REPORT on discharge in respect of the implementation of the budget of the European Chemicals Agency for the financial year 2011

22.3.2013 - (C7‑0266/2012 – 2012/2203(DEC))

Committee on Budgetary Control
Rapporteur: Gerben-Jan Gerbrandy

Procedure : 2012/2203(DEC)

Document stages in plenary

Document selected :

A7-0097/2013

Texts tabled :

A7-0097/2013

Debates :

PV 16/04/2013 - 13
CRE 16/04/2013 - 13

Votes :

PV 17/04/2013 - 12.18
Explanations of votes

Texts adopted :

P7_TA(2013)0143

1. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

1. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on discharge in respect of the implementation of the budget of the European Chemicals Agency for the financial year 2011

(C7‑0266/2012 – 2012/2203(DEC))

The European Parliament,

– having regard to the final annual accounts of the European Chemicals Agency for the financial year 2011,

– having regard to the Court of Auditors' report on the annual accounts of the European Chemicals Agency for the financial year 2011, together with the Agency’s replies[1],

– having regard to the Council's recommendation of 12 February 2013 (05753/2013 – C7‑0041/2013),

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

– 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,

– 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[3], and in particular Article 208 thereof,

– having regard to Regulation (EC) No 1907/2006 of the European Parliament and of the Council establishing a European Chemicals Agency[4], and in particular Article 97 thereof,

– 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[5], and in particular Article 94 thereof,

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

– having regard to the report of the Committee on Budgetary Control and the opinion of the Committee on the Environment, Public Health and Food Safety (A7-0097/2013),

1. Grants the Executive Director of the European Chemicals Agency discharge in respect of the implementation of the Agency's budget for the financial year 2011;

2. Sets out its observations in the resolution below;

3. Instructs its President to forward this Decision and the resolution that forms an integral part of it to the Executive Director of the European Chemicals Agency, 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).

2. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on the closure of the accounts of the European Chemicals Agency for the financial year 2011

(C7‑0266/2012 – 2012/2203(DEC))

The European Parliament,

– having regard to the final annual accounts of the European Chemicals Agency for the financial year 2011,

– having regard to the Court of Auditors' report on the annual accounts of the European Chemicals Agency for the financial year 2011, together with the Agency’s replies[6],

– having regard to the Council's recommendation of 12 February 2013 (05753/2013 – C7‑0041/2013),

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

– 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[7], and in particular Article 185 thereof,

– having regard to Regulation (EC) No 1907/2006 of the European Parliament and of the Council establishing a European Chemicals Agency[9], and in particular Article 97 thereof,

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

– having regard to the report of the Committee on Budgetary Control and the opinion of the Committee on the Environment, Public Health and Food Safety (A7-0097/2013),

1. Approves the closure of the accounts of the European Chemicals Agency for the financial year 2011;

2. Instructs its President to forward this Decision to the Executive Director of the European Chemicals Agency, the Council, the Commission and the Court of Auditors, and to arrange for its publication in the Official Journal of the European Union (L series).

3. MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

with observations forming an integral part of its Decision on discharge in respect of the implementation of the budget of the European Chemicals Agency for the financial year 2011

(C7‑0266/2012 – 2012/2203(DEC))

The European Parliament,

– having regard to the final annual accounts of the European Chemicals Agency for the financial year 2011,

– having regard to the Court of Auditors' report on the annual accounts of the European Chemicals Agency for the financial year 2011, together with the Agency’s replies[11],

– having regard to the Council's recommendation of 12 February 2013 (05753/2013 – C7‑0041/2013),

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

– 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[12], and in particular Article 185 thereof,

– having regard to Regulation (EC) No 1907/2006 of the European Parliament and of the Council establishing a European Chemicals Agency[14], and in particular Article 97 thereof,

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

– having regard to the report of the Committee on Budgetary Control and the opinion of the Committee on the Environment, Public Health and Food Safety (A7-0097/2013),

A. whereas the Court of Auditors stated that it has obtained reasonable assurances that the annual accounts of the European Chemicals Agency ("the Agency") for the financial year 2011 are reliable and that the underlying transactions are legal and regular,

B. whereas on 10 May 2012, Parliament granted the Executive Director of the Agency discharge for implementation of the Agency's budget for the financial year 2010[16], and in its resolution accompanying the discharge decision, inter alia:

- underlined that as the Agency works with non-dissociated credits in all its Titles, it is unrealistic to expect that all operations budgeted for one calendar year could both be committed and paid up within the same budgetary year, especially for project-type operational expenditure (e.g. IT systems developments),

- called on the Agency to improve the planning of its human resources activities and projects at the time of establishing its Annual Work Programme,

- welcomed the establishment by the Agency of a separate registration and submission unit, as well as a contingency task force,

