Donington, Lord Bruce

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n451 'ttEuropean CommunitiesEUROPEAN PARLIAMENTWorking Documentst978 - 19797 June 198wtDOCUMENT t49178Reportdrawn up on behdf of the Committee on Budgets/on thel(itial list of tequesb for the crry-over of appropriations from the 1977 tofin Glgfinsncid year (non'autornafic carry-ove$) - (Doc. l22l78lRapporteur: Iord BRUCE of DONINGTONPE 53.678/fin.Englbh EditionBy 1etter of 3 May 1978 the President of the Council of the EuroPeanCommunities requested the European Parliament, pursuant to Article 5(3) ofthe Financial Regulation of 2l December 1977, to deliver an opinion on theinitial list of requests for the carry-over of appropriations from the 1977to the 1978 financial Ycar.The list was referred to the Committee on Budgets. On 24 trlay 1978 theCommittee confirmed the appointment of Lord Bruce of Donington as raPPorteur.At its meeting of 24 May 1978 the Committee on Budgets conoideredthe listand unanimously adopted the motion for a resolution and the explanatorystatement.present: Mr Langc , Clrairnran; Lord Ilru<-'c o I DonitlqLon, rapporLeur;Mr van Aerssen, Mr Alber, Lord Bessborough, Mrs Dahleirup, Mr Hamilton,Mr Ripamonti, Mr Schreiber, tlr Shaw and Mr Spinelli.-3- PE 53.678/fin.57A.B.CONIENTSIIOTION FOR A RESOI,TITIONEXPIAI{AT,ORY STATEMEIiIE .. .... 'Paqe-4- PE 53.67a/fin.ATrhe committee on Budgets hereby submits to the EuroPean Parliament thefollovring motion for a resolution, together with explanatory Etatement:I4OTION FOR A RESOLUTIONembodying the opinion of the European Parliament on the lnitial list ofrequests for the carry-over of appropriations from the 1977 to the 1978financial year, (non-automatic carry-overs)The EuroPean Parliament- having regard to the tist submitted by thc cornmission to the EuroPeanParliament (cO!'l(78) I89 final)'having been consulted by the council pursuant to Article 6(3) of theFinancial Regulatior,,l 1Do". L22/78) '- having regard to the report of the committee on Budgets (Doc. L49/78),I. Approves the non-automatic carry-over of appropriations requested bythe Conunission of the EuroPean Communities in resPect of thefollowing amounts:(a) L,267,250 EuA(?trrapters rz, 2L and 22) for section r - parliament;(b)1I,331,595.44EUA(ChaPters37,94and95)forSectionIII-Commission;(c) 6L,'7g8.42 F:vA (Chapters 12, 13, 15, 22 and 231 for Section v -The Court of Auditors;Regrets that the Council did not agree to the abolition of this non-automatic carry-over procedure as was proposed by the Commission, andsupported by Parliament, during the revision of the Financial Regulation;3. Dravrs attention to the problem of the undermining of Parliament'e righteillustrated by the failure to commit appropriations inserted in thebudget by Parliamentary amendment and will return to this point when thefuII picture is knovrn, and when it takes a decision on the granting ofthe discharge in respect of the 1977 financial yeart(1)o, "o. L 356 of 3r. L2.tg77(2)throrrghoot, your rapporteur refers to the EUA, although the amount wasincluded in the 1977 budget in u.a.s. Eor the 1978 financial year, however,the budget is measured in EUAs.2.-5- PE 53.678/fln.4. Requests that, in future, all the Institutions "onnr, fulI explanationswhere underspending has taken place and where carry-overs are requested;5. Will reassess the carry-over procedure at the time of its examinationof the complete list of requests later in the financial year.-6- PE 53.678 /fi.n.BEXPIANATORY STATEMEMProcedure for the non-automatic carrVinq over of appropriationEI. The Financial Regulation provides the possibility for the Institutlonsto carry-over appropriations from one financial year to another. The carry-over is deemed to be aPProved, unless the Council, acting by a qualifiedmajority and after consulting the European Parliament, decides othenpisewithin orr" *ont-h. (l)2. In its proposals for reviewing the Financial Regulation the Commissionproposed the abandoning of this procedure, following increasing Parliamentaryhostility to the practice, since the scale of these carry-for:r.rards sometimesreached as much as I0% of the initial budget. fhe principle of theannuality of the budget was thus2jeopardised. Mr SHAW, in his rePort onthe Financial Regulation review\'' approved the Commission's