OBJECTIVE: granting of discharge for implementing the EU’s general budget for 2003 – Court of Auditors.

LEGISLATIVE ACT: Decision 2005/534/EC of the European Parliament concerning the discharge for implementing the general budget of the EU for the 2003 financial year (Section V – Court of Auditors).

CONTENT: With this Decision, the European Parliament grants discharge to the Court of Auditors for the implementation of the budget for the 2003 financial year.

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 a resolution drafted by Alexander STUBB (EPP-ED, FI) g ranting the Court of Auditors discharge in respect of the implementation of the budget for the 2003 financial year. (Please see the summary of 17/03/2005). The European Court of Auditors (ECA) administered a budget of EUR 77 076 689 of which 96.83 % had been committed and 89.58 % spent by 31 December 2003.

Parliament added that it was of the opinion that there could be a need to analyse whether the current structure and functioning of the "top heavy" European Court of Auditors should be reformed. At the moment the Court of Auditors has 736 employees, of whom 325 are professional auditors (A and B grades), with 275 (A and B grades) working in the audit groups and 50 (A grades) in Members' cabinets.

The European Parliament adopted a resolution drafted by Alexander STUBB (EPP-ED, FI) g ranting the Court of Auditors discharge in respect of the implementation of the budget for the 2003 financial year. (Please see the summary of 17/03/2005). The European Court of Auditors (ECA) administered a budget of EUR 77 076 689 of which 96.83 % had been committed and 89.58 % spent by 31 December 2003.

Parliament added that it was of the opinion that there could be a need to analyse whether the current structure and functioning of the "top heavy" European Court of Auditors should be reformed. At the moment the Court of Auditors has 736 employees, of whom 325 are professional auditors (A and B grades), with 275 (A and B grades) working in the audit groups and 50 (A grades) in Members' cabinets.

EP: decision of committee responsible, 1st reading/single reading

The report welcomed the steps taken by the ECA on the use of official cars for members, and recognised that "the new provisions are transparent and represent an improvement of the situation". It nevertheless said that the private use of official cars, which the new provisions still allowed, represented "an undisclosed benefit-in-kind" which was inappropriate.

The committee called on the ECA to provide it with a copy of the internal auditor's annual report and stressed that most other institutions trusted the Committee on Budgetary Control to handle internal documents of this nature responsibly.

In its other remarks, the report congratulated the ECA on the network it had built up with audit institutions in the Member States and applicant countries (in preparation for enlargement). Lastly, the Court was asked to evaluate the implications of the new Financial Regulation for its administrative and judicial work in time for its review in 2005/2006.

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

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 Court’s budget, it is audited by an independent external audit firm which has issued a ‘certificate concerning the regularity and fairness of the financial statements at 31 December 2003’, accompanied by a report. The report states that, in the auditor’s opinion, ‘the current internal control rules ensure that the operational objectives are achieved satisfactorily, the financial statements are reliably drawn up and the legal framework is complied with’.

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

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 Court of Auditors.

The Court’s 2003 budget was EUR 77 076 689 committed to the height of 96.83%.

The amount of committed money that has not yet been paid (RAL) and that which has been carried over to the financial year 2004 represents an estimated 7.25% of the total amount committed.

The most important part of the institution’s expenditure is based on salaries and other associated costs.

Its mission is to carry out the expenditure audit of the European funds and also how the institutions work.

It examines, in particular, if the financial operations of the Community are legal and regular and if they are managed according to the appropriate principles.

The 2003 budget was mainly marked by a surplus in Title 1of the budget (staff on active duty) due to the delays in the recruitment of staff (staff particularly difficult to recruit because of the high technical skills requested by the Court).

The budget was equally marked by an under-utilisation of mission costs (limitation of missions in 2003) as well as the expenses of experts used by the Court.

As regards Title 2 of the Court’s budget (operating expenditure), the budget for studies and surveys has been reduced.

Moreover, one notes the budget transfers to enable the proper functioning of the institution (increase the number of auxiliaries, implement the principle of "frontloading" or budget anticipation in order to anticipate certain future expenses).

Lastly, the Court continues with its investment in real estate, in particular, the extension of its main building in Luxembourg. Work started in 2001 and an amount of EUR 9.3 million was transferred in 2003 to a special bank account with a limit of EUR 10 million for the duration of the project.

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

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 Court of Auditors.

The Court’s 2003 budget was EUR 77 076 689 committed to the height of 96.83%.

The amount of committed money that has not yet been paid (RAL) and that which has been carried over to the financial year 2004 represents an estimated 7.25% of the total amount committed.

The most important part of the institution’s expenditure is based on salaries and other associated costs.

Its mission is to carry out the expenditure audit of the European funds and also how the institutions work.

It examines, in particular, if the financial operations of the Community are legal and regular and if they are managed according to the appropriate principles.

The 2003 budget was mainly marked by a surplus in Title 1of the budget (staff on active duty) due to the delays in the recruitment of staff (staff particularly difficult to recruit because of the high technical skills requested by the Court).

The budget was equally marked by an under-utilisation of mission costs (limitation of missions in 2003) as well as the expenses of experts used by the Court.

As regards Title 2 of the Court’s budget (operating expenditure), the budget for studies and surveys has been reduced.

Moreover, one notes the budget transfers to enable the proper functioning of the institution (increase the number of auxiliaries, implement the principle of "frontloading" or budget anticipation in order to anticipate certain future expenses).

Lastly, the Court continues with its investment in real estate, in particular, the extension of its main building in Luxembourg. Work started in 2001 and an amount of EUR 9.3 million was transferred in 2003 to a special bank account with a limit of EUR 10 million for the duration of the project.