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(2), and in particular Article 185 thereof,

17.10.2012 | EN | Official Journal of the European Union | L 286/298 ---|---|---|--- * * * DECISION OF THE EUROPEAN PARLIAMENT of 10 May 2012 on discharge in respect of the implementation of the budget of the European GNSS Agency for the financial year 2010 (2012/602/EU) THE EUROPEAN PARLIAMENT, — | having regard to the final annual accounts of the European GNSS Agency for the financial year 2010, ---|--- — | having regard to the Court of Auditors’ report on the annual accounts of the European GNSS Agency for the financial year 2010, together with the Agency’s replies (1), ---|--- — | having regard to the Council’s recommendation of 21 February 2012 (06083/2012 – C7-0051/2012), ---|--- — | having regard to Article 319 of the Treaty on the Functioning of the European Union, ---|--- — | 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 (2), and in particular Article 185 thereof, ---|--- — | having regard to Regulation (EU) No 912/2010 of the European Parliament and of the Council of 22 September 2010 setting up the European GNSS Agency (3), and in particular Article 14 thereof, ---|--- — | 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 on the Financial Regulation applicable to the general budget of the European Communities (4), and in particular Article 94 thereof, ---|--- — | having regard to Rule 77 of, and Annex VI to, its Rules of Procedure, ---|--- — | having regard to the report of the Committee on Budgetary Control (A7-0127/2012), ---|--- 1\. Grants the Executive Director of the European GNSS Agency discharge in respect of the implementation of the Agency’s budget for the financial year 2010; 2\. Sets out its observations in the resolution below; 3\. Instructs its President to forward this Decision and the resolution that forms an integral part of it to the Executive Director of the European GNSS Agency, the Council, the Commission and the Court of Auditors, and to arrange for their publication in the Official Journal of the European Union (L series). The President Martin SCHULZ The Secretary-General Klaus WELLE * * * (1) OJ C 366, 15.12.2011, p. 112. (2) OJ L 248, 16.9.2002, p. 1. (3) OJ L 276, 20.10.2010, p. 11. (4) OJ L 357, 31.12.2002, p. 72. * * * RESOLUTION OF THE EUROPEAN PARLIAMENT of 10 May 2012 with observations forming an integral part of its Decision on discharge in respect of the implementation of the budget of the European GNSS Agency for the financial year 2010 THE EUROPEAN PARLIAMENT, — | having regard to the final annual accounts of the European GNSS Agency for the financial year 2010, ---|--- — | having regard to the Court of Auditors’ report on the annual accounts of the European GNSS Agency for the financial year 2010, together with the Agency’s replies (1), ---|--- — | having regard to the Council’s recommendation of 21 February 2012 (06083/2012 – C7-0051/2012), ---|--- — | having regard to Article 319 of the Treaty on the Functioning of the European Union, ---|--- — | 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 (2), and in particular Article 185 thereof, ---|--- — | having regard to Regulation (EU) No 912/2010 of the European Parliament and of the Council of 22 September 2010 setting up the European GNSS Agency (3), and in particular Article 14 thereof, ---|--- — | 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 on the Financial Regulation applicable to the general budget of the European Communities (4), and in particular Article 94 thereof, ---|--- — | having regard to Rule 77 of, and Annex VI to, its Rules of Procedure, ---|--- — | having regard to the report of the Committee on Budgetary Control (A7-0127/2012), ---|--- A. | whereas the European GNSS Agency (‘the Agency’) became financially autonomous in 2006, ---|--- B. | whereas the Court of Auditors stated that it was unable to form an opinion on the accounts of the Agency for the financial year 2007 and points out that the entire architecture of the Galileo project was being revised in 2007 and that the Agency’s accounts were prepared in an uncertain legal environment, ---|--- C. | whereas the Court of Auditors nuanced its statement of assurance on the reliability of the annual accounts of the Agency for the financial year 2008 and on the legality and regularity of the underlying transactions, ---|--- D. | whereas the Court of Auditors stated that it has obtained reasonable assurances that the annual accounts of the Agency for the financial year 2009 are reliable and that the underlying transactions are legal and regular, ---|--- E. | whereas the Court of Auditors in its report on the annual accounts of the Agency for the financial year 2010 qualified its opinion with regard to the reliability of its annual accounts for 2010, ---|--- F. | whereas