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RESOLUTION OF THE EUROPEAN PARLIAMENT

of 10 May 2012

with observations forming an integral part of its Decision on discharge in respect of the implementation of the budget of the Translation Centre for the Bodies of the European Union for the financial year 2010

THE EUROPEAN PARLIAMENT,

—	having regard to the final annual accounts of the Translation Centre for the Bodies of the European Union for the financial year 2010,

—	having regard to the Court of Auditors’ report on the annual accounts of the Translation Centre for the Bodies of the European Union 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 Council Regulation (EC) No 2965/94 of 28 November 1994 setting up a Translation Centre for bodies of the European Union (3), and in particular Article 14 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 (A7-0125/2012),

A.	whereas the Court of Auditors has stated that it has obtained reasonable assurances that the annual accounts of the Translation Centre for the Bodies of the European Union (‘the Centre’) for the financial year 2010 are reliable and that the underlying transactions are legal and regular,

whereas on 10 May 2011 Parliament granted the Director of the Centre discharge for implementation of its budget for the financial year 2009 (5), and whereas in its resolution accompanying the discharge decision, inter alia, called on the Centre:

—	to further develop the evaluation of its performance by improving the links between its strategic actions and the actions envisaged in its Annual Work Programme and by reviewing the indicators for monitoring its performance in order to comply with SMART criteria,

—	to take more effective measures to remedy its constant rise in surplus; in 2009 the surplus amounted to EUR 24 000 000, whereas it was EUR 26 700 000 in 2008, EUR 16 900 000 in 2006, EUR 10 500 000 in 2005 and EUR 3 500 000 in 2004,

—	to inform the discharge authority of the steps put forward for making the ABAC accounting system effectively operational,

C.	whereas the Centre’s final budget for 2010 was EUR 55 928 077 compared with EUR 62 630 000 in 2009, which represents a decrease of 11,98 %,

D.	whereas the volume of translation in 2010 was the highest since the establishment of the Centre, representing an increase of 20,1 % of the number of translated pages compared to 2009,

Budget and financial management

Notes from the its Annual Activity Report (AAR) and its annual accounts for the financial year 2010 that the original budget of the Centre, EUR 48 100 000, was the subject of two amending budgets; acknowledges in particular that the purpose of the two amending budgets was twofold:

—

to include the budgetary surplus from previous years, of EUR 24 000 000, in order to pay the employers’ contributions to the Commission for pensions from 1998 -2009, namely a total sum of EUR 18 400 000 and to reimburse the Centre’s largest client agency, the Office for Harmonization in the Internal Market, with the economic outturn for 2009, namely the sum of EUR 6 121 255,

—	to rebalance the budget with the sum of EUR 8 000 000, following a significant increase in client forecasts;

Acknowledges from its AAR that, due to the higher total number of pages translated in 2010, the revenue of the Centre rose to EUR 51 200 000 in 2010, an increase of 13,71 % compared to 2009; notes also from its AAR that the Centre’s implementation rate of expenditure rose to EUR 43 040 000, i.e. 86,79 % of the appropriations, which represents an increase of 18,27 % compared to 2009;

Recalls that, under Article 10 of its founding Regulation (EC) No 2965/94, the Centre revenue and expenditure shown in its budget must be balanced; notes that for the financial year 2010 the Centre’s accumulated 2009 surplus amounted to EUR 24 000 000; takes note, however, that principally through the transfer of funds to the Union’s pension scheme and the reimbursements to its clients, the Centre managed to reduce the aforementioned surplus to EUR 9 200 000; acknowledges moreover from the Centre that the Management Board decided in 2011 to use these EUR 9 200 000 to create a reserve for exceptional investment (EUR 4 300 000) and a reserve for price stabilisation (EUR 4 900 000);

Welcomes the settlement of the long-lasting dispute between the Centre and the Commission on the question of the employer’s contribution to the Union’s pension scheme;

