Financial Corrections, Repayment of Funding

GJW Gramza i Wspólnicy provides legal advisory services to beneficiaries and entities implementing projects co-financed from EU funds in matters concerning financial corrections, reductions of funding, and the repayment of EU funding and EU grants. We support clients in dispute situations, in particular during EU project controls and audits, when the managing or intermediary authority challenges expenditures, procurement procedures, achievement of indicators, or compliance with state aid conditions. Our objective is to limit financial losses and achieve a resolution that can be defended at subsequent stages of the proceedings, including in matters concerning demands for repayment of grants and recovery of funds.

Working closely with our clients, we prepare arguments challenging the basis for the imposition of a financial correction, which is usually based on allegations concerning: eligibility of costs, breach of the competitiveness principle or Public Procurement Law (PZP), amendments to contracts with contractors, irregularities in documentation, breach of project durability requirements, allegations of double financing, or incorrect classification of support as state aid, including aid intensity and cumulation.

Legal Support in EU Project Inspections, Audits, and Proceedings for Repayment of EU Funds

The scope of our services includes in particular:

• analysis of the grounds for the correction or repayment demand, including verification of the scope, methodology, and rate, as well as the link between the allegation and specific expenditures,
• preparation of objections, explanations, and formal positions in response to the findings of an EU project inspection or audit, together with organisation of the evidentiary material,
• defence of the eligibility of costs (link to the project, reasonableness, proper documentation, timing of expenditure, settlement of personnel and subcontractor costs),
• handling cases involving procurement breaches: the competitiveness principle / Public Procurement Law (PZP) (value estimation, description of the subject matter of the contract, award criteria, conflict of interest, contract amendments, splitting of contracts),
• verification of allegations relating to indicators and results, including assessment of whether compliance with the relevant conditions can be demonstrated or settlements safely corrected,
• advice on project durability requirements (ownership changes, relocation restrictions, maintenance of functions and results),
• EU project audit and audit of state aid risks: classification of support, incentive effect, aid intensity, eligible costs, cumulation, and reporting obligations,
• preparation of arguments aimed at reducing or setting aside the financial correction, including demonstrating that the alleged breach had no impact on the outcome of the procedure or on the level of expenditure,
• designing and implementing remedial measures: correction of settlements, organisation of procedures, documentation, and the audit trail,
• comprehensive representation in follow-up proceedings, in particular in matters concerning repayment of an EU grant, repayment of EU funding, receipt of a repayment demand, as well as preparation of appeals, requests for reconsideration, and representation in disputes concerning recovery of funds and the calculation of interest.

How We Handle Financial Correction and Repayment Cases

At the outset, we identify whether the allegation concerns a single expenditure item, an entire package of costs, or is of a “systemic” nature (for example, procurement issues, including breaches of the competitiveness principle or Public Procurement Law, incorrect estimation of contract value, errors in the description of the subject matter of the contract, award criteria, conflicts of interest, improper amendments to contracts with contractors, or improper contractor selection). We then carefully analyse the subject matter of the dispute and develop an evidentiary strategy, limiting the risk of the inspection being expanded to additional areas of the project. At the same time, we assess whether the better course is to challenge the matter in principle or to take steps aimed at mitigating its consequences, such as narrowing the scope of the correction, reducing the rate, or excluding certain expenditures.

Our Approach

We combine formal precision in legal argument with a practical approach to the settlement of projects financed from EU funds, including during EU project inspections and audits. We strive to ensure that the client’s position is coherent, precise, and evidence-based, while at the same time allowing for a realistic resolution of the matter: minimisation of the financial correction, limitation of the repayment obligation, and protection of the beneficiary’s further financing and financial liquidity.