on 10 May 2011 Parliament granted the Executive Director of the Agency discharge for implementation of the Agency’s budget for the financial year 2009 (5), and in its resolution accompanying the discharge decision, inter alia: | — | urged the Agency to remedy the deficiencies in the final budget published by the Agency on 31 March 2010 as it did not reflect the final budget for 2009 approved by the Administrative Board and did not include revenue, ---|--- — | urged the Agency to remedy the deficiencies in staff selection procedures which infringe the principle of equal treatment in the application of the eligibility criteria in recruitment procedures open to both internal and external candidates, ---|--- — | called on the Agency to remedy the exclusion criteria for the seventh research framework programme (FP7) which were not published and checked, ---|--- — | noted that the discharge authority did not systematically prove that small and medium enterprises criteria, for the potential beneficiaries in one of the topics which were not met, had been verified, ---|--- G. | whereas in 2011 the Agency took the steps required by Parliament to guarantee transparency, equal treatment, and effectiveness in its staff selection procedures, ---|--- H. | whereas the budget of the Agency for the financial year 2010 was EUR 15 900 000 compared to EUR 44 400 000 in 2009, which represents a decrease of 64,19 %; whereas the Agency reported a contribution of the Union to its budget for 2010 of EUR 8 690 000, ---|--- Reliability of the accounts | 1. | Notes that, in keeping with the accounting practice of the Galileo programme, components in the amount of EUR 4 400 000, namely Satellite magneto-torquers, satellite propulsion thrusters, satellite fuel tanks (In Orbit Validation) and ground rubidium atomic clocks (Full Operational Capability), were recorded by the Agency in 2010 as research expenditure; ---|---|--- | 2. | Notes that these assets have been recorded as research expenditure instead of being classified as assets held for transfer by the Agency to the Commission; points out that this accounting practice is in line with the Union requirements for the accounting treatment of Galileo components; ---|---|--- | 3. | Notes that, in the report sent to Parliament on 28 February 2012, the Agency explained why these components were dealt with in its accounts as described above; ---|---|--- | 4. | Takes notes of the Agency’s reply to the Court of Auditors on this respect and acknowledges that the Agency justified not having recorded this equipment as assets in its accounts for the following reasons: | — | the objective of the IOV/FOC phase is to assess the technical feasibility of the system, which was not validated in 2010, given that the Commission, which administers, and is in charge of, the Galileo programme, does not intend to carry out the validation until later, ---|--- — | according to the Matimop Arrangement the equipment was never intended to be acquired by the Agency and was never and shall never be under its control; this is one of the main conditions for recognition of an asset according to Union accounting standards, ---|--- — | from an accounting perspective it was found to be not prudent to recognise an asset without any economic benefit/value for the Agency, ---|--- — | based on the above and in line with a Commission’s consistent accounting practice in such a situation, the costs for the equipment were booked as research expenditure in 2010; ---|--- | 5. | Acknowledges in addition the Court of Auditors’ observations that, following the entry into force of Regulation (EC) No 683/2008 of the European Parliament and of the Council of 9 July 2008 on the further implementation of the European satellite navigation programmes (EGNOS and Galileo) (6), most of the activities and assets related to the EGNOS and Galileo programmes were transferred to the Commission in December 2009 but at 31 December 2010 the status of EUR 2 000 000 held by the Agency in respect of technical support from the European Space Agency had still to be determined; notes from the Agency that the transfer of EUR 2 000 000 was finalised on 3 October 2011; ---|---|--- Budget and financial management | 6. | Takes note from the Agency that the final contribution made by the Union to the Agency for 2010 amounted to EUR 8 690 000 and that this amount includes the initial budget of EUR 5 135 000 complemented by the recovery of surplus of EUR 2 755 000 and an additional amount of EUR 800 000 of payment appropriations to reinforce Title III (Operational expenditure); ---|---|--- | 7. | Acknowledges from its Report on Budgetary and Financial Management (RBFM) that the budget of the Agency for the financial year 2010 was subject to one amendment by the Administrative Board; takes note that