Legal action threatened over €20m European Union grant

THE European Commission is demanding the Tánaiste’s department give back more than €20 million in EU grants - despite agreeing that the money was spent correctly.

The Department of Enterprise is vigorously contesting the demand and threatening legal action against the Commission to prevent the money being recouped.

The squabbling is over the technical details of the funding application, even though the Commission admits the expenditure was reasonable.

The row centres on a sum of €20,560,287 paid out by the European Commission in grant aid between 1994 to 1999 for training programmes. During that period, Ireland received €1.65 billion from a total fund of €5.1 billion available.

Applications under the European Social Fund go through the Department of Enterprise and are then passed on to a variety of government departments.

The problems with the funding arose when the Commission said the submission was not backed up by adequate documentation. Complications also arose with converting figures between punts and ECUs - the currencies in use at the time.

The department brought in accountants to back up the application and adjusted it to allow sections to claim for more resources, so the European Commission asked them to resubmit.

But Department of Enterprise secretary general Paul Haran said yesterday that while the commission agreed that any expenditure was reasonably deductible, they are objecting to the resubmission of the claim.

At the Dáil Public Accounts Committee, Mr Haran said the department were claiming there was a precedent for reapplying for funding and were now talking to the Attorney General’s office regarding the matter.

“We might have to enter into legal action depending on the action. The Commission said verbally that they don’t agree with the way we did business,” he said.

To compound the issue, Mr Haran said more than sufficient expenditure took place to justify the draw down.

“In this case they are questioning the technicality of what we did and claiming the regulations don’t support the resubmitting of the claim. We are strongly contesting it,” he said.