Brussels, 25/07/2000 (Agence Europe) - On Wednesday, the European Commission will adopt its proposal for a revision and re-shaping of the Financial Regulation, text that sets out the Community's main budgetary and financial rules, from drawing up the budget (basic principles, contents, procedure) to its execution (role and responsibility of the different players) and its control (prior control, auditing, discharge), with specific rules for certain activities (research, Eaggf, etc.). the reform being proposed relates to important elements of substance, such as the definition of principles and exemptions, notably for agricultural spending and the reform of the financial control with the abolition of the ex ante authentication. The Commission's aim is, at a general level, for the rules of the Financial Regulation to be clearer, bringing together only the basic rules and modifying the Regulation's structure.
The current Financial Regulation dates back to 1977. Is has been reviewed fourteen times on different issues. The reform is necessary, according to the Court of Auditors - which in its opinion 4/97 called for a comprehensive review - the Committee of Independent Experts - for which the Financial Regulation has to be limited to the basic principles - the Council Parliament and Commission itself, and according to the words of a communication that Commissioner Schreyer presented in April, "the structure of the Financial Regulation has become cumbersome and heterogeneous (…) the spread between the basic rules and implementing rules is not always logical (…) the situation was complicated by the drawing up of financial rules of the same rank as other texts (Eaggf, Structural Funds, pre-accession or external assistance) which were added to or exempted from the rules of the Financial Regulation".
The Commission will therefore propose that only the basic rules, accompanied with their exceptions, should be included in the Financial Regulation, which is a Council Regulation. Technical and implementing details would be decided by the Commission itself. The revision of the regulation has also as goal to stipulate and frame more clearly specific rules in certain fields, like the Structural Funds and Eaggf, that are set out within regulations belonging to these sectors themselves.
The broad budgetary principles would not only be the subject of a formal reform. The Commission is, notably, proposing reviewing the rules governing the exceptions to the year-by-year principle and the carry over of appropriations from one year to the next. Thus, carried-over payment appropriations would be subjected to stricter conditions. In addition, "negative spending" in the agricultural sector (recovery of fraud, auditing…) would now be "allocated revenue". This "negative spending" is in fact exclusively devolved in the agricultural sector, but not presented as such in the budget. The reform would clarify the situation by exempting from the principle of "non-allocation" revenue so as to maintain the profit from this revenue in the agricultural sector. Spending funded by this "allocated revenue" would not be taken into account when calculating total agricultural spending - the change in qualification thus would not lead to the ceiling of the agricultural section being exceeded. This change has to be carried out by a revision of the Eaggf regulation.
The Commission is to propose abandoning another budgetary principle, included in the current Financial Regulation: the distinction between operational and administrative spending. As it announced in March in the White Paper on its internal reform, the Commission will propose presenting, in each of the major spending chapters, a sub-chapter devoted to administrative resources. The Commission, you may recall, intends modifying the drawing up and presentation of the budget to base them on "activities" pooled within some thirty or so policy fields (business, agriculture, environment…).
The Commission is to propose a series of other changes linked to its administrative reform: separation of the role of prior control ad auditing; abolition of the prior authentication of the financial control and delegation of responsibility for prior control to the person giving the order - who takes the decision for making a payment; setting up of an auditing procedure for each DG, under the control of the Internal Audit Services and its auditors…the rules governing the disciplinary or financial responsibility of officials should not be modified in this revision, the revision of the "statute" of officials being considered as a question apart.
End-May, the Commission presented an initial partial draft revision of the Financial Regulation; the general proposal for a revision presented on Wednesday was, moreover, announced for the same month (May), but was delayed until this week. It is a question of a separation of the role of control (ex ante) and auditing (ex post) of financial operations. So far, the financial controller, and his directorate general, have exercised these two roles. The Commission hopes that ths specific proposal will be adopted through the "fast-track" procedure by Council and Parliament by the end of the year (see EUROPE of 1 June, p.16), whereas the adoption of the proposal for a comprehensive revision should take at least eighteen months.