Changes from report parliamentary committee draft to plenary report

2. MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

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with observations forming an integral part of the decision on discharge in respect of the implementation of the general budget of the European Union for the financial year 2023, Section V – Court of Auditors

(2024/2023(DEC))

The European Parliament,

– having regard to its decision on discharge in respect of the implementation of the general budget of the European Union for the financial year 2023, Section V – Court of Auditors,

– having regard to Rule 102 of and Annex V to its Rules of Procedure,

Changed– having regard to the report of the Committee on Budgetary Control (A100000/2025),(A10-0047/2025),

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A. whereas in the context of the discharge procedure, the discharge authority wishes to stress the particular importance of further strengthening the democratic legitimacy of Union institutions by improving transparency and accountability and by implementing the concept of performance-based budgeting and good governance of human resources;

B. whereas the Court of Auditors (the ‘Court’) is the Union’s external auditor, entrusted, by way of independent, professional and impactful audit work, with assessing the economy, effectiveness, efficiency, legality and regularity of Union action to improve accountability, transparency and financial management, thereby enhancing citizens’ trust and responding effectively to current and future challenges facing the Union;

C. whereas, without prejudice to Articles 287 and 319 of the Treaty on the Functioning of the European Union (TFEU), each year since the close of the 1987 financial year, the Court has had its revenue and expenditure accounts audited by an independent external auditor and, since the report on the 1992 financial year, the external auditor’s reports have been published in the Official Journal of the European Union;

D. whereas management accountability to the budgetary authorities is provided via the annual activity report of the Secretary-General of the Court, the purpose of which, according to Article 74(9) of the Financial Regulation, is to provide information about the use made of resources, including systems, and about the efficiency and effectiveness of the Court’s internal control systems;

E. whereas, by performing its tasks in a transparent and independent way, the Court contributes to democratic oversight, public debate and the sound financial management of the Union;

F. whereas the Court has taken the position that, in order to assess the governance, accountability and transparency of the Union and the quality and reliability of the information and data reported on the implementation of Union policies, the best solution would be for the Court to be mandated to audit all Union institutions, bodies, offices and agencies set up by or under the Treaties and all the intergovernmental structures of key relevance to the functioning of the Union; whereas Parliament strongly supports the Court and would welcome initiatives that would strengthen the ability of the Court to deliver on its mandate;

1. Notes that the budget of the Court falls under MFF heading 7, ‘European public administration’, which amounted to EUR 12,3 billion in 2023 (representing 6,4 % of the total Union budget); notes that the Court’s budget of approximately EUR 0,2 billion represents approximately 1,5 % of the total administrative expenditure of the Union and less than 0,1 % of total Union spending;

2. Notes that the Court, in its annual report for the 2023 financial year examined a sample of 70 transactions under Administration, 10 more than were examined in 2022; further notes that the Court reported that administrative expenditure comprises expenditure on human resources, including expenditure on pensions, which in 2023 accounted for about 70 % of the total administrative expenditure, and expenditure on buildings, equipment, energy, communications and information technology, and that its work over many years indicates that, overall, that spending is low risk;

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Added3. Welcome the continuous increase in the number of transactions audited by the Court under the heading Administration; take note of an audit planned on the Union civil service, but recalls the importance of having a more in-depth investigation into the administrative expenditure and repeats its call to include in its work comprehensive data on all institutions in order to provide a coherent basis for a consistent discharge procedure;

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4. Notes that 21 (30 %) of the 70 transactions contained errors but that the Court, based on the 5 errors which were quantified, estimates the level of error to be below the materiality threshold;

5. Notes that the financial statements of the Court are audited by an independent external auditor in order to ensure the same principles of transparency, accountability and independence as the Court applies to its auditees;

Budgetary and financial management

6. Notes that the overall budget of the Court for 2023 amounted to EUR 175 059 922, equivalent to an increase of 7,97 % from EUR 162 141 175 in 2022; notes that the increase was primarily due to salary adjustments and nine new temporary posts related to NextGenerationEU; notes that for 2023 88,5 % of appropriations were for its Members and staff, while 11,5 % were for buildings, equipment and miscellaneous expenditure;