the amending budget reflected a decision from DG ENTR to reinforce the Agency’s payment appropriations on budget line 3100 ‘Expenditure for studies’ by EUR 800 000 in order to maintain payment capacity on commitments carried over from previous years and on those entered into in 2010; ---|---|--- | 8. | Establishes its RBFM that the budget execution rate of the Agency reached 97 % for expenditure financed by the Union operation subsidy and 89 % for the operational activities financed from earmarked revenue; notes in particular that the budget execution rate of the Agency reached: | — | 96 % in terms of commitments and 89 % in terms of payments under Title I (Staff expenditure), ---|--- — | 99 % in terms of commitments and 78 % in terms of payments under Title II (Administration expenditure), ---|--- — | 99 % in terms of commitments and 60 % in terms of payments under Title III (Operational expenditure), ---|--- is concerned that under Title III the Agency’s execution rate in terms of payments was only of 60 % compared to 97 % in 2009; welcomes the fact that the Agency has taken the necessary measures to remedy this situation, which have in fact translated into a high out-turn of payments in 2011 (90 % for Title III and 94 % for the budget as a whole); | 9. | Ascertains from the RBFM that two internal transfers of a total value of EUR 205 000 were authorised by the Executive Director in 2010; ---|---|--- | 10. | Takes note from its Annual Activity Report (AAR) that the Agency received pre-financing from the Commission amounting to EUR 2 606 675 and EUR 4 556 158 in accordance with the FP7 Delegation Agreement; ---|---|--- Grant procedures | 11. | Calls on the Agency to rectify the deficiencies identified by the Court of Auditors in the evaluation process as regards the FP7/Galileo/Second Call grant procedures which has a budget of EUR 26 000 000; acknowledges in particular the Court of Auditors’ observations according to which the criteria for assessing the applicants’ financial capacity were not defined and although the status of the applicant determined the maximum reimbursement rate, such status was not verified by the Agency; ---|---|--- | 12. | Urges the Agency, in addition, to remedy the weaknesses found by the Court of Auditors on two grant agreements within the sixth research framework programme (FP6)/Third Call; notes in particular that the cost claims submitted by the beneficiaries were based on standard rates, instead of actual costs; reminds the Agency that this is not in compliance with the non-profit principle for Union financial contributions and that the Agency should promptly redress the situation; ---|---|--- | 13. | Acknowledges, in addition, the Court of Auditors’ observations according to which five audited grants, related to the FP6, showed delays of between one and three years in their implementation and successive increases in the initial value of the contracts were noted; notes that the Agency justified those delays by stating that the technological leading-edge nature of the activities is subject to constant change and therefore the Agency decided that those amendments and extensions were necessary and useful for the entire Galileo programme; notes that, in any case, the Agency states that it never exceeded the limit laid down in the budget for contracts as a whole; ---|---|--- Procurement activities | 14. | Notes from its AAR that the Agency had the following procurement activities in 2010: | — | 65 purchase orders corresponding to an overall amount of approximately EUR 900 000, ---|--- — | six negotiated procedures corresponding to an overall amount of EUR 470 000, ---|--- — | three open calls corresponding to an overall amount of EUR 9 400 000; ---|--- Consistency of the Annual Work Programme (AWP) and the AAR | 15. | Notes that the Agency’s AAR does not necessarily mirror its AWP; establishes, in addition, that the objectives of its AWP are rather vague and therefore is quite difficult to assess and check whether they have been fulfilled; urges the Agency, therefore, to improve its AWP in order to allow the discharge authority to better evaluate the efficiency of the Agency; points out that the Agency has taken note of the Court of Auditors’ recommendations, and welcomes the fact that, as a result, the format of the next AWPs will conform to the requirements; ---|---|--- Human resources | 16. | Urges the Agency to improve the selection procedures in order not to jeopardise the transparency of recruitment; acknowledges the Court of Auditors’ observations according to which in the staff selection procedures audited, threshold scores were not determined for admission to written tests and interviews or for inclusion in the list of suitable candidates; ---|---|--- | 17. | Notes from its AAR that the Agency launched 16 