Welcomes the above-mentioned decision of the Management Board, adopted in 2011, to create a reserve of EUR 4 300 000 for investments into an e-CDT programme to be realised over the years 2012-2013 and a reserve of EUR 4 900 000 for the stabilisation of the prices, in order to compensate for the potential decrease of its revenue due to the anticipated reduction of translation requests from its clients;

Welcomes that following the request of the discharge authority the final annual accounts of the Centre for the financial year 2010 have been made publicly available on the Centre’s website;

Procurement procedures

Calls on the Centre to ensure compliance with Article 60 of its Financial Regulation by establishing financing decisions for operational expenditure; asks the Centre in particular to establish stronger controls in the process of procurement planning;

Acknowledges from its AAR that the Centre launched two new procedures for the provision of translation/revision services in the rail and maritime fields;

Notes also that a total of 47 framework contracts were signed;

Human resources (HR)

10.

Acknowledges that, given that eight staff members with higher points were not promoted whereas some other staff in the same grade were promoted, Article 45 of its Staff Regulations was not respected, as additional discretionary elements were actually incorporated into the final decision to award promotion; notes the Centre’s statement according to which the Internal Audit Service (IAS) acknowledged that the decisions on career and promotion of officials and of temporary staff adopted by the Management Board on 7 February 2008 were subject to interpretation and that following the final IAS assessment on ‘Implementation of the staff promotion’, issued in September 2010, the Centre adapted its interpretation to the one of the IAS while the additional criteria which were previously used for promotion were abandoned;

11.

Acknowledges, in addition, from its AAR that the Centre conducted 22 selection procedures for temporary and contract staff, as well as two competitions for established posts in 2010;

12.

Notes that the Centre implemented a professional orientation service in order to identify possibilities for staff and enable mobility or career orientation;

Performance

13.

Welcomes the Centre’s increase of its services, in terms of volume of translation, to the Union institutions compared to 2009, and notably the increase by 20,1 % of the number of translated documents, while its budget was reduced by 11,98 % compared to the previous year;

14.

Notes from the Centre’s AAR that in 2010 agreements were signed with six new clients, i.e. the Joint Undertakings Artemis, ENIAC, IMI and FCH, the European Asylum Support Office and the Agency for the Cooperation of Energy Regulators and first contacts were established with the European Banking Authority, the European Securities and Markets Authority and the European Insurance and Occupational Pensions Authority;

15.

Acknowledges from the Centre’s AAR that during the financial year 2010 around 55 % of the total volume of pages translated was outsourced; notes from its AAR that the Centre took steps to consolidate the management of its translation workflow in 2010 by merging the Demand Management and Freelance Management Sections; acknowledges, in particular, that an external study on validation of the ratio between works carried out internally and outsourcing has been completed and that the calculation model used by the Centre was validated;

16.

Welcomes the efforts of the Centre to improve the quality of translation; underlines the fact that 17 terminology projects were finalised until the end of 2010, which improved the terminology database; supports the Centre in organising training events for its translators, which helps to improve their productivity;

17.

Calls on the Centre to analyse the current data flow and tools used for budget planning and establish controls; notes, in this respect, that the Centre’s budget planning is based on excel tools and manual or system-based controls of data which could result in calculation errors and wrong expenditure planning, and ultimately have a negative impact on the Centre’s pricing;

18.

Encourages the Centre to apply minimum requirements for forecasting information and enhance the cooperation and exchange on forecasting with selected clients, in order to avoid overestimate of expenditure and pricing;

Internal audit

19.

Notes that 12 ‘very important’ recommendations from the IAS were still open as at 31 December 2010; is concerned that the implementation of seven of those recommendations was delayed; acknowledges, in particular, that those delays concern the following important issues:

—	the quality of client forecast,

—	the disclosure of the 2008 exercise,

—	the assessment of the Internal Control System,

calls therefore on the Centre to explain those delays to the discharge authority and to remedy the situation;

20.