7. Notes that the implementation rate for commitments and payments was high, though slightly lower than in 2022; observes that the utilisation rate for appropriations stood at 97,92 %, and payments represented 94,45 % of total commitments, compared to 98,12 % and 95,26 %, respectively, in 2022;

8. Notes that Russia’s illegal and unjustified war of aggression against Ukraine in various ways created budgetary pressures for the Court, including through rising inflation and salary adjustments, strongly increasing electricity and heating costs;

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Changed8.9. Highlights that the budgetary execution for 2023 was impacted by two factors:factors, which explain the slightly lower rate than in 2022:

1. the higher-than-budgeted level of inflation and the resulting price indexations affecting new and existing contracts, which triggered additional budgetary needs to cover non-salary expenditure and, in particular, the energy and IT budget lines; those increases in appropriations were eventually made possible mainly as a result of an underutilisation of some appropriations in Chapter 10 (Members of the Institutions), in Chapter 12 (Officials and temporary staff) and in Title 2 on budget lines such as Publications, Limited consultations, studies and surveys and Interpretation costs;

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Changed2. the higher turnover of contract staff and SNEs (some SNE contracts were not extended and a few SNEs passed an internal competition for temporary staff), delays and difficulties in recruitment procedures;procedures as for any European bodies located in Luxembourg;

10. Notes that, in the course of 2023, the Court carried out 36 budgetary transfers totalling EUR 5 676 379, which were aimed at ensuring that the Court’s various departments operated smoothly and that any related needs were met;

11. Notes that, in 2023, the Court purchased goods and services totalling EUR 23 426 750,05 (EUR 5 512 853 in 2022 and EUR 15 215 515 in 2021), of which purchases from local suppliers amounted to EUR 21 453 665,05 (EUR 4 848 701 in 2022 and EUR 10 144 812 in 2021);

12. Notes with satisfaction that the external auditor declared that the resources allocated had been used for their intended purpose and that the control procedures put in place by the authorising officers provided for the necessary guarantees to ensure that financial operations were in compliance with the applicable rules and regulations;

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Changed12.13. NotesWelcomes that the overall mission budget of the Court (Members and staff) initially set at EUR 2 722 500 has declined by 4,4 % to EUR 2 602 500 given changes in the Court’s working methods following the pandemic;

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Added14. Calls on the Court to conduct a comprehensive review of travel and meeting allowances, ensuring that expenditures are cost-effective, justified, and environmentally sustainable, including an increased reliance on hybrid meetings to reduce unnecessary spending and carbon emissions;

Internal management, performance and internal control

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Changed13.15. Welcomes the fact that, in 2023, the Court significantly increased its on-the-spot visits compared to the previous three years, when COVID-related travel and public health restrictions were still partly in place; notes that the Court spent a total of 4 897 days in Member States and outside the Union compared withto 2 984 days in 2022, 1 156 days in 2021, 1 190 days in 2020 and 3 605 days in 2019;

16. Notes that, in the course of 2023, the Court presented 2 annual reports, 4 specific annual reports, 29 special reports, 4 opinions and 6 reviews, totalling 45 items;

17. Notes that of the 29 strategic measures of the Court’s 2021-2025 strategy, 1 has been cancelled and the other 28 fully implemented;

18. Appreciates that the Court measures the implementation of its recommendations based on the follow-up carried out by its auditors; notes that, in 2023, the Court analysed the recommendations addressed to the Commission and other institutions in its 2019 reports; appreciates that the analysis showed that of the recommendations that have been followed up, 100 % of the 15 recommendations made in the Court’s 2019 annual report and 85 % of the 208 recommendations in the Court’s 2019 special reports had been implemented either in full or in some or most respects;

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Changed17.19. RecallsWelcomes the readiness of the Court to respond to Parliament’s request to focus its audit work on the most pressing challenges, as well as to improve cooperation with Parliament’s CCC; stresses that the Court should have full access to fraud risk assessment tools, including Commission and Member State databases regarding fraud cases related to Union funding, to enhance early warning systems against fraudulent activities; regrets deeply that the Court’s access to FENIX, the new reporting tool on the Recovery and Resilience Facility (RRF), remains an open issue due to the fact the Commission only grants the Court access to some of the FENIX modules;modules, supportsand the Court’sinformation requestcontained thattherein is not updated in a timely manner; urges the Commission to grant itthe Court full and immediate access asto soonall asFENIX possible;modules without delay; notes that the Commission’s Directorate-General for Economic and Financial Affairs has endeavoured to grant the Court access to FENIX files within 2 weeks of approving a payment request; is alarmed, however, that in practicepractice, that deadline is not being met in many cases and that delays of up to 2,5 months have been encountered in some instances, significantly slowing down the delivery of Court findings; recalls that the Commissioner for Budget in the CONT meeting on 10 October 2024 openly stated that the Court has a full mandate on the RRF which indicates the need for a speedy improvement of the Court’s access to all tools to deliver on its mandate;

