Subsidies for regional and special-needs schools were burdened by weaknesses in the distribution of funds and by a number of breaches of terms and conditions

Press Release on audit No 19/28 – 15 February 2021


The Supreme Audit Office examined the funds distributed by the Ministry of Education, Youth and Sports (MoEYS) between 2016 and 2018 for the improvement of the conditions in regional and special-needs schools. The SAO audited projects amounting to almost CZK 260 million. The audit revealed that the MoEYS did not take into account the actual needs of the regions when allocating subsidies for regional schools. In some cases, the allocation of subsidies was not transparent and disadvantaged certain beneficiaries. Moreover, the MoEYS was not thorough enough in monitoring and enforcing compliance with the terms and conditions of the subsidy. The auditors have also found discrepancies on the part of the beneficiaries. On a number of occasions they have breached the terms and conditions of the subsidy as well as the legislation.

The MoEYS has created two programmes, one for special-needs schools and the other for regional schools. The aim of the subsidies was to improve conditions in children’s homes, educational institutions, special-needs schools set up by the MoEYS, and to create new teaching capacities in regional schools set up by municipalities, towns, and/or regions. Most of the funds were thus intended for the construction, renovation, or modernisation of these facilities and for the improvement of their equipment.

Under the Regional Schools Programme, the MoEYS selected 12 projects to fund without first identifying the actual needs in the regions. Moreover, the projects were selected at a time when the volume of funds from the state budget was not approved and the objectives of the programme were not set either. As a result, more than CZK 17 million was used in support of projects that had been completed before the documentation for the entire programme was approved.

The auditors also found that the MoEYS had breached the terms and conditions it had itself laid down for allocating the subsidies. For example, the MoEYS paid more than CZK 46 million on behalf of two projects which should not have received any funds according to the terms and conditions. In several cases, the actual costs of the subsidised project were ultimately lower than was originally planned. However, the MoEYS did not take this into account and it paid out the initially allocated sum.

The MoEYS also amended the rules governing the granting and drawing of subsidies, thereby creating an uneven playing field for the beneficiaries. In the Special-needs Schools Programme, it issued guidelines for 7 out of the 13 projects audited, which were not in line with the documentation for the entire programme. In the case of regional schools, it placed all the five audited projects unjustifiably under more lenient conditions than those laid down in the programme documentation. It also changed the mandatory share to be paid by the beneficiary from its funds or the period during which the assets acquired under the subsidy were intended to serve the given purpose.

At the same time, the MoEYS did not thoroughly monitor or enforce the conditions it had imposed on the beneficiaries. The MoEYS monitored the compliance with the terms and conditions only formally. The SAO found a number of serious errors in selected 18 projects carried out by eleven beneficiaries and reported to the tax authorities its suspicion of breach of budgetary discipline amounting to more than CZK 86 million. The weaknesses were related to the breach of the terms and conditions of the subsidy as well as of the legislation. For example, there were errors in the drafting of contracts, false information in the project documentation, incomplete documents, or shortcomings in payments to contractors.

One of the beneficiaries, for example, paid over CZK 14.8 million for construction works, although in fact the contractor carried out works for only around CZK 6.5 million. Moreover, the renovation of one building was not completed and was therefore not fit for use. For example, in a contract for supplying a vehicle, another beneficiary evaluated tenders only on the basis of the price and not according to the criteria set out in the tender documentation. In the case of another beneficiary, a contractor invoiced prices which did not correspond to the prices set out in the contract.

In the past, the SAO found significant weaknesses in the allocation of subsidies on the part of the MoEYS on a number of occasions. Therefore, it recommended the MoEYS to take appropriate measures in order to improve the management and monitoring of the distribution of subsidies, while reducing the risk of weaknesses and subsequent sanctions for beneficiaries.

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