PURPOSE: to grant discharge to the European Agency for the Cooperation of Energy Regulators (ACER) for the financial year 2012.

NON-LEGISLATIVE ACT: Decision 2014/561/EU of the European Parliament on discharge in respect of the implementation of the budget of the European Agency for the Cooperation of Energy Regulators for the financial year 2012.

CONTENT: with the present decision, the European Parliament grants discharge to the Director of the European Agency for the Cooperation of Energy Regulators 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 comments made by the Court of Auditors on the legality and regularity of the transactions (unauthorised school fees) and called on it to remedy the situation.

The European Parliament adopted a decision concerning the discharge to be granted to the Director of the European Agency for the Cooperation of Energy Regulators discharge in respect of the implementation of the Agency’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 Agency for the financial year 2012 are reliable, and that the underlying transactions are legal and regular, Parliament adopted by 524 votes to 67, with 9 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:

Legality and regularity : Parliament noted with concern that in order to cover higher school fees, the Agency grants staff whose children attend primary or secondary school a top-up allowance which amounted to some EUR 23 000 in 2012, in addition to the education allowances provided for in the Staff Regulations. For the Parliament, these allowances are not covered by the Staff Regulations and are, therefore, considered irregular even though they acknowledge that this situation is due to the lack of European Schools in the city where the Agency is based. Budget and financial management : Parliament noted that budget monitoring efforts during the financial year 2012 resulted in a budget implementation rate of 93.75% and that the payment appropriations execution rate was 66.8%. It regretted that the Agency carried over committed appropriations amounting to EUR 1.7 million, representing 81% of total committed appropriations relating mainly to the implementation of the REMIT regulation. It noted with concern that the Agency held EUR 4.2 million in cash at the end of the year, including the 2011 budget surplus of EUR 1.6 million resulting from an excessive call for funds in 2011. Parliament called on the Agency to report on its progress within the framework of the 2012 discharge follow-up. Performance : Parliament requested that the Agency 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 the Agency is reviewing its policy on the prevention and management of conflicts of interests on the basis of the Commission's Guidelines on the Prevention and Management of Conflict of Interest in EU Decentralised Agencies. It called on the Agency to inform the discharge authority of the assessment results once available.

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 Director of the European Agency for the Cooperation of Energy Regulators discharge in respect of the implementation of the Agency’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 Agency for the financial year 2012 are reliable, and that the underlying transactions are legal and regular, Members approved the closure of the Agency’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.

Legality and regularity : Members noted with concern that in order to cover higher school fees, the Agency grants staff whose children attend primary or secondary school a top-up allowance which amounted to some EUR 23 000 in 2012, in addition to the education allowances provided for in the Staff Regulations. For Members, these allowances are not covered by the Staff Regulations and are, therefore, considered irregular even though they acknowledge that this situation is due to the lack of European Schools in the city where the Agency is based. Budget and financial management : Members noted that budget monitoring efforts during the financial year 2012 resulted in a budget implementation rate of 93.75% and that the payment appropriations execution rate was 66.8%. They regretted that the Agency carried over committed appropriations amounting to EUR 1.7 million, representing 81% of total committed appropriations relating mainly to the implementation of the REMIT regulation. They noted with concern that the Agency held EUR 4.2 million in cash at the end of the year, including the 2011 budget surplus of EUR 1.6 million resulting from an excessive call for funds in 2011. Members called on the Agency to report on its progress within the framework of the 2012 discharge follow-up.

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 Agency is reviewing its policy on the prevention and management of conflicts of interests on the basis of the Commission's Guidelines on the Prevention and Management of Conflict of Interest in EU Decentralised Agencies. They called on the Agency to inform the discharge authority of the assessment results once available.

Having examined the revenue and expenditure accounts for the financial year 2012 and the balance sheet at 31 December 2012 of the Agency for the Cooperation of Energy Regulators (ACER), as well as the Court of Auditors' report on the annual accounts of the Agency for the financial year 2012, accompanied by the Agency's replies to the Court's observations, the Council recommends the European Parliament to give a discharge to the Director of the Agency 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 Agency'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 Agency'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. Eligible expenses : notwithstanding this favourable opinion, the Council invites the Agency to remedy the weaknesses found by the Court concerning payments of the top up allowances in order to ensure compliance with the Staff Regulations. Carry-overs : the Council calls on the Agency to continue to improve its financial programming and monitoring of the budget implementation, in order to reduce the level of commitments carried over and budget transfers to the minimum necessary, in line with the budgetary principle of annuality. Treasury : furthermore, the Council regrets the shortcomings identified by the Court in the Agency's treasury management and urges the Agency to avoid excessive surpluses at the end of the year. Recruitment : the Council invites the Agency to improve its recruitment procedures and to ensure full transparency and an equal treatment of candidates.

PURPOSE : presentation of the EU Court of Auditors’ report on the annual accounts of the

Agency for Cooperation of Energy Regulators (ACER) for the year 2012, together with the Agency’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 Agency for Cooperation of Energy Regulators (ACER).

In the Court’s opinion, ACER’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 Agency for the financial year ended 31 December 2012 are, in all material respects, legal and regular.

The report confirms that the Agency’s 2012 budget amounted to EUR 4.8 million.

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

The Court’s observations :

· carried-over commitments: the Agency carried over committed appropriations (Agency’s building and associated costs) amounting to EUR 1.7 million, representing 81 % of total committed title II appropriations. The Agency also made 20 budget transfers of some EUR 1 million euro and affecting 43 budget lines;

· recruitment: the audited recruitment procedures revealed shortcomings affecting transparency and equal treatment of candidates.

The Authority’s reply:

· the EUR 4.2 million cash balance held in the Agency’s bank account at year-end included the 2011 budgetary surplus of EUR 1.6 m paid back in January 2013, as the Agency received the request from the Commission only on 8 January 2013. The Agency’s cash management aims to ensure that funds are available to cover outstanding liabilities as they occur ;

· the Agency is strictly following the interview and written test procedures as established in detail in the relevant Director decision 2012-17 on Guidelines on recruitment procedures and work of the Selection Committees on 20 March 2012, ensuring questions and assessment criteria are fixed before the start of the testing and interviews. In order to take account of the auditors comments the Agency agrees to revise the current procedure.

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

opinions and framework guidelines, inter alia, on electricity ; reasoned opinions and recommendations on network codes ; joint report on market surveillance ; quarterly reports on regional initiatives on electricity ; two new Agency Working Groups established (implementation, monitoring and procedures Working Group and a market integrity and transparency Working Group), and the Rules for the functioning of the Working Groups were updated.