Strasbourg, 2 February 2004

Dear Mrs H.,

On 26 June 2003, you submitted a complaint against the European Commission to the European Ombudsman concerning the Commission’s decision to exclude certain expenses from Community funding. On 23 July 2003, and at my request, you forwarded a number of supporting documents to me.

On 25 July 2003, I forwarded the complaint to the President of the European Commission. The Commission sent its opinion on 17 November 2003. I forwarded it to you on 26 November 2003 with an invitation to make observations.

In a letter dated 28 November 2003, you informed me that the matter should be regarded as having been dealt with. In my reply of 12 December 2003, I renewed my invitation to make observations on the Commission’s opinion and offered to grant you an extension of time for doing so. I asked you to contact my office until 31 December 2003 in case you should wish to make use of this offer. It appears that no such contact was made.

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

THE COMPLAINT

Council Regulation (EEC) No 2078/92 of 30 June 1992 on agricultural production methods compatible with the requirements of the protection of the environment and the maintenance of the countryside (OJ 1992 no. L 215 page. 85) provided for an aid scheme to promote inter alia the extensification of farming. Farmers could for example obtain a grant if the “Livestock Units” (LSU) per hectare did not exceed a certain figure (1.4). In order to calculate the relevant figure, the regulation provided that “Equidae over six months old” should be taken into account as 1.0 LSU. Ewes and goats counted as 0.15 LSU.

A farmer in the Karlsruhe area applied for a grant under the Regulation. His land covered 3 hectares, and he possessed 4 horses and a dwarf donkey. The farmer considered that the donkey had about the size of a ewe. He therefore calculated a total of 4.15 LSU and thus an average LSU per hectare slightly below the relevant threshold of 1.4 LSU/hectare. The competent authority in the area (the Landwirtschaftsamt Wildberg) examined the matter and arrived at the conclusion that an LSU of 0.16 was appropriate for the dwarf donkey. This meant that the relevant threshold was still respected.

A subsequent check by the European Commission led to the conclusion that this approach was incorrect, given that the donkey belonged to the “Equidae” for which an LSU of 1.0 had to be calculated. As a result, the grant that had been paid to the farmer concerned was claimed back. According to the complainant, the relevant sum amounted to 240 DM.

According to the complainant, the president of the Regierungspräsidium Karlsruhe, the Commission carries out sample checks regarding agricultural subsidies granted by Member States. For example, of 100 000 applications some 400 are checked. If it turns out that 40 out of the 400 applications checked have been granted incorrectly, the Commission takes the view that 10 % (40/400) of the total subsidy has been paid incorrectly.

According to the complainant, the Commission carried out only one check in the present context, i.e. the one on the above-mentioned farmer. Of all the applications checked (i.e., one), 100 % thus proved to have been handled incorrectly. The complainant alleges that the Commission therefore concluded that the whole subsidy granted to the Land Baden-Württemberg (927 401 €) should be withdrawn with effect from the following year. According to the complainant, various appeals proved to be unsuccessful.

In her complaint, the complainant basically took the view that it is unfair and disproportionate to punish the Land with nearly 1 million € on account of a single mistake concerning one single application.

THE INQUIRY

The Commission's opinion

In its opinion, the Commission made the following comments:

The complaint concerned the exclusion of expenses incurred by Germany and amounting to € 927 401 from Community financing by Commission Decision 2003/364/EC of 15 May 2003 excluding from Community financing certain expenditure incurred by the Member States under the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF)(1). The decision to exclude this amount from Community financing had in the meantime become definitive, since Germany, the only party entitled to challenge the decision, had not considered it necessary to bring an action before the Court of Justice.

As to the substance of the case, the Commission referred to the final report that had been adopted by the Conciliation Body on 22 October 2002 and forwarded to the German authorities on 24 October 2002. The Conciliation Body was established by Commission Decision 94/442/EC of 1 July 1994 setting up a conciliation procedure in the context of the clearance of the accounts of the European Agricultural Guidance and Guarantee Fund (EAGGF) Guarantee Section(2). Its mission was to try to reconcile the divergent positions of the Commission and the Member State concerned as regards decisions refusing Community financing under the EAGGF – Guarantee Section.

