Sittings · Document

REPORT (2023/2167(DEC)) 2024-03-15

On discharge in respect of the implementation of the budget of the European Foundation for the Improvement of Living and Working Conditions (Eurofound) for the financial year 2022

Committee on Budgetary Control · Rapporteur: Petri Sarvamaa

PR_DEC_Agencies

1. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on discharge in respect of the implementation of the budget of the European Foundation for the Improvement of Living and Working Conditions (Eurofound) for the financial year 2022

(2023/2167(DEC))

– having regard to the final annual accounts of the European Foundation for the Improvement of Living and Working Conditions (Eurofound) for the financial year 2022,

– having regard to the Court of Auditors’ annual report on EU agencies for the financial year 2022, together with the agencies’ replies,

– having regard to the statement of assurance as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2022, pursuant to Article 287 of the Treaty on the Functioning of the European Union,

– having regard to the Council’s recommendation of 22 February 2024 on discharge to be given to the Foundation in respect of the implementation of the budget for the financial year 2022 (00000/2024 – C90000/2024),

– having regard to Article 319 of the Treaty on the Functioning of the European Union,

– having regard to Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012, and in particular Article 70 thereof,

– having regard to Regulation (EU) 2019/127 of the European Parliament and of the Council of 16 January 2019 establishing the European Foundation for the improvement of living and working conditions (Eurofound), and repealing Council Regulation (EEC) No 1365/75, and in particular Article 16 thereof,

– having regard to Commission Delegated Regulation (EU) 2019/715 of 18 December 2018 on the framework financial regulation for the bodies set up under the TFEU and Euratom Treaty and referred to in Article 70 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council, and in particular Article 105 thereof,

– having regard to Rule 100 of and Annex V to its Rules of Procedure,

– having regard to the opinion of the Committee on Employment and Social Affairs,

– having regard to the report of the Committee on Budgetary Control (A9-0122/2024),

1. Grants the Executive Director of the European Foundation for the Improvement of Living and Working Conditions (Eurofound) discharge in respect of the implementation of the Foundation’s budget for the financial year 2022;

2. Sets out its observations in the resolution below;

3. Instructs its President to forward this decision, and the resolution forming an integral part of it, to the Executive Director of the European Foundation for the Improvement of Living and Working Conditions (Eurofound), the Council, the Commission and the Court of Auditors, and to arrange for their publication in the Official Journal of the European Union (L series).

2. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on the closure of the accounts of the European Foundation for the Improvement of Living and Working Conditions (Eurofound) for the financial year 2022

(2023/2167(DEC))

– having regard to the final annual accounts of the European Foundation for the Improvement of Living and Working Conditions (Eurofound) for the financial year 2022,

– having regard to the Court of Auditors’ annual report on EU agencies for the financial year 2022, together with the agencies’ replies,

– having regard to Article 319 of the Treaty on the Functioning of the European Union,

– having regard to Rule 100 of and Annex V to its Rules of Procedure,

– having regard to the opinion of the Committee on Employment and Social Affairs,

– having regard to the report of the Committee on Budgetary Control (A9-0122/2024),

1. Approves the closure of the accounts of the European Foundation for the Improvement of Living and Working Conditions (Eurofound) for the financial year 2022;

2. Instructs its President to forward this decision to the Executive Director of the European Foundation for the Improvement of Living and Working Conditions (Eurofound), the Council, the Commission and the Court of Auditors, and to arrange for its publication in the Official Journal of the European Union (L series).

3. MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

with observations forming an integral part of the decision on discharge in respect of the implementation of the budget of the European Foundation for the Improvement of Living and Working Conditions (Eurofound) for the financial year 2022

(2023/2167(DEC))

– having regard to its decision on discharge in respect of the implementation of the budget of the European Foundation for the Improvement of Living and Working Conditions (Eurofound) for the financial year 2022,

– having regard to Rule 100 of and Annex V to its Rules of Procedure,

– having regard to the opinion of the Committee on Employment and Social Affairs,

– having regard to the report of the Committee on Budgetary Control (A9-0122/2024),

