A financial correction is a reduction of the non-repayable financial contribution applied by the provider as a result of a breach of the rules during project implementation, most often in the public procurement process. The amount of the correction is determined as a percentage rate of the value of the affected contract, according to a methodology based on a European Commission decision – common rates are 5, 10, 25 or 100%, depending on the severity of the breach. The correction can be applied ex ante, that is, before reimbursement of expenditure by reducing the eligible amount, or ex post, in the form of a request for the return of funds already paid out. Typical grounds include discriminatory participation conditions, unlawful splitting of a contract, conflict of interest or insufficient documentation. Prevention consists of thorough preparation of procurements, use of the provider's ex-ante control, and consultation on disputed steps before the contract is announced.
See also: Public procurement in EU projects.
