PURPOSE : to grant discharge to the European Parliament for the implementation of the 2003 general budget.

LEGISLATIVE ACT : Decision 2005/531/EC, Euratom of the European Parliament on the discharge for implementing the general budget of the European Union for the financial year 2003 (Section I – European Parliament).

CONTENT : with the present decision, the European Parliament grants a discharge to its Secretary General for the implementation of the general budget for 2003.

This decision is in line with the European Parliament’s resolution adopted on 12 April 2005 and comprises a series of observations that form an integral part of the discharge decision (please refer to the summary of the opinion of 12/04/2005).

The European Parliament adopted the resolution drafted by Ona JUKNEVICIENE (ALDE, LT) recommending that the President of Parliament be granted the budgetary discharge for 2003 . It noted that in 2003 98.98 % of the appropriations entered in Parliament's budget were committed with a cancellation rate of 1.02 % and that as in previous years a very high level of budget implementation was achieved. W ithout calling into question Parliament's settled policy of buying rather than renting its buildings, Parliament felt that that this high level of implementation is partly attributable to the consistent practice since 1992 of the "ramassage" (mopping-up transfer) for the purposes of transferring any appropriations available at year end to the budget lines for buildings and, in particular, for advance payments of capital to reduce future payments of interest. It r ecognised that the greater part of Parliament's property acquisition programme has already been completed, but urged the budgetary authorities to ensure optimum budgetary forecasting and that the amounts entered in the draft budget reflect Parliament's real requirements rather than resorting systematically to significant transfers from unrelated budget lines.

Parliament moved on to point out that m uch of the management activity of the Institution in 2003 was geared to adjusting to the new requirements of the Financial Regulation, setting up new systems, methodologies and working methods, devising training programmes and establishing new lines of responsibility. It noted that the Court praised Parliament's efficiency in putting the new structures in place. Parliament recognised that the transition from a highly centralised to a decentralised approach to internal control procedures in a short space of time represented a major challenge in 2003, and noted that of the smaller institutions, Parliament - thanks to the efforts of its Administration - was one of the few to have succeeded in adopting the necessary subsidiary texts in time for the entry into force of the new Financial Regulation on 1 January 2003.

With regard to the general expenditure allowance, Parliament r equested the Quaestors to review the general rules for reimbursement of allowances to see if changes are required to be able to maximise the use of new IT capabilities. On s ecretarial assistance allowance, it noted that Bureau adopted amendments to the rules governing the secretarial allowance intended, inter alia, to ensure greater consistency between the rules and the requirements of the Financial Regulation.

On the Member’s voluntary pension scheme, Parliament noted that according to the latest revised actuarial valuation dated 31 December 2003, the fund's future liabilities at that date exceeded its current assets by EUR 41 795 982 and that the actuarial funding level at the end of 2003 was 76.4%. It recalled the view of the Court of Auditors that there should be clear rules established in the scheme to define the liabilities and responsibilities of the European Parliament and of the Members of the scheme if a future actuarial valuation were to indicate a deficit. It was necessary to clarify precisely the nature of Parliament's liability vis-à-vis future financial obligations linked to the pension fund. Furthermore, Members" contributions to the Fund should be deducted from a personal source rather than the parliamentary allowance system. Parliament felt that , as soon as the Statute for Members is approved, a new and separate pension instrument, equal for all Members, should be set up and that from that date all contributions from Parliament's budget to a voluntary pension fund should stop. It expressed concern at the view taken by the Court of Auditors that if the present scheme were to continue, a sufficient legal basis (other than a Bureau decision) had to be created as soon as possible, and that Parliament's financial contribution to the voluntary pension scheme should be based on an act of secondary legislation adopted in conformity with Article 190(5) of the Treaty.

Finally, on the matter of buildings, Parliament n oted that the long-running dispute between Parliament and the French authorities over the final purchase price of the Strasbourg LOW building was resolved at the end of 2003 and that purchase was completed in 2004. It recalled that the absence of a single working place resulted in significant extra costs for Parliament's budget. The cost of siting the European Parliament in three countries is put at more than EUR 200 million per year.

