The reduction in public funding is proving to be a major challenge for associations. Whether as a result of a breach of contract or for other legal reasons, your association may find itself deprived of certain financial support. Under what circumstances might the revocation of a grant be justified, and what recourse is available to manage this withdrawal?
When there is no agreement
Theawarding of a subsidy gives rise to a right that guarantees its payment, even in the absence of an agreement with the local authority.
If your association suddenly finds its promised funding cut off, it can take legal action to force the local authority to honor its financial commitment. The compensation awarded by the courts generally corresponds to the amount originally provided for in the grant.
Without proof of subsidy
In some cases, associations receive subsidies over a long period without providing any formal justification to the local authority.
But beware: the absence of such proof can be detrimental, as without it, your association has no firm entitlement and no automatic claim to continued financial support in subsequent years. In such cases, a grant awarded without notification confers no right to its payment outside the financial year in question.
Legal grounds for revoking your grant
When it comes to retracting a subsidy that has already been granted, strict criteria must be met, as defined by legislation.
In the event of a breach of your association's commitments, or the presentation of breaches, the local authority must issue a formal notice before taking any initiative to withdraw. The local authority may be held liable for any illegitimate act of withdrawal.
When to return your grant
Grant returns may take the form of cancellation of the grant or a request for reimbursement, for a variety of reasons such as non-compliance with the conditions awarded, failure to carry out the project financed, or failure to submit the association's accounts on time. The seriousness of the situation may also lead to legal proceedings for breach of trust if the use of the subsidy proves to be illicit.
A grant can only be withdrawn for specific, legally defined reasons. For example, cancellation is justified if your association no longer complies with the conditions of the grant or has obtained it illegally.
Irregularities in the revocation of your grants
The local authority is not above the law, and cannot use reasons that have not been legally established to recover aid that has already been granted.
Any requirement added after the fact, any implication of rules not applied at the time of award, or even discontinuity of activity due to withdrawal are not valid arguments for demanding the return of funds.
Appeal procedures for your association
In the event of non-payment, your association has the right to bring the matter before the Chambre régionale des comptes.
In the event of withdrawal for failure to comply with obligations, they can also refer the matter to the administrative court. In certain urgent cases, the summary procedure may be used to suspend the withdrawal decision.
If your association's subsidy has been withdrawn, it's vital to find out about the current legislation, to understand your rights and the steps you need to take to defend your interests.