Strasbourg, 23 October 2006

Dear Ms X.,

On 30 June 2005, you made a complaint to the European Ombudsman on behalf of the European Institute for Advanced Legal Studies (IALS) concerning three applications submitted by the IALS in response to a 2005 AGIS call for proposals.

On 31 August 2005, I forwarded the complaint to the President of the European Commission. The Commission sent its opinion on 8 December 2005. I forwarded it to you with an invitation to make observations, which you sent on 13 January 2006.

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

THE COMPLAINT

The complainant gave, in summary, the following account of her view of the matter complained of:

The complainant wished to complain against the decision of Directorate General 4, Justice and Home Affairs, to reject three applications for funding made by the Institute for Advanced Legal Studies (IALS) in response to a call for proposals under AGIS 2005. The decision to reject the applications was made on the grounds that the budget form used was not the 2005 budget form but the budget form used in past years. Following approaches to the Commission, the latter confirmed the decision by letter dated 20 June 2005.

The relevant part of the Call for Proposals reads as follows:

“IV – PRACTICAL INFORMATION ABOUT SUBMITTING AN APPLICATION

Applications must be submitted with the application form and model forward budget which are available on the Europa web-site: [reference]

The applicant must fill in the fields indicated and send back the document on a diskette or CD-ROM and in three paper copies (one signed original plus two copies).

Applications submitted on an application form that has been altered or used before, as well as forms completed by hand, will be disqualified.”

The IALS challenged the Commission’s decision to classify all three applications as ineligible, since they were neither submitted on an application form that had been altered or used before, nor were they completed by hand. The Call for Proposals "did not introduce a penalty of disqualification for any other reason. Therefore the use of the wrong budget form may not lead to ineligibility of the application. In substance, the budget form used was the form used in past years. The only difference between the form used and the 2005 form is on page one where the year 2005 is mentioned."

As the Call for Proposals introduced conditions of eligibility in an exhaustive and restrictive manner, the unilateral introduction of further conditions for the ineligibility of applications was a departure from the Call for Proposals and lacked legal basis. The unilateral addition of further conditions of eligibility by the Commission constituted a clear case of maladministration.

The applications should be accepted as fulfilling the relevant conditions, and should accordingly be submitted to the evaluation committee. If the time scale for the handling of the complaint to the Ombudsman would not allow consideration of the three applications, the Commission should instead provide the complainant with an “acknowledgement of error [...] and perhaps permission to submit these applications either later than the set deadline or next year. In the latter case I would like assurances that the application will not be rejected as falling outside the thematic scope of the Call for Proposals 2006.”

THE INQUIRY

The Commission’s opinion

The Commission submitted, in summary, the following opinion:

Background

The IALS had been awarded EU grants in the past – under the Falcone, Grotius and the AGIS programmes – as well as under the Jean Monnet and the Phare programmes.

On 14 December 2004, IALS submitted its applications under the 2005 AGIS Call for Proposals.

The service responsible for the management of the AGIS Programme had checked all the applications received under the AGIS Call for Proposals against the eligibility criteria indicated in the Call. A standard eligibility sheet had been used to ensure full consistency in the work of the assessors. As a safeguard, a supplementary eligibility control had been carried out by a different person before any final finding of ineligibility. Out of the 208 proposals received, 24 had been declared ineligible.

The reason for the ineligibility in the complainant’s case had been the same for all three applications, and had been stated in a letter sent to the IALS on 27 April 2005: “[t]he budget form submitted [with the application] was not the standard budget form for the AGIS 2005 call for applications (point VI.1 of the call)”. Point VI.1 of the Call referred to stated as follows:

“1. Documents to be submitted

The following documents must be submitted in triplicate

(...)

(...)

a forward budget, dated and signed, presented on the standard budget form for the programme, including a detailed breakdown of expected expenditure and revenue (the relevant budget form can be found on the Commission’s website)...”.

