3.6.2010   

EN

Official Journal of the European Union

C 145/1

1.

The draft Regulation of the European Parliament and of the Council on which the Court of Auditors’ opinion is requested aims to update the current Financial Regulation to take into account the changes stemming from the Lisbon Treaty which entered into force on 1 December 2009.

2.

The Court considers that in most cases the proposed amendments perfectly transpose the changes concerning budgetary and financial issues introduced by the Lisbon Treaty into the Financial Regulation. However, the Court has concerns about one of the amended provisions and proposes to add one new provision. Proposed modifications to the text can be found in the table annexed to this opinion.

3.

It is necessary to change Article 24 of the Financial Regulation due to the ending of the distinction between compulsory and non-compulsory expenditure. The Commission proposes the replacement of Article 24 with a new text. The Court has two observations in that regard.

4.

Paragraphs 1, 3, 4 and 6 each refer specifically to the Commission. However, Article 22(2) and (3) of the Financial Regulation states that the procedure described in Article 24 also applies to the other institutions when one or other arm raises duly substantiated reasons for objecting to the transfer proposal or when the proposed transfer is from title to title and exceeds a specified limit. It is thus necessary to replace ‘Commission’ by ‘institutions’ in those four paragraphs.

5.

The Commission proposes in paragraph 5(i) to allow the budgetary authority only three weeks to consider transfer proposals that are within certain limits (less than 10 % of the appropriations of the line from which the transfer is made, maximum amount of EUR 5 million). The Court points out that, at present, transfer proposals are considered within the European Parliament by the Committee on Budgets, whose meetings are approximately on a monthly cycle. Without taking a view as to the merits or otherwise of this proposal, the Court notes that its implementation would give rise to a problem of timing.

6.

The Conciliation Committee established by Article 314(5) of the TFEU is composed of members of the Council and of the European Parliament and has the task of reaching agreement on a joint text on the Union’s annual budget. The Commission will take part in its proceedings and has the task of taking the initiatives necessary to reconcile the positions of the two arms of the budgetary authority. In carrying out this task, the Commission may find itself obliged to take initiatives in respect of the draft budgets of the institutions which are not represented in the Committee. For reasons of transparency, it is appropriate to reflect in the Financial Regulation the conclusions of the budgetary trilogue of 25 March 2010. The Court therefore proposes to add a new provision which would become Article 34a.

7.

Article 34a in the Commission’s proposal becomes Article 34b.

3.6.2010   

EN

Official Journal of the European Union

C 145/4

1.

The draft Regulation of the European Parliament and of the Council on which the Court of Auditors’ opinion is requested aims to amend the current Financial Regulation in order to adapt its rules to the specific nature of the European External Action Service (hereinafter ‘EEAS’) whose existence is foreseen in Article 27(3) of the Treaty on the European Union, as modified by the Lisbon Treaty which entered into force on 1 December 2009. The EEAS will be an autonomous body of the Union under the authority of the High Representative (hereinafter ‘HR’) that will support her in fulfilling her mandates. The organisation and functioning of the EEAS will be established by a Council decision. The proposal for such a decision is dated 25 March 2010.

2.

To ensure the operational continuity of the current Delegations, operational expenditure executed by the Heads of Delegations will be deemed as corresponding to the implementation of the budget by the Commission on a centralised direct management, although the EEAS is a separate institution.

3.

The EEAS will be made up of a central administration and Union Delegations to third countries and to international organisations. Each Union Delegation will be led by a Head of Delegation who will have authority over all staff in the Delegation.

4.

The EEAS staff will comprise officials from the Secretariat-General of the Council, officials of the Commission and personnel seconded from the diplomatic services of the Member States. They will be appointed as temporary agents under the Staff Regulations. For staff matters the EEAS will be treated as an institution within the meaning of Staff Regulations.

5.

The Court takes note that, as requested in the report from the Presidency to the European Council on the European External Action Service of 23 October 2009 (3), the EEAS will be a service of a sui generis nature, which will be treated as an institution for the purposes of the Financial Regulation, benefiting from its own section of the budget, and submitted as such to the European Parliament discharge, while, at the same time, the EEAS, namely at Delegation level, will remain the relevant service to the Commission for the implementation of a wide range of operational appropriations depending from the ‘Commission’ section of the budget.

6.

