Mr. Tony Murphy:

I thank Deputy Harkin. The Deputy raises the perennial bugbear, if you like, in terms of ensuring accessibility to EU funding and reducing the administrative burden and the bureaucracy on the beneficiary. As an auditor and also as a normal taxpayer, I would be completely in favour of that.

On some of the issues arising, we had the discussion earlier. I know the Deputy missed it. We are there basically to see how the rules which have been prescribed by the Commission or the national states are being adhered to. We do not make the rules in the first instance. We are there to check, as the Deputy says, compliance with the rules.

We are always promoting simplification. Simplified cost options, SCOs, was a big thing for a while. I refer to lump-sum payments and all that sort of thing. They are talking about going down the road of having an agreed budget in advance - it is only a pilot in research and development - and then if the research is delivered, they get the budget and that is it. The scope for error there is almost gone. They are continually looking at ways of doing this.

We also mentioned earlier - I am not saying it is a particular issue here in Ireland - that in some member states we have an issue of gold-plating where, basically, on top of the EU rules, the member states add their own rules. I can understand that sometimes they want to make sure that they are bullet-proof in terms of not having problems down the line and having recovery demands from the EU, but sometimes they go even beyond what the EU requirements are. We are always signalling that as well because once there are national rules on top of the EU rules, we also have to make sure that they are respected as well. That causes some issues for us also.

In terms of the particular case the Deputy mentioned, the SCO, what happened was that, between one party, I think, it was the member state, therefore, Ireland, and the beneficiary, it was a cost reimbursement. They, basically, did the cost reimbursement as usual but the claim to the Commission was based on a simplified cost option, which was not the same amount. I do not know why. It was blended. One did not have either cost reimbursement or SCO. One had a mixture of the two. Obviously, the two amounts should match. That was the problem there. There was a mismatch between the amounts. As I say, however, this we considered to be more of a system issue because at the end it was not material enough to be quantified. There will be no recovery or anything like that. We merely raised the issue that they have to pay more attention-----