A. whereas, according to its statement of revenue and expenditure, the final budget of the European Foundation for the Improvement of Living and Working Conditions (the ‘Foundation’) for the financial year 2022 was EUR 22 438 000 representing an increase of 3,13% compared to 2021; whereas the Foundation’s budget derives mainly from the Union budget;

B. whereas the Court of Auditors (the ‘Court’) in its report on the annual accounts of the Foundation for the financial year 2022 (the ‘Court’s report’), states that it has obtained reasonable assurance that the Foundation’s annual accounts are reliable and that the underlying transactions are legal and regular;

Budget and financial management

1. Notes with appreciation that the budget monitoring efforts during the financial year 2022 resulted in a budget implementation rate of current year appropriations of 100 %; takes note of the fact that the current year payment appropriations execution rate was 79,93 %, representing a decrease of 3,63 % compared to 2021;

2. Recognises the agility of the Foundation in the 2022 budget execution by conducting formal forecast reviews based on Eurostat reports, as well as by adjusting various budget lines and adopting amending budgets, in the context of the increase in the Irish country coefficient and the staff’s basic salaries; notes that the budget of the Foundation has been either frozen or adjusted with less than 2 % on annual basis over a period of 20 years, which puts at risk the sustainable performance of the Foundation and its ability to deliver high quality, relevant and timely products; notes in this context that the Foundation has actively looked for savings in order to fund the increases in Title 1 of its budget, whereas such savings ranged from a reduction in the number of missions and in-person meetings to reductions in spending on various studies and research projects in 2022; calls on the budgetary authority to address the need of proper adjustment of the Foundation’s budget within the next MFF;

Performance

3. Commends the Agency for the achievement of 97 % of its annual work programme, with 30 out of 31 outputs delivered in 2022;

4. Notes that the Foundation uses eight key performance indicators (KPIs), included in its performance monitoring system; observes that the KPIs are grouped into three types related to results, scientifically sound delivery and input and output; notes in particular for a third year in a row an improved performance with regard to the uptake of the Foundation’s expertise in key Union-level policy documents, from 74 % in 2021 to 82 % in 2022; regrets however a decrease in the performance of several KPIs, such as with regard to the uptake of the Foundation’s knowledge in the media (with 572 press articles in 2022 compared to 1 083 in 2021), the Agency’s engagement with stakeholders in meetings and events (44 % in 2022 compared to 48 % in 2021) and the number of articles mentioning the Agency in academic journals (1 143 in 2022 compared to 1 220 in 2021);

5. Notes that the difference in the uptake of the Foundation’s knowledge in the media between 2021 and 2022 reflects the unprecedented increase in this indicator during 2021 due largely to the increased visibility and profile of the Foundation’s work during the COVID period; observes that the results in 2022 represented a ‘return to normal’ for most indicators which now are largely on a par, or higher than pre-COVID results;

6. Observes some of the Foundation’s most important achievements in 2022, such as the publication of the overview report of the sixth European Working Conditions Survey revealing a positive association of the job quality with work-life balance during the COVID-19 crisis, of the fifth round of the ‘Living, working and COVID-19 e-survey: Living in a new era of uncertainty” providing data and analyses on the impact of the pandemic on workers, trust in government institutions and gender divide, as well as the publication of the annual review of minimum wages in 2022 showing, among other, the negative impact of the inflation on low-wage earners; notes with appreciation the review provided by the Foundation regarding the role and involvement of social partners in the just transition and in the implementation of recovery and resilience plans for strengthening social dialogue as foreseen in the Council recommendation as well as of green transition’s and the Fit-for-55 climate package impact on employment;

7. Notes with appreciation that in 2022 the Foundation has attained its strategic objective in ample ways, e.g. by being active across a range of policy debates and legislative activities on platform work, care workers and care services, mental health, telework and the right to disconnect, by providing knowledge and support as input for various meetings organised by the French and Czech Presidencies of the Council, as well as through its research findings having been referenced in around 200 Union-level policy documents, such as the European Care Strategy, the Joint employment report 2022 and the European Parliament’s ‘European Semester for economic policy coordination: Employment and social aspects in the sustainable annual growth survey 2022’ report, among other); reiterates the importance of high-quality data provided by the Foundation’s ongoing monitoring tools for evidence-based policymaking, especially the Europe-wide surveys conducted by the Foundation;

