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Recommendations of the European Ombudsman in case 2024/2014/ANA on the European Commission’s recovery of EU funds

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  • Caso:  2024/2014/ANA
    Abierto el 09-ene-2015 - Recomendación sobre 31-jul-2017

Made in accordance with Article 3(6) of the Statute of the European Ombudsman[1]

The complainant is the owner of a Croatian company, which was part of a consortium that carried out an EU-funded project. Based on the findings of an audit carried out after the project was concluded, the European Commission sought to recover funds totalling more than the amount the complainant had received. The complainant considered this to be unreasonable and unfair, and he turned to the Ombudsman.

The Ombudsman inquired into the complaint and found no maladministration with most of the audit findings, which concerned whether or not the contractual obligations had been respected. However, the Ombudsman considers that certain statements in the Commission’s audit reports were inappropriate and that the Commission should not have rejected the rate the complainant applied for the calculation of his personal staff costs. In addition, the Ombudsman found that it was unfair of the Commission to seek to recover funds in excess of the amount the complainant had received under the project.  

She therefore recommended to the Commission that it: (1) acknowledge that statements made in the audit reports were inappropriate, and apologise to the complainant; (2) review its audit findings regarding the rate the complainant applied for the calculation of staff costs and adapt the amount to be recovered accordingly; (3) further reduce the amount it is seeking to recover to reflect the fact that the Commission did not make a final payment under the project; and (4) waive the ‘liquidated damages’ it seeks to recover in their entirety.

Article I. The background to the complaint

1. The complainant is a retired professor of physics, who subsequently set up ACT d.o.o (hereafter, ‘ACT’), a company registered under Croatian law. ACT was a member of the consortium that was chosen to carry out the Underwater Coastal Sea Surveyor (UNCOSS) project under the EU’s 7th Framework Programme for European Research and Technological Development (FP7). The aim of the UNCOSS project was to equip a Remotely Operated Vehicle (‘ROV’) with a neutron generator in order to scan coastal areas for bombs and explosives.

2. The project started on 1 December 2008 and was concluded within the agreed time-limit (by 31 July 2012), having met its intended objectives to the European Commission's satisfaction.

3. While the project was ongoing, ACT was audited by a Croatian audit firm at the request of the Croatian tax authorities and by an international audit firm (KPMG) at the request of the Commission. Based on the KPMG audit, the Commission reduced by €52 369 the funding ACT was to receive under the ‘grant agreement’ and outlined measures to address the audit’s findings both retrospectively and for the remainder of the project.

4. On 15 October 2012, after the project had ended, the Commission carried out its own audit of ACT. In the ‘draft audit report’, the auditors found "significant and material deficiencies which raise a concern on the entire contribution of the beneficiary to the UNCOSS project". The auditors recommended that the Commission recover funds amounting to €1 081 294.03. The complainant submitted detailed observations on the draft audit report and contested all of its findings. In response, the Commission completed the ‘final audit report’ in which it had made certain adjustments but, in general, maintained the findings of the draft audit report.

5. On 16 July 2014, the Commission started the procedure to recover the funds. Following this, the complainant wrote to the Commission to summarise his objections concerning the auditors' findings and question the amount of funds to be recovered. In its reply, the Commission stated that the audit report would not be altered, explaining that it had deemed certain costs to be ineligible as they did not meet the eligibility criteria. This decision was not related to the operational quality of the work. The Commission issued a debit note for the recovery of €720 755.79, which was to be paid by 24 November 2014. This amount was made up of (a) €641 246.53, which corresponded to the overall costs claimed, as well as a final payment for the project that was pending at the time, and (b) €79 509.27 of ‘liquidated damages’[2].

6. Shortly after the Commission’s final audit report, the European Anti-Fraud Office (OLAF) also carried out an investigation into alleged irregularities by ACT in carrying out the UNCOSS project. On 14 November 2014, OLAF closed its investigation without making any recommendation for action to be taken, and stating that "no evidence of fraud or other irregularities of the kind suggested in [the Commission’s] final audit report could be established".

7. On 19 November 2014, the complainant turned to the Ombudsman.

Article II. The inquiry

8. The Ombudsman opened an inquiry into the complaint and identified the following issues:

The Commission acted unreasonably and unfairly by seeking to recover EU funds granted to the UNCOSS project.

