Sittings · Document

DRAFT REPORT (2023/2143(DEC)) 2024-01-15

On discharge in respect of the implementation of the budget of the European Centre for the Development of Vocational Training (Cedefop) 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 Centre for the Development of Vocational Training (Cedefop) for the financial year 2022

(2023/2143(DEC))

– having regard to the final annual accounts of the European Centre for the Development of Vocational Training (Cedefop) 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 … February 2024 on discharge to be given to the Centre 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) 2019/128 of the European Parliament and of the Council of 16 January 2019 establishing a European Centre for the Development of Vocational Training (Cedefop) and repealing Council Regulation (EEC) No 337/75, and in particular Article 15 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 opinions of the Committee on Employment and Social Affairs and the Committee on Industry, Research and Energy,

– having regard to the report of the Committee on Budgetary Control (A90000/2024),

1. Grants the Executive Director of the European Centre for the Development of Vocational Training (Cedefop) discharge in respect of the implementation of the Centre’s budget for the financial year 2022 / Postpones its decision on granting the Executive Director of the European Centre for the Development of Vocational Training (Cedefop) discharge in respect of the implementation of the Centre’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 Centre for the Development of Vocational Training (Cedefop), 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 Centre for the Development of Vocational Training (Cedefop) for the financial year 2022

(2023/2143(DEC))

– having regard to the final annual accounts of the European Centre for the Development of Vocational Training (Cedefop) 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 opinions of the Committee on Employment and Social Affairs and the Committee on Industry, Research and Energy,

– having regard to the report of the Committee on Budgetary Control (A90000/2024),

1. Approves the closure of the accounts of the European Centre for the Development of Vocational Training (Cedefop) for the financial year 2022 / Postpones the closure of the accounts of the European Centre for the Development of Vocational Training (Cedefop) for the financial year 2022;

2. Instructs its President to forward this decision to the Executive Director of the European Centre for the Development of Vocational Training (Cedefop), 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 Centre for the Development of Vocational Training (Cedefop) for the financial year 2022

(2023/2143(DEC))

– having regard to its decision on discharge in respect of the implementation of the budget of the European Centre for the Development of Vocational Training (Cedefop) for the financial year 2022,

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

– having regard to the opinions of the Committee on Employment and Social Affairs and the Committee on Industry, Research and Energy,

– having regard to the report of the Committee on Budgetary Control (A90000/2024),

A. whereas, according to its statement of revenue and expenditure, the final budget of the European Centre for the Development of Vocational Training (Cedefop) (the ‘Centre’) for the financial year 2022 was EUR 18 434 420, a decrease of 0,29 % in comparison with the 2021 budget; whereas the Centre’s budget derives mainly from the Union budget;

B. whereas, besides the Union contribution of EUR 17 960 000, the Centre’s budget available in 2022 included an amount of EUR 464 420 of contributions from associated countries (Norway and Iceland), and another amount of EUR 43 960 of miscellaneous own revenue and reimbursed amounts;

C. whereas the Centre joined Protocol 31 of the EEA Agreement, with effect from 1 January 2023, according to which the Centre will receive contributions from associated countries through the EEA EFTA budget;

D. whereas with regard to the agency’s procurement sector, no issues requiring corrective actions were reported for 2022, nor are there ongoing or outstanding corrective actions from previous years’ audits and assessments;

E. whereas the Court of Auditors (the ‘Court’), in its report on the Centre’s annual accounts for the financial year 2022 (the ‘Court’s report’), states that it has obtained reasonable assurances that the Centre’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 resulted in a budget implementation rate in 2022 of 99,98 %, representing a slight decrease of 0,02 % compared to 2021; regrets the low level of the current year payment appropriation rate (77,64 %) representing a decrease of 2,38 % compared to 2021;

2. Recalls form the Court’s report for 2021 the observation regarding weaknesses in the Centre’s transition to a new accounting system (ABAC) also used by the Commission; observes from the Court’s report that in 2022 similar occurrences (inconsistencies between the actual final date of implementation of legal commitments and the date registered in ABAC) were also observed in the carried-over budgetary commitments from 2022 to 2023; notes with appreciation from the Centre’s follow-up report to the 2021 discharge (hereinafter the ‘follow-up report’) that the Centre has meanwhile put in place a monitoring system to capture those types of inconsistencies that, once detected, are immediately corrected in ABAC;

3. Notes from the Court’s report the observation that the Centre did not correctly apply the contribution calculation method set out in the Statement on Cedefop/EFTA cooperation in relation to Amendment no. 1 to its budget; notes, as a result, that for 2022 Iceland’s and Norway’s contributions to the Centre’s budget on the one hand, and the Union’s contribution on the other hand were higher and, respectively lower than they should have been; further notes the Court’s acknowledgment that an amendment of Protocol 31 on Cooperation in Specific Fields Outside the Four Freedoms was signed and entered into force as of 1 January 2023 and, therefore, as of 2023, the issue of adjustments of EFTA’s countries contributions because of amendments to the Centre’s budget will no longer arise;

Performance

4. Notes with appreciation that, despite the continued challenges posed by the Covid-19 pandemic, the unjustifided war in Ukraine, the energy crisis, and the escalating climate emergency, the Centre has fully implemented its work programme in 2022, with noteworthy achievements in all the Centre’s three strategic areas of operation going beyond those planned in the 2022 work programme; notes that the vocational education and training has been identified as a focus area for cooperation under the European Education Area initiative for the period 2021-2030;

5. Takes note, among several achievements in 2022, of: - the launch of the Centre’s Green Observatory which looked at the implications of the green transition for cities and three key areas (waste management, agri-food and the circular economy); - the Centre’s analysis of the national implementation plans, which present ongoing and upcoming national VET reforms and initiatives; - the presentation of the findings of the Centre’s study on microcredentials which fed the Commission’s proposal for a Council Recommendation on that topic; - the feasibility study conducted by the Centre for a survey of initial VET teachers and trainers; - the completion of the second ‘Future of VET’ project that contributes to a better overall understanding of the challenges and opportunities facing European VET in the coming years; - and the release of the second European Skills and Jobs Survey (ESJS) which helped cast light on digitalisation and its impact on jobs and skills;

Efficiency and gains

6. Commends the Centre’s longstanding practice of cooperation and information sharing with the European Training Foundation (ETF) and the European Foundation for the Improvement of Living and Working Conditions (Eurofound); notes that the Centre and ETF work together on shared projects with regard to VET, publications, the platform economy/platform work on skills matching and anticipation/identification, monitoring and analysing countries’ progress, as well as the ESJS; notes also that in 2022 the Centre further strengthened its long-standing cooperation with Eurofound on operational activities by jointly preparing a second flagship report on skills based on the European Company Survey, working more closely on just green transition and jointly leading the preparation and organisation of the ‘Youth first’ 5-Agency event held in the Parliament; commends the conclusion of a specific Memorandum of Understanding between the Centre and the European Labour Authority which covers knowledge sharing and synergies with a focus on skills and labour market trends and cross-border labour mobility; notes lastly the Centre’s service-level agreements with the European Institute for Gender Equality to share accounting services and with ENISA in fields such as data protection, procurement and ICT, among other, as well as the ongoing discussion with ETF on a shared cyber-security officer; further calls on the Centre and other agencies to explore and identify new synergies and areas of cooperation in order to increase efficiency gains and reduce costs;

7. Notes with appreciation the Centre’s commitment to become carbon neutral by 2030 and the adoption (in 2023) of its strategy and action plan towards climate neutrality; notes in this context specific actions already taken in 2022, such as installation of energy-efficient window blinds and finalisation of the preparation work to install photo-voltaic panels in 2023, to produce own renewable electricity which are expected to lead to a return on investment of around 50 %; commends the Centre for its success in achieving or exceeding its targets for 2022, having as a basis the year 2019, with regard to a reduction in the use of electricity (by 27 %), heating oil (by 43 %) and paper (by 73 %), as well as a reduction of mission costs by (71 %) and (presential) meetings costs (by 56,5 %);

8. Commends the strengthening of the Agency’s core business activities through efforts simplifying and streamlining administration, sharing knowledge and resources with other Agencies, digitalising, streamlining and reorganising tasks, as well as reducing physical meetings and increasing online participation to events; notes the outcome of those efforts, among other the transformation of three assistant posts (AST) into expert posts (AD) and savings of about EUR 390 000 on account of reducing the physical meetings, all contributing to a commendable increase in the share of core business staff from 66,5 % in 2021 to 73,2 % in 2022;