The European Parliament adopted the resolution drafted by Ona JUKNEVICIENE (ALDE, LT) recommending that the President of Parliament be granted the budgetary discharge for 2003 . It noted that in 2003 98.98 % of the appropriations entered in Parliament's budget were committed with a cancellation rate of 1.02 % and that as in previous years a very high level of budget implementation was achieved. W ithout calling into question Parliament's settled policy of buying rather than renting its buildings, Parliament felt that that this high level of implementation is partly attributable to the consistent practice since 1992 of the "ramassage" (mopping-up transfer) for the purposes of transferring any appropriations available at year end to the budget lines for buildings and, in particular, for advance payments of capital to reduce future payments of interest. It r ecognised that the greater part of Parliament's property acquisition programme has already been completed, but urged the budgetary authorities to ensure optimum budgetary forecasting and that the amounts entered in the draft budget reflect Parliament's real requirements rather than resorting systematically to significant transfers from unrelated budget lines.

Parliament moved on to point out that m uch of the management activity of the Institution in 2003 was geared to adjusting to the new requirements of the Financial Regulation, setting up new systems, methodologies and working methods, devising training programmes and establishing new lines of responsibility. It noted that the Court praised Parliament's efficiency in putting the new structures in place. Parliament recognised that the transition from a highly centralised to a decentralised approach to internal control procedures in a short space of time represented a major challenge in 2003, and noted that of the smaller institutions, Parliament - thanks to the efforts of its Administration - was one of the few to have succeeded in adopting the necessary subsidiary texts in time for the entry into force of the new Financial Regulation on 1 January 2003.

With regard to the general expenditure allowance, Parliament r equested the Quaestors to review the general rules for reimbursement of allowances to see if changes are required to be able to maximise the use of new IT capabilities. On s ecretarial assistance allowance, it noted that Bureau adopted amendments to the rules governing the secretarial allowance intended, inter alia, to ensure greater consistency between the rules and the requirements of the Financial Regulation.

On the Member’s voluntary pension scheme, Parliament noted that according to the latest revised actuarial valuation dated 31 December 2003, the fund's future liabilities at that date exceeded its current assets by EUR 41 795 982 and that the actuarial funding level at the end of 2003 was 76.4%. It recalled the view of the Court of Auditors that there should be clear rules established in the scheme to define the liabilities and responsibilities of the European Parliament and of the Members of the scheme if a future actuarial valuation were to indicate a deficit. It was necessary to clarify precisely the nature of Parliament's liability vis-à-vis future financial obligations linked to the pension fund. Furthermore, Members" contributions to the Fund should be deducted from a personal source rather than the parliamentary allowance system. Parliament felt that , as soon as the Statute for Members is approved, a new and separate pension instrument, equal for all Members, should be set up and that from that date all contributions from Parliament's budget to a voluntary pension fund should stop. It expressed concern at the view taken by the Court of Auditors that if the present scheme were to continue, a sufficient legal basis (other than a Bureau decision) had to be created as soon as possible, and that Parliament's financial contribution to the voluntary pension scheme should be based on an act of secondary legislation adopted in conformity with Article 190(5) of the Treaty.

Finally, on the matter of buildings, Parliament n oted that the long-running dispute between Parliament and the French authorities over the final purchase price of the Strasbourg LOW building was resolved at the end of 2003 and that purchase was completed in 2004. It recalled that the absence of a single working place resulted in significant extra costs for Parliament's budget. The cost of siting the European Parliament in three countries is put at more than EUR 200 million per year.

The committee adopted the report by Ona JUKNEVICIENE (ALDE, LT) recommending that the President of Parliament be granted the budgetary discharge for 2003 . In its accompanying comments, the committee noted that, "as in previous years a very high level of budget implementation was achieved". This was due largely to Parliament's consistent policy of buying rather than renting its buildings. MEPs said that, of the smaller institutions, Parliament was one of the few to have implemented the new Financial Regulation in good time, although they queried " whether the degree of scrutiny and the complexity of the control apparatus currently in place is wholly proportionate", given that Parliament's budget is essentially administrative.

