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having regard to the final annual accounts of the European Foundation for the Improvement of Living and Working Conditions for the financial year 2010,

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having regard to the Court of Auditors’ report on the annual accounts of the European Foundation for the Improvement of Living and Working Conditions for the financial year 2010, together with the Foundation’s replies (1),

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having regard to the Council’s recommendation of 21 February 2012 (06083/2012 – C7-0051/2012),

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having regard to Article 319 of the Treaty on the Functioning of the European Union,

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having regard to Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (2), and in particular Article 185 thereof,

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having regard to Regulation (EEC) No 1365/75 of the Council of 26 May 1975 on the creation of a European Foundation for the Improvement of Living and Working Conditions (3), and in particular Article 16 thereof,

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having regard to Commission Regulation (EC, Euratom) No 2343/2002 of 19 November 2002 on the framework Financial Regulation for the bodies referred to in Article 185 of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities (4), and in particular Article 94 thereof,

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having regard to Rule 77 of, and Annex VI to, its Rules of Procedure,

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having regard to the report of the Committee on Budgetary Control and the opinion of the Committee on Employment and Social Affairs (A7-0116/2012),

A.

whereas the Court of Auditors stated that it has obtained reasonable assurances that the annual accounts for the financial year 2010 are reliable and that the underlying transactions are legal and regular,

B.

whereas on 10 May 2011 Parliament granted the Director of the European Foundation for the Improvement of Living and Working Conditions discharge for the implementation of the Foundation’s budget for the financial year 2009 (5), and in its Resolution accompanying the discharge decision, inter alia:

C.

whereas the overall Agency budget for the financial year 2010 was EUR 20 900 000, which represents an increase of 3,4 % over the financial year 2009; whereas the initial contribution of the Union to the budget of the Agency for 2010 was EUR 19 067 159 compared to EUR 19 450 000 in 2009 (6), which represents a decrease of 0,97 %,

1.

Acknowledges from its Annual Activity Report (AAR) that the Foundation undertook the commitments and actions below following the Court of Auditors’ observations of 2009:

2.

Calls on the Court of Auditors to confirm to the discharge authority that these actions and commitments are sufficient to redress the deficiencies found in the Foundation by the Court in 2009;

3.

Recalls that the initial Union contribution to the Agency for 2010 amounted to EUR 19 067 159; notes however that EUR 762 841, which came from the recovery of surplus, was added to this which, as a result, makes a total Union contribution of EUR 19 830 000 for 2010;

4.

Takes note from entries in its Annual Accounts that the Foundation published an amended budget totalling EUR 20 848 000 very close to the year-end 2010; regrets the absence of information from the Agency on the reasons behind these changes; calls on the Agency to remedy the situation and inform the discharge authority about this matter;

5.

Notes from its AAR that the Foundation had an execution rate of 98 % in terms of committed appropriations; notes in particular from the Annual Accounts that the utilisation rate of the Foundation under Title I (Staff expenditures), Title II (Administration) and Title III (Operational expenditures) were respectively of 99,8 %, 95,1 % and 96 %;

6.

Establishes from the Annual Accounts of the Foundation that the utilisation of appropriations carried over from 2009 to 2010 amounted to 96,1 % in payment terms compared to 94,2 % in 2009;

7.

Observes from the Foundation’s AAR that the percentage of staff posts filled, 91 %, has improved in 2010 compared to 2009 (78 %);

8.

Underlines that the main activity of the Foundation is to contribute to the establishment of better living and working conditions by increasing and disseminating knowledge relevant to this subject through networks and surveys; observes that 68 % of the Foundation’s staff is allocated to these operative activities while the rest of staff is allocated to administrative tasks; considers it therefore of high importance for the discharge authority to assess the efficiency and the effectiveness of the surveys’ management process in the Foundation;

9.

Notes in particular that in 2010 the Foundation has undertaken the following activities within its Network of European Observatories and surveys:

10.

Urges the Foundation to register all the decisions of the Governing Board on surveys as the efficiency and effectiveness in communicating these decisions may be affected in the absence of proper standards for documenting decisions made; acknowledges, in particular, that the Foundation is deficient in this respect and that the Chairperson of the Governing Board does not necessarily sign and date the decisions taken;

11.

Notes, in addition, that the Foundation’s Advisory Committees, responsible for the Governing Board giving input to the preparation and evaluation phases of surveys, do not have Terms of Reference nor Rules of Procedure for the organisation of their meetings; considers that these deficiencies may lead to a misunderstanding of the roles and responsibilities of the Advisory Committees with detrimental effects on the preparation of the surveys; calls therefore on the Foundation to address this situation and inform the discharge authority on the measures taken in this respect;

12.

Calls also on the Foundation to put in place written procedures describing its core activities; underlines that this could help the Foundation use its resources effectively and identify possible weaknesses;

13.

Notes, nevertheless, the Foundation’s efforts to strengthen control measures to improve the quality of its surveys; notes, in particular, that its staff visit some countries where the surveys are carried out to assess how contractors conduct interviews and its staff test the questionnaire used for conducting the surveys by carrying out cognitive interviews on a limited number of elements of the sample in some countries;

14.

Notes that, since February 2010, the Foundation’s Deputy Director fulfils the role of Internal Control Coordinator; takes note that the annual work plan for internal control is monitored in quarterly meetings of an Internal Control committee with the Head of Administration, Head of Human Resources and Head of Operations;

15.

Acknowledges from the Foundation’ AAR that the internal audit activities in 2010 were built on the strategic audit plan 2009-2011 which is based on the 2008 risk assessment; notes also that a new risk assessment was carried out in February 2011 resulting in a new strategic audit plan for 2011-2013 with the following topics:

16.

Notes, moreover, that for 2012/2013 the prospective topics are:

17.

Notes that the Internal Audit Service (IAS) planed to perform in 2010 an audit on the Foundation’s surveys management; is concerned that due to limited availability of key Foundation staff during the audit engagement and incomplete documentation of the surveys management, the IAS was unable to collect sufficient audit evidence with regard to some modules of the risk-based scope; notes, however, that an additional phase of this audit was conducted at the beginning of 2011 and that the results will be presented in the annual internal audit report for 2011; calls on the Foundation to provide the discharge authority with this report in a timely manner;

18.

Is concerned that the IAS recommendation on the validation of Accounting Systems has been delayed; notes in particular that this recommendation is considered by the IAS as ‘critical’; urges the Foundation, therefore, to take immediate steps in this regard and to inform the discharge authority of the measures taken to redress this deficiency;

19.

Establishes that five ‘very important’ recommendations of the IAS were still open at year-end 2010; notes that these recommendations relate to the need to:

notes from the Foundation’s AAR that the three ‘very important’ recommendations on Financial Management are reported as implemented by the Foundation while the Annual Internal Audit Report establishes that they suffer delay with respect to the original action plan of the Foundation; calls, therefore, on the Foundation and IAS to inform the discharge authority of the actual status of these particular recommendations;

20.

Urges the Foundation to properly address the recommendations issued by the IAS and to inform the discharge authority about the measures taken in this respect;

21.

Observes, nevertheless, in the Foundation’s AAR that following the IAS recommendation on Financial Management in 2009, the procedure for the ex-post verification was reviewed and updated with a risk assessment for the justification of the sample size selection;

22.

Draws attention to its recommendations from previous discharge reports, as set out in the Annex to this Resolution;

23.

Refers, in respect of the other observations accompanying its Decision on discharge, which are of a horizontal nature, to its Resolution of 10 May 2012 (7) on the performance, financial management and control of the agencies.