proposal.Ho\^rever, this was not one of the items on which it was Possible to obtainagreement with Council and for the foreseeable future, the slightly moreflexible system created by the review still permits the Institutions tomake these carry-overs.3. In his subsequent report on the complete list of requests for the carry-overs, your rapporteur will make certain suggestions for the improvementof this procedure. One element of dissatisfaction is the current two-stageapproach, whereby the Commission submits, before 1 lvlay, an initial list ofcarry-fori^rards, and this is supplemented by a final list two months later.This in turn causes delays in the discharge procedure and encourages delaysin the implementation of the budget. The abolition of carry-overs wouldact as a positive inducement to fully implement the budget in the financialyear.Initial list of requests for carrv-overs from 1977 to 19784. These initial requests can be summarised as follqls:(i) for the budget of Parliament - Section I(a) from ChapLet L2, 3,500 EUA, "lliscellaneous expenditure onstaff recruitment" i(1)fir,.rr"ial Regulation of 2l December 1977, OJ No. L 355 of 31 December Lg77,Article 6, sub-paragraPh 3.(2)ro".46s/:.6.-7- PE 53.678 /f.in.(b) from Chapter 21, 101,250 EUA, "Fitting out of prentises";(c) from Chapter 22, 18,750 EUA, "New purchases of furniture" and143,750 EUA, "New purchases of technical equipment and installationg".This totals 1,267,250 EUA for all of Section I.Ttre Conunittee on Budgets has already pronounced favourably on this carry-fonrrard by an internal procedure. At its meeting of I March, L978, theCommittee on Budgets approved these carry-fonrrards, the Chairman of theCommittee on Budgets writing to the President of Parliament indicating thatapproval. At that stage, it was considered that there rrras no need to takethis matter to plenary session, given the relatively minor srrrns that wereinvolved. It is to be regretted, however, that in the list forrrarded by thePresident of Parliament, explanations as to the reasons for underspendinglrere exceesively s,rccirr.t. (1)(ii ) for Seetion II - CouncilTtre Council has no carry-overs of appropriations from the 1977 to the1978 financial year requiring approval by the budgetary authority andthis is an element of satisfaction for the Parliament. Ttris alsoapplies to Section IV of the budget - the Court of Juetice.for Section III - Commission, four carry-overs are proposed:(a) from ftem 3700, 85,538.44 EVA, "First programme in the dataprocessing sector".(iii)This represents onJ-y L2% of the appropriations for this line and theunderspending is juetified due to a reassessment of the efficiency of theprogramme during the financial year.(b) from ftem 3710, 8,000,000 EUA, "Basic research operations in theaerospace sector".Parliament usod part of its margln for Lnereage ln non-compulsory expenditure to enter appropriations on the operatlonal line foraerosPace, which was considered by Parliament to be a priority for Communityaction. Ttris item alone amounted to mce than 5% of the margin thatParliament took up. Council indicated its agreement to that expenditure.The commission did not bring forrrrard proposals until August L977, whichrePresents a lamentable delay given that Parliament had already reacted to anearlier Communication setting out general policy aims in the previous year.It becomes clear that Council never had any intention that thlg amount ehouldbe spent during the financial year and thc Conrmission is, to a certaln extcnt,reeponsible for the delays and the thwarting of Parliament's rlghta.ffi; members, pE s2.s76-8- PE 53.678 /fin.During the 1978 budgetary procedure, when it became clear that theserights had been undermined, Parliament amended the budget to placeappropriations under Chapter 100 and included within the amendment (althoughnot within the margin for increase) the I million EUA urLsPent for 1977 thathad to be carried forurard.Ttrerefore, Parliament's approval of this carry-for:r,rard is alreadyimplicitly given. The Committee on Budget.s will follor this item veryclosely and will seek to ensure that well before the end of tbe financial-year appropriations are committed to the fuII amount, irrespective ofwhether Council has concluded its deliberations on the proposal for anaerospace research programme, which have been with it since the beginningof August last Year.