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having regard to the final annual accounts of the European Institute of Innovation and Technology for the financial year 2011,

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having regard to the Court of Auditors’ report on the annual accounts of the European Institute of Innovation and Technology for the financial year 2011, together with the Institute’s replies (1),

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having regard to the Council’s recommendation of 12 February 2013 (05753/2013 – C7-0041/2013),

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having regard to Article 319 of the Treaty on the Functioning of the European Union,

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having regard to Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (2), and in particular Article 185 thereof,

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having regard to Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002 (3), and in particular Article 208 thereof,

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having regard to Regulation (EC) No 294/2008 of the European Parliament and of the Council of 11 March 2008 establishing the European Institute of Innovation and Technology (4), and in particular Article 21 thereof,

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having regard to Commission Regulation (EC, Euratom) No 2343/2002 of 19 November 2002 on the framework Financial Regulation for the bodies referred to in Article 185 of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities (5), and in particular Article 94 thereof,

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having regard to Rule 77 of, and Annex VI to, its Rules of Procedure,

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having regard to the report of the Committee on Budgetary Control (A7-0108/2013),

A.

whereas the Court of Auditors stated that it has obtained reasonable assurances that the annual accounts of the European Institute of Innovation and Technology (‘the Institute’) for the financial year 2011 are reliable and that the underlying transactions are legal and regular,

B.

whereas the Institute, which is located in Budapest, was established by Regulation (EC) No 294/2008,

C.

whereas the Commission granted financial autonomy to the Institute on 8 June 2011,

D.

whereas 2011 was the Institute’s first year that the Court of Auditors published a report on its annual accounts; whereas the audited period runs from 8 June to 31 December 2011,

E.

whereas the Institute’s overall budget for 2011 was EUR 64 294 640,

F.

whereas grants represent about 90 % of the Institute’s budget and their impact on budget execution is, therefore, significant; whereas the Knowledge and Innovation Communities grants (KIC grants) were EUR 56 847 080,

G.

whereas in accordance with its Foundation Regulation, the Institute’s 2011 budget was financed by a subsidy granted by the Union, a contribution granted by the European Free Trade Association (EFTA) countries and a contribution granted by the host Member State,

H.

whereas the Institute signed a host agreement with the Government of the Republic of Hungary on 23 March 2010,

I.

whereas at the end of 2011, the Institute recorded a negative budget outturn of EUR 1 824 955,81 (6); whereas the Institute recognises the outturn as a contingent asset; whereas according to the guidelines issued by the accounting services of the Commission, the negative budgetary outturn should not be booked as receivable against the Commission since the amounts carried forward are usually cancelled partially,

J.

whereas in 2010 and 2011, the Institute and its partner DG, Directorate-General for Education and Culture (DG EAC), worked together to set up the appropriate internal structures and procedures to enable the Institute to manage Union funds in accordance with the principles of sound financial management and to fulfil the minimum conditions for its financial autonomy; whereas those conditions (7) were defined as establishing: