Costs of traineeships amounted to CZK 1,000 million but the Ministry of Labour does not intend to use them to tackle the youth unemployment
PRESS RELEASE on Audit No. 14/24 – July 13, 2015
The Supreme Audit Office (SAO) scrutinized funds, which were utilized for so called “national projects” that were funded under the Education for Competitiveness Operational Programme. The audited period was from 2007 to 2014. Auditors selected and scrutinized three projects worth CZK 1,700 million in total: “Traineeships in companies – practical training”, “Development and implementation of the National system of qualifications”, and “Keys for life – developing key competences in interest and informal education”.
Auditors scrutinized the Ministry of Education and the Ministry of Labour and Social Affairs that had provided the funds under the Programme, as well as institutions, which were either partners or beneficiaries.
When supervising the projects, the Ministry of Education failed to reveal that beneficiaries had made errors when ordered public contracts and paid for expenses, which the support had not been aimed at. Auditors found out that the ineligible expenses amounted to nearly CZK 19 million. For example, with the project entitled “Traineeships in companies – practical training”, which was the second most costly project under the Education for Competitiveness Operational Programme, the Ministry failed to carry out “in situ” audits.
The Ministry of Labour and Social Affairs violated the law when established a fund for training of professionals that implemented a project entitled “Traineeships in companies – practical training”. The auditors warned that the Commission may evaluate the Fund as an unlawful beneficiary of the grants from the Education for Competitiveness Operational Programme and the Czech Republic is at risk of a refund request. During the auditing operation, the Ministry informed that there were no further plans to use the traineeships to tackle the youth unemployment. The SAO concluded that the total costs of this project and a follow-up related project, which amounted to CZK 1,000 million in total, were unreasonably high investments.
Beneficiaries and partners made errors when ordered public contracts and applied for reimbursements of ineligible expenses. Auditors found errors with all three audited projects.
Costs of the project entitled “Traineeships in companies – practical training” exceeded CZK 750,000 million but there were no actual outcomes: the Project did not impact the intended target groups – graduates and people returning to the job market. The Fund underestimated its supervisory duties and failed to scrutinize whether the traineeships did not just cover job vacancies. There were no sanctions in case the job agreements were violated or when the trainees or the job providers failed to comply with their obligations. The mentors’ guidance was also paid from the traineeship grants; the remuneration of the mentor’s assistance could reach up to 85 % of the total price of the traineeships depending on the traineeships’ conditions. For example, a five-month training course of an architect, which cost CZK 276,000, payments to the mentor made 71 % of the amount. But it was impossible to identify the exact nature and extent of the mentor’s assistance.
Errors were also revealed with the project entitled “Development and implementation of the National system of qualifications”, which cost more than CZK 650 million. The project aimed at the development of the National system of qualifications in the further education system and was implemented by the National Institute for Education, which does not keep complete evidence records of test results. According to the informational system, about 8,000 participants successfully passed the tests, but articles in the media informed about much larger numbers of certificate holders. Trainees were only interested in a few professional qualifications and in spite the national system of qualifications lists 679 qualifications in total, two thirds of certificate holders only trained in four (!) qualifications, with the biggest number of trainees for the position of guards. Nearly a half of defined and approved qualifications in the system cannot be used in practice as there is a shortage of mentors authorized to test the applicants.
Nearly a half of the amounts allocated for the project entitled “Keys for life – developing key competences in interest and informal education” was utilized for personal outcomes of the realization team members. (The project’s total allocation was CZK 240 million.) Auditors revealed that ineligible expenses had been reimbursed. The National Institute for Further Education, which was responsible for implementation of the said project, paid for services performed by suppliers who were its employees at the same time.
Supreme Audit Office