The European Parliament adopted a decision concerning the discharge to be granted to the High Representative of the Union for Foreign Affairs and Security Policy in respect of the implementation of the European External Action Service's budget for the financial year 2012.

In its resolution accompanying the decision, adopted by 523 votes to 76, with 9 abstentions, Parliament noted the conclusion of the Court of Auditors that the payments as a whole for the year ended on 31 December 2012 for administrative and other expenditure of the institutions and bodies were free from material error. 

However, Parliament was concerned that in 2012, the PMO system was not yet fully operational, leading to the incorrect payment of social allowances to staff members.

Financial and budget implementation: Parliament noted that at the end of 2012, the final budget for EEAS headquarters was EUR 184.1 million, with an execution of commitments rating of 99.35% and was EUR 304.5 million for the delegations, with a commitments rating of 99.45%. It also noted that the budget of the delegations had to be supplemented by the Commission for a total of EUR 268 million.

Parliament welcomed that in its second financial year, the European External Action Service has continued to implement its budget without material errors being identified by the Court of Auditors and that most of the problems identified in the 2011 Annual Report of the Court of Auditors as result of the setting-up process have not recurred. Concerned with the carrying over of appropriations in 2012, Parliament recalled that the EEAS is a recently created institution, resulting from the consolidation of different services, and that 2011 was its first year of operation with numerous technical challenges to be overcome, particularly in procurement and recruitment.

If, overall, Parliament was satisfied with the progressive setting up of this institution, it is concerned, however, that the Chief Operating Officer of the EEAS has maintained his reservations concerning some of the security contracts of Union Delegations and several Union Delegations have issued reservations as well.

Future framework for discharge exercises: Parliament noted the importance of the current discharge in establishing the framework for future discharge exercises and believed that it will reinforce the expectations of future developments and improvements in the effectiveness of the EEAS and its operations.

Taking note of the difficulties in implementing a budget with various sources that lack equilibrium, Parliament:

• believed that the current structure of the EEAS budget, with contributions from the Commission's 26 different budget lines and the European Development Fund makes it impossible to have a clear overview of the real costs and expenses of the work of the EEAS and its Delegations: it supported the simplification proposal made by the EEAS in 2013 and asked the Commission to implement the changes proposed and to examine the further simplification of the EEAS's current financing;
• observed the over-representation of diplomats from the new Member States and called on the EEAS to strengthen the geographical balance;
• noted the over-representation and quick promotions in the higher grades in the institution;
• requested clarification as regards the responsibilities of the Union Special Representatives (EUSRs) and the review of this statute given that the High Representative was planning to do away with EUSRs in 2010. It was concerned that the EUSR budget was raised from EUR 15 million in 2011 to EUR 27 million in 2012 and that the travel budget for 2012 was tripled; it calls for an end to the parallel foreign policy pursued through the EUSRs and, in terms of pay, insists that EUSRs should not be treated more favourably than Union ambassadors in post; 
• called to introduce a requirement that newly appointed EEAS staff give a declaration of honour stating that they have not worked for intelligence services in the past;
• called for improvements to be made in the financial management of security contracts;
• pointed to the need for parliamentary scrutiny to be brought to bear on INTCEN, EUMS INT, the Situation Room, and the Satellite Centre, which produce analyses for decision-makers, based on national intelligence service information;
• called for the publication of how many classified documents the EEAS has received from or sent to individual institutions, other bodies, Member States, and third parties;
• demanded clarification of the housing policy of those employed in Union delegations given that in year 2012 the housing costs paid for the accommodation of 675 officials in Union Delegations had a total cost of EUR 30 million;
• asked that the EEAS's building policy be attached to the annual activity report and for the EEAS to provide the discharge authority with the list of building contracts concluded in 2012, including the details of the contracts, the country where the contract is entered in and the length of the contract. In addition, Parliament called on the EEAS to compile a summary – to be submitted to Parliament – showing how many embassies and consulates of Member States in countries with Union delegations have been closed since the EEAS was set up or specifying the countries where the establishment of the EEAS has served to create synergies. Efforts should be made to increase savings in this area.

Parliament reiterated the importance of continuing efforts to identify opportunities for long-term savings and synergies, both between EEAS and Commission and with Member States, to ensure the sustainability of the EEAS budget in a time of budgetary restraints.

Lastly, Parliament invited the EEAS to explain why it was necessary to create the post of Deputy Head of Delegation for Afghanistan and it emphasised once again the need for the Union to create a delegation in Panama.

The Committee on Budgetary Control adopted the report by Tamás DEUTSCH (EPP, HU) in which it called on the European Parliament to grant discharge to the High Representative of the Union for Foreign Affairs and Security Policy in respect of the implementation of the European External Action Service's budget for the financial year 2012.

Members noted that on the basis of its audit work, the Court of Auditors concluded that the payments as a whole for the year ended on 31 December 2012 for administrative and other expenditure of the institutions and bodies were free from material error.

