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2012 discharge: EU general budget, European External Action Service

2013/2205(DEC)

PURPOSE: presentation by the Commission of the consolidated annual accounts of the European Union for the financial year 2012, as part of the 2012 discharge procedure.

Analysis of the accounts of the EU Institutions: Section X – European External Action Service (EEAS).

Legal reminder: the consolidated annual accounts of the European Union for the year 2011 have been prepared on the basis of the information presented by the institutions and bodies under Article 129(2) of the Financial Regulation applicable to the general budget of the European Union. They were prepared in accordance with Title VII of the Financial Regulation and with the accounting principles, rules and methods set out in the notes to the financial statements.

The objective of the financial statements is to provide information about the financial position, performance and cashflow of a body that is useful to a wide range of users. The objective is to provide information that is useful for decision making, and to demonstrate the accountability of the entity for the resources entrusted to it.

1) Purpose: the document helps to bring insight into the EU budget mechanism and the way in which the budget has been managed and spent in 2012. It recalls that the European Union's operational expenditure covers the various headings of the financial framework and takes different forms, depending on how the money is paid out and managed. In accordance with the Financial Regulation, the Commission implements the general budget using the following methods: direct or indirect centralised management (by means of bodies or agencies of public law or other); decentralised management where the Commission delegates certain tasks for the implementation of the budget to third countries; and, thirdly, shared management where budget implementation tasks are delegated to Member States, in areas such as agricultural expenditure and structural actions.

The document also presents the different financial actors involved in the budget process (accounting officers, internal officers and authorising officers) and recalls their respective roles in the context of the tasks of sound financial management.

Amongst the other legal elements relating to the implementation of the EU budget presented in this document, the paper focuses on the following issues:

  • accounting principles applicable to the management of EU spending (business continuity, consistency of accounting methods, comparability of information ...);
  • consolidation methods of figures for all major controlled entities (the consolidated financial statements of the EU comprise all significant controlled entities –institutions, organisations and agencies);
  • the recognition of financial assets in the EU (tangible and intangible assets, financial assets and other miscellaneous investments);
  • the way in which EU public expenditure is committed and spent, including pre-financing (cash advances intended for the benefit of an EU organ);
  • the means of recovery following irregularities detected;
  • the modus operandi of the accounting system;
  • the audit process followed by the European Parliament's granting of the discharge.

To recap, the final control is the discharge of the budget for a given financial year. The discharge represents the political aspect of the external control of budget implementation and is the decision by which the European Parliament, acting on a Council recommendation, "releases" the Commission from its responsibility for management of a given budget by marking the end of that budget's existence.

The document also details specific expenditure of the institutions, in particular: i) pensions of former Members and officials of institutions; ii) joint sickness insurance scheme and iii) buildings.

Lastly, the document presents a series of tables and detailed technical indicators on (i) the balance sheet; (ii) the economic outturn account; (iii) cashflow tables; (iv) technical annexes concerning the financial statements.

2) Implementation of appropriations under Section X of the budget for the financial year 2012: the document comprises a series of detailed tables, the most important concerning the implementation of the budget. Concerning the EEAS’s expenditure, the table on the financial and budgetary implementation of this institution is presented as follows (information drawn from the EEAS Report on budgetary and financial management for the year 2012).

  • final budget EEAS headquarters (Brussels): EUR 184.1 million;
  • payments implemented at 31.12.2012 for the HQ: EUR 165.3 million (rate of implementation: 90%);
  • final budget of the EEAS for the management of delegations in third countries: EUR 304.5 million;
  • payments implemented at 31.12.2012 for the delegations: EUR 278.2 million (rate of implementation: 91%);
  • total budget of the EEAS amounted to EUR 488.6 million (rate of implementation of commitments 99.41% and 91% of payments).

During 2012, assigned revenues carried over from 2011 of EUR 1.8 million were also available on EEAS budget lines. At 31/12/2012, commitments of 1.78 M€ (99%) had been made and payments amounted to 1.057 M€ (59%).

3) Budgetary implementation – conclusions: in more general and political terms, in 2012, the EEAS pursued its institutional building-up started in 2010-2011. The main goals while creating the EEAS were to provide a platform for coherent and effective EU foreign policy and to bring together all foreign policy assets/instruments and levers at the EU's collective disposal.

The document proposes an accurate presentation of the actions that have been undertaken in the management and technical implementation of the institution still in its start-up phase in particular in terms of human resources management and staff from incorporation of other staff from other European institutions and Member States.