(c) from Artic].e 94O, 2,436,370 EUA, "Expenditure resulting fromthe agreement between the EEC and UNRWA".The reason for this delay in paying the contribution to the UNReliefs and Works Agency for Palestinian refugees (UNRWA) is that the aidorganisation did not inform the Commission in time as to its real needs forthe cost of implementing the supplementary food prograrlme fot L977. 1lttisinformation was provided in February of this year and indicates that theoriginal budget entry is not needed in its entirety (2.4 million EUA beingrequired instead of 3 million EUA as originally entered). It seems toyour rapporteur that the Commission was correct in making no PaYment untilfull information had been provided by the Agency.(d) from Articl.e 964, 809,687 EUA,"Cooperation with the Arab countrieeat regional leve1".It was only at the end of the financial year that the Council approveda transfer for this amount from Chapter lOI to Chapter 95 within the 1977budget, and this delay and subsequent delays have resulted from thedifficulties in convening the Working Committee on the financing of thedialogue. Therefore, a carry-fo:*rard has become inevitable.your rapporteur takes this opportunity to reaffirm the view that thefuII expenditure from the Community countries in the context of the Euro-Arab dialogue should be included within the general budget of the Communitiee.The Commission should be invited to make a statement on this point as soonas posslb1c.PE 53.67A /fin--9-(iv) for Section V - Court of Auditors:(a) from Chapter L2, 9,6L2.44 EUA, "Installation, resettlement andtransfer allovrances " ;(b) from Chapter 13, 26,721.46 EUA, "Expenditure relating to missionand duty travel";(c) from Chapter 15, 2'479.75 EUA, "Training courses"i(d) from Chapler 22, 11,002.52 EUA, "Movable propertyrri(e) from Chapter 23, 1I,982.24 EIJA. "Current administrative expenditure".fhis totals 5I,798.42 EUA.It will be recalled that the Court of Auditors \rras only set up in theIast two months of L977 and the financing of the Court was made possible bya transfer within the budget, on the basLs of what !{ere necessarilyimprecise estimates. It is proposed to carry-forward certain unused amountsin view of the experience gained and in the light of invoices already received.These items, whieh are smalI, do not call for any particular remarks.In future, all the Institutions should seek to emulate the Conunissionin providing full explanations where underspending has taken place andwhere carry-folr^rards are requested.Conclusions5. The Conunittee on Budgets proposes that the European Parliament shouldapprove all the carry-forrrrards in this initial list submitted by theCommission.5. Ho$rever, it reserves its judgement on the principal matters raiseduntil the complete list of requests is submitted later in the year anduntil the report of the Court of Auditors on the implementing of the 1977general budget is available and until it grants, or does not grant, diechargeto the,Institutions with respect to the 1977 financial year.7. It is already, horever, appropriate to take note of the failure, for atleast one major item,of the Commission to implement the budget as voted andamended by Parliament. This undermining of Parliament's budgetary pmrerstwill be one of the principal items for comment in the report on the dischargefor 1977.8. As regards the carry-for*rards procedure, the Committee on Budgets reaffirmgits view that this procedure should be abolished as it acts as an inducementto underspend.-10- PE 53.678/fin.

Report drawn up on behalf of the Committee on Budgets on the initial list of requests for the carry-over of appropriations from the 1977 to 1978 financial year (non-automatic carry-overs) - (Doc. 122/78). EP Working Documents, document 149/78, 7 June 1978

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http://aei.pitt.edu/95666/1/1978%2D79.78.149.pdf

Report drawn up on behalf of the Committee on Budgets on the initial list of requests for the carry-over of appropriations from the 1977 to 1978 financial year (non-automatic carry-overs) - (Doc. 122/78). EP Working Documents, document 149/78, 7 June 1978

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