The distribution of Brexit subsidies is riddled with irregularities

The State Audit Office (ÁSZ) has uncovered serious irregularities in relation to the handling of Brexit damage relief tenders run by the Foreign Office, the organization revealed in a recent report. From its meaning.

This was the tender within which local companies could apply for more than twenty billion forints, and which could credibly prove that the damages to them were or would result from the UK’s withdrawal from the European Union. Based on the European Commission’s decision, non-refundable support was available between 2022 and 2025, but the Hungarian government had pre-financed the amount and decided to allocate the full amount.

As 24.hu wrote, a total of eighty applications were successful. And he stood out among the winners Adam Matolksi His furniture factory, which would receive seventeen times his profit as compensation, and his friend Adam Matulsi also came in second place, Istvan Saraz The company earned five times its previous profits. The list includes Butcher of Lorinc Kall Ingredients Kft., owned by the billionaire businessman from Felcsút, which operates an icing sugar factory in Tiszapüspök, located next to Szolnok, received the second largest support from the framework.

The review of EU support from the Brexit Adaptation Reserve was carried out by the State Audit Office between January 2021 and June 2023. The organization selected 15 tenders – which have not been named exactly – six of which were for projects… Peter Szijjarto It is managed by the Ministry of Foreign Affairs and Trade (KKM), and in nine cases HEPA Zrt., which operates under the control of the Ministry, was the tender manager.

Among other things, the SAO audit established that in the case of 13 of the 15 tenders mentioned, grants amounting to HUF 1,209.5 million were paid irregularly.

For this reason, there is a risk that the European Commission will not agree to finance the subsidized projects, and therefore the subsidies paid will be charged to the local budget.

According to ÁSZ, the Ministry of Foreign Affairs prepared the regulations for the tender procedure too late, including the rules for the procedure, payment of subsidies, and monitoring of beneficiaries. According to the organization’s findings, this also contributed to committing violations.

The auditor’s office found that the State Department and HEPA Zrt decisions on tenders were not made properly. As written, the Foreign Office irregularly accepted grant applications for 12 projects, because in the case of these projects the damage caused by Brexit had not been reliably demonstrated and therefore did not meet the conditions of the call for tenders.

According to ÁSZ, there were also cases in which the exclusion condition resulting from exceeding the deadline during the tender process was not met. As a result, the State Department irregularly released supporting documents for 13 of the 15 projects reviewed.

The errors revealed stem from the unclear definition and content of the eligibility criteria and content – ​​set out by KKM in the invitations to bid – and its subjective assessment, the broad framework given to assess the damages of Brexit, and the insufficient detail of the supporting documents required for the grant application.

– It can be read in the SAO report.

The review also revealed that in addition to failing to prove damages caused by Brexit, the Foreign Office also issued a certificate of support in breach of legal regulations to a company against which liquidation proceedings were already underway. A similar special tender has already been floated through the ministry led by Peter Szijjarto, and the ministry has been continuing to operate since then beyond the allocated funds.

The review also found this

• Although the State Department made a decision on the grant applications within the deadline, the evaluation of the content of the applications submitted by the 13 recipients did not meet all the criteria set forth in the calls.
• The provision of reporting and monitoring activities was insufficient.
• During the evaluation of the content of requests for support for the six projects of the Ministry of Foreign Affairs, the four-eyes principle was not applied, that is, the organization is completely reviewed by two people working independently.
• The State Department did not audit the professional reports submitted by the beneficiaries for five projects, and the HEPA Zrt for two projects, until the SAO on-site inspection was completed.
• During the implementation of projects, deficiencies and irregularities identified by SAO were not revealed either in partial reports of HEPA Zrt., or during inspection activities carried out by the State Department on HEPA Zrt.
• Inadequate functioning of controls may also have contributed to inappropriate evaluation of claims and irregular payment of benefits.

The Audit Bureau’s report also addresses the fact that the State Department indicated within the 15-day comment period on the draft report that it intends to take the necessary measures to eliminate the violations that were revealed. The State Department wrote that it was prepared to take measures to ensure the operation of the surveillance system. To this end, they are working to build oversight activities that prevent the recurrence of exposed irregularities related to the decision of applications, the disbursement of subsidies, and professional reports.

Our goal is that in September 2024, only properly paid costs and receipts that can be accounted for by the European Commission will be counted.

They wrote. Incidentally, there were findings made by the SAO that were not accepted by the State Department.

In our featured image, the British flag is removed from the flags of EU member states at the Europe Building in Brussels, which hosts European Council meetings, on Brexit Day, 31 January 2020.