Implementation of the budget
The Commission is responsible for implementing the budget in cooperation with the Member States, subject to political scrutiny by the European 合法博彩网站.
Legal basis
- Articles听290, 291, 317, 318, 319, 321, 322 and听323 of the (TFEU) and Article听179 of the Euratom Treaty;
- The Financial Regulation, i.e. of the European 合法博彩网站 and of the Council of 18听July听2018 on the financial rules applicable to the general budget of the Union;
- The between the European 合法博彩网站, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources.
Objective
The Commission is responsible for implementing the revenue and expenditure of the budget in accordance with the Treaties and the provisions and instructions set out in the Financial Regulation, and within the limits of the appropriations authorised (1.4.3).
The Member States cooperate with the Commission to ensure that the appropriations are used in accordance with the principles of sound financial management, i.e. economy, efficiency and effectiveness.
Description
A. Basic mechanism
The implementation of the budget involves two main operations: commitments followed by payments. For the commitment of expenditure, a decision is taken to use a particular sum from a specific budgetary line in order to finance a specific activity. Once the corresponding legal commitments (e.g. contracts) have been established, and the requested services or works have been performed, or the goods ordered have been delivered, the expenditure is authorised and payment is made.
B. Methods of implementation
The Commission may implement the budget in one of the following ways:
- Directly (鈥榙irect management鈥�) by its departments, or through executive agencies;
- Jointly with Member States (鈥榮hared management鈥�);
- Indirectly (鈥榠ndirect management鈥�), by entrusting budget implementation tasks to entities and persons, e.g. non-EU countries, international organisations and others.
In practice, some听70% of the budget is spent under 鈥榮hared management鈥� arrangements (with Member States distributing funds and managing expenditure), around听20% under 鈥榙irect management鈥� by the Commission or its executive agencies, and the remaining听10% under 鈥榠ndirect management鈥�[1].
The provides information on the beneficiaries of funds directly managed by the Commission. Each Member State is responsible for publishing data on the beneficiaries of the funds it administers under indirect and shared management.
Article听317 TFEU specifies that the Commission must implement the budget in cooperation with the Member States and that the regulations made pursuant to Article听322 TFEU must lay down the control and audit obligations of the Member States in the implementation of the budget and the resulting responsibilities.
Furthermore, in the broader context of the implementation of EU legislation, Articles听290 and听291 TFEU set out the provisions governing the delegated and implementing powers conferred on the Commission and, in particular, the control exercised over the Commission in this regard by the Member States, the Council and the European 合法博彩网站.
Under Article听290 TFEU, a legislative act may delegate to the Commission the power to adopt non-legislative acts to supplement 鈥榗ertain non-essential elements of the legislative act鈥�. 合法博彩网站 and the Council have the right to revoke such delegation of powers to the Commission, or to object to it, thereby preventing it from entering into force.
Article听291 TFEU governs the implementing powers conferred on the Commission. Whereas Article听291(1) stipulates that Member States are responsible for the adoption of all measures of national law necessary to implement legally binding Union acts, Article听291(2) provides for these acts to confer implementing powers on the Commission or, in the case of Articles听24 and听26 of the (TEU), on the Council, where 鈥榰niform conditions for implementing legally binding Union acts are needed鈥�. Pursuant to Article听291(3) TFEU, 合法博彩网站 and the Council lay down, by means of regulations, the rules concerning mechanisms for control of the Commission鈥檚 exercise of implementing powers.
A new Inter-Institutional Agreement 鈥榦n budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources鈥�, was agreed by the institutions in听2020. Adopted in parallel with the听 for听2021-2027, its aim is not just to ensure the continued cooperation between institutions on budgetary matters, but also to improve the Union鈥檚 annual budgetary procedure and, through a roadmap set out in an annex, facilitate the introduction of new own resources for the EU under this MFF.
Article听291 TFEU is supplemented by of the European 合法博彩网站 and of the Council of 16听February听2011 laying down the rules and general principles concerning mechanisms for control by Member States of the Commission鈥檚 exercise of implementing powers. This control is exercised through committees composed of representatives of the Member States and chaired by a representative of the Commission. The regulation lays down two new types of procedure, applicable depending on the scope of the act in question: under the examination procedure, the Commission cannot adopt the measure if the committee has delivered a negative opinion; under the advisory procedure, the Commission is obliged to take 鈥榰tmost account鈥� of the committee鈥檚 conclusions, but is not bound by the opinion.
