14 FINANCIAL MANAGEMENT
(26960)
13542/05
+ ADD1
SEC(05) 1240
| Draft Regulation amending Regulation (EC, Euratom) No 2342/2002 laying down detailed rules for the implementation of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities
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| Legal base | Commission Regulation — Article 211 EC; Council's opinion on draft Regulation — Article 279 (1) EC; consultation; unanimity
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| Document originated | 12 October 2005
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| Deposited in Parliament |
28 October 2005 |
| Department | HM Treasury
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| Basis of consideration |
EM of 8 November 2005 |
| Previous Committee Report |
None |
| To be discussed in Council
| No date set |
| Committee's assessment | Politically important
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| Committee's decision | Clear
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Background
14.1 Management of the general budget of the European Communities
is governed by Council Regulation (EC, Euratom) No. 1605/2002,
the so-called Financial Regulation, and Commission Regulation
(EC, Euratom) No. 2342/2002, the so-called Implementing Rules.
These Regulations were a significant recasting of the previous
legislation, introducing new accounting practices and systems,
and came into operation from 1 January 2003. When the new Financial
Regulation was adopted in 2002 the Commission gave an undertaking
to the Council to report by 1 January 2006 on its operation and,
if necessary, to submit appropriate proposals. In May 2005 the
Commission so reported and tabled a draft Regulation to amend
the Financial Regulation. We are holding that document under scrutiny
pending deposit of a revised proposal which is expected from the
Commission in 2006.[36]
The document
14.2 In this document the Commission sets out a draft Regulation
it proposes to make, and on which it wants the Council's opinion.
The draft Regulation would amend the Implementing Rules in relation
to the existing Financial Regulation. It deals with technical
changes, which can be introduced under the current Financial Regulation,
aimed mainly at simplifying administrative procedures for the
institutions, economic operators and beneficiaries of grants,
in particular in relation to the External Actions section of the
budget, "while maintaining a high level of protection of
the Communities' financial interests". The Commission proposes
this action as a result of deciding not to delay its proposed
amendment of the Financial Regulation by including these matters
in its parallel revision of the Implementing Rules. The revisions
proposed in this document relate to budgetary principles, the
duty of the accounting officer, imprest accounts, the liability
of an authorising officer, recovery of debts, expenditure issues,
public procurement and contracts, grants, presentation of accounts,
the special provisions related to External Actions and offices
(specifically the European Administrative School).
14.3 It is expected that this document will be considered
together with the proposal to amend the Financial Regulation during
the first half of 2006.
The Government's view
14.4 The Economic Secretary to the Treasury (Mr Ivan
Lewis) says that as a result of practical experience the Commission
thinks the current Implementing Regulation is in need of some
simplification and clarification. He says that the changes proposed,
albeit of a routine nature, contribute to the process of improving
financial management in the Commission and protecting the financial
interests of the Community.
Conclusion
14.5 This document provides evidence of continued
Commission efforts to improve financial management. Whilst clearing
the document we draw it to the attention of the House as background
to the ongoing debate about management and protection of the Communities'
finances.
36 See (26712) 11021/05: HC 34-vii (2005-06), para
10 (26 October 2005). Back
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