IMAGINE that you owned a small vodka distillery, and that the labels on your bottles are often damaged by workers as they handle the product. You might decide to buy a machine that will prevent damage to the labels, and thus make your company more competitive. You might also hire an experienced adviser to draw up a project, and with this project apply for Sk2 million (€65,000) in European Union funds from the Ministry of Economy.
Imagine then your shock when you discover that your project has been rejected – has not even been evaluated – because in filling out one of the required tables, you made two small clerical mistakes. In one table you wrote “100%” instead of just “100”, and you also ticked a box you ought to have left empty. No other errors were found in the entire 130-page project with 21 appendices, but these typos were enough to doom your application.
You would probably appeal the decision and fix the mistakes, right? In order that your project could be judged on its true merits, and not on the basis of a pair of silly mistakes.
But at Slovakia’s Economy Ministry, you would not be allowed to correct your application. “In keeping with the conditions set out in the call for applications for subsidies, it is not possible to amend applications that do not fulfil the formal requirements,” stated dozens of letters sent out to unsuccessful applicants last year by the Economy Ministry.
Failure of common sense
If the above scenario happened to you, you aren’t alone. Of 308 applications for funding within an EU programme to support innovation, which in Slovakia closed on July 4, 2008, 244 were rejected. Fully 225 of those were denied because they were “incomplete”, in other words because they did not meet the formal requirements.
The Slovak Spectator has seen half a dozen projects that were rejected for similar formal reasons. Most of these were evaluated by the Slovak Innovation and Energy Agency (SIEA), one of four such agencies under the Economy Ministry that by 2013 can distribute up to €908 million in support of competitiveness and economic growth.
“The SIEA conducts its evaluations of the formal correctness of applications for subsidies fully in keeping with its programme management manual and the directives of the [Economy Ministry],” said ministry spokesman Vahram Chuguryan.
The owners of the firms in question did not want to comment on their applications, because they intend to apply for subsidies again in future and did not want to prejudice the ministry against them. But they stressed that the system, rather than decisions in individual cases, was to blame – a system that the Economy Ministry claims is in line with the law, but that for the European Commission defeats the very purpose of structural funds.
“The bottom line is this,” said Dennis Abbott, spokesman for European Commissioner for Regional Policy Danuta Hübner. “The European Commission does not want to see project applications getting rejected as a result of the sort of trivial, form-filling errors that you have highlighted. Yes, rules have to be respected, not least to safeguard EU taxpayers’ money, but we also expect people to exercise a bit of common sense. Trivial mistakes can easily be rectified – the sort of examples you cite should clearly not be a reason for rejecting project applications.”
In different decisions on rejecting funding applications, the ministry and its agencies cited other trivial mistakes. One applicant wrote the date in the wrong format – instead of mm.yyyy, he wrote mm/yyyy. Another had the wrong-shaped stamp from a court of law on one document – his was rectangular, whereas it should have been round. And still another submitted an Austrian rather than a Slovak criminal record check – logically, since the applicant was Austrian, not Slovak.
“The original subsidy application is poorly secured, the binding is falling apart,” a ministry official wrote of another project.
“The box that was ticked regards the public sector only,” an official notified another rejected applicant.
Chuguryan noted that not all errors highlighted by SIEA officials were ultimately the reason the project was rejected.
“In an attempt to inform applicants as completely as possible, SIEA also informed unsuccessful applicants of mistakes that were not in themselves grounds for disqualification,” he said. He also noted that of 344 applicants for funding within two programmes, only five appealed.
But experienced project advisers contacted by The Slovak Spectator shook their heads. “Most of the unsuccessful applicants knew from experience that an appeal would not help them, and what is even more important, the ministry itself wrote that appeals were not permitted,” said one specialist in securing EU funds with four years of experience in writing projects.
“The main problem is that the ministry absolutely ignored the principle of clarification, and did not call on applicants to provide missing information or fix errors, even though the ministry itself gave all applicants this right in the documents related to the call for applications,” said another advisor.
The European Commission cannot tell individual countries or ministries what criteria to use in judging and selecting projects for financing. All it can do is demand that the process be transparent, objective and non-discriminatory – and that the best projects be chosen from among those submitted.
“Where applications do not technically match all the requirements of a call for applications, the Commission recommends that the project applicant is advised of this and given reasonable time to provide additional or clarifying information,” said the EC’s Abbott. “This helps to ensure that high quality projects are not rejected in favour of lower quality projects with a lower potential.
“Unfortunately, this is not the first time I have heard of applications being rejected for piddling little errors. It’s not a problem just in Slovakia. But hopefully, publication of this case could help raise awareness of the problem, and convince the stricter members of the selection committee to chill out and use their common sense.”