Dear Mr K.,
On 22 March 2000 you made a complaint, on behalf of IFHOH Europe, to the European Ombudsman against the European Commission concerning the latter's decision to claim back part of the subsidy that had been granted for a project for hard of hearing and deafened adult people.
On 30 March 2000, I forwarded the complaint to the Commission for its comments.
The Commission sent its opinion on your complaint on 16 June 2000, and I forwarded it to you on 22 June 2000, with an invitation to make observations, if you so wished. On 3 July 2000, I received your observations on the Commission's opinion.
On 5 July 2000, I decided that it was appropriate for me to inspect the Commission's file. This inspection was carried out on 14 September 2000.
I am writing now to let you know the results of the inquiries that have been made.

THE COMPLAINT

In June/July 1997 the complainant, the International Federation of Hard of Hearing People, European Region (IFHOH Europe), applied for a subsidy for a seminar and two courses for hard of hearing people (project 97/E3/II/047). According to the budget submitted by the complainant, the costs of the seminar were € 14 300 whilst the costs for the two courses were to be € 50 560. The complainant asked for a subsidy of € 45 400, i.e. 70 % of the total expenditure envisaged. According to the complainant, this request was granted by the Commission.
In early 1998, the complainant received an amount of € 22 700, i.e. half of the total subsidy of € 45 400. The complainant subsequently informed the Commission that the actual costs had been lower than envisaged and had amounted to only € 36 323. As a consequence, the complainant expected to receive a final payment of € 2 726 from the Commission (i.e., 70 % of € 36 323 minus the € 22 700 already received). Instead of that, in early 1999 the complainant received an undated invoice in French that contained no reference to the project. The invoice mentioned a 'real share' of € 21 078.30 (that represented 89.7943 % of the 'real costs') and deducted this amount from the amount already paid by the Commission. The complainant was asked to pay back the balance of € 1 621.69.
After the complainant had queried this invoice, the Commission explained in a letter of 16 March 1999 that the calculation had been correct. According to the Commission, when the contract had been signed it had been agreed to disregard the expenses of € 14 300 for organising the seminar. As a result, the words "montant rejeté" had been added for that item and the complainant's representative had signed that page of the contract at the time.
The complainant subsequently paid back the relevant amount but queried on several occasions (notably in a letter of 15 June 1999) why the description 'Training courses and a seminar for hard of hearing people' had been used, why the first instalment of the subsidy had been based on the total estimated project cost and why the Commission had later raised a question in relation to the seminar if that seminar had not been part of the project at all. The complainant also asked for a copy of the page that had been mentioned in the Commission's letter of 16 March 1999.
In a short letter dated 11 January 2000, the Commission confirmed its position, pointing out that it had only accepted the estimated costs of the two courses of € 50 560 for the purpose of calculating its subsidy.
In its complaint to the Ombudsman, the complainant made the following allegations:
1) The Commission ought to have made a further payment of € 2 726 to the complainant instead of claiming back the sum of € 1 621.69.
2) The Commission had not provided sufficient explanations as to why it had claimed back the sum of € 1 621.69.

THE INQUIRY

The Commission's opinion
In its opinion, the Commission claimed that it had agreed to grant a subsidy amounting to a maximum of € 45 400 where the costs of the project were estimated at € 50 560. A first instalment of 50 % of that sum had been paid in accordance with Article 4 of the Agreement. The agreement, signed by both parties, covered the period from 16 June 1997 until 16 May 1998. Only expenditure incurred during that period was taken into account when determining the total of the actual costs. The seminar had been planned for 30/31 May 1997, i.e. outside the period covered. Consequently the costs for the seminar had been deducted from the costs to be taken into account.
The Commission further pointed out that the budgetary estimates set out in Annex II of the Agreement formed an integral part thereof. On the relevant page, the costs for the seminar had been excluded, by adding the words 'montant rejeté' for the item. The complainant's representative had signed that page of the contract at the time.
The Commission provided a copy of the agreement and mentioned that the original was in its possession.
The Commission claimed to have explained these facts to the complainant on several occasions.
The complainant's observations
In its observations, the complainant maintained its complaint and pointed out that the copy of the agreement provided by the Commission did not prove that it had been signed by its representative.

FURTHER INQUIRIES

In view of the fact that the copy of the agreement provided by the Commission did not show the signature of the complainant's representative, the Ombudsman proceeded to an inspection of the file. On that occasion, the Ombudsman's agents were shown the original agreement the Commission had referred to.