The Commission should:

(1) withdraw the draft and final audit reports and, either accept the KPMG audit report, or carry out a professional evaluation of ACT's role in carrying out the UNCOSS project;

(2) apologise to the complainant for the damage to his reputation caused by the auditors' insinuations in the draft and final audit report;

(3) cancel the debit note; and

(4) make the outstanding final payment under the grant agreement.

9. In the course of the inquiry, the Ombudsman’s inquiry team inspected the Commission's file on the case. After a preliminary analysis of the complaint, the Ombudsman invited the Commission to address a number of specific issues in order to focus the inquiry on the most important aspects. The Ombudsman received the Commission’s reply and the comments of the complainant in response. The Ombudsman's recommendations take into account the arguments and views put forward by the parties.

Article III. Claim that the Commission acted unreasonably and unfairly in seeking to recover funds from ACT

10. One of the main issue in this case is that the Commission is seeking to recover an amount totalling more than the funding ACT received under the UNCOSS project.

11. The Ombudsman acknowledges that a financial audit (which concerns the accounts)[3] may lead to a project participant receiving no funds, despite having successfully carried out work under the project. This can mean that the participant’s role under the project is essentially not recognised, even where the participant’s contribution to delivering the project had been previously acknowledged, as in this case. As such, a financial audit can have the same impact as does a technical audit (which concerns the quality of the work carried out)[4].

12. The Commission has argued elsewhere that the successful outcome of a project cannot be considered as evidence that all costs declared have actually been incurred[5]. However, in the view of the Ombudsman, where there is uncertainty about assumptions in a financial audit that also relate to the technical features of the project, technical auditors/experts should also be consulted. This is both fair and provides legal certainty[6].

Section 3.01 Aspects of the complaint on which the Ombudsman does not consider it necessary to make recommendations

13. The Ombudsman has decided there is no need to make recommendations regarding the following issues raised by the complainant: (A) staff costs and the reliability of the timesheets, (B) the reimbursement of travel expenses, and (C) the relevance of previous audits.

(a) A) Staff costs and the reliability of the timesheets

14. The Commission’s auditors deemed almost 90% of the complainant’s personal staff costs, and 100% of all other staff costs, to be ineligible. The main reasons for this were that: the timesheets were not completed at the time, there was no system of internal control, and it was thus not possible to reconcile the timesheets with the actual activities carried out by the complainant[7].

15. It is possible that, following a financial audit, a high percentage of staff costs may be declared ineligible[8]. Without referring to the issue of the ‘Marie Curie flat rates’[9], which will be assessed below, the Ombudsman considers that the level of scrutiny by the auditors, although thorough, was reasonable and the conclusions are supported by the evidence in the file. Therefore, the Ombudsman finds that there is no maladministration as regards this aspect of the complaint.

(b) B) Travel expenses

16. The Commission’s auditors deemed most of the travel costs as ineligible because: they were incurred before the eligibility period started; they were not necessary for disseminating the UNCOSS research results; they were unrelated to the UNCOSS project; or they were already covered under the flat rate of 60% for indirect costs. In spite of the complainant’s specific arguments and general argument that it is disproportionate to deem as ineligible 78% of the travel expenses, the Ombudsman considers that the Commission’s decision was reasonable. Therefore, there is no maladministration as regards this aspect of the complaint.

(c) C) Relevance of previous audits

17. The Commission argued that, according to Article II.25 of the grant agreement, the fact that KPMG had previously carried out an audit on the instruction of the Commission does not affect its own right to perform a financial audit. According to the Commission, the satisfactory audit report from KPMG does not necessarily imply that there were no errors or breaches of contractual obligations. This argument appears reasonable. While the Ombudsman notes that there are discrepancies between the Commission’s audit and the previous audit, she considers that the Commission’s acceptance at the time of the findings in the KPMG audit does not prevent the Commission from conducting its own audit[10]. Therefore, the Ombudsman does not find maladministration regarding this aspect of the case.

Section 3.02 Aspects of the complaint dealt with in the Ombudsman’s recommendations

18. The Ombudsman has identified the following outstanding issues in the case on which she intends to make recommendations: (A) the auditors’ statements in the audit reports about the project; (B) the application of ‘Marie Curie rates’ to the staff costs claimed under by ACT; (C) the final payment; and (D) the Commission’s decision to seek ‘liquidated damages’.

