PURPOSE: to grant discharge to the European Insurance and Occupational Pensions Authority for the financial year 2012.

NON-LEGISLATIVE ACT: Decision 2014/587/EU of the European Parliament on discharge in respect of the implementation of the budget of the European Insurance and Occupational Pensions Authority for the financial year 2012.

CONTENT: with the present decision, the European Parliament grants discharge to the Executive Director of the European Insurance and Occupational Pensions Authority in respect of its budget for the financial year 2012.

This decision is in line with the European Parliament's resolution adopted on 3 April 2014 and comprises a series of observations that form an integral part of the discharge decision (please refer to the summary of the opinion of 3 April 2014).

Amongst the main observations made, Parliament regretted the difficulties brought to light by the Court of Auditors as regards public procurement and called on the Authority to improve the situation.

The European Parliament adopted a decision concerning the discharge to be granted to the Executive Director of the European Insurance and Occupational Pensions Authority in respect of the implementation of the Authority's budget for the financial year 2012. The vote on the discharge decision approved the closure of the accounts (in accordance with Annex VI, Article 5(1) of the Rules of Procedure of the European Parliament.

Noting that the Court of Auditors stated that it has obtained reasonable assurances that the annual accounts of the Authority for the financial year 2012 are reliable, and that the underlying transactions are legal and regular, Parliament adopted by 496 votes to 75, with 14 abstentions, a resolution containing a series of recommendations that form an integral part of the discharge decision and as well as the general recommendations that appear in the draft resolution on performance, financial management and control of EU agencies.

These recommendations are summarised as follows:

Financing, budget and financial management : Parliament noted that budget monitoring efforts during the financial year 2012 resulted in an overall budget implementation rate of 90.63%. However, it noted with concern that the payment appropriations execution rate was 67.21%. Carryovers : Parliament regretted that the carry-over of committed appropriations to 2013 was very high for title III (operational expenditure) at 79% of total appropriations even if it acknowledged that this is mainly the result of the complexity and of the lengthy duration of one IT procurement procedure. It also regretted that one contract related to the design of a financial database was subdivided into four lots of EUR 60 000 each, which were all directly awarded to two companies. According to Parliament, an open or restricted procedure should have been applied and that the related commitments and payments are thus irregular. Performance : Parliament requested that the Authority communicate the results and impact its work has on European citizens in an accessible way, mainly through its website.

Parliament also made a series of observations on transfers, procurement and recruitment procedures as well as comments on internal controls.

Lastly, it acknowledged that the Authority adopted its Ethics Rules in 2011 and established specific provisions for its Stakeholders Groups and Board of Appeal to handle potential conflicts of interests. It called on the Authority to inform the discharge authority whether it intends to review its Ethic Rules on the basis of the Commission's Guidelines.

The Committee on Budgetary Control adopted the report by Petri SARVAMAA (EPP, FI) in which it recommended the European Parliament to grant discharge to the Executive Director of the European Insurance and Occupational Pensions Authority in respect of the implementation of the Authority's budget for the financial year 2012.

Noting that the Court of Auditors stated that it has obtained reasonable assurances that the annual accounts of the Authority for the financial year 2012 are reliable, and that the underlying transactions are legal and regular, Members approved the closure of the Authority’s accounts. They made, however, a number of recommendations that needed to be taken into account when the discharge is granted, in addition to the general recommendations that appear in the draft resolution on performance, financial management and control of EU agencies.

Financing, budget and financial management : Members noted that budget monitoring efforts during the financial year 2012 resulted in an overall budget implementation rate of 90.63%. They noted with concern that the payment appropriations execution rate was 67.21%. Carryovers : Members regretted that the carry-over of committed appropriations to 2013 was very high for title III (operational expenditure) at 79% of total appropriations even if they acknowledged that this is mainly the result of the complexity and of the lengthy duration of one IT procurement procedure. They also regretted that one contract related to the design of a financial database was subdivided into four lots of EUR 60 000 each, which were all directly awarded to two companies. According to the Members, an open or restricted procedure should have been applied and that the related commitments and payments are thus irregular.

