The background to the complaint

1. The Education, Audiovisual and Culture Executive Agency (EACEA) is responsible for the management of certain parts of the EU's programmes in the fields of education, culture and audiovisual. One of these programmes is the Lifelong Learning Programme, an umbrella programme comprising education initiatives directed at all stages of people's lives. The Leonardo da Vinci sub-programme focuses on vocational education and training.

2. The complainant, a Belgian non-profit organisation, was the project coordinator for the European Design Training Incubator (EDTI) project funded under the Leonardo da Vinci programme. The project aimed to establish a European network of design-related vocational training organisations. A grant agreement (the 'Agreement') was signed on 29 October 2007 and the two-year project started on 1 January 2008. The names of the project partners were listed in Annex IV of the Agreement.

3. Article II.13 of the General Conditions to the Agreement provides as follows:

"1. Any amendment to the grant conditions must be the subject of a written supplementary agreement. No oral agreement may bind the parties to this effect.

[…]

3. If the request for amendment is made by the beneficiary, he must send it to the Agency in good time before it is due to take effect and at all events one month before the closing date of the action, except in cases duly substantiated by the beneficiary and accepted by the Agency."

4. On 28 March 2008, the complainant informed EACEA that its Estonian project partner had founded a new daughter entity, to which it entrusted the handling of the project. On 24 September 2008, the German partner withdrew from the project. Collaboration with a new German partner started on 25 September 2008. The complainant informed EACEA about this by e-mail of 21 October 2008. On 24 October 2008, it sent EACEA the contracts with both the new German and the new Estonian partner. On 5 December 2008, it submitted a formal request for amendment. EACEA asked for further information, which meant that the amendment was not signed until 11 March 2009.

5. In an e-mail of 5 May 2009, EACEA stated that the costs incurred by the new project partners would only be eligible from the date on which the amendment to the agreement was signed, that is, 11 March 2009.

6. The complainant objected to this decision in a number of letters and e-mails sent between 8 May and 19 November 2009. It argued that EACEA's decision to reject the relevant costs was based on a new version of the project handbook. Even though this version was dated October 2008, it was in fact only available from January 2009, that is, one month after the complainant had introduced its request for amendment of the agreement. According to the complainant, the project handbook in force at the time did not provide instructions on how to proceed following a change in the partnership.

7. The partners thus did not see a reason for them to stop implementing the project while the complainant was preparing the formal request for amendment. In fact, the complainant considered that they had no other choice, given that the project only ran for two years and that any delay would have jeopardised its success. Further, the partners relied on their past experience with similar projects funded by the EU, which was that costs could be claimed retroactively. In a similar situation, a contract had been signed on 8 May 2008 for administrative reasons, but costs had been eligible from 1 January 2008, the date on which collaboration started, and EACEA had agreed to this approach. In other projects, costs were eligible as of January 2007, even though the agreement was only signed in 2009, or as of November 2008, even though the agreement was only processed in August 2009.

8. In any event, the complainant submitted that it could not have anticipated the changes in the structure of its Estonian partner which led to the creation of a new partner, nor the behaviour of its initial German partner, which decided to withdraw from the project. It therefore could not have informed EACEA "in good time before [the change] was due to take effect".

9. Furthermore, EACEA had been aware of the changes to the partnership with the Estonian and German partners since at least 28 March 2008 and 24 October 2008 respectively. Also, EACEA project officers participated in a meeting with the partners, including the new Estonian partner, on 29 and 30 April 2008. Even though EACEA was thus aware that new partners were actively participating in the project and thus incurring costs, it did not warn the complainant that these costs would be considered ineligible. In fact, EACEA even accepted the changes in the partnership. In a letter dated 13 November 2008, it expressed "no objections to replace the German partner". The complainant further stated that EACEA confirmed "that the costs were eligible for the German partner as from September 2008 and for the Estonian partner as from May 2008."

10. EACEA initially confirmed its position, underlining that it never advised the complainants that the costs incurred by the new partners would be eligible before the amendment entered into force.

