Dear Mr B.,

On 17 July 2002, you made a complaint to the European Ombudsman concerning an alleged delay by the Commission in the assessment of the final report of the project "Painted organdoors" which you submitted in the framework of the Raphael programme 1999. On 1, 2, 5 and 15 August 2002, you sent further information concerning your complaint.

On 30 August 2002, I forwarded the complaint to the President of the Commission. The Commission sent its opinion on 11 November 2002. On 6 September and 8 October 2002 you had sent further information with regard to your complaint. I forwarded the Commission's opinion to you with an invitation to make observations, which you sent on 26 December 2002 and 2 January 2003.

I am writing now to let you know the results of the inquiries that have been made.

THE COMPLAINT

According to the complainant, the relevant facts were as follows:

The complainant, a Dutch foundation specialised in organs, submitted in March 1999 a project to the Commission in the framework of the Raphael programme 1999 monitored by the DG Education and Culture (former DG X). The project called "Painted organdoors" consisted in a publication on painted organdoors in Europe. On 7 September 1999, the Commission informed the complainant that it decided to allocate a grant of 100.000 € for this project and sent a copy of the Grant Agreement which was signed by the complainant and the Commission.

After submitting an interim report, the complainant received a first instalment of 50.000 € on 19 October 1999 and a second instalment of 30.000 € on 29 October 1999. There was thus still an outstanding instalment of 20.000 €.

According to the Grant Agreement, the Foundation should have submitted the publication on 30 June 2000. However, because of the progressive discovery of historical organs in Italy, the complainant submitted on 30 November 2000 an interim report requesting more time to complete the publication which would contain more than 700 pages instead of the 400 pages initially foreseen. The Commission replied on 18 December 2000 that the complainant should send as soon as possible the financial statement presenting the total expenditure for the project. On 23 February 2001, the complainant wrote to the Commission requesting the remainder of the grant to be paid. The Commission replied on 5 March 2001 asking the complainant to send the final report.

On 14 March 2001, the complainant asked again for an extension of the date for the completion of the project until March 2002 (exemption of articles 2.2 and 2.3 of the Grant Agreement). The Commission did not reply. On 31 October 2001, the complainant sent copies of the publication to the Commission, which requested on 16 November 2001 a detailed breakdown of the costs and a detailed project report.

On 8 March 2002, the Commission informed the complainant that it received the final financial statement and that it would in due course inform about the outcome of the assessment. On 26 April 2002, the Commission informed the complainant that the final date for the submission of the publication was 30 June 2000, and that, on the basis of a preliminary evaluation of the final report, the Commission might issue a recovery order. The Commission observed that it would inform the complainant of its final findings by the latest on 30 April 2002. On 12 June 2002, the Commission informed the complainant that it had concluded the assessment of the final report which it sent to the financial services for verification and approval. On 12 July 2002, the Commission sent a fax stating that the examination by the financial services was still pending, but that it was doing its utmost to find a mutually acceptable solution by the end of July 2002. On 16 July 2002, the complainant informed the Commission that he would submit a complaint to the Ombudsman.

On 17 July 2002, the complainant made the present complaint with the Ombudsman alleging 1) delay by the Commission in the final assessment of its report and claiming 2) payment of the remainder of the grant amounting to 20.000 € as well as interests from 31 December 2001 onwards.

THE INQUIRY

The Commission's opinion

In its opinion, the Commission observed that, in accordance with article 2.2 of the Grant Agreement (N° 99/SI2.81108) only expenditure incurred during the period 1.1.1999 - 30.6.2000 could be taken into consideration.

Articles 3.1 and 3.2 of the Grant Agreement, accepted and signed by the complainant, fixes the estimated total expenditure of the project and foresees that the grant, representing a percentage of this amount, could not exceed € 100.000. Furthermore, Article 3.3 of the Grant Agreement stipulates clearly that, should the total expenditure be less than originally estimated, the Grant will be calculated at the same percentage on the real and final expenditure incurred for the project (in the agreed period).