(a) A) Statements in the audit reports
(i) Arguments presented to the Ombudsman

19. The complainant is unhappy with statements made by the Commission’s auditors in the audit reports (especially in the draft audit report). In particular, he is unhappy with (i) statements about the project’s connection with a previous NATO project, and (ii) statements accompanying the auditors’ findings and, ultimately, comments on the role of ACT in this project, which he considers damaging to his reputation.

20. Regarding (i), the Commission referred several times in the audit reports to the existence of a previous NATO project[11] and accused the complainant of failing to disclose it. It suggested that the main objectives of the UNCOSS project had already been achieved under the NATO project[12], and stated that it was deeming as ineligible certain expenses being claimed by ACT, as they had been funded already by NATO. The complainant argued that the NATO and UNCOSS projects had nothing in common. The NATO project, which was completed before the UNCOSS project started, aimed to detect materials and humans inside a ship container, whereas the UNCOSS project concerned the analysis of objects on the sea floor, with the use of an ROV.

21. Regarding (ii), the complainant argued that the auditors’ comments in the draft audit report seriously damaged his reputation. He contested the use of certain terms - "yacht A”, “yacht B”, “summer villa" - to describe the boats used in the project and his family house, where he had been born. He also regarded as derogatory the use of the terms "wife [X], a retired English teacher" and "son [Y]", given that both worked as employees on the project for ACT, which is a small family-run business. Finally, he strongly contested the following statement: "... It was also observed that ACT does not have a laboratory of its own or research facilities. Any research activities done in relation with UNCOSS project, if any was performed by [the complainant], were done from the office or lab facilities of ..." (emphasis added). The complainant takes issue with this statement as he claims it denigrates him, the project and his role in it. He argues that, contrary to the auditors’ statements, the Commission has never questioned the quality of the work nor the outcome of the project.

22. The Commission explained that the draft audit report is not an official document. It aims to give the audited party the opportunity informally to comment on the audit findings and provide additional evidence to be taken into account in the final audit report. The Commission stated that the auditors were bound by rules and standards regarding ethics and independence. It claimed they had expressed an impartial, evidence-based opinion when finalising the audit report. The Commission also pointed out that the audit aimed at checking and validating the eligibility of the costs; it questioned neither the work performed, its quality nor the outcome of the project.

(ii) The Ombudsman’s analysis leading to the first recommendation

23. The Public Service Principles for EU civil servants state that: “Civil servants should be impartial, open-minded, guided by evidence, and willing to hear different viewpoints. .... Civil servants should not discriminate or allow the fact that they like, or dislike, a particular person to influence their professional conduct.”[13]

24. Regarding (i), the Ombudsman notes that the direct financial impact of the auditors’ statements about the NATO project is marginal (travel expenses totalling €740.69 were deemed ineligible, in addition to the costs of an “experimental laboratory container”, for which, depreciation costs were accepted). On the basis of the available evidence, the Ombudsman cannot definitively conclude whether costs claimed under UNCOSS had already been claimed under another project.

25. However, the Ombudsman considers that the statements in relation to the NATO project appear to have indirectly influenced the auditors’ findings. There is no disagreement between the complainant and the Commission’s auditors that the UNCOSS project aimed to test technology previously applied in other contexts to underwater scanning of the sea floor with the use of an ROV. However, the auditors’ statement calls into question the very purpose of the project. In the absence of a technical audit, the Ombudsman believes that this statement cannot be justified, particularly as the audit specifically states that it “is not a value for money or performance audit[14]. The Ombudsman therefore finds that the making of this statement amounted to maladministration.

26. Regarding (ii), the Ombudsman acknowledges that the draft audit report is informal and some statements in it were not included in the final audit report. However, the language and tone of the draft audit report seems inappropriate. In the Ombudsman’s view, strongly worded statements, which imply the existence of fraud and serious irregularities, should be backed up by substantial and concrete evidence. However, OLAF’s investigation found no evidence of fraud or other irregularities of the kind suggested in the Commission’s audit reports. The lack of concrete evidence in support of the auditors’ statements could give the impression that the Commission lacked objectivity in carrying out the audit. Finally, the auditors’ statement, potentially raising doubt as to whether any laboratory research had been carried out, concerns the quality of the research activities related to the project and goes beyond the scope of a financial audit. For such a statement to be justified, a technical audit would have been necessary.

27. In light of the above, the Ombudsman finds that certain statements in the Commission’s audit reports do not conform to the requirements of good administrative practice and amount to maladministration. As such, the Ombudsman recommends that the Commission acknowledge this and apologise to the complainant.

