European subsidies on research and development for innovation? Initially, applicants waited for MoIT’s decision on the subsidy allocation for almost a year

Press release to audit No. 18/06 – 4 March 2019

The Supreme Audit Office focused on European subsidies to support research and development for innovation from the Operational Programme Enterprise and Innovation for Competitiveness (OP EIC). This subsidy is intended mainly for small and medium-sized enterprises, and also for large firms, research institutions, and other bodies. Besides the successfulness of the use of the subsidy, auditors also examined how the Ministry of Industry and Trade (MoIT) had set up rules for the funds allocation or had assessed the effects of split support. The Agency for Entrepreneurship and Innovation focused, for example, on how the Agency had assessed aid projects or controlled tenders. In the sample of 12 beneficiaries who had received almost CZK 220 million, auditors checked how the beneficiaries had used the subsidy and whether they had complied with the rules for obtaining the aid. Within the programming period 2014-2020, CZK 34.8 billion for investments in research, development, and innovations have been earmarked for the Czech Republic.

In autumn 2018, approximately CZK 3.5 billion under the OP EIC were reimbursed to projects supporting research and development for innovation. This sum represents about 10 per cent of the allocated subsidies. In terms of projects approved for support, the situation was more favourable — at the same time the MoIT approved aid projects for about half of the funds spent, approximately CZK 16.7 billion.

In addition, auditors found that in one of the areas of support for the OP EIC, the drawing of subsidies did not de facto start at all. This concerns territorial integrated investments, where subsidies are intermediated by urban agglomerations. By the autumn of 2018, urban agglomerations had submitted only 15 aid applications for less than CZK 450 million and no project had been approved at that time. More than CZK 2.1 billion are prepared, though. Furthermore, at the time of audit, the MoIT did not have a timeline in place to launch further calls for 2019.

One of the reasons for having a negative impact on the use of European subsidies was the very long time needed to approve grant applications — in 2016, applicants waited for 345 days on average to be told whether their submitted projects would be supported. Also, contrary to the assumption of the MoIT, between 2016 and 2018, small and medium-sized enterprises were not interested enough in the subsidy calls.

Auditors also reviewed whether the MoIT had controlled whether beneficiaries had followed all the conditions to obtain the aid. At the time of sustainability during which the project has to be maintained by the beneficiary, the MoIT did not carried out any on-site control. A third of the more than 550 completed projects had been operated for at least the first year of operation at that time.

Communication Department
Supreme Audit Office

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