- called on the Agency to respect a stringent top down/bottom up methodology for reporting and clear guiding principles in order to define the relevant indicators and tools to be used,

C. whereas according to the Court of Auditors' report, the Agency's overall budget for the financial year 2011 was of EUR 93 200 000 compared to EUR 75 500 000 in 2010, which represents an increase of 23,44%,

D. whereas during the financial year 2011, the Agency operated as a self-financed agency and did not receive any reimbursable subsidy from the Commission,

Budget and financial management

1. Acknowledges from the Agency's 2011 annual activity report (AAR), that in accordance with Regulation (EC) No 1907/2006, the Agency is financed through fees paid by industry for registrations of chemical substances, and possibly by Union subsidy as referred to in Article 185 of the Financial Regulation;

2. Takes note that in 2011, the Agency was effectively fully financed through fee income and did not receive any Union subsidy; notes, however, that the Agency was supported by the Union with an amount of only EUR 500 000 from the Commission (Directorate-General Environment) as contractual compensation for undertaking certain preparatory activities for the upcoming Regulation (EU) No 528/2012[17] on biocidal products;

3. Notes that the initial budgetary payment appropriations for 2011, as concluded by the Management Board in December 2010, amounted to EUR 99 800 000;

4. Notes from the AAR that in 2010, the Agency received a balancing subsidy of EUR 36 000 000 registered as a pre-financing liability from the Commission; notes, moreover, that the amount was entirely reimbursed to the Commission in 2011 as the foreseen high level of own fee income of the Agency in 2011 was reached;

5. Acknowledges that in 2011, the Management Board adopted two amending budgets, as follows:

- the first amending budget increased the revenue with the surplus resulting from 2010 by EUR 280 565 807,25; notes that it also entered the amount of EUR 500 000 on earmarked revenue for the service contract established between the Agency and DG Environment for the preparatory work for Regulation (EU) No 528/2012 ;

- the second amending budget decreased the budget expenditure by EUR 7 142 500 (7%);

6. Observes from the AAR that the budget execution rate for 2011 was 96%;

Commitments and payments

7. Acknowledges from the AAR that the total amount of carryover of commitment and payment appropriations was of EUR 14 421 314,76, representing 16,2 % of the established commitments; calls on the Agency to inform the discharge authority of the actions taken to address that deficiency as the level of carryover is excessive and at odds with the budgetary principle of annuality;

8. Takes note from the AAR that the adopted budget for Title I in 2011(EUR 54 508 000) was increased via transfers from Title III by 4,25 % (EUR 2 316 781,90), out of which EUR 2 005 138,33 was related to expenditure for staffing; notes, moreover, that as a result, the execution rate for Title I reached 99,16 %;

9. Notes that a total amount of EUR 1 758 060,98 was cancelled from the total amount of EUR 12 254 740,59 of commitment and payment appropriations that were carried over from the budget of 2010;

10. Welcomes the Agency’s efforts in improving the planning and the monitoring of resources and the fact that it introduced Agency-wide guidelines to foster the principle of annuality; acknowledges, in particular, that the Agency managed to reduce the carry-over rate from 29% in 2009 to 17% in 2010 and to 16,2 % in 2011;

Supervisory and control systems

11. Acknowledges from the Court of Auditors' report that the results of the latest physical inventory carried out in 2011 show several shortcomings, notably as regards the low proportion of Information and Communication Technology (ICT) assets checked in terms of value; notes, moreover, that no formal policy on the inventory of fixed assets is in place; calls on the Agency to inform the discharge authority of the actions taken to implement a formal policy on the inventory of fixed assets;

12. Notes that the Agency records costs related to ICT projects that are already in use as expenditure instead of recognising them as fixed assets; notes furthermore that the policy is expected to be formalised and formally approved in the first quarter of 2013; calls on the Agency to inform the discharge authority of the state of play of that policy;

Recruitment procedures

13. Notes that the Court of Auditors identified shortcomings in the recruitment procedures; calls, therefore, on the Agency to inform the discharge authority of the actions taken to address that deficiency; considers that some of the provisions of the Staff Regulations may present a considerable administrative burden; therefore encourages the Commission to allow for a certain degree of simplification under Article 110 of the Staff Regulations in regard to the agencies;

14. Notes from the AAR that the Agency continued to attract highly qualified personnel, with 88 new staff recruited in 2011, which resulted in the completion of 98% of the Agency's establishment plan;

15. Acknowledges that as of 31 December 2011, the total number of temporary agents occupied positions was 441 of 456 available posts had been occupied and 101 contract agents and seconded national experts were employed by the end of 2011; the total number of contract agents occupied positions was 62 and the total number of other staff was 46 (seconded national experts, interims, trainees);

