Subsidies from EU funds used for costly reconstructions of playgrounds and for an automatic warning system worth CZK 20,000 per one user

PRESS RELEASE on Audit No. 14/09 – December 29, 2014

The Supreme Audit Office (SAO) scrutinized funds from the Operational Programme Prague – Competitiveness, which were provided in the years 2007–2013. Auditors scrutinized whether the funds were drawn effectively, economically, efficiently, and in accordance with the applicable law. Auditors selected 17 projects, which were implemented by 12 individual beneficiaries and cost CZK 1,000 million in total. The sum represents about 19 % of expenditure paid to all subsidy beneficiaries under this Programme.

The auditors revealed the most serious irregularities in the project Revitalization of neglected areas at Prague 11 in which the beneficiary received a total of CZK 33.4 million from the EU funds and the State budget. The Project aimed at restorations of 63 inoperative and disused playgrounds, reconstructions of other three playgrounds, and the transformation of decorative ponds situated in front of apartment houses in Southern Prague into grassed areas. The Council of Prague 11 paid CZK 10.5 million from the subsidies to a supplier but could not prove that the paid works had really been done. For example, with a project aimed at revitalization of playgrounds, the supplier removed 362.8 cubic metres of reinforced concrete waste but according to the invoice, the Council had to pay for removing of 3,255 cubic metres. The invoices for additional works and demolition works contained similar miscalculations.

Operational Programme Prague – Competitiveness also supported a project, which cost CZK 8.6 million; within this project, a system for automatic informing and warning the citizens of Prague via short text messages (SMS) was implemented. The applicant for the subsidy claimed in the project documentation that the system would be used by 4–8,000 users after three years from its launching. In fact, the new informing and alerting system entered only 444 citizens, institutions, and companies by the end of the third year of its operation, so the costs per one user exceeded CZK 19,000 and were sixty times higher than the author of the project anticipated.

The auditors also found numerous irregularities at the level of management and control of the Operational Programme Prague – Competitiveness. The errors included the lack of segregation of duties in the control of projects where the City of Prague had been the beneficiary, inadequate screening to avoid double financing of projects, and errors in the verification of payment requests. The SAO recommended organizational separation of employees who controlled programmes from those who were responsible for the management and provision of EU funds or even drew subsidy from the Programme.

Communication Department
Supreme Audit Office

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