9. Commends the Agency for its continued progress in the implementation of its ICT and digitalisation strategy to further reach efficiency gains; notes that in 2022 the Centre digitised all workflows, introduced a digital tool for selection procedures and a new digital working and collaboration environment (SharePoint), and prepared for and launched the use (as of January 2023) of the Public Procurement Management Tool; commends that that the Centre has issued digital signatures for all its staff and the mangers are using EU-Sign certificates for contracts, order forms and legally binding documents;

10. Notes from the Court’s report that the Centre is not among the agencies that have some form of environmental reporting integrated in their annual activity reports and have received the EMAS registration; notes nevertheless the Agency’s Environmental Management System that helps the Centre achieve its environmental targets, including by using key performance indicators on consumption of energy, water, paper, as well as on waste and CO2 emissions; notes with satisfaction that the Centre’s performance management system includes an environmental indicator (‘CO2 (ton) emissions’) that assesses the Centre’s environmental performance using CO2 and overall waste emissions; notes further the Centre’s commitment to upgrade its environment management system and take steps to become EMAS certified as of 2025;

Staff policy

11. Notes that, on 31 December 2022, the establishment plan was 95,60 % executed with 79 temporary agents appointed out of 83 temporary posts and 8 officials out of 8 posts authorised under the Union budget; notes moreover that 20 contract agents out of 25 posts authorised under the Union budget, and 4-seconded national experts (SNE) and 5 interims worked at the Centre in 2022;

12. Notes that, as regards gender balance reported for 2022, the Centre’s senior management is composed by 4 men (66,7 %) and 2 women (33,3 %); also notes the management board is composed of 78 men (53 %) and 68 women (47 %); recalls that the high number of members of the Board (156) does not facilitate decision making and simplified management; notes further that regarding the Centre’s staff overall the gender breakdown is 44 % men (47) and 56 % women (61); welcomes from the follow-up report the Centre’s commitment to geographically re-balance its staff population by making use of reserve lists of other agencies, including through joining forces with them and broadening dissemination of vacancy notices;

13. Observes with appreciation that the Centre works proactively to improve staff’s wellbeing and work life balance; notes with regard to these topics that in 2022 the Centre offered trainings (on e.g. managing anxiety in the workplace, getting good at stress, digital wellbeing), ran HR ‘pulse surveys’, revamped its joint committee which serves to promote staff well-being and good health and put in place a 24/7 employee assistance programme for confidential support with regard to various life or work related challenges faced by the Centre’s staff;

14. Notes that the Centre launched its regular Staff Engagement Survey (SES) in 2022, the results of which showed favourable responses from 65 % of Centre’s staff (75 % response rate), whereas 10 out of 12 dimensions of analysis recorded positive changes in comparison to the 2019 survey results, despite the highly disruptive period since the last survey that year, while some areas need further attention such as workload, transparency in decision-making and internal cooperation;

15. Notes in the framework of the Centre’s equal opportunities and diversity policy and as regards support to persons with disabilities, the measures taken such as trainings (on diversity and inclusion issues) and guidance (how to detect and counteract unconscious bias) provided to HR staff and selection boards, as well as accommodation to applicants with disabilities; notes lastly from the Centre’s replies to Parliament written questions the Centre’s plans to adopt the ‘Charter on diversity and inclusion’ in 2023;

16. Notes with concern from the Court’s report the observation that the Centre, in the period 2017-2022, paid monthly and daily subsistence allowances to two Greek nationals employed as SNEs; notes in this context that the two SNEs were not entitled to these allowances according to the Centre’s internal rules, since the Centre is located in Greece, therefore the total associated payments made to the two SNE’s during that period and amounting to EUR 222 647 (EUR 36 608 for 2022) being deemed irregular; notes, moreover, that when the Centre identified the issue in 2022, it registered the two cases in the registry of non-compliance and exceptions, decided not to claim back the amounts irregularly paid and introduced a three months phasing-out period for the SNE still in place at that time; calls for a strict monitoring and avoidance of such situations in the future;