recruitment processes and reached a total headcount of 40 by the end of 2010; ---|---|--- | 18. | Notes also from its AWP that the Agency provided for 42 total staff, whereas the total staff in employment as at 31 December 2010 were 40 (five more than in 2009): 18 operational, 14 administrative and eight mixed; ---|---|--- Internal audit | 19. | Acknowledges from its AAR that the Agency finalised its risk management policy and a risk register was developed; ---|---|--- | 20. | Notes in addition from the Agency’s AAR that at the end of 2010 there were no critical recommendations open by the Internal Audit Service, but there were five open recommendations related to: | — | the disclosure of objectives and performance indicators in the AWP, ---|--- — | the need to formalise the appointment of the Accounting Officer by the Administrative Board, ---|--- — | the establishment of adequate financing decisions, ---|--- — | the reinforcement of key controls in grant management, ---|--- — | the update of financial delegations and the regular assessment of ABAC users’ rights; ---|--- | 21. | Welcomes the fact that, according to the Agency’s annual implementation review of recommendations issued in December 2011, the above mentioned five open recommendations have been implemented; ---|---|--- | 22. | Draws attention to its recommendations from previous discharge reports, as set out in the Annex to this resolution; ---|---|--- | 23. | Refers, in respect of the other observations accompanying its Decision on discharge, which are of a horizontal nature, to its resolution of 10 May 2012 (7) on the performance, financial management and control of the agencies. ---|---|--- * * * (1) OJ C 366, 15.12.2011, p. 112. (2) OJ L 248, 16.9.2002, p. 1. (3) OJ L 276, 20.10.2010, p. 11. (4) OJ L 357, 31.12.2002, p. 72. (5) OJ L 250, 27.9.2011, p. 232. (6) OJ L 196, 24.7.2008, p. 1. (7) Texts adopted, P7_TA(2012)0164 (see page 388 of this Official Journal). * * * ANNEX EUROPEAN PARLIAMENT RECOMMENDATIONS OVER THE PAST YEARS European GNSS Agency | 2006 | 2007 | 2008 | 2009 ---|---|---|---|--- Budgetary and financial management | | — | Weaknesses in the operation of the management and control systems: in 12 cases, the initiating official for the transaction did not have the delegated authority and the appropriate financial circuit was not followed ---|--- — | Uncertainties with regard to Galileo and EGNOS project assets ---|--- | — | Weaknesses in the management of the budget: absence of a clear link between the Authority’s work programme and the budget, transfers neither adequately justified nor documented, repeated late booking of recovery orders in the budgetary accounts and inconsistent presentation of the budget’s implementation ---|--- — | Even with a de facto 50 % budget reduction, the consumption level of commitment and payment appropriations for operational activities was low: 63 % for commitments an 51 % for payments ---|--- — | Regrets that the Court of Auditors nuanced its statement of assurance on the reliability of the annual accounts for the financial year 2007 and on the legality and regularity of the underlying transactions ---|--- — | Uncertainties with regard to Galileo and EGNOS project assets ---|--- | — | Weaknesses in the management of the budget: No proper amending budget was established ---|--- — | Regrets that the Court of Auditors nuanced its statement of assurance on the reliability of the annual accounts for the financial year 2008 and on the legality and regularity of the underlying transactions ---|--- — | Uncertainties with regard to Galileo and EGNOS project assets ---|--- | — | The exclusion criteria for the framework programme 7 were not published and checked and the Authority did not systematically evidence that it had verified that the small and medium enterprises criteria for the potential beneficiaries participating in one of the topics were not met ---|--- — | The final budget published by the Authority on 31 March 2010 did not reflect the final budget for 2009 approved by the Administrative Board and did not include its revenue, urges the Authority therefore to remedy the situation and inform the discharge authority of the change ---|--- Human resources | n.a. | n.a. | n.a. | | — | Deficiencies in staff selection procedures ---|--- — | The need to remedy deficiencies which infringe the principle of equal treatment in the application of the eligibility criteria in recruitment procedures open to both internal and external candidates ---|--- Internal audit | n.a. | n.a. | Calls on the Agency to fulfil the last two recommendations made by the Internal Audit Service in 2007: i.e. sensitive posts and job description | Acknowledges two remaining important IAS recommendations yet to be implemented relate to sensitive posts and job descriptions * * *