2 Financial management
| (a)
(28927)
13117/07
+ ADD 1
COM(07) 537
(b)
(28928)
13118/07
+ ADD 1
COM(07) 538
|
Commission Report on the follow-up to 2005 Discharge Decisions (Summary) — Council recommendations
Commission Report on the follow-up to 2005 Discharge Decisions (Summary) — European Parliament Resolutions
|
| Legal base | Article 276 EC; —; —
|
| Documents originated | 19 September 2007
|
| Deposited in Parliament | 26 September 2007
|
| Department | HM Treasury |
| Basis of consideration | EM of 7 October 2007
|
| Previous Committee Report | None
|
| To be discussed in Council | Not known
|
| Committee's assessment | Politically important
|
| Committee's decision | For debate in European Standing Committee together with the 2006 Annual Report of the European Court of Auditors and other relevant documents
|
Background
2.1 Each annual audit of the Community's general and other budgets
by the European Court of Auditors is concluded by a discharge
given to the Commission by the European Parliament on the recommendation
of the Council. But the Commission is required to act on and report
back on any observations made by the European Parliament in the
discharge decisions and any comments accompanying the Council's
recommendation. Any results from action on and follow-up to observations,
comments and recommendations feed into subsequent annual audits.
The documents
2.2 Document (a) is a summary report from the Commission about
its follow-up to the Council's Recommendations in connection with
the Discharge Decisions for the 2005 budget. The report covers
three areas: the General Budget, European Court of Auditors' special
reports and the European Development Funds. The bulk of the summary
is concerned with the General Budget and this part of the report
deals with recommendations under several headings:
- an introduction covering an
integrated internal control framework, reliable, cost-effective
and easily understood indicators for internal controls, a single
audit model and improving implementation of supervisory and control
systems;
- the Statement of Assurance and supporting information;
- Commission internal control;
- budgetary management;
- revenue;
- the Common Agricultural Policy;
- structural measures;
- internal policies, including research;
- external actions;
- pre-accession strategy;
- administrative expenditure; and
- financial instruments and banking activities.
The staff working document annexed to the report
gives a much more detailed account of the Commission's responses
to the Council's recommendations under similar headings.
2.3 Document (b) is a summary report from the Commission
about its follow-up to the European Parliament's Resolutions in
its Discharge Decisions in relation to the 2005 budget. The summary
is in three parts dealing with recommendations on:
- the General Budget, including
both horizontal and sectoral issues and European Court of Auditors'
special reports;
- the European Development Funds; and
- individual Community agencies.
2.4 The summary cross-references to the Commission's
annexed staff working document which gives a much more detailed
account of the Commission's responses to the European Parliament's
recommendations under several headings:
- the Statement of Assurance;
- declarations (by Member States in relation to
their management of Community funds);
- an Inter-Institutional Agreement[8]
provision about assessments of Member States' management and control
systems;
- suspension of payments and financial corrections;
- the Commission's internal control system;
- political responsibility and administrative responsibility
at the Commission;
- revenue;
- the Common Agricultural Policy;
- structural measures, employment and social affairs;
- internal policies;
- external actions;
- pre-accession strategy;
- administrative expenditure and general issues
concerning the agencies;
- ten special reports;
- the European Development Funds; and
- individual Community agencies.
The Government's view
2.5 The Economic Secretary to the Treasury (Kitty
Ussher) says:
"These reports provide a useful summary of the
action taken by the Commission in response to the recommendations
of the Council and the European Parliament relating to the discharge
for the 2005 EC budget. These actions should lead to some further
improvement in the management of the budget. Nevertheless, considerable
further efforts are needed by all concerned — notably the
Commission, the Council and individual Member States — if
the Court of Auditors is to provide the positive statement of
assurance on the EC budget that the Government believes that taxpayers
deserve.
"In this context the Government looks forward
to the Court's report on the 2006 EC budget, which should be published
in November 2007, as well as the Commission's final report on
the implementation of its Action Plan "Towards an Integrated
Internal Control Framework",[9]
which should be published in early 2008. The Government, which
has already announced an initiative to increase audit and parliamentary
scrutiny of the UK's own management of EC funds,[10]
will continue to press the Commission and partners for further
progress to improve financial management and combat fraud, and
for these issues to be considered explicitly as part of the upcoming
comprehensive review of the EC budget."
Conclusion
2.6 These documents usefully summarise Commission
attempts to improve management of the Community's finances. As
such we recommend that they should be debated together with the
Commission's 2006 report on the fight against fraud, which we
have already recommended for debate in European Standing Committee,[11]
and the 2006 report of the European Court of Auditors, which we
expect to be reporting on in due course.
8 "The Inter-Institutional Agreement between the
European Parliament, the Council and the Commission on budgetary
discipline and sound financial management." Back
9
(27230) 5509/06 + ADD1: see HC 34-xix (2005-06), para 14 (15 February
2006). Back
10
See http://www.hm-treasury.gov.uk/newsroom_and_speeches/speeches/statement/speech_statement_est202206.cfm Back
11
(28786) 11724/07 + ADDs 1&2: see HC 41-xxxiii (2006-07), para
1 (2 October 2007). Back
| 