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Added20. Calls on the Court to expand its audit scope to include European Investment Bank (EIB) operations financed with the EIB’s own funds, given the EIB’s growing role in EU economic,financial, and industrial policy; urges the Commission and Member States to grant ECA the legal mandate required for this expansion;

Added21. Commends the timely and pertinent special reports on the implementation of the RRF, which enable the discharge authority to effectively exercise its prerogatives and provide recommendations to the Commission for enhancing the functioning of this instrument; urges the Court to strengthen its role in combating fraud in the Union budget by identifying weaknesses, engaging in anti-fraud discussions, intensifying audits, cooperating with fraud detection bodies, and providing relevant feedback to the discharge authority;

Added22. Notes that the Court, at the end of 2023, had 969 members of staff; notes that in 2023, women constitute 53 % of the staff and men 47 %, unchanged from the previous year, 2022; regrets that women represent only 30 % of senior management, a significant decline from 36,4 % in 2022; highlights that the overall proportion of women in management positions has decreased in 2023; calls on the Court to continue its efforts to promote gender balance for the middle and senior management;

Human resources, equality and staff well-being

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Changed18.23. Is alarmed that the recruitment process required additional effort, as around 50 % of candidates turned down the job offers from the Court, in part due to the limited attractiveness of Luxembourg as a place of employment and the high cost of living; notes, however, that the big audit firms present in Luxembourg are also facing challenges and are now turning to Asian markets to recruit auditors; stresses that such an approach cannot be applied by the Court due to security and eligibility concerns; acknowledges the Court's efforts and encourages it to collaborate with other Luxembourg-based institutions within the High Level Interinstitutional Group to enhance Luxembourg’s appeal to prospective staff through identified measures, such as higher relocation allowances, housing allowances to mitigate high rental costs for lower-grade staff and reasonably priced temporary housing for short stays to make employment in Luxembourg more attractive;

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Removed19. Shares the Court’s concern that, in general, the audit profession is facing recruitment issues due to a lack of interest in audit and control jobs among young workers;

Added24. Recalls the Treaty on the European Union, that the EU and its institutions, shall promote solidarity and equality between women and men;

Removed20. Shares the Court’s observations that EPSO competitions do not always achieve the objective of attracting and selecting relevant profiles of candidates from the private sector; highlights that several issues with EPSO competitions, for example technical problems with remote testing leading to the cancellation of one competition and putting all others on hold, raised serious concerns with the Court about business continuity; notes with appreciation that the Court has engaged in cooperation with EPSO in order to organise audit competitions at regular intervals;

Added25. Shares the Court’s concern that, in general, the audit profession is facing recruitment issues due to a lack of interest in audit and control jobs among young workers; calls for proactive solutions and immediate systematic inter-institutional cooperation to address this issue;

Added26. Shares the Court’s observations that EPSO competitions do not always achieve the objective of attracting and selecting relevant profiles of candidates from the private sector; highlights the several issues with EPSO competitions, for example technical problems with remote testing leading to the cancellation of one competition and putting all others on hold; acknowledges the concerns related to the recruitment and the selection procedures of new staff; encourages the Court to continue its effort to address this situation in order to safeguard the continuity of the Court's activity; notes with appreciation that the Court has engaged in cooperation with EPSO in order to organise audit competitions at regular intervals; suggests possible cooperation with other relevant Union bodies in order to optimise hiring processes;

27. Appreciates the fact that the Court has organised flexible and varied selection procedures as provided for in the Staff Regulations and the Conditions of Employment of Other Servants of the European Union and has put in place procedures to retain talented staff;