11. On 19 October 2009, however, EACEA stated that it was ready to accept costs incurred by the Estonian partner as of 28 August 2008, and costs incurred by the new German partner as of 2 February 2009. The written requests indicating the respective changes of partners were received on these dates. However, EACEA rejected the complainant's argument that it had based its decision on the new version of the handbook, stating that the handbook was intended to add clarity to the rules contained in the Agreement but that the Agreement itself determined how the project was to be administered. It recalled that, according to Article II.13 of the General Conditions, changes required a "written supplementary agreement", which the beneficiary had to send to EACEA "in good time before [the change was] due to take effect". It added that costs could only be accepted "as of the date that the first written request arrived to the Agency".

12. On 19 November 2009, the complainant recalled that it had informed EACEA by e-mail of the change of its Estonian partner on 28 March 2008, and the change of its German partner on 21 October 2008. The dates referred to by EACEA in its letter dated 19 October 2009 were the dates on which the hard copy request were received. However, neither the Agreement nor the Handbook required that the relevant information be provided by sending registered letters rather than e-mails. The complainant further referred to the exception in Article II.13.3 of the General Conditions to highlight that the Agency had the power to waive the requirement of notifying the EACEA before implementing the changes.

13. Not having received a reply to this letter, the complainant turned to the European Ombudsman.

The subject matter of the inquiry

14. Against this background, the complainant made the following allegations:

(1) EACEA wrongly rejected the costs incurred by the new Estonian project partner before 28 August 2008, and those incurred by the new German project partner before 2 February 2009.

In support of this allegation, the complainant submitted the following arguments:

(a) When rejecting the costs, EACEA referred to a new version of the Project Handbook, which was not in force when it was informed of the change in partners; and

(b) EACEA's decision was in contradiction with its earlier practice, according to which costs were eligible from the date on which collaboration started, even if the contract between the partners was signed later.

(2) EACEA failed to reply to the complainant's letter of 19 November 2009.

15. The complainant claimed that EACEA should accept costs incurred by the new project partners from the date they actually started contributing to the project as partners.

The inquiry

16. The complaint was submitted on 11 March 2010. On 27 April 2010, the Ombudsman opened an inquiry and asked EACEA for an opinion.

17. EASA sent its opinion on 21 May 2010. On 27 May 2010, this opinion was forwarded to the complainant for his observations.

18. On 22 November 2010, the complainant confirmed that it was satisfied with EACEA's opinion.

The Ombudsman's analysis and conclusions

A. Allegation that EACEA wrongly rejected costs incurred by the project partners and the alleged failure to reply to a letter

Arguments presented to the Ombudsman

19. The complainant maintained the arguments advanced in its correspondence with EACEA. It further alleged that EACEA did not reply to its letter dated 19 November 2009.

20. In its opinion, EACEA stated that it had reviewed its decision and agreed to consider the costs of the Estonian and German partners as eligible from the date on which the changes in the partnership were first notified to it by e-mail, that is, from 28 March and 21 October 2008 respectively.

21. However, it underlined that this decision did not set a precedent because, according to its contracts, costs were only eligible from the date on which the beneficiary formally applied for an amendment. While it is true that the Project Handbook was revised in October 2008, this was merely to clarify that costs could not be accepted retroactively. It did not alter the terms of the contract.

22. As regards the delay in replying to the complainant's letter dated 19 November 2009, EACEA explained that it was due to the time it took to analyse the file and subsequently to explore the possibility of accepting the costs on an exceptional basis.

23. The complainant informed the Ombudsman that it considered the case settled.

The Ombudsman's assessment

24. In view of the above, the Ombudsman considers that, following his intervention, EACEA settled the case to the complainant's satisfaction. The Ombudsman therefore closes his inquiry.

B. Conclusions

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

EACEA has settled the case to the complainant's satisfaction.

The complainant and EACEA will be informed of this decision.

 

P. Nikiforos Diamandouros

Done in Strasbourg on 1 February 2011