Key facts of the case:

The appellant S.I. LLC appealed against a decision of the lower administrative court, rejecting the company’s appeal against a decision by the contracting authority of an operative programme, obliging the company to reimburse funds under a grant agreement for human resources training programmes. The lower administrative court had found the decision lawful and rejected the company’s appeal. The appellant claims the lower court’s decision violates material law and is not duly justified.

The Supreme Administrative Court looks both at EU acts regulating the powers of the authorities, managing EU funds, and the national law on the matter, which has introduced common conditions for admissibility of costs and procedures for verifying costs and imposing financial corrections. Thus, the head of the contracting authority had to, when verifying costs and imposing financial sanctions, comply with the national law’s procedures and requirements towards his/her decisions. Moreover, the decisions should also be compliant with the requirements of the Administrative Procedure Code (Административнопроцесуален кодекс) towards individual administrative acts.

The Supreme Administrative Court finds the decision for financial corrections not duly justified and issued in violation of administrative procedure rules, as the beneficiary was not given the opportunity to make a statement on the evidence. The national contracting authority had to also take into account Art. 41 of the Charter, providing for a right to good administration, as it was directly applying EU law within the meaning of Art. 51 of the Charter.  

Key legal question raised by the Court:

Was the decision for financial corrections against the beneficiary pronounced in compliance with material law and administrative procedure rules?

Outcome of the case:

The Supreme Administrative Court revoked the decision of the lower court and the decision for financial corrections by the head of the contracting authority.