2014; notes with satisfaction that the Authority conducted a job screening exercise as in previous years, which showed that 80,1 % of the jobs were operational, that is directly focused on the implementation of the Authority's mandate, 12,5 % included administration and coordination and 7,4 % were neutral; points out that for each four posts linked to the direct implementation of the Authority's mandate there is only one administrative post;












12.


Notes that the Authority shall ensure geographical and gender balance and compliance with the principle of equal opportunities, in accordance with Articles 1d and 27 of the Staff Regulations; notes that the Authority has published all its vacancies on its website;





Prevention and management of conflicts of interests and transparency









13.


Notes that the Authority adopted a conflict of interest policy in October 2014 and has ethics guidelines in place since 2012; acknowledges that during the recruitment procedure, future staff must declare potential conflicts of interest, in addition to the assessment of their CV; notes that all staff must declare potential conflicts of interest on an annual basis, which are assessed by the Authority's ethics officer; notes that the members of the board of supervisors and their alternates must also declare their actual or potential conflicts of interest, including economic interests, in particular any holdings in shares of financial institutions; notes further that all these declarations and those of the Authority's senior management are published on its website and are updated annually; regrets, however, that the CVs of neither the management board nor the board of supervisors are published on the Authority's website; calls on the Authority to publish those documents as soon as possible to ensure necessary public oversight and scrutiny of its management;












14.


Observes that the Authority adopted an Anti-Fraud Strategy which was to be fully implemented by the end of 2016; notes with satisfaction that in 2016 the Authority performed an initial fraud risk assessment within all departments, in addition to creating a dedicated anti-fraud section on its intranet with a communication channel for whistleblowers;












15.


Acknowledges from the Authority that it works closely together with all Member States in the preparation of regulatory reports in the area of its competence, which it publishes regularly; notes with satisfaction that the Authority implemented measures to ensure transparency regarding public speaking events and stakeholders it meets;












16.


Considers that the minutes of meetings of the board of supervisors and of the Stakeholder Groups, which are publicly available, should be published immediately after the meeting to reduce the current time lag of up to three months between meetings and disclosure of minutes and to provide better insight into the discussions held, members' positions and voting behaviour; believes that outreach to Union citizens could also be enhanced by web streaming events; is concerned about de facto unequal accessibility of documents and information from internal meetings to different stakeholders, including Parliament; welcomes that, among the ESAs, the Authority provides the most appropriate extent of disclosure of information on meetings of its staff with stakeholders; is of the opinion that the Authority should establish a secure channel for whistleblowers in the framework of its action plan for the years to come;





Internal audit









17.


Notes that the Commission's Internal Audit Service (IAS) performed a follow-up on the limited review on IT project management, which originally included four recommendations; notes furthermore that one recommendation rated as ‘important’ was already closed in February 2015 on the basis of an IAS desk review;












18.


Observes that the IAS conducted an audit on human resources management, which resulted in six recommendations, two marked as ‘very important’, four marked as ‘important’ and no critical recommendations; welcomes the fact that the Authority accepted all observations and recommendations and developed appropriate action plans which are being followed up regularly by the Authority;





Performance









19.


Notes that the Authority closely cooperates with the European Insurance and Occupational Pensions Authority (EIOPA) and the European Securities and Markets Authority (ESMA) across all support functions in order to reduce administrative costs were possible, to leverage synergies and to share best practices; looks forward to further efforts from the Authority to enhance cooperation with other decentralised agencies and further reduce overhead and administrative costs;





Other comments









20.


Notes that, on 23 June 2016, the citizens of the United Kingdom voted to leave the Union; points out that Article 50 of the Treaty on European Union provides that a Member State which decides to withdraw from the Union shall notify the European Council of its intention and the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal; acknowledges from the Court's report that the accounts and related notes of the Authority, which is located in London, were prepared using the information available at the date of signing of those accounts, when the results of the referendum were not yet known and the formal notification of the triggering of Article 50 had not been presented;












21.


Notes that following the outcome of the UK referendum on 23 June 2016, the Authority drafted impact assessments for all support areas, namely IT, human resources, procurement, corporate services and communications, which will be updated according to developments;












22.


Welcomes the detailed information provided by the Authority to the discharge authority on its current contractual commitments and liabilities linked to its physical presence in the UK; notes that, excluding the rental contract, the Authority's maximum potential contractual commitment or liability is EUR 33,16 million, but that there would be no financial penalties for early termination of these contracts if the applicable notice periods of between one and three months are observed; expresses concern, however, regarding the potential operational and business continuity risks and related costs of a relocation decision, such as the extra procurement work that may need to be carried out at short notice if the timing does not provide for a sufficient transition to a new location;












23.


Notes that the Authority signed a 12-year-lease with an end date of 8 December 2026 and that, under normal contractual conditions, there is a liability to pay the full rent for the entire period; observes, however, that the Authority negotiated a break-out clause at the midway point of the contract, meaning that if the clause is exercised, the Authority would be relieved of the obligation to pay the rent for the final six years; further notes that if the break-out clause is activated, the Authority has an obligation to repay half of an incentive (32 month rent-free period), which it had already received and which was based on the full 12 years of the contract; notes that the Authority is liable to restore the property to its original condition when leaving, in this case the Authority is obliged to pay for taking out the office fit-out that it had installed in the premises; notes that the exact amount is subject to expert estimates and further negotiations; asks the Authority to inform the Parliament on the amount once it is known;












24.


Following the triggering of the Article 50 by the Government of the United Kingdom, calls on the Commission and the Council to make the merits and the decision making process on the Authority's reallocation destination transparent and democratic;












25.


Recalls that the Authority's mixed financing arrangement, which relies heavily on contributions from national competent authorities, is inadequate, inflexible, burdensome and a potential threat to its independence; therefore calls on the Commission, in the White Paper planned for the second quarter of 2016 and in a legislative proposal to be presented by 2017, to launch a different financing arrangement based on a separate budget line in the budget of the Union and on the complete replacement of the contributions from national authorities by fees paid by market participants;












26.


Stresses that, while making sure that all assignments are carried out in full and within deadline, the Authority should stick only to the tasks assigned to it by Parliament and the Council; believes that the Authority should fully use its mandate to effectively foster proportionality; notes that, wherever the Authority is authorised to draw up Level 2 and Level 3 measures, it should pay particular attention to the specific features of the various national markets when drafting those standards and that market participants and consumer protection organisations concerned should be involved at an early stage in the standard-setting process and during drafting and implementation stages;












27.


Notes with concern that the Authority does not exercise all the prerogatives established in its legal framework; underlines that the Authority should ensure that resources are maximised in order to fully fulfil its legal mandate; notes, in this regard. that a closer focus on the mandate given to it by Parliament and the Council could result in a more efficient use of its resources and a more effective achievement of its objectives; stresses that, while carrying out its work and, in particular, when drafting technical standards and technical advice, the Authority needs to inform Parliament and the Council about its activities in a timely, regular and comprehensive manner;












28.


Refers, for other observations of a cross-cutting nature accompanying its decision on discharge, to its resolution of 27 April 2017 (1) on the performance, financial management and control of the agencies.






(1)  Texts adopted, P8_TA(2017)0155 (see page 372 of this Official Journal).