It emerges from this report that the German authorities considered the error that had been made in the individual case that is mentioned in the present complaint to be a “systematic” one whereas the Commission took the view that it constituted a “random” error. In the case of a random error found in a sample it is assumed that the error reproduces itself proportionally in all the transactions of which the sample was taken. On the contrary, a systematic error, the reasons of which can be determined, may be evaluated in isolation since it is assumed that it only affects the transactions concerned by this error.

The report of the Conciliation Body notes that during the hearing, the German authorities admitted that, contrary to their initial declarations, the error had not been an isolated one but that some similar cases had been detected. In the Commission’s view, this confirmed the “random” nature of the error.

The Conciliation Body concluded that it was unable to achieve a compromise between the views of the two parties.

The Commission maintained its position in its summary report dated 28 February 2003 concerning the results of the checks that had been carried out.

In the Commission’s view, its approach had been correct, in accordance with the principles governing the audit and duly reasoned. It underlined that the Conciliation Body had not found any irregularities as regards this approach.

The Commission added that the clearance of accounts by necessity referred to a previous budgetary year that was closed. In the present case, it concerned expenses made in 2000. The financial correction thus concerned the past, even if it was made at a later stage. The clearance of accounts had no automatic repercussions for Community financing in subsequent budgetary years. The expenses made in these subsequent years were, in their turn, checked ex post.

The complainant's observations

The Commission’s opinion was sent to the complainant for her observations.

In her reply, the complainant noted that she did not dispute that the Commission had acted correctly in formal terms. She pointed out, however, that she had had a different idea of the mandate and the working methods of the Ombudsman and that she was of the view that an ombudsman should not be the representative of the higher ranks of bureaucracy.

The complainant concluded by saying that the matter should be regarded as having been dealt with and that she would not trouble the Ombudsman any more.

The Ombudsman’s efforts to clarify the situation

Given that there appeared to be a possible misunderstanding, the Ombudsman wrote to the complainant in order to inform her that when dealing with complaints, the Ombudsman seeks to ascertain whether there has been maladministration. He noted that the term “maladministration” constituted a broad concept, and that the fact that a decision had been adopted in accordance with the law did thus not necessarily mean that there was no maladministration. The Ombudsman further informed the complainant that before taking a stance on the merits of a complaint, he asked the administration for an opinion and subsequently gave the complainant the possibility to make observations. He stressed that this was not only in conformity with the principle of hearing the parties concerned, but also in the complainant’s best interest. The Ombudsman also stressed that he acts in complete independence and that he is in no way the representative of the administration.

In his letter, the Ombudsman renewed his invitation to the complainant to make observations on the Commission’s opinion and asked the complainant to contact his office by 31 December 2003 if she wished to make use of this possibility. The Ombudsman pointed out that if he should not hear from the complainant by that date, he would close the case as requested by her and inform her and the Commission accordingly.

The complainant did not contact the Ombudsman’s office or submit further observations.

THE DECISION

1 Allegedly unfair decision regarding clearance of accounts

1.1 By its Decision 2003/364/EC of 15 May 2003 excluding from Community financing certain expenditure incurred by the Member States under the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF)(3), the European Commission decided to exclude expenses incurred by Germany in 2000 and amounting to € 927 401 from Community financing. In her complaint to the Ombudsman, the complainant, the president of the Regierungspräsidium Karlsruhe, alleged that this decision was unfair and disproportionate since it was based on a single case where the amount at stake had been DM 240.

1.2 In its opinion, the Commission explained the reasons for its decision and expressed the view that its approach had been correct, in accordance with the principles governing the audit and duly reasoned.

1.3 The opinion was sent to the complainant for her observations. In her reply, the complainant informed the Ombudsman that the matter should be regarded as having been dealt with. Given that there appeared to be a possible misunderstanding, the Ombudsman wrote to the complainant in order to explain the purpose of his inquiry and to renew his invitation to make observations on the Commission’s opinion. However, the complainant did not take up this offer.

2 Conclusion

It appears from the information supplied to the Ombudsman by the complainant that she wishes to drop the complaint. 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) OJ 2003 no. L 124, p. 45.

(2) OJ 1994 no. L 182, p. 45.

(3) OJ 2003 no. L 124, p. 45.