Projects under Rural Development Programme implemented by the Ministry of Agriculture: advices for CZK 1 million and puzzles for CZK 500,000
PRESS RELEASE on Audit No. 14/07 – December 22, 2014
The Supreme Audit Office (SAO) focused on how the Ministry of Agriculture and the State Agricultural Intervention Fund provided and drew funds from the Technical Assistance from the Rural Development Programme in the period from 2007 to 2013. Technical Assistance is also used to finance expert studies, data collections and analysis, and the development of information materials. The SAO also scrutinized 86 selected projects worth CZK 127 million in total. Errors in grants amounting to nearly CZK 8 million were discovered; this sum represents more than 6 % of the checked amount.
The Ministry of Agriculture and the State Agricultural Intervention Fund were the only entities, which were allowed to draw EU funds from the Technical Assistance. At the same time, they had to perform as subsidy providers. Provided subsidies were governed by rules issued by the Ministry of Agriculture. However, these rules did not include penalties and corrections for errors made by subsidy recipients – in this case, again, the Ministry of Agriculture and the State Agricultural Intervention Fund – in case they breached conditions for granting subsidies or they reimbursed ineligible expenses. For drawing from the EU funds, the Ministry and also the State Agricultural Intervention Fund set more benevolent rules for themselves than for other applicants for subsidies from the Rural Development Programme.
Technical Assistance could also be used for purchasing promotional materials, through which the Ministry of Agriculture informed about the Rural Development Programme. Auditors also revealed that the Ministry used subsidies in the amount of nearly CZK 1 million to purchase promotional goods, which did not have any informational values at all. Among the promotional goods were sweets, first-aid adhesive plasters, fans, animal figures, and puzzles. The Ministry only paid CZK 500,000 for the purchased puzzles.
In another project, the Ministry of Agriculture paid CZK 595,000 for consultant services. But the Ministry neither provided the auditors with any project outputs nor proved, which services had been claimed. Furthermore, the Ministry got elaborated two analyses of how to better manage the Programme, which cost CZK 4.1 million in total. The Ministry only implemented three out of 18 recommendations that followed from the analyses, so one piece of advice actually cost almost CZK 1.4 million.
The auditors also found out that the State Agricultural Intervention Fund failed to perform the preliminary inspection (before subsidy payment) when it paid a subsidy in the amount of CZK 1.2 million to the Ministry of Agriculture, although the Ministry applied for the subsidy two years past the deadline. The State Agricultural Intervention Fund made errors mostly in public procurements. With one project that aimed at purchases of shredders, applicants with personal relations and relations of property were addressed and the call for proposals did not specify the manufacturer or type of the shredders thus one particular tenderer was made more favourable.
Supreme Audit Office