(b) B) Staff costs
(i) Arguments presented to the Ombudsman

28. ‘Marie Curie rates’ are flat rates that are payable in all grants for indirect actions under FP7 for the work carried out by the owners of small and medium-sized enterprises who do not receive a salary from the business[15]. The complainant was advised by the project co-ordinator that he was eligible to charge Marie Curie rates. The Commission confirmed that, as a non-salaried owner of ACT, he was eligible to charge Marie Curie rates for his staff costs. The complainant applied these rates to his costs in period 3 of the project and retroactively in periods 1 and 2. Subsequently, the Commission’s auditors considered that it was incorrect to apply Marie Curie rates, as the complainant was receiving a salary from ACT. As a result, the Commission sought to recover these funds. Combined with the other ineligible staff costs assessed above, this meant that the funds received by the complainant for staff costs were reduced from €252 799.62 to €29 521.80.

29. The complainant did receive payments from ACT during the period in question. The Commission’s auditors deemed these payments to be a salary, as they were not listed as an expense in ACT’s accounts. In addition, ACT paid the complainant’s social security and taxes, which are received by the tax office in Croatia responsible for salaried persons. As such, the Commission claimed that the complainant does not qualify as a non-salaried owner.

30. The complainant stated that, under Croatian law, it was not possible for him to receive a salary, as he was a pensioner. In addition, when a Croatian audit firm carried out an audit at the request of the Croatian authorities, it found no problem with this arrangement. On this basis, the complainant argued that it was “unfair” of the Commission to refuse to accept payments made according to the Marie Curie rates.

(ii) The Ombudsman’s analysis leading to the second recommendation

31. The issue of whether Marie Curie rates should have been applied appears to centre on how Croatian law defines the complainant’s situation. Both the Commission and the complainant have put forward detailed and apparently convincing arguments to support their contrasting positions. However, the Ombudsman also notes that the Commission had previously confirmed to the complainant that, as a non-salaried owner which he considered himself to be, he could charge Marie Curie rates. As such, the complainant acted in good faith in applying the Marie Curie rates. Furthermore, if grant beneficiaries cannot rely on the advice they receive about EU-funded programmes from the relevant parts of the Commission, it would undermine public trust in the administration and the functioning of EU funding programmes.

32. The Ombudsman considers the complainant should not be penalised for acting on the advice given by another Commission department. As such, it was not good administrative practice for the Commission to maintain its decision to deem as ineligible the application of Marie Curie rates to the complainant. In order to remedy this shortcoming, the Commission should review its audit findings on the staff costs and, in particular, the application of Marie Curie rates, and adapt the amount to be recovered accordingly.

(c) C) The final payment under the project
(i) Arguments presented to the Ombudsman

33. The complainant stated that the final payment for ACT’s contribution to the project had not been made, meaning the company had received only €561 095.38 out of a total €641 246.53 in costs he had submitted for funding. The complainant argued that the Commission was not justified in refusing to pay the costs claimed for the third project period (covering 1.5 years of work). However, it had calculated the ‘liquidated damages’ it sought (see below) on the basis of the complainant’s total reported expenditures (including the unpaid amount). He also stated that, as a direct consequence of the Commission’s failure to make the final payment, his company had to be liquidated.

34. In its letter to the complainant of 16 October 2014, after the recovery procedure had begun, the Commission stated that it planned “to proceed with this final payment in the coming weeks”; but it did not make such a payment. In her letters of 9 January 2015 and 29 February 2016, the Ombudsman asked the Commission either (i) to pay the final instalment to the complainant under the grant agreement before proceeding to recover that sum or (ii) to suspend the recovery procedure and, more specifically, the debit note, which appeared to amount to a figure including the final (unpaid) instalment.

(ii) The Ombudsman’s analysis leading to the third recommendation

35. It is clear that at the time when the debit note was issued, the final payment under the UNCOSS project had not been made. The Commission thus sought to ‘claim back' an amount that had not been paid to the complainant. This was wrong. At this stage, it appears that the most appropriate manner to resolve the problem would be for the Commission to reduce the debit note by an amount corresponding to the final payment.

(d) D) ‘Liquidated damages’
(i) Arguments presented to the Ombudsman

36. The Commission is entitled to seek ‘liquidated damages’ where a beneficiary under a grant agreement of an EU programme is found to have overstated costs and has consequently received funds to which it was not entitled. In this case, the complainant argued that, because of the liquidated damages (€79 509.27), he would have to pay back more funds than he would have been entitled to receive from the EU. He claimed this is “unreasonable and unfair”. He argued that, according to Article II.24 of the grant agreement[16], liquidated damages are due only if a beneficiary has overstated an amount and has therefore received an unjustified financial contribution, which is not the case as far as he is concerned.

