The background to the complaint

1. This case concerns the European Commission's decision to suspend payments in the framework of a grant agreement (the 'Grant Agreement') concluded with the complainant.

2. The complainant is an Italian company. It is active in the education, training and cultural sectors as well as in the promotion of social inclusion and local development. Since 2002, the complainant has taken part in a series of projects funded by the EU aimed at supporting the deployment of trans-European e-services in the field of culture (eTEN Programme) and making digital content in Europe more accessible (eContentplus Programme). In particular, in 2002, the complainant entered into grant agreements with the Commission concerning the following projects in the framework of the programmes mentioned above: MICHAEL, EUROMUSE, ATHENA and JUDAICA EUROPEANA.

3. On 19 February 2009, the Commission informed the complainant that it had decided to carry out a financial audit of the cost statements submitted by the complainant under the three following grant agreements between the complainant and the Commission: MICHAEL, MICHAELPLUS and MINERVAPLUS. The complainant was also informed that the auditors might decide to review, during their visit, other projects in which it participated as project partner and projects in which it was involved as a subcontractor of other project partners. Between 10 March and 13 March 2009, the Commission carried out the audit on the complainant's premises.

4. On 3 February 2010, the Commission informed the coordinator of the MICHAEL project that, in accordance with Article II.17(4) of the eTEN grant agreement, it "will, based on the conclusions of the audits, take appropriate measures which it considers necessary, including the issuance of recovery orders". On 14 April 2011, the Commission informed the coordinator of the MICHAEL project that the final payment had been approved and had to be made to the partners of the project. However, the Commission pointed out that the payment to the complainant had been suspended.

5. On 8 February 2010, the Commission informed the coordinator of the JUDAICA EUROPEANA project, in which the complainant participated as a partner, that the first instalment of the pre-financing payment due to the complainant was suspended until "the final audit results are known".

6. On 17 May 2010, the Commission informed the coordinator of the EUROMUSE project, in which the complainant was a participant, that payments to the complainant should be suspended until "it will be clear which of its costs can be considered as eligible".

7. On 14 June 2010, the Commission informed the coordinator of the ATHENA project, in which the complainant participated as a partner, that the pre-financing payment due to the complainant was suspended until "successful conclusion of the audit".

8. By letter dated 5 July 2010, the complainant wrote to the Commission pointing out that it had not yet received information concerning the outcome of the audit that had been carried out more than a year earlier and that the suspension of the payments was causing it serious harm. The complainant also stressed that, according to information provided by Commission officials, it appeared that the decision to suspend the payments was based on Article 73(1), second subparagraph, of the Financial Regulation which relates to 'recovery orders'[1]. The complainant argued that the said provision did not apply to its case, as no recovery order had been issued.

9. By letter dated 13 August 2010, the Commission replied to the complainant and explained that it had to carry out various additional audit tasks in relation to the projects and consortia in which the complainant participated. These circumstances explained the delay in sending the draft audit report to the complainant. The Commission's reply, however, did not address the issue of the suspended payments.

10. By letter of 27 November 2010, the complainant wrote to the Commission again, observing that, even though there was no finding of any misconduct on its part, the payments due to it had been blocked. The complainant stressed that it was not understandable how in a democratic government an organisation could be penalised by decisions restricting its regular financial flow without there being any charge against it.

11. On 15 December 2010, the complainant received the draft audit report and was invited to make comments. On 11 January 2011, the complainant sent its comments to the Commission, expressing its disagreement with the conclusions of that report.

12. On 27 January 2011, the complainant turned to the Ombudsman.

The subject matter of the inquiry

13. The Ombudsman opened an inquiry into the following allegations and claim:

Allegation

(1) The Commission suspended payments in the framework of its Grant Agreement without informing the complainant of valid and adequate justifications for doing so.

Claim

The Commission should either now make the payments that it had suspended, or provide valid and adequate justifications for not doing so.