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Changed22.28. AppreciatesNotes the generous teleworking regime (up to 10 days per month) offered by the Court in order to mitigate the recruitment challenges; welcomes the measures taken by the Court in 2023 in order to ensure the physical and mental well-being of staff;

29. Notes that the vacancy rate in December 2023 was 2,27 % and the staff turnover rate (number of staff leaving as a proportion of all staff) was 6,6 %;

30. Appreciates the Court’s effort to keep the vacancy rate low in 2023; however, fully shares the concern about the lack of geographical balance among new recruits, making the Court’s staff as a whole even less geographically representative; notes that, according to the Court, there is a risk that within the space of five years several Nordic Member States will not be covered by the audit given a potential absence of auditors from those Member States;

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Changed25.31. Welcomes the fact that the Court took various steps to tackle the issue of geographical balance, such as increasing publicity for the Court’s competition and vacancy notices in significantly underrepresented Member States, cooperating with Members of the Court to disseminate its notices and reaching out to potential candidates by attending career fairs in certain Member States; encourages further steps being taken into consideration, such as early engagement strategies, attracting young talent from the countries with low representation; notes with a certain regret that there is still some way to go to reach gender balance in middle and senior management;

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Changed26.32. Welcomes the fact that, at the end of 2023, all 29 additional posts required for the RRF audit of EUR 723,8 billion were filled; however, underscores that the materiality, complexity, large amounts and rapid disbursements from the RRF continue to pose challenges and that not all aspects of the RRF can be covered with the resources available;available, which allow the Court to assess the satisfactory fulfilment of milestones and targets and therefore the legality and regularity of RRF payments, but they are not sufficient to systematically cover compliance of RRF expenditure with Union and national laws; highlights the importance of ensuring that the Court is consistently provided with adequate staffing levels to fulfil both its mandate and additional responsibilities stemming from new financing instruments such as the RRF; commends the efforts done by the Court to carry out its duties regarding the RRF so far despite the lack of availability of fully adequate resources;

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Removed27. Takes into account that, as regards the gender balance of the College of the Court, the Members of the Court are appointed after consultation with the European Parliament and the Court has no role in the selection process for Members under Article 286(2) TFEU;

Added33. Is aware that the Court has no role in the selection process for Members under Article 286(2) TFEU; points out, however, that there is still an important gender imbalance among the Members of the Court, with only 10 women out of 27 members; regrets that 12 Member States have never nominated a woman to the Court; calls on the Court to evaluate its overall composition and provide this analysis to the Council and the Member States, in order to ensure that gender balance is appropriately considered in future nomination processes; reiterates its call for Member States to propose candidates of different genders, aiming for a more balanced and representative composition of the Court;

Added34. Regrets that over the years the Council repeatedly proceeds to nominate members of the Court despite those nominees being rejected by Parliament; underlines that Parliament should have a binding role in assessing the suitability of candidates for the Court;

Added35. Expresses regret that the Council has repeatedly nominated members of the Court despite their rejection by Parliament; emphasizes that Parliament should hold a binding role in evaluating the suitability of candidates for the Court;

36. Notes that, in 2023, the average absence due to illness was 10 days per staff member, compared to 12,2 days in 2022; notes furthermore that, in 2023, 4 staff members (compared to 8 in 2022) were absent due to prolonged illness, defined as lasting more than 200 days in a year;

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Changed29.37. Notes with concern that 7 cases of burnout were reported in 2023;2023, reflecting the same troubling number as in 2022; welcomes the fact that the Court took several steps to reduce the risk of burnout by introducing a full wellbeing programme, offering a resilience training, publishing and implementing guidelines on returning to work after long-term sick leave, continuing to offer mental health first aid, and providing financial support to staff by covering the cost of 10 sessions with a psychologist of their choice;

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Added38. Notes with appreciation that in 2023 the Court again exceeded the professional training target of five days of non-language training per years for auditors (6.7 days), in line with the International Federation of Accountants' recommendations; notes in particular the training of the Court's staff on the NGEU and the RRF;

Added39. Welcomes the adoption of a new policy in December 2022 to ensure a respectful and harassment-free workplace, focusing on prevention, awareness-raising, and early detection; highlights measures such as a presentation to all staff in January 2023 to enhance understanding of the policy, the rollout of a harmonized reporting form, and the publication of the first aggregated annual report on policy implementation;