Subsidies from EU for water management projects fell behind schedule: approval processes took two and half years on average

PRESS RELEASE on Audit No. 13/21 – May 12, 2014

The Supreme Audit Office (SAO) scrutinized subsidies from the Operational Programme Environment, which were approved by the Ministry of Environment and the State Environmental Fund of the Czech Republic in period 2008–2013 for purification of waste waters. Auditors aimed at selection, supervising, evaluation, and monitoring processes related to projects, which had been granted subsidies. The auditing operation scrutinized 15 individual projects.

Handling of the applications took rather long. On average, 28 months passed from receiving the application to ruling about the subsidies. In 23 cases, auditors revealed that the Ministry of Environment approved applications after the construction works had been finished. Delays were caused by complexity of applications and frequent mistakes in forms, and the fact that projects managers were overburden with many tasks and big projects needed European Commission’s approval. Moreover, the Ministry and the State Environmental Fund failed to keep all necessary documents related to calls and selection processes. As a result it was not possible to assess whether these phases had been transparent.

The SAO’s concluded that it is hard to assess whether the objectives of the Operational Programme Environment were met. Priority Axis 1.1, which was the main focus of the auditing operation, aims at reducing of the pollution of ground water. But the Ministry failed to define the measures of the targeted pollution’s reduction. Errors were found in the monitoring system as well. For example, terms and dates for public administration controls at beneficiaries were not properly set. So the State Environmental Fund carried out an audit scheduled for June 2012 as late as September, the audit notes were elaborated in February 2013 and the audit protocol was presented to the beneficiary in March 2013.

The Operational Programme Environment is among the programs, which were temporarily suspended by the European Commission because of serious errors. The Czech Republic was ordered to cut by 5 % all reimbursements claimed by the end of August 2012. In 2012, the Government prepared Action Plan to deal with the reimbursement problems, but there were CZK 23,500 million left in the Program by the end of 2013, which made roughly one half of the allocations. By the end of 2013, only 44 % of the funds allocated in the Operational Programme Environment were paid to beneficiaries. The Ministry of Regional Development stated that at least 65 % of the allocation should have been drawn by the end of 2013, or there was a certain risk that the Czech Republic would never obtain some CZK 5,000 million.

Communication Department
Supreme Audit Office

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