The committee also argued that Parliament had the right to decide on its own seat, which - on logical cost-effective grounds - should be in Brussels , where "the vast majority of parliamentary activity already takes place" and where the other main EU institutions are based.

On the subject of Members' pay and expenses, the committee supported "the initiative undertaken by the current presidency of the European Union to reach agreement on the Members' Statute introducing a single remuneration for Members of the European Parliament" because of the discrepancy between Members' salaries since enlargement. However, it believed that, "even in the absence of a common statute, it should be possible to devise a system that is clear, transparent and fair". The report added that, as soon as the statute was approved, a new and separate pension instrument should be set up and that from that date all contributions from Parliament's budget to a voluntary pension fund should stop.

MEPs also made a list of recommendations to Parliament's Bureau. They deplored the lack of clarity regarding social security obligations of parliamentary assistants. They also said it was unacceptable that smoking was allowed in Parliament's offices and demanded "urgent action to reduce the level of smoke on its premises".

PURPOSE : to present the report from the Court of Auditors on the implementation of the budget for the financial year 2003 (Other institutions – European Parliament).

CONTENT : in its 27 th Annual Report on the 2003 financial year, the Court states that, on the whole, the institutions have made a considerable effort to adapt their supervisory systems and controls to the requirements of the new Financial Regulation. Nevertheless, most of them have not succeeded to implement the changes necessary and weakness have been stated in terms of the legality and regularity of the underlying transactions. These discrepancies do not however jeopardise the positive character of the State of Assurance (DAS) on the implementation of the budget for the other institutions.

Concerning the expenditure, the Court highlights that there were no significant discrepancies. It does note that the new supervisory systems and controls should have been better applied by all the institutions in order to respect the rules of the new Financial Regulation.

It should be noted that in 2003, the authorising officers by delegation have presented for the first time annual activity reports which provide very useful information on the working of the control systems. The Court would like these report to be more comprehensive so that they can be used in the framework of the annual DAS.

More specifically, as regards the execution of the Parliament’s budget, the Court of Auditors states that the decentralisation of the controls was a difficult task as the financial and internal control procedures had previously been highly centralised and dependent on the work carried out by the Financial Controller. During 2003, the Parliament was able to implement new control methods, based on decentralised ‘Internal Control Frameworks’, including ‘Minimum Standards for Internal Control’ (MSIC), a ‘Central Financial Service’ and an internal audit function. However, the authorising officers were not able to fully apply all the MSIC. This was recognised by the authorising officers themselves in a self-assessment of the level of implementation of the MSIC carried out while preparing the annual activity reports at the beginning of 2004.

Moreover, the Court’s audit identified weaknesses at the level of the ex ante controls on staff salary payments. Key controls formerly carried out by the Financial Controller in the field of staff remunerations, were not replaced by equally effective checks. This was due to problems with the availability of a new computer system.

PURPOSE : to present the revenue and expenditure account and the balance sheet concerning the activities of the budget for the financial year 2003 (European Parliament).

CONTENT : this document sets out the amount of expenditure and the balance sheet for the other institutions of the Union (except the Commission) for the financial year 2003, in particular the European Parliament.

The document shows that the appropriations included in the Parliament’s budget for 2003 amounted to EUR 1 086 644 375, committed to the amount of EUR 1 075 556 058, that is 98.9%. 1.02% of the final appropriations were cancelled.

The final appropriations were paid to the amount of EUR 862 078 203 EUR in 2003, representing 80.15% of the committed appropriations. Concerning the appropriations carried over from 2002 to 2003, 13.61% of the payment appropriations were finally cancelled and 86.39% were paid.

As regards the implementation of the budget, the 2003 budget was marked by a series of amendments made to the initial allocations of certain posts, in particular :

- the implementation of the new regulatory measures concerning pensions of EP staff (adaptation of a special retirement system for civil servants/officials);

- releasing the appropriations from the reserve linked to enlargement;

- new budget guidelines on the acquisition of buildings : in particular, the repurchasing of the Louise Weiss Building in Strasbourg due to various anticipatory budget operations.