Financial and budget implementation: Members are concerned that in 2012, the Payment Of Individual Entitlements (PMO) system was not yet fully operational, leading to the incorrect payment of social allowances to staff members.

They also noted that at the end of 2012, the final budget for EEAS headquarters was EUR 184.1 million, with an execution of commitments rating of 99.35% and was EUR 304.5 million for the delegations, with a commitments rating of 99.45%. They also noted that the budget of the delegations had to be supplemented by the Commission for a total of EUR 268 million.

Concerned with the carrying over of appropriations in 2012, Members recalled that the EEAS is a recently created institution, resulting from the consolidation of different services, and that 2011 was its first year of operation with numerous technical challenges to be overcome, particularly in procurement and recruitment.

If overall Members were satisfied with the progressive setting up of this institution, they are concerned, however, that the Chief Operating Officer of the EEAS has maintained his reservations concerning some of the security contracts of Union Delegations and several Union Delegations have issued reservations as well.

Future framework for discharge exercises: Members noted the importance of the current discharge in establishing the framework for future discharge exercises and believed that it will reinforce the expectations of future developments and improvements in the effectiveness of the EEAS and its operations.

Taking note of the difficulties in implementing a budget with various sources that lack equilibrium, Members:

• believed that the current structure of the EEAS budget, with contributions from the Commission's 26 different budget lines and the European Development Fund makes it impossible to have a clear overview of the real costs and expenses of the work of the EEAS and its Delegations: they supported the simplification proposal made by the EEAS in 2013 and asked the Commission to implement the changes proposed and to examine the further simplification of the EEAS's current financing;
• observed the over-representation of diplomats from the new Member States and called on the EEAS to strengthen the geographical balance;
• noted the over-representation and quick in the higher grades;
• requested clarification as regards the responsibilities of the Union Special Representatives (EUSRs) and the review of this statute given that the High Representative was planning to do away with EUSRs in 2010. They are concerned that the EUSR budget was raised from EUR 15 million in 2011 to EUR 27 million in 2012 and that the travel budget for 2012 was tripled;
• called to introduce a requirement that newly appointed EEAS staff give a declaration of honour stating that they have not worked for intelligence services in the past;
• called for improvements to be made in the financial management of security contracts;
• pointed to the need for parliamentary scrutiny to be brought to bear on INTCEN, EUMS INT, the Situation Room, and the Satellite Centre, which produce analyses for decision-makers, based on national intelligence service information;
• called for the publication of how many classified documents the EEAS has received from or sent to individual institutions, other bodies, Member States, and third parties;
• demanded clarification of the housing policy of those employed in Union delegations given that in year 2012 the housing costs paid for the accommodation of 675 officials in Union Delegations had a total cost of EUR 30 million;
• asked that the EEAS's building policy be attached to the annual activity report and for the EEAS to provide the discharge authority with the list of building contracts concluded in 2012, including the details of the contracts, the country where the contract is entered in and the length of the contract. In addition, Members called on the EEAS to compile a summary – to be submitted to Parliament – showing how many embassies and consulates of Member States in countries with Union delegations have been closed since the EEAS was set up or specifying the countries where the establishment of the EEAS has served to create synergies. Efforts should be made to increase savings in this area.

Lastly, Members invited the EEAS to explain why it was necessary to create the post of Deputy Head of Delegation for Afghanistan and they emphasised once again the need for the Union to create a delegation in Panama.

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 X – European External Action Service (EEAS).

Legal reminder: the consolidated annual accounts of the European Union for the year 2011 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 the 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 a body that is useful to a wide range of users. The objective is to provide information that is 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.

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 X 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 EEAS’s expenditure, the table on the financial and budgetary implementation of this institution is presented as follows (information drawn from the EEAS Report on budgetary and financial management for the year 2012).

• final budget EEAS headquarters (Brussels): EUR 184.1 million;
• payments implemented at 31.12.2012 for the HQ: EUR 165.3 million (rate of implementation: 90%);
• final budget of the EEAS for the management of delegations in third countries: EUR 304.5 million;
• payments implemented at 31.12.2012 for the delegations: EUR 278.2 million (rate of implementation: 91%);
• total budget of the EEAS amounted to EUR 488.6 million (rate of implementation of commitments 99.41% and 91% of payments).

During 2012, assigned revenues carried over from 2011 of EUR 1.8 million were also available on EEAS budget lines. At 31/12/2012, commitments of 1.78 M€ (99%) had been made and payments amounted to 1.057 M€ (59%).

3) Budgetary implementation – conclusions: in more general and political terms, in 2012, the EEAS pursued its institutional building-up started in 2010-2011. The main goals while creating the EEAS were to provide a platform for coherent and effective EU foreign policy and to bring together all foreign policy assets/instruments and levers at the EU's collective disposal.

The document proposes an accurate presentation of the actions that have been undertaken in the management and technical implementation of the institution still in its start-up phase in particular in terms of human resources management and staff from incorporation of other staff from other European institutions and Member States.