Notes that out of the 12 ‘very important’ recommendations from the IAS, the Centre rejected the recommendation on financial reporting; calls on the Centre to inform the discharge authority about the reasons for this decision;

21.

Observes that the IAS conducted an audit on ‘Budgeting of expenditures’, finalised a follow-up audit on ‘HR management’ and on the ‘implementation of internal control standards’, and carried out an IT risk assessment;

22.

Notes from the Centre’s AAR that the IAS final audit follow-up report revealed that 41 recommendations were made, 29 recommendations were still in progress, 10 implemented and two partially or not accepted;

23.

Acknowledges that the Internal Audit Capability carried out formal consulting activities on the following areas:

—	advice on the optimisation of the organisational structure and related cost reduction,

—	coordination of the IT risk assessment exercise,

—	facilitation and advice for the Centre’s annual risk management exercise,

—	support and guidance to the Quality Audit activity;

24.

Draws attention to its recommendations from previous discharge reports, as set out in the Annex to this resolution;

25.

Refers, in respect of the other observations accompanying its Decision on discharge, which are of a horizontal nature, to its resolution of 10 May 2012 (*1) on the performance, financial management and control of the agencies.

(1) OJ C 366, 15.12.2011, p. 117.

(2) OJ L 248, 16.9.2002, p. 1.

(3) OJ L 314, 7.12.1994, p. 1.

(4) OJ L 357, 31.12.2002, p. 72.

(5) OJ L 250, 27.9.2011, p. 125.

(*1) Texts adopted, P7_TA(2012)0164 (see page 388 of this Official Journal).

ANNEX

EUROPEAN PARLIAMENT RECOMMENDATIONS OVER THE PAST YEARS

Translation Centre for the Bodies of the European Union

2006

2007

2008

2009

Performance

n.a.

—	Objectives and performance indicators are often not measurable

—	Notes that in 2007 refunded EUR 9 300 000 to its client

—	Improvements in IT (FLOSYSWEB)

—	Notes that in 2008 refunded EUR 11 450 000 to its client.

Calls on the Centre to further develop the evaluation of its performance by improving the links between its strategic actions and the actions foreseen in its Work Programme and by reviewing the indicators for monitoring its performance in order to comply with SMART criteria

Budgetary and financial management

n.a.

The programming should be based on a clear and consistent link between the set objectives and the implementation of the budgetary resources needed to achieve them

—	Calls on the Centre to take more effective measures to remedy the constant rise in its surplus → 2008: EUR 26 700 000 ; 2006: EUR 10 500 000

—	Calls on the Commission to examine the scope of the Centre’s cash holdings: EUR 48 405 006

—	Calls on the Centre to offer its clients cost-covering services in the future

—	Calls on the Centre to systematically apply Article 8.2 of its Financial Regulation in which it is stated that ‘commitment appropriations shall cover the total cost of the legal commitments entered into the current financial year’

—	Calls on the Centre to take more effective measures to remedy its constant rise in surplus, this surplus is mainly linked to the lack of precision in the forecasts for translation requests received from its clients

Human resources

—	Weaknesses in the recruitment procedures: no written evidence of the rules applied to the evaluation of the candidates’ file

—	The conflict between the Centre and the Commission on the employer’s share contributions for staff has not been solved

n.a.

—	The Centre should plan its recruitment procedures more realistically and effectively in order to respect the time limits and meet all the needs arising from an increase in the Centre’s staff (in quantitative and qualitative terms)

—	The conflict between the Centre and the Commission on the employer’s share contributions for staff has not been solved

—	Calls on the Centre to include information on sensitive functions in job descriptions and ensure that all mitigating controls put in place are identified

—	Encourages the Centre to update the implementing rules for training and define new timing for this.

Internal audit

n.a.

Calls on the Centre to issue a comprehensive written procedure defining roles, riming and workflows for the establishment, validation and booking of recovery orders for transactions delivered to customers