Members also made a series of observations on transfers, procurement and recruitment procedures as well as comments on internal controls.

Lastly, they acknowledged that the Authority adopted its Ethics Rules in 2011 and established specific provisions for its Stakeholders Groups and Board of Appeal to handle potential conflicts of interests. They called on the Authority to inform the discharge authority whether it intends to review its Ethic Rules on the basis of the Commission's Guidelines.

Having examined the revenue and expenditure accounts for the financial year 2012 and the balance sheet at 31 December 2012 of the European Insurance and Occupational Pensions Authority (EIOPA), as well as the Court of Auditors' report on the annual accounts of the Authority for the financial year 2012, accompanied by the Authority's replies to the Court's observations, the Council recommends the European Parliament to give a discharge to the Executive Director of the Authority in respect of the implementation of the budget for the financial year 2012.

The observations in the Court of Auditors' report in relation to the financial year 2012 call for some comments by the Council, which may be summarised as follows:

in general, the Council welcomes the Court's opinion that, in all material respects, the Authority's annual accounts present fairly its financial position as at 31 December 2012 and the results of its operations and its cash flows for the year then ended, in accordance with the provisions of the Authority's Financial Regulation and the accounting rules adopted by the Commission's accounting officer, and that the underlying transactions for that financial year are legal and regular. Procurement : notwithstanding this favourable opinion, the Council regrets the weaknesses found by the Court in one of the audited procurement procedures. It insists on the full respect by the Authority of the procurement rules foreseen in the Financial Regulation. It also urges the Authority to improve its financial management by launching procurement procedures in good time before the end of the budgetary year, in order to limit carry-overs of appropriations to the following year to the minimum necessary, in line with the budgetary principle of annuality. Tangible assets : the Council encourages the Authority to improve the procedures and the documentation relating to the verification of its tangible assets.

PURPOSE: presentation of the EU Court of Auditors’ report on the annual accounts of the European Insurance and Occupational Pensions Authority (EIOPA) for the year 2012, together with the EIOPA’s reply.

CONTENT: in accordance with the tasks conferred on the Court of Auditors by the Treaty on the Functioning of the European Union, the Court presents to the European Parliament and to the Council, in the context of the discharge procedure, a Statement of Assurance as to the reliability of the annual accounts of each institution, body or agency of the EU, and the legality and regularity of the transactions underlying them, on the basis of an independent external audit.

This audit concerned, amongst others, the annual accounts of the European Insurance and Occupational Pensions Authority (EIOPA).

In the Court’s opinion, EIOPA’s Annual Accounts fairly present, in all material respects, its financial position as of 31 December 2012 and the results of its operations and its cash flows for the year then ended, in accordance with the provisions of its Financial Regulation and the accounting rules adopted by the Commission’s accounting officer.

The Court also considers that the transactions underlying the annual accounts of the Authority for the financial year ended 31 December 2012 are, in all material respects, legal and regular.

The report confirms that the Authority’s 2012 budget amounted to EUR 15 655 000

The report also makes a series of observations on the budgetary and financial management of the Authority, accompanied by the latter’s response. The main observations may be summarised as follows:

The Court’s observations :

procurement procedures: one contract related to the design of a financial database was subdivided into four lots of EUR 60 000 each, which were all directly awarded to two companies. Given the total value of the services to be procured for the same project (EUR 240 000 euro), an open or restricted procedure should have been applied and the related commitments and payments are thus irregular.

The Authority’s reply:

there is sound business rationale backing both the decision to run a procurement, and to do it in 4 separate lots, in order to deepen knowledge on how to design the system, reducing the risk of acquiring the wrong services and products and ensuring sufficient competition in the core stage of the process, namely the main procurement.

Lastly, the Court of Auditors’ report contains a summary of the Authority’s activities in 2012 . This is focused on the following:

regulatory and supervisory tasks; consumer protection and financial innovation ; common supervisory culture and related events ; bi-annual Financial Stability Reports and preparation of Europe-wide stress test for the insurance sector ; finalisation of a comprehensive, decision-making framework setting in detail the processes that the Authority will follow in discharging its crisis and management responsibilities ; actions relating to external relations.