TALLINN, 2 February 2012 – The audit of the National Audit Office that takes a look at the use of European Union grants for the development of the social infrastructure of municipalities, towns and cities, indicates that there are problems in the allocation and use of the funds, which must be resolved by the next financing period of 2014-2020.

Estonia has set itself goals in the use of European Union (EU) grants, which should help overcome the problems that have an adverse effect on the state’s ability to develop and leave as lagging behind the other European countries. It is therefore important to allocate EU grants to projects that help resolve these problems in the best possible manner. The National Audit Office audited how local authorities have used the EU grants allocated to them for building and renovating schools, kindergartens, culture centres, youth centres, etc.

EU funds have been used to build a number of buildings and facilities; the options of using services have improved and the number of the services provided has usually also improved. However, we found that there is no accurate overview of the location of existing buildings at the level of state. It is therefore impossible to assess how the investments made from EU funds affect competition between service providers. Although the majority of the funds have been spent on general education schools, it is still unclear which schools are sustainable in lights of the decreasing number of students, and how this should be considered when the investments of schools are supported. The National Audit Office therefore finds no assurance that the funds are given to the projects the results of which benefit the society in the long run.

The National Audit Office finds that the process for selecting the audited projects has not been transparent. It therefore unclear why the projects of the municipalities, towns and cities that received grants were considered better than those to which no money was given. The National Audit Office also finds that the achievement of the goals set to projects is not adequately checked. One project often has several goals, but it is not often ascertained whether or not all of them were achieved. Six of the audited local authorities had measured the achievement of goals in some manner. As there were twenty auditees, then this figure is certainly not adequate and it suggests that many auditees have never even intended to ascertain whether the goals set to projects are actually achieved. The implementing entities that pay out EU grants have focussed on the eligibility of expenditure and the construction works of the site when checking the use of grants. Little attention is paid to checking whether the completion of the project has improved public services, i.e. helped resolve substantive problems.

The National Audit Office audited 20 projects that were carried out with funds from the previous (2004-2006) and the current (2007-2013) periods of the EU structural funds. The activities of the final beneficiary as well as the implementing agencies the Ministry of the Interior and the Ministry of Education and Research, as well as the implementing entities Enterprise Estonia and the Foundation for Lifelong Learning Development Innove were evaluated on the basis of these. The grants allocated to the projects of the KOIT Plan and to projects of youth, information and councelling centres since Estonia’s accession to the European union total ca 186 million euros. These funds have been used to renovate old and establish new objects in approximately 180 local authorities.

The audit took a look at how eligible projects were selected, whether the goals set to the projects were achieved and whether the allocator of the grant checked the achievement of goals. The results of the projects and the factors that make them last were also analysed in the course of the audit. The reasonability or measurability of the of the overall goals set to the support measures were not checked in the course of the audit, as it focussed on specific projects. As a result of the audit, the National Audit Office gave eight recommendations to the Regional Minister, the Minister of Education and Research, the Minister of Finance, and the management boards of Foundation for Lifelong Learning Development Innove and Enterprise Estonia. The auditees promised to consider the recommendations made by the National Audit Office in their activities during the next period of the EU structural funds.

Toomas Mattson
Head of Communication Service, National Audit Office
+3726400777
+3725134900
[email protected]
 

• Posted: 2/1/2012 9:45 AM
• Last Update: 11/10/2015 5:39 PM
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