THE DECISION

1 The Commission's failure to make a further payment of € 2 726
1.1 The complainant takes the view that the Commission ought to have made a further payment of € 2 726 to it instead of claiming back the sum of € 1 621.69.
1.2 The Commission claims that it agreed to grant a subsidy amounting to a maximum of € 45 400 where the costs of the project were estimated at € 50 560. According to the Commission, the costs of the seminar could not be taken into account since this seminar had been planned for 30/31 May 1997 whereas under the agreement, which covered the period from 16 June 1997 until 16 May 1998, only expenditure incurred during that period was taken into account. Finally, the Commission claims that the costs for the seminar had been excluded, since the words 'montant rejeté' had been added on the relevant page of the contract and since the complainant's representative had signed that page.
1.3 An inspection of the original agreement between the complainant and the Commission leads the Ombudsman to the conclusion that the Commission's position appears to be correct. This agreement was dated 27 November 1997 and was signed by Mrs Christina Wahrolin on behalf of the complainant. All the pages of the agreement and of its annexes were initialled, and it appears that these initials read "CW".
1.4 According to Article 3 of the agreement, the Commission agreed to grant a subsidy amounting to a maximum of € 45 400 whilst the costs of the project were estimated at € 50 560. The amount of the subsidy was proportionate to the estimated costs of the project and were to be reduced proportionately if the real costs were to be lower than the estimated costs. Article 2 of the agreement provides that only expenditure incurred during the period for which the agreement was entered (16 June 1997 until 16 May 1998) was to be taken into account for the purpose of determining the costs. However, according to the schedule contained in Annex I of the agreement, the seminar was to take place on 30/31 May 1997.
1.5 The budgetary estimates are set out in Annex II of the agreement that forms an integral part of this agreement (cf. Article 3 of the Agreement). On the second page of this annex, the words "éléments considérés" had been added next to the amount of € 50 560 for the two courses and the words "éléments rejetés" next to the amount of € 14 300 for the seminar. The relevant page in the copy of the agreement inspected by the Ombudsman appeared to be a photocopy. This page (like all the other pages in the agreement and its annexes) was initialled in biro. It thus appears clear that the above-mentioned words were added before the page was initialled.
1.6 In these circumstances, the Ombudsman concludes that the position adopted by the Commission appears to be in conformity with the terms of the agreement.
1.7 On the basis of the above, there appears to have been no maladministration on the part of the Commission in so far as the first allegation put forward by the complainant is concerned.
2 Failure to provide sufficient explanations
2.1 The complainant claims that the Commission failed to provide sufficient explanations as to why it had claimed back the sum of € 1 621.69.
2.2 The Commission replies that it explained the relevant facts to the complainant on several occasions.
2.3 The Ombudsman notes that the Commission did indeed provide the main reason for which it asked the complainant to claim back part of the subsidy in a letter of 16 March 1999. This letter pointed out that when the contract had been signed it had been agreed to disregard the expenses of € 14 300 for organising the seminar and that, as a result, the words "montant rejeté" had been added for that item. The Commission further explained that the complainant's representative had signed that page of the contract at the time.
2.4 It has to be noted, however, that the complainant subsequently submitted several questions with regard to the reasons for the Commission's decision in its letter of 15 June 1999 and asked in particular to be provided with a copy of the page of the agreement that the Commission had referred to. It appears that the only written reply to this letter was a short letter sent on 11 January 2000 in which the Commission simply confirmed its position. None of the complainant's questions set out in the letter of 15 June 1999 were addressed. It further appears that the complainant never received the copy of the page for which it had asked in that letter.
2.5 It is good administrative practice for the administration to reply to letters it receives within a reasonable period and in an adequate way. In the Ombudsman's view, this standard was not met in the present case, given that the Commission only replied to the complainant's letter in writing more than six months after it was sent, did not reply to the questions it contained and failed to provide a document that the complainant had requested.
2.6 In these circumstances, the Ombudsman concludes that the way in which the Commission dealt with the complainant's letter of 15 June 1999 constitutes an instance of maladministration. The Ombudsman therefore considers it necessary to make a critical remark in this regard.
3 Conclusion
On the basis of the European Ombudsman's inquiries into this complaint, it is necessary to make the following critical remark:

It is good administrative practice for the administration to reply to letters it receives within a reasonable period and in an adequate way. In the Ombudsman's view, this standard was not met in the present case, given that the Commission only replied to the complainant's letter in writing more than six months after it was sent, did not reply to the questions it contained and failed to provide a document that the complainant had requested.

Given that this aspect of the case concerns procedures relating to specific events in the past, it is not appropriate to pursue a friendly settlement of the matter. The Ombudsman therefore closes the file.
The President of the European Commission will also be informed of this decision.
Yours sincerely
Jacob SÖDERMAN