The final statement of account submitted by the complainant for the eligibility period covered under the terms of the Grant Agreement amounted only to € 97.282,92. As this expenditure justifies a grant of only € 33.689 (34,63 % of the total real expenditure), the Commission would have been entitled to issue a recovery order for € 46.311 on the advance and interim payments of € 80.000 already received by the complainant.

The complainant's request for an extension of the eligibility period was not very clear, and, most important of all, it was made after the expiry of the Grant Agreement (article 2.3). The Commission could not, therefore, grant him this request within the context of its legal and financial regulations.

The complainant's assertion that the Commission did not comply with the clause stipulated in the Grant Agreement about payment of final remainder of the grant within 60 days of reception of the final statement of account is not correct. The Grant Agreement stipulated very clearly in article 4.1 payment of "the balance of the amount specified in Article 3.2 within 60 days of receipt and approval of a final report and statement of account and explicit proof that reference has been made to the grant provided by the European Commission". The Commission made the payment of the approved balance well within the 60 days period. Actually, the payment was made within two weeks from the date of the approval of the final statement of account by letter of Mr V. of 31 July 2002. The payment was acknowledged by the complainant himself on 15 August 2002.

The delay in the examination and approval of the final report was caused by the fact that the complainant included costs incurred both before and after the eligibility period, which engendered protracted correspondence with the complainant and consultation of the Commission's financial services.

In view of the complainant's special situation (ill and overworked) and of the project's good results (publication of two catalogue editions), the Commission adopted a flexible, understanding and favourable position vis-à-vis the complainant in accepting all expenditure as from 1 January 1999 to 30 November 2001 as eligible, but not expenditure before 1 January 1999 (the complainant presented expenditure as from 1996 which was clearly not mentioned in this original application nor covered under the terms of the Grant Agreement). It thus awarded the complainant 3.077,79 € as the balance of the grant.

In view of the above, the Commission services consider that the complainant has been treated more than fairly.

The complainant's observations

On 15 August 2002, the complainant sent a copy of the letter he had sent the same day to the Commission and in which he confirmed the receipt of 3.077,79 €, but also claimed to be entitled to the remainder of the grant which is 20.000 € - 3.077,79 € = 16.922,21 €.

In his observations, the complainant maintained that, on basis of the decision by the group of independent experts to allocate the project a grant of 100.000 € and of the statement in the Grant Agreement that the project would receive this amount, the foundation was entitled to the payment of the above remainder of the grant. The complainant observed that the fact that the Commission withholds this amount on the basis of a bizarre article testifies of the Commission's incomprehension and lack of knowledge on the subject.

The complainant stated that gradually and through further in depth investigation, the foundation had found a substantial additional number of unknown painted organdoors in private collections and in vaults and cellars of Italian dioceses which resulted in a publication of 720 pages with 850 illustrations. The complainant did however not state the actual facts in the application about the duration of the project. The Commission's ignorance and lack of knowledge about inventorying and cataloguing of cultural goods means that the Commission itself is to blame for it.

The complainant concluded that, should the Commission stand by its point of view, he would apply to the Court of First Instance.

THE DECISION

1 The alleged delay in the assessment of the final report of the project

1.1 The complainant alleged delay by the Commission in the final assessment of the report. The Commission observed that the delay in the examination and approval of the final report was caused by the fact that the complainant included costs incurred both before and after the eligibility period, which engendered protracted correspondence with the complainant and consultation of the Commission's financial services.

1.2 The Ombudsman first notes that, as regards the duration of the project, Articles 2.2 and 2.3 of the Grant Agreement (ref. N° 99/SI2.81108) - signed by both parties in September 1999 - provide that the contract shall cover the period from 1 September 1999 to 30 June 2000 and that the project must be completed by 30 June 2000.

1.3 Article 5 of the Grant Agreement stipulates that the interim report and a statement of account shall be supplied by 1 October 1999 and that the final report on the project shall be submitted within two months following its' completion, as specified in Article 2.2, that is by 31 August 2000 at the latest, including a) a statement of account (real expenditure and income) in EUR, signed and certified either by the beneficiary or the person responsible for finances within the organisation and b) a detailed list of all invoices.

