Discharge procedure for the EU Budget: Political scrutiny of budgetary implementation

05-05-2020

The European Commission is ultimately responsible for the execution of the European Union's budget. However, the process also involves a range of other players, including Member States, to which the Commission delegates implementing tasks relating to a significant share of the budget. Each year, the discharge procedure ensures that there is ex-post democratic oversight at political level of how the EU's annual budget has been used. It aims to verify whether implementation was in accordance with relevant rules (compliance), including the principles of sound financial management (performance). The decision on whether to grant discharge for the execution of the EU budget is made by the European Parliament, which acts on a non-binding recommendation by the Council, the other arm of the EU budgetary authority. Another key institution is the European Court of Auditors, the EU's independent external auditor, whose reports are a fundamental part of the procedure. The discharge procedure has proved to be a powerful tool, which has had an impact on the evolution of the EU's budgetary system, while helping to increase the Parliament's political leverage. Recent years have shown a trend towards a greater focus on results and performance, strongly supported and promoted by the European Parliament. For example, the 2018 version of the EU's Financial Regulation simplified the rules for budgetary implementation and introduced the 'single audit' approach to shared management. Another noteworthy issue is the question of how to ensure EU-level democratic scrutiny of financial tools set up to respond to crises either outside the EU's institutional framework (e.g. the European Stability Mechanism) or at least partially outside the EU budget (e.g. EU trust funds). This Briefing updates a previous edition of April 2016.

The European Commission is ultimately responsible for the execution of the European Union's budget. However, the process also involves a range of other players, including Member States, to which the Commission delegates implementing tasks relating to a significant share of the budget. Each year, the discharge procedure ensures that there is ex-post democratic oversight at political level of how the EU's annual budget has been used. It aims to verify whether implementation was in accordance with relevant rules (compliance), including the principles of sound financial management (performance). The decision on whether to grant discharge for the execution of the EU budget is made by the European Parliament, which acts on a non-binding recommendation by the Council, the other arm of the EU budgetary authority. Another key institution is the European Court of Auditors, the EU's independent external auditor, whose reports are a fundamental part of the procedure. The discharge procedure has proved to be a powerful tool, which has had an impact on the evolution of the EU's budgetary system, while helping to increase the Parliament's political leverage. Recent years have shown a trend towards a greater focus on results and performance, strongly supported and promoted by the European Parliament. For example, the 2018 version of the EU's Financial Regulation simplified the rules for budgetary implementation and introduced the 'single audit' approach to shared management. Another noteworthy issue is the question of how to ensure EU-level democratic scrutiny of financial tools set up to respond to crises either outside the EU's institutional framework (e.g. the European Stability Mechanism) or at least partially outside the EU budget (e.g. EU trust funds). This Briefing updates a previous edition of April 2016.