In the applications that it had submitted in response to the AGIS 2005 Call for Proposals, IALS had not used the standard budget form requested for 2005. The correct form, as noted by the complainant, was headed “Project Budget Estimate – AGIS 2005”.

In addition, the budget form used by the complainant (which was the budget form for AGIS 2004) specified a maximum of 5% for Budget Heading L “Eligible indirect costs”, while the correct budget form for 2005 specified a maximum for this heading of 7% of eligible direct costs.

As Point IV.1, “Criteria and eligibility” of the Call stated that, to be eligible, a grant application had to be accompanied by all the documents listed in Section VI (which included the standard budget form), the Commission had informed the complainant that its proposal was ineligible.

By e-mail of 7 June 2005, IALS had asked the Commission to reconsider its decision. By letter of 20 June 2005, the Commission, having re-examined the applications, had declined this request.

The Commission’s comments on the complainant’s arguments

The Commission did not share the view of the complainant that the Call specified, as a sole ground for rejecting an application as ineligible, that it should not be submitted on an application form that had been altered or used before, or completed by hand. On the contrary, Section IV.1 of the AGIS Call for 2005 states that “[t]o be eligible, a grant application must be accompanied by all the documents listed in Section VI”.

One of the essential documents listed in Section VI was “- a forward budget, dated and signed, presented on the standard budget form for the programme, including a detailed breakdown of expected expenditure and revenue (the relevant budget form can be found on the Commission’s website) (...)”.

This essential document had not been submitted by the IALS and its applications had been rejected accordingly, with the complainant having been informed of the exact reason and given the correct reference to where this appeared in the Call.

The complainant had erroneously used the budget form for AGIS 2004 which specified a maximum of 5% for Budget Heading L “Eligible indirect costs”, while the correct budget form for 2005 specified a maximum for this heading of 7% of eligible direct costs. This correct form had been made available for download on the Commission website under a heading, which clearly stated “Documents for applicants: CALL 2005”.

The requirement to use a specific form for all applicants was necessary for the management of the programme and allowed the Commission to determine eligibility in a transparent way and to provide assurance that all applicants were being treated equally. Even if the Commission had had a margin of flexibility allowing for the acceptance of other forms than the 2005 AGIS form, it would have been extremely difficult to determine objectively to which extent other forms could have been accepted and this might have caused discrimination among applications.

In conclusion, the Commission considered that there had been no maladministration on its part.

With regard to the complainant’s claims, the Commission wished to clarify that the proposals rejected in 2005 related to topics which would again fall within the thematic scope of AGIS 2006. The proposals could therefore be presented again under the 2006 AGIS Call for Proposals. They would in that case be considered for award of grants on the same basis as all other proposals received and in conformity with the conditions set out in the 2006 call.

The complainant's observations

In her observations, the complainant made, in summary, the following comments:

In its opinion, the Commission had argued that ineligibility of the three IALS applications for funding had been based on Section IV.1 of the 2005 AGIS call for applications. Section IV stated that “[t]o be eligible, a grant application must be accompanied by all the documents listed in section VI”. Thus, in its opinion, the Commission had stated that the basis for the disqualification of the three IALS applications had been a failure to provide all necessary documents. However, in the Commission’s letters informing the IALS of the disqualification of the IALS applications the ground put forward was that “the budget form submitted was not the standard budget form”. As the Commission’s response to the present complaint had been based on a different basis for disqualification than the one put forward in their letters, the Commission’s opinion was unacceptable and the arguments put forward therein were irrelevant to the case.

However, the content of the Commission’s opinion was nevertheless discussed. Criterion 3 of Section IV.1 indeed stated that the grant application must meet all the formal requirements and “[b]e accompanied by all the documents listed in Section VI”. Amongst the documents listed in Section VI.1 is “[a] forward budget, dated and signed, presented on the standard budget form for the programme, including a detailed breakdown of expected expenditure and revenue (the relevant budget form can be found on the Commission’s website).” The IALS had provided the Commission with one budget per grant application. All budgets had been dated and signed. They had, furthermore, been submitted on the standard form used for the AGIS projects and had included all details required by the programme. The budget form had been found on the Commission’s website and had not been arbitrarily constructed by the IALS. Thus, IALS complied with the requirements of criterion 3.