16. Monitors closely the improved recruitment and selection procedures which have been put into place in the last year; considers the full application of rules and procedures a necessity to ensure the best reputation of the Agency;Conflict of interest

17. Welcomes the fact that the Court of Auditors carried out an audit aimed at evaluating the policies and procedures for the management of conflict of interest situations for four European agencies, including the Agency, and presented the results of the audit in the Court of Auditors' Special Report No 15/2012;

18. Regrets that according to the findings of the Court of Auditors, at the time of completion of the field work (October 2011), the Agency did not adequately manage situations involving conflicts of interest; notes, moreover, that the Agency's policies for managing conflict of interest were incomplete, declarations of interest were neither screened nor published but sealed and training on conflict of interest was absent;

19. Welcomes the fact that the Agency is to take a number of steps following the Court of Auditors' audit, in particular:

- an Agency policy for the management of potential conflicts of interest, adopted in September 2011,

- a new, more detailed template for declarations of interest,

- a new guidance for filling in declarations of interests, adopted in November 2011,

- publication of declarations of interest of the Agency's managers on its website since January 2012,

- conflicts of interest advisory committee established in June 2012, with a constituent meeting in August 2012,

- a code of conduct for the Management Board members, adopted in March 2012,

- provisional eligibility criteria for the bodies of the Agency, adopted in September 2012,

- implementing rules on prevention of conflicts of interest and on processing information on potential conflicts of interest of the Agency staff, adopted in June 2012 and October 2012 respectively,

- guidance for managers on the prevention of conflicts of interest, including concrete assessment criteria, adopted in November 2012,

- revised guidelines on gifts and hospitality for staff, adopted in December 2012;

urges the Agency to continue to act on the recommendations made by the Court of Auditors in order to avoid any conflict of interests among its various governing and operational structures and to report to the discharge authority on the implementation of the abovementioned policies and procedures, as well as on any further developments as regards management of conflict of interest;

20. Calls on the Agency to introduce in its annual activity reports a special section describing the actions taken to prevent and manage conflicts of interest, which shall include, inter alia:

- the number of conflicts of interest cases verified,

- the number of revolving door cases,

- the measures taken in each category of cases,

- the number of breach of trust procedures launched and their outcomes;

- the sanctions applied;

21. Points out that all Management Board members' declarations of interest are available on the Agency's website, yet not all curriculum vitae of the Management Board members are available; calls on the Agency to inform the discharge authority of the progress made on this matter as soon as possible;

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22. Refers, in respect of the other observations accompanying its Decision on discharge, which are of a horizontal nature, to its resolution of ….2013[18] on the performance, financial management and control of the agencies.

28.1.2013

OPINION of the Committee on the Environment, Public Health and Food Safety

for the Committee on Budgetary Control

on discharge in respect of the implementation of the budget of the European Chemicals Agency for the financial year 2011

(C7 -0266/2012 - 2012/2203(DEC))

Rapporteur: Jutta Haug

SUGGESTIONS

The Committee on the Environment, Public Health and Food Safety calls on the Committee on Budgetary Control, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:

1. Reiterates that the European Court of Auditors (Court of Auditors) considers the transactions underlying the annual accounts of the European Chemicals Agency (ECHA) for the financial year 2011 as legal and regular in all material respects; underlines again that the discharge procedure shall focus on the preceding year; is aware that any progress made since then should be duly noted and taken into account; thinks it is noteworthy in this context that the special report No 15/2012 on ‘Management of conflict of interest in selected EU Agencies’ by the Court of Auditors, which found significant shortcomings in conflict of interest policies and procedures in ECHA, has not taken into account changes implemented after the Court completed its audit field work in October 2011; considers nevertheless that further efforts are needed to implement the recommendations of the Court, in particular with regard to conflict of interest policies and procedures for staff and Board of Appeal members, and their post-employment activities;

2. Draws attention to the Roadmap agreed by the European Commission on 19 December 2012 as follow-up as requested by the European Parliament in the "Joint Statement and Common Approach of the European Parliament, the Council of the EU and the European Commission on decentralised agencies" in order to improve the governance, efficiency and transparency of agencies which includes self-evident initiatives to tackle conflict of interests;

3. Points out that the ECHA in 2011 was still in its start-up phase with revenues from fees amounting to EUR 33 500 000 with no Union contribution added; notes further that 441 of 456 available posts had been occupied and 101 contract agents and seconded national experts were employed by the end of 2011;

4. Is satisfied with the operation of the ECHA in implementing the Union’s chemicals' legislation within its legal role and responsibilities; welcomes the efforts by the ECHA to cooperate as closely as possible with the whole range of stakeholders working in this policy field as well as to further work on transparency guidelines; considers it however equally important to re-assess on a regular basis the balance between the necessary transparency and the needed confidentiality;

