The Czech Republic has long-standing problems in the distribution of EU subsidies in terms of correctly allocating the aid and assessing its impact

Press release – 16. 2. 2022


The Supreme Audit Office has issued an annual assessment of how the Czech Republic manages money it receives from the EU. From April 2020 to March 2021, 10 audits focusing on funds drawn from the EU budget were carried out, this represents one third of the total number of audits carried out by the SAO in this period. The audit results highlighted the weaknesses in the distribution of EU money in the Czech Republic, which the SAO had pointed out multiple times in the past. However, in comparison with the past, the main weaknesses have shifted into the area of system management and the way subsidies are distributed. This includes, for example, unclear objectives, insufficient evaluation of the impact of allocated aid or errors in the control system of beneficiaries. These problems may pose a significant risk that the record amount of money the Czech Republic will receive from the EU for the National Recovery Plan will not produce the expected result in restarting the economy after the pandemic.

“We are not in a position to afford to co-finance projects whose benefits cannot be clearly measured and documented. Those who have a genuine intention to stabilise public finances must start by achieving efficiency of spending, EU funds included," said SAO President Miloslav Kala.

In the context of the 10 audits on the distribution of EU funds, the SAO described 354 audit findings where the number of deficiencies exceeded CZK 15.5 billion. In the past, auditors revealed weaknesses in the area of suspected fraud, public procurement errors, or the reimbursement of ineligible expenditure. Currently, auditors point to weaknesses in the design and functioning of management and control systems or the setting of non-specific and non-measurable objectives of the subsidy programmes. The Czech state also often lacks an overview of the real needs in the areas to which it directs the subsidy funds. In a number of cases, it does not have clear parameters for evaluating the outcome of the supported projects. These problems had been raised by the SAO many times in the past.

The Czech Republic is expected to receive a record amount of CZK 179 billion from the EU for the National Recovery Plan to help restart the country after the pandemic and to help it meet the many challenges it faces, be it investment in infrastructure, mitigation of the effects of climate change, digitalisation of the state, changes in the area of social and health needs, and others. However, the above-mentioned weaknesses in the distribution of EU funds show that subsidies may not always deliver the expected results.

The SAO also considers it problematic that the Czech Republic may not be able to distribute at least 70% of the amount allocated to the National Recovery Plan by the end of 2022. In the two previous programming periods, the Czech Republic was lagging behind other EU countries in the speed of concluding contracts with beneficiaries. Moreover, in the Czech Republic we struggle with disproportionately long deadlines for the issue of building permits, so this situation may cause that large infrastructure projects will not be ready in time and launched for completion by 2026.

Communication Department
Supreme Audit Office

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