The Ministry of Regional Development failed to monitor who lives in 9,500 apartments intended for the disabled and disadvantaged people

PRESS RELEASE on Audit No. 15/18 – March 29, 2016

The Supreme Audit Office scrutinized the national as well as EU funds, which were used for assistance housing. In the period from 2011 to 2015, the Ministry of Regional Development and the State Housing Development Fund granted more than CZK 8,300 million from the national budget and CZK 5,000 million from EU funds for the assistance housing projects. In total, funds from the national budget exceeding CZK 137,000 million were utilized for assistance housing projects from 1997 to 2012 in the Czech Republic.

The housing assistance policy for the Czech Republic was outlined by the Ministry of Regional Development in a concept, which omitted criteria for assessment of achieved goals. In the concept, the Ministry did not estimate total amounts, which would be necessary. In spite the issue of housing assistance is the principal business of the State Housing Development Fund, the Fund had a concept done by an external company for CZK 2 million.

The housing assistance is provided to those for whom housing is unaffordable because of social considerations or health conditions. The Ministry of Regional Development granted around CZK 4,900 million for the development of 9,453 apartments. The applicants did not have to provide evidence that the assistance was really needed and after obtaining the grants, the Ministry did not monitor whether the tenants of the apartments were disadvantaged or disabled. Auditors selected and scrutinized nine projects and revealed that beneficiaries lent 18 out of 71 new or reconstructed apartments to someone who were not in the target group. Only one out of nine apartments procured by one audited beneficiary was lent to a disadvantaged tenant but the beneficiary stated that all apartments were lent to people from the target group.

At three beneficiaries, the auditors suspected violations of the budgetary discipline in the amount exceeding CZK 8.5 million. For example, one beneficiary was granted CZK 100,000 more than the costs of the project, which was approved by the Ministry of Regional Development.

The Ministry of Regional Development also included allowances for mortgage credits into the housing assistance policy. The aim was to increase access to mortgages so that houses and apartments could be built by people under 36 years old. On the basis of support agreements, banks administered the support. From 2011 to 2015, the Ministry did not allocate any financial assistance to new applicants but banks received more than CZK 37 million for the administration of clients, who were not entitled for the support because of low interest rates. The SAO also criticized that the Ministry spent more for the administration tasks performed by the banks than for the housing assistance in total.

Communication Department
Supreme Audit Office

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