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Decision of the European Ombudsman on complaint 1202/99/(CD)(IJH)JMA against the European Commission

Strasbourg, 27 November 2000

Dear Mr P.,
On 28 September 1999, you lodged a complaint with the European Ombudsman against the European Commission. Your complaint concerned an alleged failure on the part of the Commission to make the final payment of a Community financed project (Alfa project n. ALR/B7-3011/94.04/6.0010.8) for an amount of 1.300 €.
Following a request from my Secretariat dated 21 October 1999 to further clarify the object of your complaint, you sent additional information on 25 October 1999. On 15 December 1999, I forwarded your complaint to the President of the European Commission. The Commission sent its opinion on 22 March 2000, which I forwarded to you on 17 April 2000 with an invitation to make observations, if you so wished. You faxed a number of additional materials to the Ombudsman on 26 April, 6 May, 22 June and 14 July 2000. Since it was unclear whether these documents should be taken as your observations, the Ombudsman wrote to you on 27 July 2000 asking for further clarification. Your reply of 31 July 2000 confirmed that these faxes constituted your observations, and also included some new evidence.
I am writing now to let you know the results of the inquiries that have been made.


The claims made by the complainant were in summary as follows:
The complainant was the co-ordinating partner in project n. ALR/B7-3011/94.04/6.0010.8, which had been partly financed by the European Commission under the Alfa project. Although the complainant had sent the final scientific and financial report of the project at the beginning of 1999, he had only received an advanced payment for the contract of 19,480 €, out of a maximum Community contribution which had been estimated at 24,350 €. The final cost of the project as reflected in the financial reports prepared by the complainant had been 20,671.80 ECU. Thus, the complainant was requesting the payment of the remaining 1,131.80 €.
Although the complainant had approached the responsible Commission services claiming the payment of the remaining contribution, no reply had apparently been received.


The Commission's opinion
In its opinion, the Commission first explained the background to the project. The Community contribution had taken place in the framework of the "ALFA" programme ("Amerique Latine-Formation Académique"). The complainant, acting on behalf of the University of Lecce co-ordinated a network, named "Esperanza Network", which had been awarded a grant for the study of the deposition of different hard material films by reactive laser ablation (contract n. ALR/B7-3011/94.04/6.0010.8).
The total costs of the project were calculated at 31.350 €, of which the Commission agreed to pay a maximum of 24.350 €, on the basis of a detailed breakdown of costs which included travel expenses and per diems. A first payment of 19.480 € had been advanced following the signature of the contract.
As regards the final payment of the remainder, the Commission explained that it had asked the complainant by letter of 10 May 1999 to submit evidence of the claimed airfares. The Commission's letter also contested the eligibility of some per diems. The complainant replied with an undated letter stating that he had paid the air tickets through a direct contribution. He also explained that some of the outstanding per diem resulted from the fact that there were no available flights which matched the dates of the organised events. In an e-mail of 13 December 1999, the complainant indicated that additional information was to be sent shortly.
In the absence of a clearer justification, the Commission reminded him of the missing documentation by letter of 21 December 1999, and asked for a total reimbursement of 5.955,67 €.
The complainant's observations
Following the Ombudsman's letter of 17 April 2000, which invited the complainant to comment on the Commission's opinion, he sent some additional information by faxes of 26 April, 6 May, 22 June and 14 July 2000. These faxes included copies of several certificates signed by the complainant in order to confirm that the air tickets mentioned in the Commission's request had been directly paid by the University, and accordingly that he was unable to produce the original receipts. They also contained copies of letters from the participants in the project, justifying their per diem requests.
Since the faxes were not accompanied by any cover letter or any other information which could be considered as an observation to the Commission's opinion, the Ombudsman asked the complainant on 27 July 2000 to forward his observations, or to provide full information regarding his subsequent contacts with the Commission.
In his reply of 31 July 2000, the complainant confirmed that the faxes he had submitted in April and May constituted his observations to the Commission's opinion. He also submitted a copy of a letter from the Commission dated 31 May 2000, in which the responsible Commission services had reconsidered their request for refund in the light of the information that the complainant had forwarded. On the basis of the new supporting evidence, and taking into account the requirements set out in the original contract, the Commission's financial services concluded that the total Community contribution to the project should amount to 18,863.22 €. Since the advance payment made to the beneficiary was 19,480 €, the Commission concluded that he had to refund 616.78 €, as detailed in the Annex to the letter.
The complainant contested this calculation, and pointed out that the money spent by the organisers, namely 20,611.80 €, was less than the amount foreseen in the contract, i.e., 24,350.00 €. He complained about the bureaucracy involved all through the process, and requested the intervention of a European inspector.


1 Delay in the payment due to requests for additional evidence
1.1. The complainant claims that long after he submitted the final technical and financial reports for a Community co-financed project (Alfa project n. ALR/B7-3011/94.04/6.0010.8.), the Commission had not yet paid its agreed contribution. Since the final cost of the project amounted to 20,611.80 ECU and the advanced payment made by the Commission was 19,480 ECU, the complainant asked for the payment of the remaining 1,131.80 ECU.
1.2. In its opinion, the Commission justified its refusal to complete its contribution on the grounds that the complainant had not submitted all necessary information, such as the original receipts for air tickets, and the justification for certain daily allowances. The need to have that information as a requisite for any final payment had been made clear to the complainant in two letters from the Commission's Financial services dated 10 May, and 21 December 1999.
1.3. The Commission has justified its request for additional information in order to ensure the respect of sound financial principles. As set out in Art. 4 of the contract agreed between the Commission and the complainant, the Commission may ask for any additional information which the scrutiny of the final report may prompt. Furthermore, Art. 9 (Payment Clauses), paragraph 2 of the contract, states:
"Payment of the final balance shall be subject to completion by the Beneficiary of all his obligations […].

