Sittings · Document

DRAFT REPORT (2023/2163(DEC)) 2024-01-16

On discharge in respect of the implementation of the budget of the European Training Foundation 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 Training Foundation for the financial year 2022

(2023/2163(DEC))

– having regard to the final annual accounts of the European Training Foundation 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 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 (EC) No 1339/2008 of the European Parliament and of the Council of 16 December 2008 establishing a European Training Foundation, and in particular Article 17 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 (A90000/2024),

1. Grants the Director of the European Training Foundation discharge in respect of the implementation of the Foundation’s budget for the financial year 2022 / Postpones its decision on granting the Director of the European Training Foundation 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 Director of the European Training Foundation, 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 Training Foundation for the financial year 2022

(2023/2163(DEC))

– having regard to the final annual accounts of the European Training Foundation 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 Regulation (EC) No 1339/2008 of the European Parliament and of the Council of 16 December 2008 establishing a European Training Foundation, and in particular Article 17 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 (A90000/2024),

1. Approves the closure of the accounts of the European Training Foundation for the financial year 2022 / Postpones the closure of the accounts of the European Training Foundation for the financial year 2022;

2. Instructs its President to forward this decision to the Director of the European Training Foundation, 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 Training Foundation for the financial year 2022

(2023/2163(DEC))

– having regard to its decision on discharge in respect of the implementation of the budget of the European Training Foundation 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 (A90000/2024),

A. whereas, according to its statement of revenue and expenditure, the final budget of the European Training Foundation (the ‘Foundation’) for the financial year 2022 was EUR 25 051 848, representing an increase of 17,05 % compared to 2021; whereas the budget of the Foundation derives entirely from the Union budget;

B. whereas the Court of Auditors (the ‘Court’), in its report on the Foundation’s annual accounts for the financial year 2022 (the ‘Court's report’), has stated that it 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 budget monitoring efforts during the financial year 2022 resulted in a high budget implementation rate of 99,98 %, representing a slight increase of 0,07 % compared to 2021; points out that the payment appropriations execution rate was 97,70 %, representing an increase of 11,48 % compared to the previous year;

Performance

2. Notes with satisfaction that the Foundation uses certain measures as Key Performance Indicators (KPIs) to assess the added value provided by its activities and other measures to improve its budget management;

3. Notes that the Foundation achieved a 93 % activity completion rate, a slight decrease compared to 2021, with a timely completion of 89 %; commends that the Foundation has achieved all the KPIs above or well above targets set;

4. Notes the Foundation’s key achievements of 2022, which are based on three strategic objectives: skills relevance and anticipation, skills development and validation, and performance and quality of education and training policies; notes that those objectives are delivered by the Foundation under three core services: knowledge hub, monitoring and assessment, and policy advice;

5. Notes the new initiatives launched by the Foundation in 2022, such as, among others, the new Team Europe Initiative in the Southern and Eastern Mediterranean and the network gathering GLAD (Governance Learning Action and Dialogue); notes the growth of its Network of Excellence and the ENE online conference in November which provided the opportunity for participants to share developments and results on the work of the thematic partnership;

6. Welcomes that the measures taken by the Foundation in response to shocks such as the continued effects of the Covid-19 pandemic and the Russian aggression in Ukraine were very effective in ensuring a continued and very high level of delivery of the annual work programme; commends the initiative of the Foundation to support Ukraine through the online resource hub for the recognition of qualifications, skills and study periods of Ukrainian refugees and other means, and to respond where possible and relevant, in close contact with different European Commission services, tapping into its thematic expertise and knowledge of education and training systems of the country;

Efficiency and gains

7. Notes that in 2022, the Foundation continued to identify opportunities to introduce efficiency gains in its operations, such as improving digital workflows and proactively participating to the EU Agencies network and its different working groups; notes here, among others, the sharing of the Foundation’s Accounting Services with EU-OSHA through a SLA signed in 2022 and the evaluation of the possibility of sharing resources in the areas of recruitment, cyber-security, EMAS, sustainability and greening, procurement and IT tools and systems with CEDEFOP;

8. Notes that the Foundation has put in place measures including the areas of energy consumption and building management, for example, closing the offices in August 2022, sensors for lighting and water, timers for boilers, heating and air conditioning; notes the increased efforts on energy management that have led to savings of 2,000 mc of gas and 49,107 KwH of electricity in 2022 despite the increased presence of staff in offices throughout the year due to hybrid working modalities in place;

9. Welcomes the Foundation commitment to adopting all the EC eProcurement tools and the fact that Foundation’s procurement process is fully digitalised;

Staff policy

10. Notes that, on 31 December 2022, the establishment plan was 98,8 % filled, with 85 Officials and Temporary Agents (TAs) appointed out of 86 TAs and Officials authorised under the Union budget (86 authorised posts in 2021); notes that in addition, 39 Contract Agents and 1 Local Agent worked for the Foundation in 2022;