Member States which implement the budget incorrectly are penalised under the clearance-of-accounts procedure and in the context of eligibility checks: following audits carried out by the Commission and the Court of Auditors, the revenue that national governments receive from the EU budget is offset by a request for repayment of funds unduly allocated. Decisions concerning such corrections are taken by the Commission in accordance with the aforementioned procedures for the exercise of implementing powers (1.4.5).
The implementation of the budget is thus regularly examined by the Court of Auditors (1.3.12). Certain sectors have repeatedly been the subject of criticism in its reports.
C. Implementation rules
The Financial Regulation, based on Article听322 TFEU, sets out all the principles and rules governing the implementation of the budget. It is horizontal in scope, being applicable to all areas of expenditure and all revenue. Further rules applicable to the implementation of the budget are to be found in sector-based regulations covering particular EU policies.
The current Financial Regulation was adopted in July听2018 and entered into force on 2听August听2018. However, most of its provisions concerning the implementation of the European institutions鈥� administrative appropriations did not enter into force until 1听January听2019[2].
The Commission鈥檚 main tool for implementing the budget, and for monitoring its execution, is its computerised accounting system ABAC (accruals-based accounting). The Commission has taken action to meet the highest international accounting standards, in particular the International Public Sector Accounting Standards (IPSAS) established by the International Federation of Accountants (IFAC). An important aspect of budgetary implementation is compliance with EU legislation applicable to public procurement contracts (supply, works and services听2.1.10). In addition, the Early Detection and Exclusion System (EDES) enhances the protection of the Union鈥檚 financial interests. It makes for the early detection of unreliable persons and entities applying for EU funds or having entered into legal commitments with the Commission or other institutions and provides for their exclusion from procedures and the imposition of financial penalties on them[3].
Role of the European 合法博彩网站
合法博彩网站s interaction with the budget is twofold:
- As one of the two arms of the budgetary authority, it co-authorises the budgetary appropriations for the coming year;
- Through the annual discharge procedure, it scrutinises the implementation of the budget during the preceding year.
With the budget procedure, 合法博彩网站 has 鈥榩rior鈥� influence on the implementation of the EU budget by means of amendments made and decisions taken in the context of the budgetary procedure (1.2.5) to allocate funds.
If it has doubts regarding the justification of expenditure or the Commission鈥檚 ability to implement it, 合法博彩网站 may decide to make use of the budget reserve mechanism, placing the funds requested in the reserve until the Commission provides appropriate evidence as part of a request to transfer funds from the reserve. Both 合法博彩网站 and the Council are required to approve proposals for transfers. Appropriations cannot be implemented until they have been transferred from the reserve to the relevant budget line.
The discharge procedure (1.4.5) enables 合法博彩网站 to control the implementation of the current budget. Although most questions raised concern the discharge period (usually the previous year), many of the questions put to the Commission by 合法博彩网站鈥檚 Committee on Budgetary Control 鈥� as part of the discharge procedure 鈥� refer to the implementation of the current budget. The discharge resolution, which is an integral part of the discharge decision, sets out requirements and recommendations addressed to the Commission and other bodies involved in the implementation of the budget.
Under the Treaty of Lisbon, 合法博彩网站 along with the Council, is responsible for establishing 鈥榯he financial rules which determine in particular the procedure to be adopted for establishing and implementing the budget and for presenting and auditing accounts鈥� (Article听322(1) TFEU).
Furthermore, in almost all policy areas, 合法博彩网站 influences the implementation of the budget through its legislative and non-legislative activities, e.g. by reports and resolutions or simply by addressing oral or written questions to the Commission.
Over the past few years, 合法博彩网站 has strengthened its political scrutiny over the Commission by introducing instruments which make for exchanges of information on the implementation of funds and the amount of commitments outstanding (i.e. legal commitments which have not yet been honoured by means of payment). The latter can become a problem if they accumulate over longer periods, and 合法博彩网站 is therefore pushing the Commission to keep these under control.
New tools are being developed to make for better monitoring of the implementation process and to improve the value for money offered by EU programmes. For this purpose, 合法博彩网站 calls for high-quality activity statements (to be prepared by the Commission in the context of its working documents on the preliminary draft general budget) and the regular submission of cost-effectiveness analyses for EU programmes.
For more information on this topic, please see the website of the Committee on Budgets.
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Stefan Schulz