It was correct that the budget forms submitted were not the 2005 form. However, the 2004 forms used in the three IALS applications and the 2005 budget forms were identical. In substance, therefore, the IALS had submitted a forward budget, dated and signed and presented on the standard budget form, as required. In fact, the close similarity of annual budget forms was reflected in the choice of the drafter of the call for applications to describe the budget forms required in general terms as “the standard budget form for this programme”, rather than in specific terms as the budget form for 2005.

The Commission had argued that the 2005 budget form differed from the 2004 budget form in that the maximum percentage of the budget allowed to be claimed as overheads in 2005 was 7% of the eligible costs rather than 5% in 2004. This minute difference would not render the three IALS budget ineligible in substance, as the 5% claimed by the IALS for overheads would be within the limit of 7% allowed by the 2005 budget. In any case, in practice, the Commission negotiates budgets with applicants and even substantive amendments to the budget are made before the applicants enter into contract with the Commission.

In any event, the conditions for the eligibility of budgets included in grant applications were expressly introduced by criterion 4 of Section IV.1 of the Call. Criterion 4 referred specifically to the conditions of eligibility concerning the budget to be submitted with the grant application. Item 4 of Section IV.1 stated that to be eligible, a grant application must meet the following criteria: “...it must submit a budget in Euro, balanced in income and expenditure. The amount of Community funding requested may not exceed 70% of the costs of the project; it must include a minimum contribution of 30% of the total cost of the project (from the applicant, partners other sponsors and revenue), except in the case of specific project and complementary measures...”. The budget submitted by the IALS met all these criteria for eligibility. It should be noted that the form for the budget and indeed the current form for the budget was not a criterion for eligibility under Section IV.1.

Notwithstanding this, even if the argument of the Commission, according to which the form of the budget used in the three IALS applications was inappropriate, were to be accepted, the sanction for the use of the wrong budget form could not be ineligibility of the whole application file. The Call for Proposals stated expressly, and therefore restrictively, that “applications submitted on an application form that has been altered or used before, as well as forms submitted by hand, will be disqualified”. There was no provision in the Call introducing the sanction of disqualification of the application for any other reason. The identification of the use of the wrong application form as the only basis upon which a whole file can be disqualified had been drafted clearly, expressly and categorically. The unilateral introduction by the Commission of a further basis for the administration sanction of disqualification (despite the express provision of the Call) was a clear case of maladministration.

In the case of ineligibility of any other documents in the application file, the Commission had discretion to request amended documents. This was reflected in the usual practice of the Commission to request additional documents or amended documents from applicants after the submission of applications and after the set submission date has passed.

In conclusion, the 2005 AGIS call for applications introduced expressly the only basis for the disqualification of an AGIS application file. This was the use of the wrong application form. Disqualification of the whole application file on the basis of any other reason was a case of maladministration. The rejection of the three IALS applications for funding under the 2005 AGIS programme on the basis of the use of the 2004 budget form had not been in compliance with the 2005 AGIS Call for Proposals and, therefore, was a clear case of maladministration.

THE DECISION

1 Preliminary remarks

1.1 The complaint concerns the decision of the Commission's Directorate General 4, Justice and Home Affairs, to reject three applications for funding made by the Institute for Advanced Legal Studies (IALS) in response to a call for proposals under AGIS 2005. This decision was made on the grounds that the budget form used by the complainant was not the 2005 budget form but the 2004 budget form, not valid for the 2005 exercise. The complainant, in her observations on the Commission's opinion, argued, for the first time, that the Commission had failed to exercise its discretion to ask the IALS to correct the error (as the Commission saw it) in the IALS' applications. Exercising that discretion would, according to the complainant, have been consistent with "usual practice".