Concerning the utilisation of appropriations by heading, 2003 was marked by :

1) the implementation of the new Financial Regulation : new internal administrative rules were put in place for the internal control services, the financial authorizing officer, auditors and the entire accounting department of the European Parliament. The implementation of these measures resulted in the lose of the financial controller’s position but enabled the adoption of the internal auditor’s position;

2) enlargement preparation : the effects of enlargement have been felt on the real estate level as well as on technical, security and staff levels. As regards the issue of recruitment, most of the officials from the new Member States can be found in the interpretation, translation and information services. Measures have been taken to facilitate the early retirement of statutory staff in order to free up certain positions;

3) "Raising the Game" : concerns an EP initiative aiming to make the services provided to the MEPs more efficient. In this context, several actions have been carried out : the organic and geographic reclassification of DGs in order to facilitate the legislative and parliamentary work of the MEPs, the reorganization of the Documentation Centre, initiatives to reinforce the links between the citizen and the Parliament;

4) Real estate policy : 2003 was marked by the end of the acquisition transactions concerning the LOW building in Strasbourg and the KAD in Luxembourg. Negotiations have also begun on the future acquisition of the Atrium 2 in Brussels and buildings IPE, 1, 2 and 3 in Strasbourg.

Other initiative should be noted:

- modernise the staffing policy;

- improve the integration of handicapped people,

- strengthen the interinstitutional cooperation whether it be on staff training, recruitment or information to citizens.

PURPOSE : to present the revenue and expenditure account and the balance sheet concerning the activities of the budget for the financial year 2003 (European Parliament).

CONTENT : this document sets out the amount of expenditure and the balance sheet for the other institutions of the Union (except the Commission) for the financial year 2003, in particular the European Parliament.

The document shows that the appropriations included in the Parliament’s budget for 2003 amounted to EUR 1 086 644 375, committed to the amount of EUR 1 075 556 058, that is 98.9%. 1.02% of the final appropriations were cancelled.

The final appropriations were paid to the amount of EUR 862 078 203 EUR in 2003, representing 80.15% of the committed appropriations. Concerning the appropriations carried over from 2002 to 2003, 13.61% of the payment appropriations were finally cancelled and 86.39% were paid.

As regards the implementation of the budget, the 2003 budget was marked by a series of amendments made to the initial allocations of certain posts, in particular :

- the implementation of the new regulatory measures concerning pensions of EP staff (adaptation of a special retirement system for civil servants/officials);

- releasing the appropriations from the reserve linked to enlargement;

- new budget guidelines on the acquisition of buildings : in particular, the repurchasing of the Louise Weiss Building in Strasbourg due to various anticipatory budget operations.

Concerning the utilisation of appropriations by heading, 2003 was marked by :

1) the implementation of the new Financial Regulation : new internal administrative rules were put in place for the internal control services, the financial authorizing officer, auditors and the entire accounting department of the European Parliament. The implementation of these measures resulted in the lose of the financial controller’s position but enabled the adoption of the internal auditor’s position;

2) enlargement preparation : the effects of enlargement have been felt on the real estate level as well as on technical, security and staff levels. As regards the issue of recruitment, most of the officials from the new Member States can be found in the interpretation, translation and information services. Measures have been taken to facilitate the early retirement of statutory staff in order to free up certain positions;

3) "Raising the Game" : concerns an EP initiative aiming to make the services provided to the MEPs more efficient. In this context, several actions have been carried out : the organic and geographic reclassification of DGs in order to facilitate the legislative and parliamentary work of the MEPs, the reorganization of the Documentation Centre, initiatives to reinforce the links between the citizen and the Parliament;

4) Real estate policy : 2003 was marked by the end of the acquisition transactions concerning the LOW building in Strasbourg and the KAD in Luxembourg. Negotiations have also begun on the future acquisition of the Atrium 2 in Brussels and buildings IPE, 1, 2 and 3 in Strasbourg.

Other initiative should be noted:

- modernise the staffing policy;

- improve the integration of handicapped people,

- strengthen the interinstitutional cooperation whether it be on staff training, recruitment or information to citizens.