8. Commends the Foundation for having reacted quickly to the Russian illegal and unprovoked invasion of Ukraine by providing up-to-date relevant information on topics related to its mandate; notes in this context that the Foundation, among several actions, published an overview of national measures to accommodate refugees from Ukraine and to counter inflation and supply problems and adapted the fifth round of the Foundation’s e-survey to include questions on Ukraine and the record high inflation and sharp rises in the cost of living in the Europe; notes further that the Foundation continues to inform citizens through the ‘Stand with Ukraine’ online hub;

Efficiency and gains

9. Commends that the Foundation has a long-standing practice of sharing annual work programmes with six other agencies, including those partnering with the Commission’s Directorate-General for Employment, social affairs and inclusion (DG EMPL), in order to improve efficiency, address interconnected issues, share synergies and significant risks and exchange best practices on risk management; further notes that thanks to the Foundation’s contacts with the European Environmental Agency and the European Centre for Disease Control, areas of common interest and joint activity have been identified;

10. Appreciates the Foundation’s close working relationships with international organisations, such as the International Labour Organization (ILO), with which a new Framework agreement for cooperation was signed in 2022, as well as the Organisation for Cooperation and Development (OECD); appreciates that the Foundation is further building on its relations with the European Commission Joint Research Centre (JRC) and close collaboration is taking place in the domains of digitalisation and new forms of work, as well as monitoring structural change in the labour market;

11. Observes that the Foundation carried out an exercise of zero-based budgeting in 2022, whereby each contract in place was scrutinised in order to identify potential efficiencies with a view to optimising the allocation of the Foundation’s financial and human resources;

12. Notes the Foundation’s efforts towards digitalisation through the use of EU Signature and DocuSign in case of procurement, contractual documents and internal documents;

13. Notes with satisfaction from the Court’s report that the Foundation is among the 19 decentralised agencies that have a plan to improve energy efficiency and climate neutrality of their operations and issue an environmental statement as part of their annual activity reports and among the three agencies that planned to start issuing a sustainability report by 2024; commends the Agency for having received the Union’s Eco-Management and Audit Scheme certification in 2022; notes moreover from the Foundation’s replies to written questions that the Foundation is using green procurement criteria in case of tenders regarding canteen services and provision of electricity, among other; notes with satisfaction the Foundation reporting extraordinary cuts in its paper consumption, the latter being in 2022 30 % lower than in 2020 when the Foundation’s premises were mostly closed due the COVID-19 crisis;

Staff policy

14. Notes that on 31 December 2022, the establishment plan was 92,3 % completed (compared to 89 % in 2021), with 9 officials and 75 temporary agents appointed out of 91 authorised under the Union budget (91 authorised posts in 2021); notes that, in addition, 11 contract agents were working for the Foundation in 2022; notes a staff turnover in 2022 of approx. 5 % (excluding retirements and invalidity pensions);

15. Notes the Foundation’s gender breakdown reported for 2022 at the senior and middle management level with 5 men (56 %) and 4 women (44 %), the management board (MB) level with 90 men (58 %) and 64 women (42 %), and overall staff with 41 men (44 %) and 53 women (56 %); encourages the Foundation to ensure gender balance in the future at all levels of staff; asks the Commission and the Member States to take into account the importance of ensuring gender balance when nominating their members to the Foundation’s management board; notes the high number of members of the Foundation’s management board; notes further that the management board of the Foundation has a key role in its governance by providing strategic direction and overseeing its activities, and that the mandate of the Foundation and the specific composition of its board based on the tripartite principle, thus including representatives of the national authorities and social partners; recognises that trough its members the management board of the Foundation ensures the necessary alignment between the Foundation’s work and stakeholder needs and priorities;

16. Notes the launch of the Human Resources Development Programme exercise for 2022 with as a basis an annual training plan, including external trainings related to ethics, legal topics and statistical software; welcomes the efforts in this context that the Foundation has provided its workers with physical and psychological well-being training to maintain their performance while working remotely due to the pandemic situation;