As regards travel made by air plane, Art. 9, paragraph 4 points out that,
"In the case of air travel, original tickets stubs, corresponding boarding passes as well as receipt of the travel agency shall be presented […]. Per diem payments will only be effected on receipt of proof of presence at the pace of destination".

1.4. It appears that the complainant produced the requested information to the satisfaction of the Commission as it can be inferred from the institution's letter to the complainant of 31 May 2000. In the light of that information, the institution modified its requests of 21 December 1999 for a refund of 5,955,67 €.
The Ombudsman has therefore concluded that there appears to be no maladministration as regards this aspect of the case.
2 Amounts to be covered by the final Community contribution
2.1. Having taken into account the latest evidence submitted by the complainant, the Commission reassessed the final balance of the contract. It concluded in a letter sent to the complainant of 31 May 2000, that he should still refund 616,78 € from the amount initially advanced to him (19,480 €).
The complainant disagrees with this calculation, and has pointed out that the money spent by the organisers, namely 20,611.80 €, is less than the amount initially foreseen in the contract (24,350.00 €).
2.2. The Commission's reasoning for this new regularization is contained in the annex to the letter sent to the complainant, which breaks down the costs as reflected in the original contract. On the basis of that breakdown, the institution refers to the Community contribution initially foreseen, the figures included in the final financial report, and the eligible EC contribution.
2.3. An evaluation of the figures presented by the Commission reveals that the calculation of its contribution has been based on a maximum percentage of the amount actually spent by the complainant in each one of the items included in the original contract(1).
By contrast, the complainant seems to take the view that the expenditure for the project has to be taken as a whole. Since the total expenditure has been inferior to that initially foreseen, and therefore the Commission is being called to contribute an amount inferior to that agreed in the contract, the complainant considers that there should be no reason to refund a part of the advanced money.
2.4 According to Article 195 of the EC Treaty, the European Ombudsman is empowered to receive complaints "concerning instances of maladministration in the activities of the Community institutions or bodies". The Ombudsman considers that maladministration occurs when a public body fails to act in accordance with a rule or principle binding upon it(2). Maladministration may thus also be found when the fulfilment of obligations arising from contracts concluded by the institutions or bodies of the Communities is concerned.
2.5 However, the Ombudsman considers that the scope of the review that he can carry out in such cases is necessarily limited. In particular, the Ombudsman is of the view that he should not seek to determine whether there has been a breach of contract by either party, if the matter is in dispute. This question could be dealt with effectively only by a court of competent jurisdiction, which would have the possibility to hear the arguments of the parties concerning the relevant national law and to evaluate conflicting evidence on any disputed issues of fact.
2.6 The Ombudsman therefore takes the view that in cases concerning contractual disputes it is justified to limit his inquiry to examining whether the Community institution or body has provided him with a coherent and reasonable account of the legal basis for its actions and why it believes that its view of the contractual position is justified. If that is the case, the Ombudsman will conclude that his inquiry has not revealed an instance of maladministration. This conclusion will not affect the right of the parties to have their contractual dispute examined and authoritatively settled by a court of competent jurisdiction.
2.7. In order to determine whether the position taken by the Commission in the present case has been reasonable, it is first necessary to consider the provisions of the contract.
The contract refers to the applicable financial conditions in its Article 9 (Payment Clauses) as well as in its Annex B (Financial Provisions). Art. 9, paragraph 1 states:
"All invoices shall be brawn up in duplicate and in keeping with the breakdown of costs set down in the Financial Provisions of this contract and with clear reference to the various budget items (Annex B)"

Furthermore, the Financial Provisions of the contract referred to in its Annex B, explicitly mentions that,
"The EC contribution represents a percentage of the costs foreseen in the budget. Should these costs be lower, the EC contribution will be limited to this percentage".

2.8. In view of these legal provisions, the Ombudsman considers that the position taken by the Commission in this case does not appear to be unreasonable. In these circumstances, and bearing in mind that the scope of the Ombudsman's review is limited in such cases, the Ombudsman has concluded that the inquiry has not revealed an instance of maladministration as regards this aspect of the case.
3 Conclusion
On the basis of the Ombudsman's inquiries into the complaint, there appears to be have been no maladministration by the Commission. The Ombudsman therefore closes the case.
The President of the European Commission will also be informed of this decision.
Yours sincerely

(1) For instance, as regards the EC contribution for continental flights, the initial budget had foreseen six flights of this type for a total cost of 4,800 € from which the EC was to bear round 3,3,00 € (i.e., 68,75 % ). For its final contribution, the Commission took the costs actually incurred by the beneficiary for six continental flights, as indicated in the complainant's final report, and fixed its contribution on the basis of a 68,75 % of these costs. This calculation resulted in a figure of 1,859 €, well below the institution's maximum contribution as estimated in the contract.

(2) See Annual Report 1997, pages 22 et ss.