The SAO assessed how the Czech Republic managed EU funds. A clear vision is lacking, subsidies are burdened by bureaucracy and the state is unable to set up support for SMEs
Press release – 12 January 2021
The Supreme Audit Office has issued an annual assessment of how the Czech Republic manages funds received from the EU. In its EU Report, the SAO points out all the areas where the Czech state fails to achieve an improvement despite significant financial support coming from EU funds. Moreover, according to the SAO, the Czech Republic has not clarified as to what it intends to achieve in the future, for example in the area of transport, industry, social affairs, agriculture, or the environment. The SAO also points out that many projects are burdened by bureaucracy. The complicated process of assessing and approving applications also discourages many applicants, especially small and medium-sized enterprises. To date, the Czech state has not been able to target its support correctly, which in turn often goes to large businesses instead.
According to the President of the SAO, Miloslav Kala, the Czech state will need to better respond to the changes in EU’s priorities and to current challenges: “This means that the Czech Republic will have to decide where it wants to channel extra funds and why. And if this kind of support is to have a greater impact, it is important to identify exactly what we want to achieve, and we should also be able to evaluate if we are doing so or not. In addition, the Czech state should be able to prepare and promote strategic projects in real time. I see this as the main challenge for the upcoming period.“
According to the SAO, the current programming period has also been accompanied by problems with the promotion of certain key investments, the Ministries lack clarity on what they want to achieve with the allocated aid, and often it is not possible to assess whether the aid has had any effect at all. This concerns the area of transport, industry, social affairs, agriculture, or the environment.
Despite substantial support from EU funds, an improvement has not been achieved in certain areas over a long period of time. For example, in the case of livestock production, strategic objectives have not been achieved, despite a significant amount of subsidies. Aid for projects designed to help improve the environment, for example to combat drought or improve air quality, has not brought about any notable changes so far. Also, in the area of eGovernment, a significant change for the better has not been achieved.
Complex bureaucracy, which prolongs the preparation of projects and is also the reason why subsidy applicants are not interested in seeking aid in a number of cases, is an obstacle to drawing subsidies. For example, in the area of research and innovation, the authorisation of applications took almost one year in some cases.
Complex bureaucracy and lengthy decision-making related to the drawing of subsidies are also an obstacle for SMEs. Moreover, according to the SAO, the Czech state is not able to correctly set the aid for these enterprises. This is documented by audits which were performed by the SAO in the past 5 years. For example, in the case of aid for research and innovation in agriculture, the largest beneficiaries were ultimately large enterprises which, in addition, spent money on the acquisition of machinery and technology instead of spending it on science and research.
Communication Department
Supreme Audit Office