1.4 From the analysis of the file and the correspondence between the complainant and the Commission it appears that the delay of the Commission in the final assessment of the report was due to the fact that the complainant submitted the final report on the project only on 31 October 2001 (instead of 31 August 2000 as foreseen by the Grant Agreement) and that the complainant had written to the Commission asking for an extension of the project duration foreseen in the Grant Agreement.

1.5 Also, as the complainant had included costs incurred before and after the eligibility period foreseen in the Grant Agreement, the Commission engaged in a long correspondence with the complainant on this subject. This seems to have substantially delayed the final assessment of the report. There appear however to be no elements in the file which indicate that the Commission, confronted with these unexpected events, would be responsible for an additional delay in the assessment of the report.

1.6 On basis of the above, there appears to have been no maladministration by the Commission in processing with the final assessment of the financial statement of the complainant.

2 The claim for payment of the remainder of the grant and interests

2.1 The complainant claims payment of the remainder of the grant amounting to 20.000 € as well as interests from 31 December 2001 onwards. The complainant argued that, on basis of the decision by the group of independent experts to allocate the project a grant of 100.000 € and of the statement in the Grant Agreement that the project would receive this amount, the foundation was entitled to the payment of the above remainder of the grant.

2.2 The Commission stated that it adopted a flexible and favourable position towards the complainant in accepting all expenditure as from 1 January 1999 to 30 November 2001 as eligible, but not expenditure before 1 January 1999. The complainant presented expenditure as from 1996 which was clearly not mentioned in the original application nor covered under the terms of the Grant Agreement. The Commission thus awarded 3.077,79 € as the balance of the grant.

2.3 The Ombudsman considers that the scope of the review that he can carry out in contractual cases is necessarily limited. The Ombudsman does 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.

2.4 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.

2.5 As regards the present case, the Ombudsman notes that Articles 3.1 and 3.2 of the Grant Agreement provide that the total cost of the project is estimated at 288.764 € and that the parties agreed that the Commission shall provide a maximum amount of 100.000 € equivalent to 34,63 % of this cost. The eligibility period agreed in the Grant Agreement covered the period from 1 January 1999 till 30 June 2000. Article 4.1 of the Grant Agreement provided that the balance of 20 %, which is the subject of the present complaint, shall be paid to the beneficiary within 60 days of receipt and approval of the final report and statement of account and explicit proof that reference has been made to the grant provided by the European Commission.

2.6 The Ombudsman notes that the Commission has acknowledged the project's good results (publication of two catalogue editions). It appears however that the final report and statement of account presented by the complainant included costs for a higher amount than the one foreseen in the Grant Agreement (351.725,03 € instead of 288.764 €) and covered an eligibility period which was different from the one agreed in the Grant Agreement (from 1 January 1996 to 30 November 2001 instead of 1 January 1999 to 30 June 2002). In view of the good results of the project, the Commission agreed to make an exception to the terms of the Grant Agreement and to accept expenditure incurred from 1 January 1999 (start of the contract period) until 30 November 2001 (date of submission of the final report) instead of 30 June 2000 (end of contract period). The Commission thus accepted to pay 34,63 % of 239.901,24 € = 83.077,79 € minus the 80.000 € already paid = 3.077,79 €.

2.7 On basis of the above, the Ombudsman finds that the Commission has put forward a coherent and reasonable account of the reasons why it could not award to the complainant the remainder of the grant amounting to 20.000 €, but only 3.077,79 €. In these circumstances there appears to be no instance of maladministration by the Commission.

2.8 As the complainant has already indicated in his observations, he is entitled to consider bringing the case before the competent court, i.e. the Court of First Instance of the EC.

3 Conclusion

On the basis of the Ombudsman's inquiries into this complaint, there appears to have been no maladministration by the Commission. The Ombudsman therefore closes the case.

The President of the Commission will also be informed of this decision.

Yours sincerely,

 

Jacob SÖDERMAN