5. Notes the observation of the Court of Auditors on the high carry-over; accepts the explanation by the ECHA that this has been due to payments related to long-term IT development projects and translation delays of voluminous documents and webpages which were not possible to settle within the year of contracting;

6. Is convinced that the ECHA is committed to the principle of annuality; however, considers it in this context unavoidable that carry-overs are needed for some degree and should not always be considered as bad planning;

7. Will monitor closely the improved recruitment and selection procedures which have been put into place in the last year; considers the full application of rules and procedures a necessity to ensure the best reputation of ECHA;

8. Recommends on the facts available that discharge can be granted to the Executive Director of the ECHA in respect of the implementation of the ECHA’s budget for the financial year 2011.

RESULT OF FINAL VOTE IN COMMITTEE

Date adopted	23.1.2013
Result of final vote	+: –: 0:	53 4 0
Members present for the final vote	Kriton Arsenis, Paolo Bartolozzi, Sandrine Bélier, Lajos Bokros, Milan Cabrnoch, Nessa Childers, Yves Cochet, Esther de Lange, Anne Delvaux, Bas Eickhout, Jill Evans, Karl-Heinz Florenz, Elisabetta Gardini, Gerben-Jan Gerbrandy, Matthias Groote, Françoise Grossetête, Cristina Gutiérrez-Cortines, Jolanta Emilia Hibner, Karin Kadenbach, Christa Klaß, Eija-Riitta Korhola, Holger Krahmer, Jo Leinen, Corinne Lepage, Kartika Tamara Liotard, Linda McAvan, Radvilė Morkūnaitė-Mikulėnienė, Miroslav Ouzký, Gilles Pargneaux, Antonyia Parvanova, Pavel Poc, Frédérique Ries, Dagmar Roth-Behrendt, Kārlis Šadurskis, Carl Schlyter, Richard Seeber, Theodoros Skylakakis, Claudiu Ciprian Tănăsescu, Salvatore Tatarella, Thomas Ulmer, Åsa Westlund, Glenis Willmott, Sabine Wils, Marina Yannakoudakis
Substitute(s) present for the final vote	Margrete Auken, Minodora Cliveti, José Manuel Fernandes, Judith A. Merkies, Miroslav Mikolášik, Vittorio Prodi, Birgit Schnieber-Jastram, Renate Sommer, Rebecca Taylor, Vladimir Urutchev, Anna Záborská, Andrea Zanoni
Substitute(s) under Rule 187(2) present for the final vote	Olle Ludvigsson

RESULT OF FINAL VOTE IN COMMITTEE

Date adopted	19.3.2013
Result of final vote	+: –: 0:	21 4 0
Members present for the final vote	Inés Ayala Sender, Zuzana Brzobohatá, Andrea Češková, Ryszard Czarnecki, Tamás Deutsch, Martin Ehrenhauser, Jens Geier, Gerben-Jan Gerbrandy, Ingeborg Gräßle, Cătălin Sorin Ivan, Bogusław Liberadzki, Jan Mulder, Eva Ortiz Vilella, Monika Panayotova, Aldo Patriciello, Crescenzio Rivellini, Paul Rübig, Petri Sarvamaa, Bogusław Sonik, Bart Staes, Georgios Stavrakakis, Michael Theurer
Substitute(s) present for the final vote	Chris Davies, Derk Jan Eppink, Edit Herczog, Monika Hohlmeier, Ivailo Kalfin, Agnès Le Brun, Véronique Mathieu Houillon, Derek Vaughan

[1] OJ C 388, 15.12.2012, p. 73.
[2] OJ L 248, 16.9.2002, p. 1.
[3] OJ L 298, 26.10.2012, p. 1.
[4] OJ L 396, 30.12.2006, p. 1.
[5] OJ L 357, 31.12.2002, p. 72.
[6] OJ C 388, 15.12.2012, p. 73.
[7] OJ L 248, 16.9.2002, p. 1.
[8] OJ L 298, 26.10.2012, p. 1.
[9] OJ L 396, 30.12.2006, p. 1.
[10] OJ L 357, 31.12.2002, p. 72.
[11] OJ C 388, 15.12.2012, p. 73.
[12] OJ L 248, 16.9.2002, p. 1.
[13] OJ L 298, 26.10.2012, p. 1.
[14] OJ L 396, 30.12.2006, p. 1.
[15] OJ L 357, 31.12.2002, p. 72.
[16] OJ L 286, 17.10.2012, p. 192.
[17] OJ L 167, 27.6.2012, p. 1.
[18] Texts adopted, P7_TA-PROV(2013).

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