1.2 The Ombudsman considers that the complainant's new argument referred to above essentially constitutes a new basis for the complainant's challenging of the propriety of the Commission's decision to reject the applications submitted by IALS. The complainant has not, however, submitted any concrete information or evidence about the Commission's "usual practice" she has referred to. Furthermore, the complainant does not appear to have made prior administrative approaches to the Commission in respect to this new basis for her complaint, as required by article 2(4) of the Statute of the European Ombudsman(1). In these circumstances, the Ombudsman does not consider it appropriate to examine this basis, within the framework of the present inquiry. The complainant has the possibility to address the Commission, as regards this matter, and may file a new complaint with the Ombudsman in case she considers the Commission's relevant reply unsatisfactory.

2 The allegation of wrongful rejection of grant applications

2.1 The complaint is against the decision of the Commission's Directorate General 4, Justice and Home Affairs, to reject three applications for funding made by the Institute for Advanced Legal Studies (IALS) in response to a Call for Proposals under AGIS 2005. For the purpose of his review of the complaint, the Ombudsman notes the following relevant provisions of this Call for Proposals(2) (underlining added):

"IV. EVALUATION CRITERIA FOR PROPOSALS

1. Criteria and eligibility

To be eligible, a grant application must meet the following criteria:

- (...)

- (...)

- it must meet the formal requirements and be accompanied by all the documents listed in Section VI;

(...)" ...

"VI. PRACTICAL INFORMATION ABOUT SUBMITTING AN APPLICATION

Applications must be submitted with the application form and model forward budget which are available on the European web-site.

[website reference] ...

Applications submitted on an application form that has been altered or used before, as well as forms completed by hand, will be disqualified.

1. Documents to be submitted

The following documents must be submitted in triplicate

(...)

(...)

a forward budget, dated and signed, presented on the standard budget form for the programme, including a detailed breakdown of expected expenditure and revenue (the relevant budget form can be found on the Commission’s website)...”.

The Ombudsman also notes that, pursuant to article 110(1) of the Financial Regulations(3):

"Grants shall be subject to an annual programme, to be published at the start of the year (...). This work programme shall be implemented through the publication of calls for proposals (...)".

Moreover, article 173(1) of the rules for the implementation of the Financial Regulation(4) provides that:

"Applications [for grants] shall be made on the form distributed by the authorising officers responsible and in accordance with the criteria laid down in the basic act and the call for proposals."

2.2 In the present case, the Institute for Advanced Legal Studies (IALS) submitted to the Commission three applications for funding, in response to the above-mentioned call for proposals. By letter dated 27 April 2005, the Commission informed the complainant that it had "analysed the applications submitted under the AGIS 2005 call for proposals according to the eligibility criteria established in Section IV and VI of the call" and that IALS' proposals had been "rejected as ineligible, because the budget form submitted [wa]s not the standard budget form for the AGIS 2005 call for proposals (Point VI.1 of the call)". By e-mail dated 6 May 2005, the complainant challenged the Commission's decision to reject the applications submitted by IALS. She invoked the provision of the call under which "[a]pplications submitted on an application form that has been altered or used before, as well as forms completed by hand, will be disqualified." and argued that the rejected proposals from IALS "were neither submitted on an application form that has been altered or used before, nor were they completed by hand". By letter dated 20 June 2005, the Commission informed the complainant that it had re-examined IALS' applications and found that IALS "did not use the 2005 budget form, but the 2004 form, not valid for the 2005 exercise". The Commission went on to make reference "to point VI.I of the 2005 AGIS call for proposals that states that 'Applications must be submitted with the application form and model forward budget which are available on the European web-site'", on the basis of which it confirmed the ineligibility of the applications submitted by IALS.

2.3 In her complaint to the Ombudsman, the complainant alleged that the Commission wrongly rejected the grant applications submitted by IALS in response to a call for proposals under the AGIS 2005 programme. In support of this allegation, she argued that (a) the applications had neither been submitted on an application form that had been altered or used before, nor had they been completed by hand and the Call for Proposals "did not introduce a penalty of disqualification for any other reason"; and (b) "the budget form used was the form used in past years. The only difference between the form used and the 2005 form is on page one where the year 2005 is mentioned."