Prevention and management of conflicts of interest and transparency

17. Notes the Centre’s existing measures and ongoing efforts to secure transparency, prevention and management of conflicts of interest and whistle blowing-blower protection; observes that the Centre requests its staff members to declare potential or actual interests if they act in a situation where a conflict of interest may arise; notes in this context that the Centre has in place its own mechanism, which includes ex-ante measures with mitigation actions, ex-post controls, as well as assistance from the Centre’s Internal Control Coordinator (ICC) who receives information with regard to declared conflicts of interest;

18. Recalls that, pursuant to Regulation (EU) 2019/128, all members and alternates who attend management board (MB) meetings, or exercise the right to vote, must submit a declaration of interest (DOI); welcomes the fact that the DOIs of all MB members (and alternates), as well as of the Centre’s staff in senior or middle management positions have been published on the Centre’s website; observes from the Centre’s replies to Parliament’s written questions that, as of 2022, MB members (or alternates) who do not provide a signed DOI are no longer invited to MB meetings, do not receive MB documents and do not participate in written procedures to take decisions; notes the publication, although not formally required, of the CVs of MB members; observes that the CVs of some MB members are (still) missing, including that of the Chairperson of the MB; invites the Centre to publish the CVs of all its MB members (full ones and alternates);

19. Notes that the Centre acknowledges the importance of ‘revolving doors’ situations and regularly raises awareness of all its staff regarding the implementing rules on outside activities and assignments and occupational activities after leaving service; commends that all staff leaving the Centre are asked to sign a letter on their obligations after leaving the service, including that any future employment should not interfere with their obligation of confidentiality towards the Centre;

Internal control

20. Notes that the total internal control cost amounted to EUR 1 101 755 for the year 2022 (EUR 29 024 direct costs and EUR 1 072 731 indirect costs), which represents 6 % of the Centre’s budget; notes further the Centre’s statement that the moderate cost increase compared to 2021 (5,3 %) is due to increase in salary costs and the mix of staff involved in internal control tasks, leading to a higher indirect costs;

21. Acknowledges the fact that, according to it evaluation policy, the Centre carries out ex-ante evaluations for procurement procedures above EUR 500 000 and ex-post evaluations for projects/activities entailing a total expenditure of above EUR 500 000; notes that a 2022 report by the head of finance and procurement concluded that procurement procedures launched in the period examined were compliant with the requirements of ex ante evaluation; notes that in 2022 the Centre carried out an ex post evaluation of an activity focused on a framework contract in the area of labour market intelligence and skill needs analysis (contract value EUR 1 088 350); notes that the outcome of the evaluation confirmed that that activity was effective, efficient, coherent and brought EU added value; observes further that, in 2022, a working group appointed by the Executive Director concluded that, with regard to a sample of three procurement procedures, the criteria related to the effective and efficient internal control were in place and followed, with no corrective actions needed;

22. Notes that the Centre, in 2022, registered 57 non-compliance events and exception requests linked to issues of contract and financial management; further notes that the recommendations issued by the ICC were implemented and followed up to avoid reoccurrence;

23. Observes that the assessment of the Centre’s overall internal control framework (ICF), performed by the ICC using the tool provided by DG BUDG, concluded that ICF is effective, all its components are in place and functioning well and for their intended purpose, with some improvements needed with regard to the internal control component ‘Control activities’; notes with appreciation from the follow-up report that the Centre, as a part of its awareness-raising activities on ethics, integrity and internal control issues, provides regular mandatory sessions on good governance, including fraud-related issues, to all staff as well as to the MB members;

Other comments

24. Welcomes the Centre’s efforts to communicate in ways that help in reaching out to wider audiences, including by implementing a machine-translation engine on the Centre’s website to make all its web pages accessible in all Union languages; notes that in 2022 the Centre invested in several innovative products such as corporate video productions, motion graphics, animations (on the VET systems of countries holding the Union’s presidency in 2022, i.e. France and Czechia), podcasts, as well as new data visualisations and online data bases that strengthened the Centre’s web portal; notes with appreciation that the Centre’s publications and briefing notes reached tens of thousands of people through direct downloads; commends lastly the Centre for the increase in its social media metrics in 2022;

25. Highlights that the VET and Adult education are key priorities for the European Social Fund Plus (ESF+) towards the green and digital recovery, whereas the ESF+ has a budget of almost EUR 99,3 billion for the period 2021-2027;

° °

26. 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.