PURPOSE: presentation by the Commission of the
consolidated annual accounts of the European Union for the
financial year 2012, as part of the 2012 discharge
procedure.
Analysis of the accounts of the EU Institutions:
Section II Council.
Legal reminder: the
consolidated annual accounts of the European Union for the year
2012 have been prepared on the basis of the information presented
by the institutions and bodies under Article 129.2 of the Financial
Regulation applicable to the general budget of the European Union.
They were prepared in accordance with Title VII of this Financial
Regulation and with the accounting principles, rules and methods
set out in the notes to the financial statements.
The objective of the financial statements is to
provide information about the financial position, performance and
cashflow of an entity that is useful to a wide range of users. The
objective is to provide information useful for decision making, and
to demonstrate the accountability of the entity for the resources
entrusted to it.
1) Purpose: the document
helps to bring insight into the EU budget mechanism and the way
in which the budget has been managed and spent in 2012. It
recalls that the European Union's operational expenditure covers
the various headings of the financial framework and takes different
forms, depending on how the money is paid out and managed. In
accordance with the Financial Regulation, the Commission implements
the general budget using the following methods: direct or indirect
centralised management (by means of bodies or agencies of public
law or other); decentralised management where the Commission
delegates certain tasks for the implementation of the budget to
third countries; and, thirdly, shared management where budget
implementation tasks are delegated to Member States, in areas such
as agricultural expenditure and structural actions.
The document also presents the different financial
actors involved in the budget process (accounting officers,
internal officers and authorising officers) and recalls their
respective roles in the context of the tasks of sound financial
management.
Amongst the other legal elements relating to the
implementation of the EU budget presented in this document, the
paper focuses on the following issues:
- accounting principles applicable to the management of
EU spending (business continuity, consistency of accounting
methods, comparability of information ...);
- consolidation methods of figures for all major
controlled entities (the consolidated financial statements of the
EU comprise all significant controlled entities institutions,
organisations and agencies);
- the recognition of financial assets in the EU
(tangible and intangible assets, financial assets and other
miscellaneous investments);
- the way in which EU public expenditure is committed
and spent, including pre-financing (cash advances intended for the
benefit of an EU organ);
- the means of recovery following irregularities
detected;
- the modus operandi of the accounting
system;
- the audit process followed by the European
Parliament's granting of the discharge.
To recap, the final control is the discharge of the
budget for a given financial year. The discharge represents the
political aspect of the external control of budget implementation
and is the decision by which the European Parliament, acting on a
Council recommendation, "releases" the Commission from its
responsibility for management of a given budget by marking the end
of that budget's existence. When granting the discharge, Parliament
may highlight some observations that it considers important, often
by recommending that the Commission takes action on the aspects in
question.
The document also details specific expenditure of the
institutions, in particular: i) pensions of former Members and
officials of institutions; ii) joint sickness insurance scheme and
iii) buildings.
Lastly, the document presents a series of tables and
detailed technical indicators on (i) the balance sheet; (ii) the
economic outturn account; (iii) cashflow tables; (iv) technical
annexes concerning the financial statements.
2) Implementation of appropriations under Section II
of the budget for the financial year 2012: the document comprises a series of detailed tables,
the most important concerning the implementation of the budget.
Concerning the Council's expenditure, the table on the financial
and budgetary implementation of this institution is presented as
follows (information drawn from the Financial Activity Report 2012 (Section II -
European Council and Council).
Budget 2012: the
European Council and Council budget 2012 was established at EUR
533.9 million. At the end of 2012, an amount of EUR 489.9
million was committed whereas EUR 44 million was cancelled. Thus,
the implementation rate of the EC/C budget was 91.8 %.
The main reasons for the cancelled appropriations of
EUR 44 million are:
- underspending of the delegations travel
envelopes (EUR 14.7 million),
- underspending in interpretation (EUR 5.9
million),
- no salary adjustment (EUR 7.4 million),
- reduced need for the Official Journal (EUR 0.9
million),
- under-occupation of posts in the establishment plan
and lower salary costs (EUR 6.4 million),
- smaller need for other staff expenditure (e.g.
contractual agents, SNEs,), and missions (EUR 3
million),
- lower need for organising meetings, technical
installations and office equipment (EUR 1.5 million),
- non-activation of the reserve (EUR 2
million).
3) Budgetary implementation -
conclusions: in more general and political terms,
The main administrative objectives of the General
Secretariat of the Council for 2012 were: (i) to ensure continuous support to the
President of the European Council and to the Council; (ii) to
proceed further with the process of administrative modernisation
with the objective to reinforce the quality of its organisation;
(iii) to prepare the adaptation of its organisation to the
accession of Croatia in July 2013.
Building policy: the
project to renovate the Residence Palace and convert it into the
seat of the European Council and the Council of Ministers (Europa
Building) continued in 2012 with the actual construction work
including, among other things, starting to building up floors,
insulation and various technical installations.
Difference between the final budget and
implementation:
- no adjustments of remuneration in 2011 and
2012: EUR 2 million of underspent
appropriations mainly relate to a smaller need on entitlements as
foreseen by the Staff Regulations (e.g. house hold and other
allowances);
- other staff expenditure:
almost half of the global saving (EUR 1.4 million out of EUR 3
million) in the category of other staff expenditure relates to
fewer payments for contractual agents, seconded national
experts and other outside services. Smaller spending in mission
related costs corresponds to a saving of EUR 1.1
million;
- building related expenditure (excluding the Europa-Building): the global
implementation of the building related expenditure resulted in a
saving of EUR 0.9 million due to lower costs in water, gas and
electricity as well as installation and maintenance
works;
- underspending in appropriations for interpretation and
delegations travel envelopes which made it possible to
transfer EUR 10 million as an additional payment for the Europa
Building in 2012, EUR 1.3 million for fitting out and
installation works in Justus Lipsius building and EUR 0.3 million
for certain meeting expenditure in Brussels;
- other miscellaneous expenditure concerned reduced
financial need for meetings including protocol, conference,
transport and furniture.
The overall underspending of the budget made it
possible to reallocate EUR 10 million in addition to the EUR 5
million earmarked in the budget for advance payments for the Europa
Building.