2.4 The Commission emphasised, in its opinion, that Section IV.1 of the AGIS Call for 2005 states that “[t]o be eligible, a grant application must be accompanied by all the documents listed in Section VI”. One of the essential documents listed in Section VI was “- a forward budget, dated and signed, presented on the standard budget form for the programme, including a detailed breakdown of expected expenditure and revenue (the relevant budget form can be found on the Commission’s website) (...)”. This essential document had not been submitted by the IALS and its applications had been rejected accordingly, the complainant having been informed of the exact reason and given the correct reference to where this appeared in the Call. The complainant had erroneously used the budget form for AGIS 2004 which specified a maximum of 5% for Budget Heading L “Eligible indirect costs”, while the correct budget form for 2005 specified a maximum for this heading of 7% of eligible direct costs. This correct form had been made available for download on the Commission website under a heading, which clearly stated “Documents for applicants: CALL 2005”. The requirement to use a specific form for all applicants was necessary for the management of the programme and allowed the Commission to determine eligibility in a transparent way and to provide assurance that all applicants were being treated equally. Even if the Commission had had a margin of flexibility allowing for the acceptance of other forms than the 2005 AGIS form, it would have been extremely difficult to determine objectively to which extent other forms could have been accepted and this might have caused discrimination among applications. In conclusion, the Commission considered that there had been no maladministration on its part.

2.5 In her observations on the Commission's opinion, the complainant stated, inter alia, the following: Criterion 3 of Section IV.1 indeed stated that the grant application must meet all the formal requirements and “be accompanied by all the documents listed in Section VI”. Amongst the documents listed in Section VI.1 is “a forward budget, dated and signed, presented on the standard budget form for the programme, including a detailed breakdown of expected expenditure and revenue (the relevant budget form can be found on the Commission’s website).” The IALS had provided the Commission with one budget per grant application. All budgets had been dated and signed. They had, furthermore, been submitted on the standard form used for the AGIS projects and included all details required by the programme. The budget form had been found on the Commission’s website and had not been arbitrarily constructed by the IALS. Thus, IALS complied with the requirements of criterion 3. It was correct that the budget forms submitted were not the 2005 form. However, the 2004 forms used in the three IALS applications and the 2005 budget forms were identical. In substance, therefore, the IALS had submitted a forward budget, dated and signed and presented on the standard budget form, as required. In fact, the close similarity of annual budget forms was reflected in the choice of the drafter of the call for applications to describe the budget forms required in general terms as “the standard budget form for this programme”, rather than in specific terms as the budget form for 2005. The Commission had argued that the 2005 budget form differed from the 2004 budget form in that the maximum percentage of the budget allowed to be claimed as overheads in 2005 was 7% of the eligible costs rather than 5% in 2004. This minute difference would not render the three IALS budget ineligible in substance, as the 5% claimed by the IALS for overheads would be within the limit of 7% allowed by the 2005 budget. Moreover, the budget submitted by the IALS met, as to its substantive content, all the criteria set forth in Section IV.1, fourth indent, of the Call for Proposals.

2.6 The Ombudsman first notes that, according to the provisions of sections IV.1 and VI of the 2005 AGIS Call for Proposals mentioned in point 2.1 of the present decision, an application for a grant, in the context of the AGIS programme for 2005, was eligible only if accompanied, inter alia, by the "model forward budget (...) presented on the standard budget form for the programme", which could be found on the Commission's website at the time of the publication of the Call. Hence, the Ombudsman does not accept the complainant's argument that a grant application under the 2005 AGIS Call for Proposals could be disqualified only if "submitted on an application form that ha[d] been altered or used before, or completed by hand".