11. Reiterates with concern that geographical balance is a challenge; notes that 42 % of its staff are nationals of the Member State where the foundation is located; acknowledges that the Foundation uses merit-based selection procedures, whereby in presence of equal merits, the Foundation would favour the under-represented nationalities; calls on the Foundation to take the necessary measures to have a balanced and fair geographical representation;

12. Notes that the gender balance among middle and senior management in 2021 was four women out of nine; notes that the gender balance among the members of the management board is 41 % men and 59 % women (11 and 16 members respectively) and among staff overall 33 % men and 67 % women (41 and 84 members respectively);

13. Notes that the Foundation adopted the Charter on Diversity and Inclusion in December 2022; notes that in 2022 the staff had many benefits to improve the well-being at work and, additionally, new rules were adopted on working time and hybrid working that continue to provide staff with opportunities for new flexible ways of working;

Procurement

14. Takes note of the Court’s observation regarding the award of a EUR one million framework contract for content support services, initiated in 2021, was irregular due to a deviation from technical specifications; notes that tenderers were required to provide closed and signed accounts showing a turnover of at least EUR 250 000 for the last two financial years (i.e. 2019 and 2020) to demonstrate their financial capacity; observes that the winning tenderer’s turnover for 2019 had not reached the required threshold but however, the Foundation instead of rejecting the tenderer, decided not to reject it on the basis of the higher turnover shown in the 2021 provisional accounts; highlights the Court’s concludes that the evaluation procedure and the resulting contract, are irregular and so are all the related payments, which – in 2022 – amounted to EUR 100 100; takes note that following the Court’s observation, the Foundation will be simplifying its methodology, which will continue to assess the financial reliability of contractors, however making it more tailored to the current financial situation (post pandemic and war);

15. Notes that in another open procurement procedure for in-country support services for an amount of EUR four million, the tenderers’ financial and economic capacities was to be assessed by two criteria; (1) stable financial position, demonstrated by a set of parameters, including positive net profit; and (2) a yearly turnover of at least EUR one million in the last two financial years; observes that the Foundation awarded the contract to a consortium of five non-commercial entities even though none of the members of the consortium had reported any profits in the last two years and in addition, it decided to disregard the turnover requirement – which the winning tenderer did not meet – as non-applicable to non-commercial entities; highlights that the Court concluded that the Foundation applied the selection criteria incorrectly and that the economic and financial capacity of the winning tenderer has not been demonstrated; notes furthermore that the evaluation procedure, and the resulting contract, are therefore irregular, as are all the related payments, which – in 2022 – amounted to EUR 70 500; observes that the procurement procedure in question was targeting human capital development in Central Asia and following the Court’s observation, the Foundation will pursue discussions with the relevant Commission services on possible alternative methods to implement the activities in its partner countries and in parallel will be simplifying its methodology on financial assessment to target, where applicable, the non-EU market;

16. Recalls the importance, for all procurement procedures, to ensure fair competition between tenderers and to procure goods and services at the best price, respecting the principles of transparency and the sound use of public resources, proportionality, equal treatment and non-discrimination; calls on the Foundation to take actions to guarantee that in future procurement procedures there is full compliance with the applicable rules ensuring transparency, fairness, and integrity in the tendering process;

17. Notes that at the end of 2022, the Foundation had only one open Court finding on the procurement procedure for interim workers, issued in 2018, and previously acknowledged by the Parliament in its discharge report; notes, additionally, that the Foundation addressed this issue when launching the new framework contract, due to be signed in 2023;

Prevention and management of conflicts of interest and transparency

18. Notes that the Foundation published all the declarations of conflict of interest and CVs for management board members, and senior and middle managers; notes furthermore that the Foundation lists all meetings held by its Director and organisations and self-employed individuals on its website;

19. Notes that the Foundation has an internal anti-fraud strategy, which is regularly updated, and it may consider complementing that strategy with an anticorruption section; further notes that it is now in the pipeline the development of a policy on conflict of interest issues;

Internal control

20. Welcomes the positive opinion the IAS issued on the complementarity and cooperation mechanisms between the Foundation and the Commission in its final audit report in December 2022 highlighting the Foundation’s staff expertise and the set up of a bi-annual Structured Dialogue to ensure better coordination for the preparation of Governing Board (GB) meetings; observes that nevertheless, it also points out two very important issues regarding the Foundation's mandate and monitoring of indicators, as well as two important issues on priority alignment and EU requests database and procedure improvements; acknowledges that in response, the Foundation, in collaboration with DG EMPL, has devised an action plan to tackle these recommendations, which will be put into effect in 2023;

Other comments

21. Notes the Foundation’s dedicated attention to cyber security and digital records and data management and the actions undertaken in order to follow the relevant guidelines from the Union, such as backup improvements and the Foundation’s main websites’ penetration tests; notes, additionally, that following a Foundation-wide information security risk assessment performed in 2021, a risk treatment plan was developed and agreed in 2022;

22. Notes that in 2022 the Foundation retained both the EMAS certification and the ISO 14001 certification following an environmental audit carried out in March 2022 (and 2023);

° °

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