17. Commends the Foundation for its efforts in 2022 focused on increasing the transparency of managerial decisions as well as staff ownership regarding involvement and motivation measures through regular meetings and discussions on relevant issues; further commends that the Foundation has adopted the ‘Charter on diversity and inclusion’ which aims to promote equal treatment and opportunities, irrespective of any ground such as sex, race, colour, etc.;

18. Welcomes the Foundation’s efforts in taking measures for the integration of persons with disabilities, by making sure that all office rooms are wheelchair accessible; welcomes from the Foundation’s written replies its commitment to take specific measures on a case-by-case basis depending on the particular requirements of the affected staff member;

Procurement

19. Notes from the Court’s report the observation that the Foundation used in a procurement procedure for networking services the professional and language skills of the team members as an award criteria instead of selection criteria, thus contravening Article 167 of the Financial Regulation; notes from the Foundation’s reply that templates have been modified to underline the distinction between selection and award criteria more clearly;

20. Commends the Foundation for having implemented the eProcurement roadmap and that it uses the Public Procurement Management Tool (PPMT) to processes all contracts with value above EUR 15 000; invites the Foundation to implement all PPMT modules once they become available;

Prevention and management of conflicts of interest and transparency

21. Notes that the Foundation made further efforts on prevention and management of conflicts of interest and transparency; notes that declarations of conflicts of interest (COI) and CVs of staff in management function have been published on the Foundation’s website; notes that in the framework of a new 4-year mandate starting 1 April 2023, new declarations of COI and CVs of the members of the Foundation’s MB have been published;

22. Notes that the Foundation has in place a COI policy with a detailed procedure for situations of potential COI, including with regard to the members of the Foundation’s MB and Advisory Committees; commends in this context that in the framework of its annual event ‘Ethics Month’, the Foundation launched in 2022 an updated version of the practical guide to staff ethics and conduct and organised obligatory thematic sessions on e.g. prevention of conflicts of interest, with an excellent staff attendance rate (91 %);

23. Notes that the Foundation’s staff and management board members have the obligation to submit annually a declaration on the absence of conflict of interest; welcomes that staff are reminded annually of this obligation on the occasion of the ‘Ethics Month’ event which in 2022 led to an increase in the rate of compliance with reviewing the annual declaration; observes that during the year 2022 an investigation was concluded regarding a conflict of interest with a staff member, with regard to whom a disciplinary procedure was conducted and a written warning was given; notes that no whistleblowing cases were reported in 2022;

Internal control

24. Notes that all actions with regard to recommendations issued by the internal audit service (IAS) following an audit from 2020 on the Foundation’s human resources management and ethics were implemented by the end of 2022; further notes that in 2022, the IAS completed an audit on procurement and contract management, with three recommendations classified as important which led the Foundation to set up a plan with 20 actions, of which 50 % were implemented by the end of 2022; invites the Foundation to implement all the outstanding actions, including with regard to the IAS recommendations on the appraisal and reclassification process, the recruitment process and the learning and development strategy of the Foundation;

25. Welcomes the efforts of the Foundation regarding the five components of the Foundation’s internal control framework in 2022; notes in this context that the Foundation e.g. participated in a peer review of the draft corporate risks and its underlying process with the agencies related to DG EMPL, carried out a new assessment of sensitive posts, implemented the process improvement procedure of programme development in all its phases, simulated a cyber-attack, piloted a multifactor authentication solution to be rolled out in 2023 and organised the Cybersecurity Awareness Month;

26. Observes from the Court’s report the observation on weaknesses regarding the Foundation’s traineeship programme, firstly in relation to the publication of the rules governing the traineeship that have been published on the website without having been formally adopted, and secondly with regard to the trainees’ remuneration; notes on the latter issue that the Foundation had failed to update the remuneration in line with the changes to the reference remuneration rates paid by the Commission and the Ireland correction coefficient, situation which led to an underpayment of EUR 3 330 for 16 affected trainees; welcomes the Foundation’s reply regarding measures that it has taken to address the Court’s observation, namely by paying adjustments to the trainees from October 2022 onwards and by adopting new rules as of 2023 that set an absolute amount for the traineeship grant instead of linking it to the Commission trainees;