The staff in Delegations will comprise EEAS staff and Commission staff. The Head of Delegation will receive a delegation from the Commission, the institution executing the budget and managing programmes in accordance with Article 17 of the TEU and Article 317 of the TFEU, in order to implement operational appropriations on its behalf. The new structure of the EEAS and the duties of the Head of Union Delegation will mean that he will report to two different bodies. A solution seems to be sought in the new proposed Article 60a(2) and (3). The Court notes that care will need to be taken in managing the new structure, inter alia, to avoid conflicts of priorities.

7.

In the Court’s Special Report No 10/2004, the Court observed the significant progress made in the management of external aid in the framework of the ‘devolution’ process, including a strengthening of the operational and financial units of the Delegations, more robust and sound financial procedures, which brought about improvements in the regularity, timeliness and quality of the services provided. The Court considers of utmost importance to preserve and enhance accountability, responsibility, and quality of financial management at Delegation level. The future organisational structures of the Union Delegations should not put at risk the effectiveness of their operational and financial functions and their segregation of duties.

8.

In this context, the proposal may be seen as an attempt to safeguard, as much as possible, the internal Commission procedures and standards for the implementation of its appropriations, in a new and more complex institutional framework.

9.

However, the Court is concerned by the fact that this objective is sought through (a) significant derogations to the Financial Regulation, since subdelegations of the Commission powers of budget implementation will be granted to authorising officers (Heads of Delegations) who will no longer belong to Commission departments; (b) increased complexity in the financial management and reporting missions and operations of the Delegations; and (c) considerable uncertainty regarding the budgetary allocation and management of administrative and support expenditure of Union Delegations, an issue which is not clarified in the proposal.

10.

The Court has specific concerns about four of the amended provisions and proposes modifications to the text which can be found in the table annexed to this opinion.

11.

Article 30. The Commission proposes the replacement of Article 30(3), first subparagraph by a new text to the effect that the Commission shall make available, in an appropriate manner, information on the beneficiaries of funds deriving from the budget held by it when the budget is implemented on a centralised basis pursuant to Article 53a. The new Article 53a provides that the implementation of the budget by the Commission on a centralised basis can be direct — either by its departments or by Union Delegations — or indirect in accordance with Articles 54 to 57.

12.

As a result of a combined reading of the new Articles 30(3), first subparagraph, and 53a, the Commission’s obligation to hold information on the beneficiaries of funds deriving from the budget becomes applicable to situations where the budget is implemented on a centralised basis directly and indirectly. But, in the current version of Article 30(3), first subparagraph, the Commission’s obligation to hold information on the beneficiaries of funds deriving from the budget is limited to cases where the budget is implemented on a centralised basis and directly, only.

13.

The extension of the obligation to hold information on the beneficiaries of funds deriving from the budget to situations of indirect centralised management is not related to the specific situation of the EEAS. Therefore, such extension goes beyond the subject matter of the proposal and would apply to all indirect centralised management. To remain consistent with existing practice the new Article 30(3), first subparagraph, should be amended as follows:

14.

Article 60a. The purpose of Article 60a seems to be to reinforce the principle that the Heads of Union Delegations, acting under subdelegation, are subject to the same accountability rules as any other authorising officers by subdelegation (pursuant to Article 60 of the Financial Regulation). The Court considers it important to insist on the duties of the Heads of Union Delegations in that regard.

15.

However, the second subparagraph makes Heads of Union Delegations, inter alia, responsible for solving the potential conflicts of interest. The reference to the notion of ‘conflict of interest’ in this context should be avoided since it seems to cover another type of ‘conflict of interest’ for which Article 52 of the Financial Regulation gives a definition. For the sake of consistency, a notion should keep the same definition through all the provisions of the Financial Regulation. The Court proposes to amend Article 60a(1) along those lines.

16.

Article 85. For reasons of consistency, efficiency and effectiveness, the Court approves the choice of the Commission’s Internal Auditor as the internal auditor for the EEAS. However, the drafting of the proposed addendum to Article 85 of the Financial Regulation gives the impression that the Internal Auditor of the Commission does not exercise the same powers over the EEAS as he/she exercises over the Commission departments and that these powers might vary following which relevant sections — EEAS or Commission — of the budget are implemented. In order to avoid any ambiguity on the Internal Auditor’s powers, the Court suggests replacing the proposed addendum by the following text:

17.

Article 165. The sense of the proposed amendment to Article 165 is unclear. The Court does not see the necessity to amend Article 165 following the amendment of Article 53a.

18.

Article 185. The proposed amendment to Article 185 is devoid of purpose. The analogy regarding the scope of powers of the Commission’s Internal Auditor must operate only by reference to the Commission departments. The Court therefore proposes not to amend Article 185.