PURPOSE: to grant discharge to the European Securities and Markets Authority (ESMA) 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 Securities and Markets Authority for the financial year 2012.

CONTENT: with the present decision, the European Parliament grants discharge to the Executive Director of the European Securities and Markets 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 Securities and Markets Authority (ESMA) 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 491 votes to 70, with 23 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:

Budget and financial management : Parliament noted that budget monitoring efforts during the financial year 2012 resulted in a budget implementation rate of 86.12% and that the payment appropriations execution rate was 65.22%. Carryovers : Parliament regretted that according to the Court of Auditors’ annual audit, EUR 2.8 million (14%) of total appropriations were cancelled and EUR 4.2 million (21%) were carried over to 2013; this was mainly caused by the fact that a significant contract for works on the Authority’s premises was awarded in December 2012 (EUR 600 000). 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.

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

Lastly, Parliament acknowledged that following the Court of Auditors' Special Report No 15/2012 , the Authority revised its ethics guidelines on the basis of the Commission's Guidelines on the Prevention and Management of Conflicts of Interests in EU Decentralised Agencies. It welcomed them and the fact that they were considered as best practices.

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 Securities and Markets Authority (ESMA) 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.

Budget and financial management : Members noted that budget monitoring efforts during the financial year 2012 resulted in a budget implementation rate of 86.12% and that the payment appropriations execution rate was 65.22%. Carryovers : Members regretted that according to the Court of Auditors’ annual audit, EUR 2.8 million (14%) of total appropriations were cancelled and EUR 4.2 million (21%) were carried over to 2013; this was mainly caused by the fact that a significant contract for works on the Authority’s premises was awarded in December 2012 (EUR 600 000).

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

Lastly, they acknowledged that following the Court of Auditors' Special Report No 15/2012 , the Authority revised its ethics guidelines on the basis of the Commission's Guidelines on the Prevention and Management of Conflicts of Interests in EU Decentralised Agencies. They welcomed them and the fact that they were considered as best practices.

Having examined the revenue and expenditure accounts for the financial year 2012 and the balance sheet at 31 December 2012 of the European Securities and Markets Authority (ESMA), 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. Carry-overs : the Council urges the Authority to improve its budget planning and financial management and to launch projects and procurement procedures in good time before the end of the budgetary year, in order to avoid the cancellation of unused appropriations at year end and to limit carry-overs of appropriations to the following year to the minimum necessary, in line with the budgetary principle of annuality. Controls : the Council calls on the Authority to fully implement its internal control standards and to enhance the timeliness and documentation of its procurement procedures. The Council invites the Authority to finalise the validation of its accounting systems without delay. Recruitment : lastly, the Council asks the Authority to address the weaknesses identified in its recruitment procedures in order to enhance transparency and equal treatment.