Other comments

27. Observes with appreciation the Foundation’s prolific work on increasing its online presence and public visibility during 2022, which ensures delivery of timely data and information customised to the users’ needs; notes in this context the launch of 36 publications on the Foundation’s website, the increase in the use of data visualisation in blog posts, the promotion of the Foundation’s work through partnerships with media (e.g. Irish Times, EurActiv, Politico Europe), email marketing, corporate monthly newsletters and paid advertisements on social media networks to disseminate some of the Foundation’s products, the organisation of visits programmes and other events (Europe Day, Citizen’s Dialogue, Foundation Forum) including in an online format, as well as the organisation of seven webinars with exchanges between the Foundation’s experts and partner organisations, podcasts series (EurofoundTalks, focused on job quality, care, platform work, telework and minimum wages) and the presentation of some of the Foundation’s products (e.g. summaries of research reports) in multiple languages;

° °

28. Refers, for other observations of a cross-cutting nature accompanying its decision on discharge, to its resolution of [...] 2024 on the performance, financial management and control of the agencies.

ANNEX: ENTITIES OR PERSONS FROM WHOM THE RAPPORTEUR HAS RECEIVED INPUT

The rapporteur declares under his exclusive responsibility that he did not receive input from any entity or person to be mentioned in this Annex pursuant to Article 8 of Annex I to the Rules of Procedure.

5.2.2024

OPINION OF THE COMMITTEE ON EMPLOYMENT AND SOCIAL AFFAIRS

for the Committee on Budgetary Control

on discharge in respect of the implementation of the budget of the European Foundation for the improvement of living and working conditions (Eurofound)

(2023/2167(DEC))

Rapporteur for opinion: Romana Tomc

SUGGESTIONS

The Committee on Employment and Social Affairs calls on the Committee on Budgetary Control, as the committee responsible, to incorporate the following suggestions into its motion for a resolution:

– having regard to the European Court of Auditors’ Annual report on the implementation of the EU budget for the 2022 financial year;

– having regard to the European Court of Auditors’ Annual report on EU agencies for the financial year 2022;

– having regard to the European Foundation for the improvement of living and working conditions’ Consolidated Annual Activity Report (CAAR) 2022

1. Expresses its satisfaction that the European Court of Auditors (the ‘Court’) has declared the transactions underlying the European Foundation’s for the improvement of living and working conditions (Foundation) annual accounts for the financial year 2022 to be legal and regular and that its financial position as at 31 December 2022 is fairly represented;

2. Highly values the Foundation’s high quality work enhancing and disseminating knowledge, and providing evidence-based expertise to support the development of better informed social, employment and work-related policies in Europe, and appreciates the important work done and added value provided by the Foundation in this field; welcomes the Foundation’s work programme to analyse policy options to improve working conditions, industrial relations, employment and living; believes that the Foundation can play a crucial role in further analysing the increase in telework and hybrid work and related impacts on work–life balance and quality of working conditions, dissemination of best practices and assessing possible policy responses;

3. Notes that the budget of the Foundation for the financial year 2022 was EUR 26 million (EUR 27 million in 2021); expresses its satisfaction that the Foundation’s budget for 2022 was executed by 100% (as it was in 2021); highlights the need of ensuring adequate human and financial resources allowing the Foundation to fulfil its mandate and continue implementing its work programme with a very high activity completion rate, including in the light of the significant challenges regarding the changing world of work;

4. Regrets the fact that throughout 2022 the Foundation confronted a challenge because of high inflation rates; notes that this required a substantial shift in resources from the operational budget to the staff-related title; acknowledges the fact that targeted savings allowed the Foundation to deliver on its 2022 work programme;

5. Reiterates the importance of high-quality data provided by the Foundation’s ongoing monitoring tools for evidence-based policymaking, especially the Europe-wide surveys conducted by the Foundation;