2.7 Further, the Ombudsman does not accept the complainant's argument that an application for a grant in the context of the AGIS programme for 2005 was eligible even if it was not accompanied by the " model forward budget (...) presented on the standard budget form for the [2005 AGIS] programme".The 2005 AGIS Call for Proposals, which was binding both on the Commission and on the applicants, required, as a condition of eligibility of the grant applications, the presentation of the forward budget on the "standard budget form for the programme". Article 110(1) of the Financial Regulation, provides that " Grants shall be subject to an annual programme", and the Call for Proposals here concerned bears the heading "PROGRAMME FOR POLICE AND JUDICIAL CO-OPERATION IN CRIMINAL MATTERS (PROGRAMME AGIS) Annual work programme and call for applications for 2005". Consequently, the Ombudsman considers that the "programme", within the meaning of the above provision of Section IV.1 of the Call for Proposal here concerned, was not simply the AGIS programme, as the complainant has suggested, but the AGIS programme for 2005. Hence, pursuant to the Call for Proposals, an application for a grant in the context of the AGIS programme for 2005 was not eligible if it were not accompanied by the model forward budget presented on the standard budget form for this specific programme. Moreover, the Call did not provide for any exceptions from this rule. Under these circumstances, the Ombudsman does not accept the complainant's argument that the applications submitted by IALS were eligible because, although they were not accompanied by the model forward budget presented on the standard budget form for the 2005 AGIS programme, they were accompanied by the budget form of the 2004 AGIS programme, which was virtually identical to the budget form of the 2005 AGIS programme, and because the substantive content of the budget submitted met the criteria set forth in Section IV.1, fourth indent, of the Call for Proposals. As noted above, the relevant eligibility requirement of the Call is explicit and unexceptional. Moreover, the exception sought by the complainant would raise serious questions of compliance with the fundamental principle of equal treatment of the applicants for grants under the 2005 AGIS programme(5), according to which "[t]he award of grants shall be subject to the principles of transparency and equal treatment". In common with the complainant, these other applicants were under an equal duty to diligently draw up applications and submit them in accordance with the conditions of the Call(6). In this regard, the Ombudsman also remarks that, as indicated in the Commission's opinion, in the context of its assessment of the eligibility of the grant applications, the Commission has a legitimate interest in avoiding examining the extent of similarity of standard (budget or other) forms submitted by applicants with those required by the Call for Proposals and provided by the Commission for the relevant programme.

2.8 In the light of the above, the Ombudsman does not accept the complainant's allegation that the Commission wrongly rejected the grant applications submitted by IALS in response to the call for proposals under the AGIS 2005 programme. Since the Commission's challenged decision did not amount to an instance of maladministration, the Ombudsman does not accept the claims made by the complainant.

3 Conclusion

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

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

Yours sincerely,

 

P. Nikiforos DIAMANDOUROS

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(1) Article 2(4) of the European Ombudsman's Statute: "A complaint shall be made within two years of the date on which the facts on which it is based came to the attention of the person lodging the complaint and must be preceded by the appropriate administrative approaches to the institutions and bodies concerned." The purpose of this requirement is to give the institution or body concerned the possibility to correct its behaviour, or at least to explain itself, before a complaint is made to the Ombudsman, and subsequently, in case a complaint is lodged with the Ombudsman, to enable the Ombudsman to take into consideration the institution's reply when making a decision on the existence of sufficient grounds for opening an inquiry.

(2) The Call was published on the website of the Commission's Directorate-General for Justice and Home Affairs (http://europa.eu.int/comm/justice_home/funding/agis/funding_agis_en.htm), for which an announcement was made in the Official Journal (OJ 2004 C 266/11).

(3) Council Regulation (EC, Euratom) No 1605/2002, of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities, Official Journal 2002 L 248/1.

(4) Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities; OJ 2002 L 357/71.

(5) "The award of grants shall be subject to the principles of transparency and equal treatment. They may not be cumulative or awarded retrospectively and they must involve co-financing", Article 109(1) of the Financial Regulations referred to above.

(6) Cf. Case T-19/95 Adia Interim v Commission [1996] ECR II-321, paragraphs 43-47.