14. In its observations on the Commission's opinion (see point 15 below), the complainant raised the following further allegations which the Ombudsman decided to include in the inquiry:

(2) By suspending the payments due to the complainant, the Commission failed to respect the principle of equal treatment.

Supporting arguments:

(i) The Commission took precautionary measures only against the complainant but not against the other audited organisations against which the same grievances were expressed.

(ii) The Commission gave the other audited organisations the opportunity to send additional documents before receiving the final audit report, while the complainant was not given such an opportunity. Had it been given this opportunity, it is possible that the payments would not have been suspended.

(3) The decision to suspend payments under the four projects MICHAEL, EUROMUSE, ATHENA, and JUDAICA, following an audit concerning the projects MICHAEL, MICHAELPLUS and MINERVAPLUS which, with the exception of the project MICHAEL, are different projects, was abusive.

The inquiry

15. On 14 March 2011, the Ombudsman asked the Commission to submit an opinion on the complainant's allegation and claim by 30 June 2011. The Commission's opinion was forwarded to the complainant with an invitation to make observations, which the complainant sent on 30 October 2011.

16. In its observations, the complainant raised further allegations, which are set out under points (2) and (3) above. The Ombudsman decided to include the two new allegations in the inquiry and asked the Commission to provide a supplementary opinion by 31 January 2013. The Commission's opinion was forwarded to the complainant with an invitation to make observations, which the complainant sent on 25 March 2013.

17. In its supplementary opinion, the Commission pointed out that, on 1 June 2012, the complainant lodged an application with the General Court (Case T-234/12). According to the Commission, the arguments presented by the complainant in its application to the General Court do not differ substantially from the allegations raised in the present complaint. The Commission therefore concluded that, in line with Article 2(7) of the Statute of the European Ombudsman and with Article 10.3 of the European Ombudsman's Implementing Provisions, the Ombudsman should terminate consideration of the present complaint[2].

18. In its observations on the Commission's supplementary opinion, the complainant pointed out that its complaint to the Ombudsman and its application to the General Court have different aims and objects. More specifically, the complainant maintained that while the complaint to the Ombudsman concerned the Commission's decision to suspend the payments due in the MICHAEL, EUROMUSE, ATHENA, and JUDAICA projects, the application to the General Court focussed on the outcome of the financial audit carried out in relation to the MICHAEL, MICHAELPLUS and MINERVAPLUS projects and on the recovery requests adopted by the Commission following that audit.

19. The complainant also underlined that the Commission had not informed the General Court of its decision to partially pay the sums due for the ATHENA and JUDAICA projects. According to the complainant, this omission clearly showed that the Commission considered the Court proceedings and the complaint to the Ombudsman as having different objects and being clearly separated.

The Ombudsman's analysis and conclusions

Preliminary remarks

20. In its observations on the Commission's supplementary opinion, the complainant further alleged that the Commission failed to handle its case in a timely manner. In addition, it claimed that the Commission should be held responsible for the economic loss, and the damage to its reputation, which it suffered as a result of not having received the payments in due time.

21. In that regard, the Ombudsman notes that, according to Article 2(4) of the Statute of the European Ombudsman, a complaint must be preceded by the appropriate administrative approaches to the institution concerned. In the present case, it does not appear that the complainant has already contacted the Commission in relation to the issues put forward in its additional allegation and claim. The Ombudsman therefore considers that the new allegation and claim are inadmissible.

A. As regards the relationship between the present complaint and the application to the Court

The Ombudsman's assessment

22. The Ombudsman notes that, according to Article 228 of the Treaty on the Functioning of the European Union, the Ombudsman shall conduct inquiries for which she finds grounds, either on her own initiative or on the basis of complaints submitted to her direct or through a Member of the European Parliament, "except where the alleged facts are or have been the subject of legal proceedings." The Ombudsman also notes that Article 2(7) of the Statute of the European Ombudsman states that "when the Ombudsman, because of legal proceedings in progress or concluded concerning the facts which have been put forward, has to declare a complaint inadmissible or terminate consideration of it, the outcome of any enquiries [s]he has carried out up to that point shall be filed definitively." Furthermore, according to Article 10(3) of the European Ombudsman's Implementing Provisions, "if legal proceedings are instituted in relation to matters under investigation by the Ombudsman, [s]he closes the case. The outcome of any inquiries [s]he has carried out up to that point is filed without further action."

