on discharge in respect of the implementation of the budget of the European Centre for Disease Prevention and Control for the financial year 2010

(C7-0287/2011 – 2011/2227(DEC))

The European Parliament,

–   having regard to the final annual accounts of the European Centre for Disease Prevention and Control for the financial year 2010,

–   having regard to the Court of Auditors’ report on the annual accounts of the European Centre for Disease Prevention and Control for the financial year 2010, together with the Centre’s replies(1),

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

–   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 (EC) No 851/2004 of the European Parliament and of the Council of 21 April 2004 establishing a European Centre for Disease Prevention and Control(3), and in particular Article 23 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(4), 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 (A7-0123/2012),

1.  Grants the Director of the European Centre for Disease Prevention and Control discharge in respect of the implementation of the Centre's budget for the financial year 2010;

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 Director of the European Centre for Disease Prevention and Control, 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 Centre for Disease Prevention and Control for the financial year 2010

(C7-0287/2011 – 2011/2227(DEC))

The European Parliament,

–   having regard to the final annual accounts of the European Centre for Disease Prevention and Control for the financial year 2010,

–   having regard to the Court of Auditors’ report on the annual accounts of the European Centre for Disease Prevention and Control for the financial year 2010, together with the Centre’s replies(5),

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

–   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(6), and in particular Article 185 thereof,

–   having regard to Regulation (EC) No 851/2004 of the European Parliament and of the Council of 21 April 2004 establishing a European Centre for Disease Prevention and Control(7), and in particular Article 23 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(8), 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 (A7-0123/2012),

1.  Approves the closure of the accounts of the European Centre for Disease Prevention and Control for the financial year 2010;

2.  Instructs its President to forward this Decision to the Director of the European Centre for Disease Prevention and Control, 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 for the European Centre for Disease Prevention and Control for the financial year 2010

(C7-0287/2011 – 2011/2227(DEC))

The European Parliament,

–   having regard to the final annual accounts of the European Centre for Disease Prevention and Control for the financial year 2010,

–   having regard to the Court of Auditors’ report on the annual accounts of the European Centre for Disease Prevention and Control for the financial year 2010, together with the Centre’s replies(9),

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

–   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(10), and in particular Article 185 thereof,

–   having regard to Regulation (EC) No 851/2004 of the European Parliament and of the Council of 21 April 2004 establishing a European Centre for Disease Prevention and Control(11), and in particular Article 23 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(12), 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 (A7-0123/2012),

A. whereas the Court of Auditors stated that it has obtained reasonable assurances that the annual accounts of the European Centre for Disease Prevention and Control ("the Centre") 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 Centre discharge for implementation of its budget for the financial year 2009(13), and in its resolution accompanying the discharge called on the Centre, inter alia:

-    to make, in a table to be annexed to the Court of Auditors’ report, a comparison of the operations that were carried out during the year for which discharge is to be granted and those carried out during the previous financial year;

-    to address the high level of carryover which has a negative impact on the implementation of the budget and is at odds with the principle of annuality;

-    to fulfil its obligation to send to the discharge authority a report drawn up by its Director summarising the content of the Internal Audit Service (IAS) recommendations;

C.       whereas the overall budget of the Centre for the financial year 2010 was EUR 57 800 000 compared to EUR 49 200 000 in 2009, which represents an increase of 17,5 %; whereas the total contribution of the Union to the budget of the Centre for 2010 was EUR 56 225 000,

Budget and Financial Management

1.      Recalls that the initial Union contribution to the Agency for 2010 amounted to EUR 53 078 000; notes however that EUR 145 000, coming from the recovery of surplus, was added to it which, as a result, makes a total Union contribution of EUR 53 223 000 for 2010;

2.      Underlines that according to the general budget of the European Union for the financial year 2010 the total contribution to the Centre amounts to EUR 56 225 000 and was comprised of:

– a contribution of EUR 33 360 000 under Titles I and II, and

– a contribution of EUR 22 895 000 under Title III, of which EUR 10 000 000 were paid;

notes, however, that the same document presents a total Union contribution of EUR 53 223 000 for 2010; acknowledges the Commission's statement that the Union's contribution to the Centre for 2010 was EUR 56 225 000 and that the figure of  EUR 53 223 000 is the result of inconsistencies in the text accompanying the budget figures; is of the opinion that this reflects the necessity for the Commission to provide annually the discharge authority with consolidated information on the total annual funding per Agency made from the general budget of the European Union;

3.      Takes note from the Centre that a second grant agreement was reached with the Directorate General for Enlargement for an initial duration of two years and that a subsequent budget increase of EUR 400 000 for the period 2009–2010 was implemented in 2010; notes that in 2011 the Centre was due to present a request to extend the duration of the grant;

4.      Acknowledges from the final annual accounts of the Centre for the financial year 2010 that its budget execution rate reached 95% in terms of commitment appropriations; is however concerned that the budget execution rate in terms of payments only reached 68 % of its total budget; believes nevertheless that this is already an improvement compared to 59 % in 2009 but considers that further efforts need to be made by the Centre in this respect;

5.     Underlines that the implementation of payment credits improved to 92,7 % which represents an amount of unused credits of EUR 3 800 000; notes that this under-execution is related to the fact that the Centre has limited its request of payment credits in order to reduce the amount of cash in its bank account at year end, as requested by the Court of Auditors and the Commission;

6.      Notes from the Centre's 2010 Annual Activity Report (AAR) that the Director, as Authorising Officer, delegated financial responsibility to the five Heads of Unit, and for a period of time, to the Coordinator of the Director’s Office; notes, however, that all contracts over EUR 250 000 need to be signed by the Director;

