Subsidies for the development of research organisations: the MIT has distributed almost CZK 2.3 billion over 4 years but lacks specific goals and benefits for the state

Press release to audit No 22/21 – 26 June 2023

The Supreme Audit Office (SAO) focused on funds provided by the Ministry of Industry and Trade (MIT) for institutional support of research organisations between the years 2018 and 2022. These funds were used as subsidies intended for a long-term conceptual development of the organisations, for example, for basic or applied research, publication of research results, knowledge transfer, etc. The MIT granted almost CZK 2.3 billion to 14 research organisations between 2018 and 2022. The audit reveals a common issue that accompanies the distribution of subsidies - the MIT distributed funds without having set specific objectives and expected benefits which it wants to achieve by providing this support. It has emerged that a problem which the SAO pointed out in its audit at the MIT in the case of support for research and development already in 2018 has not been resolved.

The SAO also focused on how the MIT had assessed the institutions that had received support between the years 2018 and 2021. The MIT was transparent in this respect. However, from the perspective of the effectiveness of the funds used, it was problematic that the ministry had been supporting, among others, an organisation that was repeatedly assessed as below average for a long time, and even annual support did not change this.

In the case of the rules for obtaining support, the audit found that the MIT did not set any detailed rules or limits on how and on what research organisations can spend the support received. It merely adopted the basic definition of eligible expenditure from the law. Thus, in practice, research organisations were using the aid, for example, for staff remuneration, where no limits were set. The SAO recommends that the MIT addresses the limits on eligible expenditure.

For 14 specific research organisations, the SAO found that five of them did not report any income from the so-called knowledge transfer. This is an important indicator of the commercial exploitation and application of research and development results in practice and one of the objectives that organisations should strive for.

As regards the management of the research organisations - specifically the sample of six of them - the SAO did not find that the individual institutions had used the support received in an uneconomic way. In only one case did the auditors find a violation of the Public Procurement Act and a violation of the conditions for obtaining support - in the amount of CZK 2.1 million.

On the basis of these facts, the SAO recommends that the MIT should set specific objectives and expected benefits for the state to be achieved through the distribution of institutional support from the MIT budget, and that the fulfilment of these objectives should be regularly evaluated.

Communication Department
Supreme Audit Office

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