The budget discharge is the final approval of the EU budget implementation for a given year.
in the 19 years the EU accounts have been audited there has never been such a final approval by the auditors.
The final approval has always been granted by the European Parliament on a recommendation from the Member States in Council. The Parliament uses the Court of Auditors' report (statement of assurance) as the primary basis for this decision but it examines as well other sources of information.
in particular the Annual Activity Reports of the Commission's Directors-Generals and the Communications from the Commission, such as the Communication on the protection of the EU Budget1.
Discharge equates to approval of how the EU budget was implemented in that financial year and the closure of the accounts.
The EU has only been audited for the last 19 years, prior to that it just was not, leaving an open door to possible abuse.