Research centre attacked for mispending

Date: 06/07/2000

By Peter Chapman

THE EU's Court of Auditors has launched a fierce attack on the way the European Commission's Joint Research Centre (JRC) spent millions of euro of taxpayers" money in the mid-Nineties.

A 22-page report drawn by the Union's financial watchdog catalogues a long list of instances of mismanagement and irregularities in the way outside contracts were awarded between 1995 and 1998.

The centre receives more than €300 million a year from EU coffers to carry out R&D for the Union's multi-billion-euro fifth framework programme and from revenue generated through work for private-sector customers at its eight institutes across the EU.

The worst case of mismanagement highlighted by the court relates to a €1-million a year contract to supply cars to the JRC's Ispra site in Italy. The auditors" report says the centre had used just one firm for this since 1979 and that checks revealed a "whole series of both factual and legal factors which indicate that the JRC allowed this company to create an exclusive position for itself".

Anomalies included a decision in March 1996 to extend the contract with the supplier for three months without publishing a tender in the EU's Official Journal, because of a lack of time.

The JRC is also accused of bungling the subsequent formal tender for a three-year contract to supply cars until 1999, which has cost EU taxpayers an estimated €380,000. The same company won the tender on the basis of a far lower quote than for the extension to its previous contract, submitted at the same time. But when the new contract was awarded, the firm involved was allowed to charge the original, higher fee it had received during the extension period.

The Court also said it "must condemn" the way the JRC had allowed two contracts for supplying computer equipment to be sub-contracted "in their entirety". It added that sub-contracting firms acted as mere intermediaries, "whose middle-man role necessarily entails an increase in the cost borne by the contracting authority".

Other examples of mismanagement highlighted in the report include signing outside service contracts without having the budget to pay for them. In one case, the centre issued a call to tender a project to set up a European Observatory of Science and Technology without having the funds available to pay the final bid of €1.6 million for the first year of the contract.

"As this amount was more than the budgetary appropriations available, the centre should have declared the invitation to tender null and void," states the report. Instead, the JRC agreed to hand over €993,560 of the €1.6 million immediately and then broke the rules by making up the difference out of its budget for the next financial year.

The EU's Court of Auditors has launched a fierce attack on the way the European Commission's Joint Research Centre (JRC) spent millions of euro of taxpayers' money in the mid-nineties.