37. The Commission argued that the liquidated damages are a direct and automatic application of the grant agreement. A change in the liquidated damages arises only as a consequence of a re-examination of the eligibility of costs.

(ii) The Ombudsman’s analysis leading to the fourth recommendation

38. The Commission calculated the liquidated damages as a proportion of the overall costs claimed by the complainant, including the final payment that the Commission had not yet made to the complainant[17]. The amount used for calculating the liquidated damages also included the funds the Commission was seeking to recover after deeming that the complainant had incorrectly applied Marie Curie rates. The Commission was wrong in this approach as only the “unjustified financial contribution” should be taken into account for the purposes of claiming liquidated damages. It follows that the amount of liquidated damages sought by the Commission should be re-examined[18].

39. The Ombudsman notes that the grant agreement provides that in “exceptional cases, the Commission may refrain from claiming liquidated damages”. She believes that this provision should be applied by the Commission in this case. The Commission has previously decided to refrain from claiming certain liquidated damages, where doing so would be unfair and against the proportionality principle[19]. The Ombudsman finds that the circumstances of this case justify a similar approach by the Commission for the following reasons: (1) the amount claimed for recovery by the Commission exceeds the amount of funding the complainant received for a project that was concluded successfully and on time; (2) the complainant’s firm has been liquidated; and (3) OLAF found no fraud or other irregularities of the kind suggested in the Commission’s final audit report. Therefore, in the interest of fairness, the Commission should refrain from applying liquidated damages in this case and should accordingly waive the part of the recovery order that corresponds to liquidated damages.



On the basis of the inquiry into this complaint, the Ombudsman makes the following recommendations to the European Commission:

1) The Commission should acknowledge that certain statements in its audit reports were inappropriate and apologise to the complainant on that account.

2) The Commission should review the audit findings on the staff costs, notably regarding the application of ‘Marie Curie’ rates, and adjust the amount to be recovered accordingly.

3) The Commission should further reduce the amount it is seeking to recover to reflect the fact that it did not make a final payment under the project to the complainant.

4) The Commission should waive the ‘liquidated damages’ it seeks to recover in their entirety.

The European Commission and the complainant will be informed of these recommendations.  In accordance with Article 3(6) of the Statute of the European Ombudsman, the European Commission shall send a detailed opinion within three months of the date of these recommendations.


Emily O'Reilly

European Ombudsman

Strasbourg, 31/07/2017


[1] Decision of the European Parliament of 9 March 1994 on the regulations and general conditions governing the performance of the Ombudsman's duties (94/262/ECSC, EC, Euratom), OJ 1994 L 113, p. 15.

[2] The Commission is entitled to seek ‘liquidated damages’ in cases where, by overstating amounts claimed, a beneficiary receives an unjustified financial contribution under EU funding programmes.

[3] According to Article II.22 of the Grant Agreement, a financial audit “may cover financial, systemic and other aspects (such as accounting and management principles) relating to the proper execution of the grant agreement”.

[4] According to Article II.23 of the Grant Agreement, “the aim of a technical audit ... shall be to assess the work carried out under the project over a certain period, inter alia by evaluating the project reports and deliverables relevant to the period in question. Such audits ... may cover scientific, technological and other aspects relating to the proper execution of the project and the grant agreement.”

[5] Case T-399/09 Conseil scientifique international pour le développement des îles (Insula) v European Commission, judgment of the General Court (Third Chamber) of 13 June 2012.

[6] Decision in complaint 2048/2014/JAP against the European Commission’s handling of the audit of a research institute based in country Z, paragraphs 5-8, available at https://www.ombudsman.europa.eu/cases/decision.faces/en/79462/html.bookmark

[7] On the basis of the final audit report, the complainant claimed €349 697.91 for the 7 people employed or contracted by ACT for the implementation of the project over 3 1/2 years. The Commission deemed as eligible only €29 521.80.

[8] Case T-154/14 ANKO AE Antiprosopeion, Emporiou kai Viomichanias v European Commission, judgment of the General Court of 27 April 2016, at paragraph 92.

[9] ‘Marie Curie’ rates are flat rates that are payable for work carried out personally by owners of small and medium-sized enterprises in all grants for indirect actions under FP7.

