Funds for work with children and youth: errors in subsidies distribution and inconsistent control
Press release for audit No 17/17 – 12. 2. 2018
The Supreme Audit Office examined funds earmarked for non-governmental non-profit organisations (NGOs) for supporting work with children and youth from 2014 to 2016. The Ministry of Education, Youth and Sports assigned a total of CZK 509 million from the state budget for these activities in the given years. The auditors checked 67 projects of 14 recipients, to which the Ministry had paid CZK 355 million. According to the auditors, the Ministry did not have clearly defined objectives of the supported programmes or clear evaluation criteria. The Ministry could not assess the impact of the funds paid. Also, when distributing subsidies, the Ministry acted non-transparently and violated its own rules. The audit of beneficiaries performed by the Ministry was not efficient either. The SAO also found errors at the beneficiaries.
It is not clear from the Ministry´s materials what is be to achieved by supporting work with children and youth. The reason to evaluate whether the subsidies have had a real impact is missing. The only indicator that the Ministry monitors is the volume of money spent from the state budget for individual projects. Every year, more than a hundred organisations receive some support.
According to the auditors, the Ministry proceeded non-transparently in 2014 and 2015 in the distribution of subsidies. No criteria for assessing and choosing NGO´s requests for subsidies were published. The selection of projects was not transparent until 2016.
The Ministry also violated its own rules and regulations when distributing subsidies. In 2014, when the funds for work with children and youth raised, the beneficiaries could ask to increase the already approved subsidies by 10% or 20%. For four of them, the Ministry increased the subsidy by approximately 90% to 360% of the original amount. The Ministry has thus favoured and created unequal conditions for the beneficiaries.
The Ministry did not verify the use of distributed subsidies. It accepted accounting without comments, so it was obvious that the beneficiaries also paid non-deductible costs from the subsidies. It also accepted the wage bill of a beneficiary for a project for December 2013 that did not run until 2014. At some beneficiaries, the Ministry accepted the accounting with the refreshment cost which was explicitly prohibited by the terms of the subsidy.
Beneficiaries had to submit only an inventory of the project's costs, indicating the part for which they had received the subsidy. The Ministry could find out what the funds were used for only by auditing at the beneficiaries. Unfortunately, the audit was not consistent. The SAO also audited projects for which the Ministry had not found any deficiencies. However, the audit of the SAO revealed serious errors.
The SAO also found deficiencies at the beneficiaries of subsidies. Some of the beneficiaries included, for example, the same documents in the accounting for multiple projects. The beneficiaries also used a part of the subsidy for some other things than for the approved project and they did not return the subsidy. One beneficiary, for example, accounted for energy and service costs by nearly CZK 307 thousand higher than it was. Another beneficiary kept the accounts so that it was not possible to find out how he actually proceeded with the subsidy.
The SAO suspected a breach of budgetary discipline at six beneficiaries, and therefore it made a notification to the relevant Tax Office.
Communication Department
Supreme Audit Office