Tackling late payments has been a political priority, forming part of Europe's efforts to help cash-strapped small firms weather the economic storm, and is a central plank of the Small Business Act launched in 2008.
The European Commission wants public authorities to settle their bills within 30 days, but now finds itself on the receiving end of a stinging rebuke from the EU's own watchdog.
The Ombudsman said that based on a substantial number of complaints, he consulted NGOs, companies, universities and research centres about the red tape they face when dealing with Brussels.
"According to the responses received, late payments may well constitute a systemic problem in the Commission. The contributions submitted specifically stress a lack of coordination and excessive bureaucracy in the Commission as reasons for delays," said European Ombudsman P. Nikiforos Diamandouros.
Contractors complain that the Commission typically suspends the deadline for payment in cases where there are queries about the paperwork submitted as part of payment requests.
There has also been criticism that delays arise due to communication problems when a contract is administered by more than one unit within the Commission. Further delays can arise during the summer holidays and when key staff members are on sick leave, according to complaints received by the Ombudsman.
He has now asked the Commission to comment on these contributions, to provide up-to-date information about late payments and to indicate measures taken to reduce these problems.
Meanwhile, the Ombudsman has called on the EU executive to ensure that European financial procedures do not become excessively bureacractic.
He said the forthcoming reform of financial regulations should focus on reducing unnecessary administrative burdens. The new rules should include an explicit provision for additional payments to remedy cases of serious maladministration, according to the Ombudsman.
"I invite the Commission to profit from the upcoming reform of the Financial Regulation to tackle the issue systemically," he said.