6. Appreciates that Foundation’s leadership is seeking close cooperation with other European Union Agencies, including Cedefop, EU-OSHA, ETF, EIGE, FRA, EEA, and ECDC, which aims at strengthening the synergies between these agencies and avoid overlaps;

7. Appreciates the Foundation’s close working relationships with international organisations, such as the International Labour Organization (ILO), with which a new Framework agreement for cooperation was signed in 2022, as well as the Organisation for Cooperation and Development (OECD);

8. Appreciates that the Foundation is further building on its relations with the European Commission Joint Research Centre (JRC) and close collaboration is taking place in the domains of digitalisation and new forms of work, as well as monitoring structural change in the labour market;

9. Takes note that some weaknesses related to the procurement procedure for networking services were found due to the lack of a clear distinction between selection and award criteria; welcomes the fact that the Foundation has taken the steps to correct its tender templates accordingly;

10. Regrets that some weaknesses related to Foundation’s traineeship programme in 2022 were found related to updating trainees’ remuneration, resulting in the payment of €3 330 less than it should have to the 16 affected trainees; welcomes, however, the fact that the Foundation made the necessary corrections after paying adjustments to the trainees from October 2022 onwards; also appreciates the fact that in order to avoid such issues in the future, the Foundation updated its rules for 2023 accordingly;

11. Commends the Foundation for having established a corporate plan to improve energy efficiency and climate neutrality of its operations;

12. Recommends, on the basis of the facts available, that discharge be granted to the Executive Director of the Foundation in respect of the implementation of the Foundation’s budget for the financial year 2022.

ANNEX: ENTITIES OR PERSONS FROM WHOM THE RAPPORTEUR HAS RECEIVED INPUT

The rapporteur declares under her exclusive responsibility that she did not receive input from any entity or person to be mentioned in this Annex pursuant to Article 8 of Annex I to the Rules of Procedure.

INFORMATION ON ADOPTION IN COMMITTEE ASKED FOR OPINION

Date adopted

11.1.2024

Result of final vote

–:

Members present for the final vote

João Albuquerque, Atidzhe Alieva-Veli, Dominique Bilde, Vilija Blinkevičiūtė, Milan Brglez, Jordi Cañas, David Casa, Leila Chaibi, Ilan De Basso, Jarosław Duda, Estrella Durá Ferrandis, Lucia Ďuriš Nicholsonová, Cindy Franssen, Helmut Geuking, Elisabetta Gualmini, Agnes Jongerius, Radan Kanev, Ádám Kósa, Katrin Langensiepen, Elena Lizzi, Sara Matthieu, Jozef Mihál, Max Orville, Dennis Radtke, Antonio Maria Rinaldi, Mounir Satouri, Monica Semedo, Eugen Tomac, Romana Tomc, Nikolaj Villumsen, Maria Walsh

Substitutes present for the final vote

Catherine Amalric, Romeo Franz, Lina Gálvez Muñoz, José Gusmão

Substitutes under Rule 209(7) present for the final vote

Chiara Gemma, Maria Noichl, Carina Ohlsson, Vera Tax

FINAL VOTE BY ROLL CALL IN COMMITTEE ASKED FOR OPINION

Key to symbols:

INFORMATION ON ADOPTION IN COMMITTEE RESPONSIBLE

Date adopted

4.3.2024

Result of final vote

–:

Members present for the final vote

Dominique Bilde, Gilles Boyer, Olivier Chastel, Caterina Chinnici, Ilana Cicurel, Carlos Coelho, Daniel Freund, Isabel García Muñoz, Monika Hohlmeier, Joachim Kuhs, Markus Pieper, Petri Sarvamaa, François Thiollet

Substitutes present for the final vote

Katalin Cseh, Bas Eickhout, Hannes Heide, Marian-Jean Marinescu, Sabrina Pignedoli, Wolfram Pirchner

Substitutes under Rule 209(7) present for the final vote

Malin Björk, Michael Gahler, César Luena, Miguel Urbán Crespo

FINAL VOTE BY ROLL CALL IN COMMITTEE RESPONSIBLE

Key to symbols: