Budget of the European Union

• on discharge in respect of the implementation of the general budget of the European Union for the financial year 2018, Section V Court of Auditors The European Parliament, having regard to the general budget of the European Union for the financial year 2018[1], having regard to the consolidated annual accounts of the European Union for the financial year 2018 (COM(2019)0316 C90054/2019)[2], having regard to the Court of Auditors annual report to the discharge authority on internal audits carried out in 2018, having regard to the Court of Auditors annual report on the implementation of the budget concerning the financial year 2018, together with the institutions replies[3], having regard to the statement of assurance[4] as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2018, pursuant to Article 287 of the Treaty on the Functioning of the European Union, having regard to Article 314(10) and Articles 317, 318 and 319 of the Treaty on the Functioning of the European Union, having regard to Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002[5], and in particular Articles 55, 99, 164, 165 and 166 thereof, having regard to Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012[6], and in particular Articles 59, 118, 260, 261 and 262 thereof, having regard to Rule 100 of and Annex V to its Rules of Procedure, having regard to the report of the Committee on Budgetary Control (A9-0031/2020), 1.Grants the Secretary-General of the Court of Auditors discharge in respect of the implementation of the budget of the Court of Auditors for the financial year 2018; 2.Sets out its observations in the resolution below; 3.Instructs its President to forward this decision and the resolution forming an integral part of it to the Council, the Commission and the Court of Auditors, and to arrange for their publication in the Official Journal of the European Union (L series).

• with observations forming an integral part of the decision on discharge in respect of the implementation of the general budget of the European Union for the financial year 2018, Section V Court of Auditors (2019/2059(DEC)) The European Parliament, having regard to its decision on discharge in respect of the implementation of the general budget of the European Union for the financial year 2018, Section V Court of Auditors, having regard to Rule 100 of and Annex V to its Rules of Procedure, having regard to the report of the Committee on Budgetary Control (A9-0031/2020), A.whereas in the context of the discharge procedure, the discharge authority wishes to stress the particular importance of further strengthening the democratic legitimacy of the Union institutions by improving transparency and accountability, and implementing the concept of performance-based budgeting and good governance of human resources; 1.Notes that the annual accounts of the Court of Auditors (the 'Court') are audited by an external firm, PricewaterhouseCoopers Srl, in order to apply the same principles of transparency and accountability which the Court applies to its auditees; notes with satisfaction that the external auditors report states that the financial statements give a true and fair view of the financial position of the Court as at 31 December 2018, and of the results of its operations, its cash flows and the changes in net assets for the year then ended; 2.Emphasises the fact that in 2018, the Court's final appropriations amounted to a total of EUR146469000 (compared to EUR141240000 in 2017), which represents an overall increase of 3,70% compared to 2017 (the rise in price levels is estimated at 1,9% for Luxembourg); notes that 96,21% of all appropriations were committed by the end of 2018 (compared to 97,73% in 2017 and 99% in 2016) and that 94,73% of all appropriations were paid in 2018 (compared to 94,27% in 2017 and 93,29% in 2016); 3.Stresses that the Court's budget is entirely administrative, being related to expenditure concerning persons working within the institution (Title 1), to buildings, to movable property equipment and to miscellaneous operating expenditure (Title 2); is concerned about the continuing budget overestimates for Title 2 with a commitment rate of 59,13% (compared with 57,13% in 2017) and a payment rate of 55,11% (compared with 55,75% in 2017); 4.Notes that the commitments carried over to 2019 amounted to EUR6068597 or 4,1% of the 2018 budget (compared to EUR7908250 carried over to 2018 or 5,5% of the 2017 budget), notes that the main item contributing to the carry-over was the EUR4310280 carried over under chapter 21 (Data processing, equipment and movable property: purchase, hire and maintenance) for IT projects which were still ongoing at the end of 2018; 5.Regrets, as a general observation, that chapter 10 Administration of the 2018 Annual Report of the Court has a rather limited scope and conclusions, notwithstanding that the Multiannual Financial Framework Heading 5 'Administration' is considered low risk; requests that audit work for chapter 10 be broadened in order to review weaknesses in administrative expenditures in each institution; 6.Welcomes the fact that the Court has in an overall sense soundly applied its budgetary discipline in recent years in order to keep its administrative costs stable without adversely impacting its core business; notes that no additional posts were sought for 2018 and that, therefore, the Courts establishment plan (as in 2017) provides for a total of 853 authorised posts; 7.Welcomes the efforts made by the Court to publish its annual activity report by 5 May in the succeeding year and to adopt its final accounts by 31 May; agrees that the Court must be given the necessary time to carry out its audit work (as has been expressed in the Courts annual report on the implementation of the Union budget); suggests, however, that the Court should discuss the matter further with Parliament's Committee on Budgetary Control and with other relevant actors in order to better assess thetimeframe of the discharge procedure; 8.Welcomes the provision of the table in the annual activity report with the different service level agreements (SLA) signed with the Commission and other institutions on human resources (HR) related issues, translation, infrastructure, etc.
• which indicates their budgetary impact; notes with concernthat the service agreement for PMO (pay master office) expenditure in relation to managing the Courts personnel files and MIPS (management of missions) increased to EUR325000 in 2018 (compared with EUR180000 in 2017) due to a new contract; reiterates the importance of inter-institutional cooperation; 9.Appreciates the Courts efforts to achieve the most cost efficient use of its official vehicles; notes that as part of a cooperation with the Court of Justice the Court signed an inter-institutional 4-year leasing contract for these vehicles, resulting in better leasing prices and introducing environmental criteria; 10.Notes that the Court decided to review the rules for the use of official vehicles and that according to the new rules, the members and the Secretary-General may use official vehicles for journeys other than those undertaken in the performance of official duties in return for a contribution of a fixed rate of EUR100 per month plus certain costs and charges; notes that the Court expects significant savings compared to the situation under the existing rules; notes that the new rules will apply from 1 January 2020; is of the opinion that the use of official vehicles for private use should not take place under any circumstances; considers that this practicemay harm the reputation of theCourt and, in general, of theUnion institutions; asks the Court, therefore, to reconsider this subject and to keep Parliament informed; 11.Notes that the Court adopted a new set of key performance indicators for the period 2018 - 2020, consisting of key performance indicators providing a broad overview of the dissemination, impact and perception of its work; notes that included among the key performance indicators are the Courts appearances in Parliament, Council and in national Parliaments, and the number of special reports published (rather than merely adopted); welcomes the clear improvement in efficiency in the work of the Court, as the number of special reports increased by 25% since 2008, moreover, since in 2017, appearances in Parliament increased by 47%, appearances in Council increased by 39%, and appearances in national parliaments increased by 164%; invites the Court to consider including the audit's added-value into its key performance indicators and to report continually on the implementation of its recommendations; 12.Welcomes the fact that the Court sees a strong increase in media interest with particularly high coverage given to its special reports; welcomes the fact that the Court will continue to promote its publications through social media channels; notes with interest that most of the Courts publications are available on its website through a link called search publications; notes that the reports with the most media coverage in 2018 were the special reports on the European high-speed rail network, on the operational efficiency of the European Central Banks crisis management for banks and on the facility for refugees in Turkey; welcomes the Courts digital communication strategy for working with non-institutional stakeholders, such as think-tanks, NGOs, industry associations and academia (which can act as multipliers of the Courts messages); further encourages the use of free open-source self-hosted social network platforms having special regards to users' data protection; 13.Notes with satisfaction that overall media coverage (including social media) has nearly tripled (increasing from around 15 500 online articles and social media mentions in 2017 to more than 44 000 in 2018); notes that in 2018, social media posts from the Court's official accounts concerning its publications were displayed approximately 11 million times (which is nearly 18 times more than in 2017); notes that in 2018, more than 11 000 online articles about the Courts special reports were available (compared to 1 500 online articles in 2013); 14.Acknowledges the publication of 35 special reports (compared to 28 in 2017), 9 review-based publications (compared to 2 in 2017) and 10 opinions (compared to 5 in 2017); welcomes the Courts efforts, in line with the Financial Regulation, to produce its special reports generally within 13 months while noting that the average time to produce the special reports published during 2018 was 15,2 months; highlights, however, that 15 of the 35 special reports (43%) took less than 13 months to produce (compared to 29% in 2017); 15.Notes with concern that the Court selected a sample of 45 transactions (as compared to 55 in 2017 and 100 in 2016) from the Multiannual Financial Framework Heading 5 'Administration' of all Union institutions and bodies; notes that the sample was designed to be representative of the range of spending under Heading 5, which represents 6,3% of the Union budget; notes that the Courts work indicates administrative expenditure as low risk; considers, however, that the amount of transactions selected in relation to the 'other institutions' is not sufficient and asks the Court to increase the number of transactions to be examined by at least 10%; asks the Court to consider presenting an independent annual report on the Union institutions (as it already does on the Union agencies), asks the Court to keep it informed; 16.Notes with satisfaction that the chapter on transparency on the Courts website presents a calendar of meetings of the Court and a table of the missions of the Courts members (with date, place, purpose and costs) as well as links to related documents and other transparency portals; 17.Highlights the introduction of an attendance register to record the presence of members at meetings of the Court, its chambers and its committees (which has been effective since 1 January 2019); asks the Court to report on these matters to the Budgetary Control Committee in its next annual activity report; 18.Calls on the Court to establish procedures for maintaining a register of members annual leave, sick leave and absence from work for other reasons, in order to ensure that all leave taken by members is effectively recorded; stresses that the current practice could undermine the trust of Union citizens and institutions in the Court; 19.Observes with interest that the Court collects information on the work-related missions of members to assess whether the activity planned fell within the area of interest of the Court; welcomes that members provide the names and job title of the persons with whom they will meet, a general description of the topics to be discussed and, where available, the invitation containing the necessary details, in order to reduce the risk of possible abuses; 20.Notes that the decision clarifying the rules governing the missions of the members entered into force on 1 February 2018; notes that the decision defines in particular the information to be communicated when requesting a mission order; 21.Notes that the Court, within the framework of its internal control system, decided from February 2018 to delegate to the Secretary-General the powers of authorising officer with respect to the accounts related to mission expenses and representation expenses of the members; notes that those expenditures are now subject to the general control system operated by the Secretariat-Generals services which involves risk management, ex-ante and ex-post tests, and which are included in the annual declaration of the authorising officers by sub-delegation and by delegation; deeply deplores that a particular critical situation had to occur in order for the Court to take action on the matter; 22.Notes that the internal audit service reviewed the 2018 annual control reports and declarations of the authorising officers by sub-delegation in order to assess the reliability of the information provided; notes that the Secretary-General requested control reports from all directorates; acknowledges that the internal audit service confirms the reliable quality of the ex-ante and ex-post controls performed by the services and that overall the information contained in the control reports is reliable; 23.Notes the Courts decision, in relation to the period 2012 - 2018, to complete an internal audit of mission expenses and of the use of official cars (which audit was finalised in July 2019); notes that the report concluded that the vast majority of randomly selected operations examined by the internal audit service complied with the applicable rules and procedures; deploresthe fact that the report also concluded that, prior to the 2017 - 2018 reforms the management and control systems of the Court were affected by certain shortcomings; notes further that the report concluded that the 2017 - 2018 reforms effectively corrected those control weaknesses, and that management and control procedures currently in place are overall reliable; 24.Notes that based on that internal audit report no indications about any misuse of their position by members or former members have been identified; notes that there has been no other internal investigation following that audit report; 25.Observes that the European Anti-Fraud Office (OLAF) has transmitted its report concerning a former member to the judicial authorities of Luxembourg; notes that the former member's immunity has been waived; notes that the Court has recovered the sum of EUR153407,58 from the former member; 26.Notes that OLAF opened an investigation in 2016 concerning possible abuse of travel and subsistence expenses by a current member of the Court (relating to a time when he was a Member of Parliament); notes that OLAF concluded the case in September 2019, with a recommendation to Parliament to recover EUR11243; notes that no disciplinary or judicial recommendations have been made in this regard and that no recommendation was addressed to the Court; 27.Welcomes the fact that members of the Court are subject to a code of conduct governing their independence, impartiality, integrity, commitment, collegiality, confidentiality, responsibility and obligations after leaving office; welcomes the fact that the Court publishes the declarations of interests (declarations of financial interests and outside activities) and CVs of its members on the website, thereby making the Court subject to the same public scrutiny as the other institutions; 28.Is concerned that the declarations of interest are of a self-declaratory nature and that, given the current legal framework, neither the Court nor its ethics committee have any investigation powers to ensure the veracity and the exhaustiveness of the declared data; calls on the Court to ensure that members submit declarations of interest instead of declarations of the absence of conflicts of interest; underlines that the current procedures, including those of the ethics committee, need to be reinforced to ensure the absence of conflict of interests; requests the Court to report on any progress made;