Carryover appropriations

7.      Acknowledges from the Court of Auditors that in 2010, an amount of EUR 15 600 000, equivalent to 27 % of the total budget including 50 % of Title III – Operational expenditure – was carried forward to 2011; urges once more the Centre to promptly redress the deficiencies found by the Court of Auditors on carryovers; underlines that a high level of carryovers has a negative impact on the implementation of the budget;

8.      Is concerned that this high level of carry forward matched by a low level of accrued expenditure is excessive and is at odds with the principle of annuality;

Accounting system

9.      Notes from its Report on Budget and Financial Management (RBFM)that 2010 was the first full year that the Centre implemented its budget for the entire year through ABAC WF (the EC integrated budgetary and accounting system);

10.    Acknowledges from its AAR that the Centre performed a review of the internal procedures for payments and commitments;

Procurement

11.    Observes from its AAR that the procurement office dealt with 50 open procedures and 18 negotiated procedures as well as 8 calls for proposals; calls on the Centre to provide the discharge authority with the results of each of the procurement procedures;

12.    Notes that after five years of negotiations, a Seat Agreement has been signed between the Centre and the Ministry for Elderly Care and Public Health of Sweden;

Human Resources

13.    Acknowledges that the former Director left the Centre in February 2010 to take up a position at the World Health Organization Regional Office for Europe;

14.    Urges the Centre to put in place sufficient measures to guarantee the transparency of its recruitment procedures; is in particular concerned about the Court of Auditors’ findings: neither the thresholds that candidates had to meet in order to be invited to the interview, nor those necessary to be put on the reserve list were fixed in advance; notes that this could cover up a situation of nepotism or conflict of interests;

15.    Notes from its RBFM that the total number of temporary agents working at the Centre as of 31 December 2010 was 175, out of 200 posts provided for in the Establishment Table 2010;

16.    Ascertains also from the RBFM that the turnover rate for temporary agents and contract agents was 7% in 2010;

17.    Considers the Centre as an important Union body to strengthen and develop European disease surveillance, to assess and communicate current and emerging threats to human health posed by infectious diseases and to pool Europe’s health knowledge;

Performance

18.    Acknowledges that the Centre is now working with its partners to implement changes on the basis of lessons learned from the 2009 H1N1 pandemic, in order to further improve the performance of the Centre for the future; points nevertheless to the important contributions made by the Centre to the measures on fighting the H2N1 pandemic, by issuing preliminary guidelines on the "Use of specific pandemic influenza vaccines" in 2009;

Internal audit

19.    Observes from the RBFM that a review of the implementation of the Internal Control System was carried out; is concerned in particular that two of the standards have still not been implemented, notably business continuity and evaluation of activities, and four others have only been partly implemented; urges therefore the Centre to promptly take action in this respect and inform the discharge authority of the stage of implementation of these standards;

20.    Ascertains from the RBFM that the planned audit of the Internal Audit service (IAS) on 'Processes supporting the establishment of the Annual Work Programme, focusing on the Management Information System' was postponed to 2011; calls therefore on the Centre to inform the discharge authority on the IAS finding at the beginning of 2012;

21.    Acknowledges also from the Centre that at the end of 2010 the IAS audit reported no critical findings; however six important findings were still open; is informed by the Centre that four of these recommendations concern health communication, the performance indicators, the checklist used by the financial actors and the estimation of costs of the Centre’s meetings; urges the centre to inform the discharge authority about the other two recommendations that still need to be implemented by the Centre;

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 … 2012 on the performance, financial management and control of the agencies.

ANNEX

European Parliament recommendations over past years

24.1.2012

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 Centre for Disease Prevention and Control for the financial year 2010

(C7-0287/2011 - 2011/2227(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.  Considers the European Centre for Disease Prevention and Control as an important Union body to strengthen and develop European disease surveillance, to assess and communicate current and emerging threats to human health posed by infectious diseases and to pool Europe’s health knowledge;

2.  Notes that EUR 57 800 000 have been made available as resources for the Centre in 2010 of which EUR 56 300 000 are subsidies from the Union budget;

3.  Underlines that the implementation of payment credits improved to 92.7 % which represents an amount of unused credits of EUR 3 800 000; notes that this under-execution is related to the fact that the Centre has limited its request of payment credits in order to reduce the amount of cash in its bank account at year-end, as requested by the Court of Auditors and the Commission;

4.  Reminds the Centre once again of the principle of annuality in respect of the high level of carryovers representing 27 % of the total budget; takes note that the overall situation has improved compared to 2008 and 2009; calls, however, on the Centre to further reduce the rate of carryovers;

5.  Takes note of the observation by the Court of Auditors on staff selection procedures; encourages the Centre to review its selection procedure which certainly will be monitored by the discharge authority;

6.  Is of the opinion, on the basis of the data available, that discharge can be granted to the Director of the European Centre for Disease Prevention and Control in respect of the implementation of the Centre's budget for the financial year 2010.

RESULT OF FINAL VOTE IN COMMITTEE

RESULT OF FINAL VOTE IN COMMITTEE

(1) OJ C 366, 15.12.2011, p. 122. (2) OJ L 248, 16.9.2002, p. 1. (3) OJ L 142, 30.4.2004, p. 1. (4) OJ L 357, 31.12.2002, p. 72. (5) OJ C 366, 15.12.2011, p. 122. (6) OJ L 248, 16.9.2002, p. 1. (7) OJ L 142, 30.4.2004, p. 1. (8) OJ L 357, 31.12.2002, p. 72. (9) OJ C 366, 15.12.2011, p. 122. (10) OJ L 248, 16.9.2002, p. 1. (11) OJ L 142, 30.4.2004, p. 1. (12) OJ L 357, 31.12.2002, p. 72. (13) OJ L 250, 27.9.2011, p. 145.