[10] See also Proposal for a solution in complaint 2048/2014/JAP against the European Commission concerning its handling of a financial audit on a research institute based in country Z, paragraph 48, available at https://www.ombudsman.europa.eu/cases/solution.faces/en/79434/html.bookmark

[11] Project SfP-980526, NATO Science for Peace Program, "Control of Illicit Trafficking in Threat Materials". The Commission referred to a letter, in which the complainant stated among others: “After the successful completion of the NATO project we have continued our work, wrote a proposal for UNCOSS and waited for approval. (...) Some of the published articles in this period have the acknowledgment to NATO grant since it was their equipment by which this was accomplished.

[12]Thus, the essentiality of awarding a design contract for a similar ROV is put in question”.

[13] https://www.ombudsman.europa.eu/en/resources/publicserviceprinciples.faces

[14] In evaluating the statement made in the context of the financial audit, the Ombudsman is not in a position to determine whether the vehicle used to carry the neutron beam generator in the NATO project to which the Commission’s auditors refer is an ROV or not. For similar considerations, see Decision in complaint 2048/2014/JAP against the European Commission’s handling of the audit of a research institute based in country Z, paragraphs 5-8, available at https://www.ombudsman.europa.eu/cases/decision.faces/en/79462/html.bookmark

[15] Commission Decision of 24 January 2011 on three measures for simplifying the implementation of Decision No 1982/2006/EC of the European Parliament and of the Council and Council Decision No 970/2006/Euratom and amending Decisions C(2007) 1509 and C(2007) 1625, C(2011) 174 final, Brussels, 24 January 2011.

[16]II.24. Liquidated damages

1. A beneficiary that is found to have overstated any amount and which has therefore received an unjustified financial contribution from [the Union] [Euratom] shall, without prejudice to any other measures provided for in this grant agreement, be liable to pay damages, hereinafter "liquidated damages". Liquidated damages are due in addition to the recovery of the unjustified financial contribution of [the Union] [Euratom] from the beneficiary. In exceptional cases the Commission may refrain from claiming liquidated damages.

2. Any amount of liquidated damages shall be proportionate to the overstated amount and the unjustified part of the financial contribution of [the Union] [Euratom]. The following formula shall be used to calculate liquidated damages:

Liquidated damages = unjustified financial contribution of [the Union] [Euratom] x (overstated amount/total financial contribution of [the Union] [Euratom] claimed)

The calculation of any liquidated damages shall only take into consideration the reporting period(s) relating to the beneficiary’s claim for the financial contribution of [the Union] [Euratom] for that period. It shall not be calculated in relation to the entire financial contribution of [the Union] [Euratom].

3. The Commission shall inform the beneficiary which it considers liable to pay liquidated damages in writing of its claim by way of a registered letter with acknowledgement of receipt. The beneficiary shall have a period of 30 days to answer the claim of [the Union] [Euratom].

4. The procedure for repayment of unjustified financial contribution of [the Union] [Euratom] and for payment of liquidated damages will be determined in accordance with the provisions of Article II.21. Liquidated damages will be deducted from any further payment or will be subject to recovery by the Commission.

5. The Commission shall be entitled to liquidated damages in respect of any overstated amount which comes to light after the end of the project, in accordance with the provisions of paragraphs 1 to 4.”

[17] According to the Commission’s own Guide to Financial Issues relating to FP7 Indirect Actions, available at ec.europa.eu/research/participants/data/ref/fp7/89556/financial_guidelines_en.pdf , there would be no grounds for liquidated damages when “the Commission corrects an overstatement of expenditure before the payment”.

[18] In accordance with Article II.24 of the Grant Agreement that amount is also taken into account for the calculation of the liquidated damages.

[19] Decision of the European Ombudsman closing the inquiry into complaint 1962/2013/JN against the European Commission, paragraph 20: http://www.ombudsman.europa.eu/cases/decision.faces/en/58814/html.bookmark. In this case, the complainant had argued that the Commission (i) had given inconsistent information concerning the amounts to be recovered, suggesting that the liquidated damages might have been miscalculated; (ii) had approved the contents and the budgets of all the complainant's projects, on the basis of periodic reports; and, (iii) should take into account that the recovery could result in the bankruptcy of the complainant, a company which had successfully carried out a number of EU-funded projects in the past and cooperated with the Commission in good faith during the execution of the projects and the audit.