31. Emphasises the fact that an ethical framework should consist of rules to prevent, identify and avoid potential conflict of interests; notes that the Court’s ethical framework has been reviewed by experts from the Supreme Audit Institutions of Poland and Croatia; takes note of the final peer review report; calls on the Court to inform Parliament of any follow-up actions that are decided based on the outcome of the peer review;
34. Welcomes the efforts made by the Court to ensure the wellbeing of staff, such as flexible worktime and teleworking, presentations on equal opportunities and access to free psychologists; notes, however, that there were three cases of burnout in 2018; asks the Court, therefore, to assess if the workload is distributed proportionally across the different teams and staff members;

• 36.Highlights the fact that (as mentioned under the third paragraph of Article 16 of the Staff Regulations related to the occupational activities of senior officials after leaving the service) the Court publishes related information on the occupational activities of senior officials of the Court; notes also the publication of the related rules on its site; 37.Notes the fact that the Court and OLAF work in close cooperation in order to protect the financial interests of the Union; further notes that in 2018 the Court communicated nine cases of suspected fraud revealed in the context of its audits (compared to 13 in 2017); congratulates the Court that the ongoing negotiations resulted in an administrative cooperation arrangement between the Court and OLAF (signed in May 2019) which aims at facilitating the practical working relationship, in particular regarding the transmission of suspected fraud cases, and at organising actions of common interest, such as training, workshops or exchanges of staff; 38.Regrets that the Courts follow-up to the 2017 discharge resolution provided only limited responses to Parliaments remarks; stresses that the follow-up is essential to enable Parliaments Committee on Budgetary Control to determine whether the Court has implemented Parliaments recommendations; calls on the Court to include all necessary responses and more detailed explanations on the implementation of Parliaments recommendations in their next follow-up report;

43. Welcomes once more the Court’s cooperation with other public institutions and stakeholders; notes with satisfaction the cooperation between the heads of supreme audit institutions and the adoption of a joint work plan from 2018 onwards; supports, moreover, the partnerships entered into with various universities in the context of the Court’s policy to extend its range of training; asks the Court to extend its contacts to additional universities in order to establish cooperation in the future that is both diversified and keeps a geographical balance;

• 45.Welcomes the fact that the Court has set up a comprehensive environmental programme to address various themes identified in its environmental analysis and to reduce its environmental impact; notes with appreciation that it managed to reduce its energy consumption by 11,5% from 2014 to 2018, its water consumption by 21,1% from 2016 to 2018, and its paper consumption by 50,8% from 2014 to2018; 46.Supports the Court's efforts to enhance data protection and cybersecurity by adopting a three-year cybersecurity action plan in mid-2018 with a number of actions to mitigate the risks identified; notes with satisfaction the Court's cooperation with the Computer Emergency Response Team for the EU Institutions, bodies and agencies (CERT-EU) to implement some of the controls foreseen in the plan; 47.Recognises the added value that free and open source software can bring to the Court; underlines in particularits role in increasing transparency and avoiding vendor lock-in effects; recognises alsoits potential for security improvements as it permits theidentification and fixing ofweaknesses; strongly recommends that any software developed for theCourt be made publicly available under free and open-source software licence; 48.Highlights all the work achieved in recent years in areas such as performance-based budgeting, the ethical framework (with all its related rules and procedures), enhanced communication activities and the increasing number of measures to improve transparency; welcomes the significant number of inter-institutional service and cooperation agreements; underlines the importance of collaboration and sharing of experience among European institutions and bodies; suggests the possibility of analysing formalised networking activities in different domains in order to share best practises and to develop common solutions.