23. It emerges from the information provided by the Commission that the complainant has turned to the General Court with respect to some of its contractual relationships with the Commission. In these circumstances, the Ombudsman, against the background of the provisions mentioned above and, in particular, of Article 228 TFEU, needs to consider whether she is entitled to pursue her inquiry and, if so, whether there are grounds to do so.

24. In its application to the General Court, the complainant, among other claims concerning the outcome of the audit, asked the Court to declare that the debit note sent by the Commission in the framework of the MICHAEL project following the audit of that project was not justified and that the unilateral freezing of the payments due in the ATHENA and JUDAICA projects was not grounded in law[3]. Among the pleas in law put forward in support of its claims, the complainant argued that the findings of the Commission's audit were not grounded and that the unilateral freezing of the payments due in the ATHENA and JUDAICA projects was not justified or legally grounded for a number of reasons[4]. It follows that the court proceedings initiated by the complainant concern, among other things, the Commission's decisions (i) to suspend payments in the ATHENA and JUDAICA projects and (ii) to issue a debit note in relation to the MICHAEL project.

25. The Ombudsman notes that the allegations the complainant submitted to her all concern the Commission's decisions to suspend payments under the MICHAEL, EUROMUSE, ATHENA and JUDAICA projects.

26. It follows from the above that the legal proceedings in the Court and the complaint to the Ombudsman both concern the suspension of payments in the ATHENA and JUDAICA projects. In addition to that, the legal proceedings also concern the Commission's decision to issue a debit note in relation to the MICHAEL project. In that regard, the Ombudsman notes that both the Court and the Ombudsman have been asked to examine the contractual relationship between the complainant and the Commission under the MICHAEL project.

27. As a consequence, the Ombudsman considers that she is not entitled to pursue her inquiry as far as the complainant's allegations concern the ATHENA, JUDAICA and MICHAEL projects.

28. It is true that the complainant argued that the aims and objects of the Court proceedings and of the complaint to the Ombudsman are different. However, this does not affect the Ombudsman's finding that, to the extent that the complainant's allegations concern the ATHENA, JUDAICA and MICHAEL projects, the Ombudsman, if she were to pursue her inquiry, would be required to inquire into the same facts which are before the Court, which she is not entitled to do. The Ombudsman's finding is equally not affected by the fact that, according to the complainant, the Commission informed the Ombudsman, but not the Court, of its decision to partially pay the sums due to the complainant for the ATHENA and JUDAICA projects.

29. The Ombudsman finally notes that the complainant's application to the General Court does not concern the EUROMUSE project. However, the Ombudsman also notes that if she were to pursue her inquiry into this issue, she would be required to inquire into the contractual relationship between the complainant and the Commission concerning the MICHAEL project, which is the alleged basis for the suspension of the payments for the EUROMUSE project. The Ombudsman therefore concludes that she is not entitled to pursue her inquiry into this aspect of the complainant's allegations.

B. Conclusion

On the basis of the inquiry into this complaint, the Ombudsman closes it with the following conclusion:

The Ombudsman is not entitled to pursue further her inquiry into the complainant's allegations.

The complainant and the Commission will be informed of this decision.

 

Emily O'Reilly

Done in Strasbourg on 10 January 2014

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[1] Council Regulation (EC, Euratom) No 1605/2002 of 25/06/2002 on the Financial Regulation applicable to the general budget of the European Communities, OJ 2002 L 248, p. 1, now replaced by 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, OJ 2012 L 298, p.1.

[2] For the content of the provisions quoted by the Commission see paragraph 22 of the present decision.

[3] See OJ 2012 C 243, p.22.

[4] See OJ 2012 C 243, p.23.