National Audit Office: One-third of the COVID-19 reserve was remaining by the end of the year; a 56 million euro buffer was built using European grants

Priit Simson | 4/28/2021 | 10:00 AM

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TALLINN, 28 April 2021 – Nearly two-thirds, i.e. more than 58 million euros, of the 85 million euros of the government’s emergency COVID-19 reserve had been spent by the end of last year. At the time, there was over 26 million euros, i.e. 31 percent, of unobligated funds in the COVID-19 reserve, the National Audit Office found in its brief overview published today. As a number of expenditures which were initially planned to be made from the Estonian COVID-19 reserve could be covered from the European Union grants and some expenditures were not made, there was a 56 million euro buffer in the reserve by the end of 2020, which the government has been able to use to cover this years’ emergency expenditure. 

The amounts earmarked for the COVID-19 emergency reserve and their actual spending are shown in Figure 1.

Figure 1. Performance of contracts entered into and obligations assumed on the basis of the decisions of the COVID-19 reserve

MoEAC – Ministry of Economic Affairs and Communications, MoES – Ministry of Ministry of Education and Research, MoC – Ministry of Culture, MoFA – Ministry of Foreign Affairs

The bulk of the emergency reserve was spent on purchasing and transport of personal protective equipment and for coronavirus testing – by the end of the year, nearly 39 million euros was spent on this purpose, which means that 33 percent of the amount originally planned, i.e. a little over 19 million euros, was unused by the end of the year. The expenditure on personal protective equipment and testing from the emergency reserve is shown in Figure 2.

The main decisions on using the reserve as well as funds in it intended for personal protective equipment and coronavirus testing were made promptly within the three months following the adoption of the Supplementary Budget 2020 Act when around 75% of the spending of the entire year were made.

Figure 2. Performance of contracts entered into for the purchase and transport of personal protective equipment and for coronavirus testing

MoEAC – Ministry of Economic Affairs and Communications.

The largest contributors to the spending of the emergency reserve were the Ministry of Finance with 18.7 million and the Ministry of Social Affairs with 14.4 million euros. The Ministry of Finance (17.4 million) and the Ministry of Social Affairs (10.1 million) also account for the largest share of expenditure on personal protective equipment and coronavirus testing.

For example, by the end of the year, the Ministry of Social Affairs had spent 8.2 million euros from the COVID-19 reserve for purchasing coronavirus tests and testing itself, and 2.4 million euros on respiratory ventilators and other oxygen supply equipment. The Ministry of Social Affairs spent 1.9 million euros from the COVID-19 reserve on personal protective equipment, while the State Chancellery spent 9.2 million euros. The most prominent of the expenditure of the Ministry of Economic Affairs and Communications were the transportation costs of repatriating Estonian citizens, which amounted to 3.8 million euros. An overview of all the contracts entered into is provided in Table 1 and in detail by personal protective equipment in Table 2. 

While the government initially estimated that all expenditure from the COVID reserve should be paid from the Estonian taxpayers’ money received in the state budget, it became clear during the year that a large share of these can be covered with the European Union grants (see Figure 3).

As a result, of the total expenditure incurred by the ministries (58.3 million), 35.1 million euros were paid out from the state budget and 23.2 million from the grants received from the European Union budget. Due to the decrease in the actual need for funds (see Figure 1, unobligated funds in the reserve 26.3 million), the use of the European Union grants (see Figure 3, European Union grants 23.2 million) and covering some of the expenditure with other funds of the state budget (in the amount of 6,5 million), a financial buffer totalling approximately 56 million euros was built by the end of the year, to the extent of which the government could make new decisions in 2021 to cover emergency expenditure.

Figure 3. Actual sources for covering expenditure from the COVID-19 reserve as at 31 December 2020 (in million euros)

MoEAC – Ministry of Economic Affairs and Communications, MoES – Ministry of Ministry of Education and Research, MoC – Ministry of Culture, MoFA – Ministry of Foreign Affairs

Background:

The Riigikogu approved the state budget in the amount of approx. 12 billion euros for 2020. This also included the government reserve of 86.4 million that the government could use operatively, spending it at its own discretion. As the COVID crisis broke out, the Riigikogu increased the reserve by establishing a supplementary budget and amending the state budget to 360,8 million euros.

In order for the reserve to be used, the Government of the Republic or an authorised entity, for example a crisis committee, has to establish so-called limits for use for the ministries. While the Riigikogu allocated 360.8 million euros to the Government of the Republic, the government, in turn, decided to allocate 84.6 million to the ministries specifically to cover the primary expenditure of the COVID crisis.

The ministries and the State Chancellery then started to take obligations and enter into contracts for the use of the funds. As a result, 58.3 million were spent as at the end of the year (see Figure 1). The breakdown of specific contracts is given in Table 1 and Table 2. In more detailed a factual overview can be found on the website of the National Audit Office of Estonia. The National Audit Office will present a more detailed overview of the use of the Government of the Republic’s reserve as a result of the audit of the state’s consolidated annual report for 2020.

As there was no overview of the status of using the reserve at the time of the outbreak of the crisis, the National Audit Office decided to publish the main facts about the use of the emergency reserve. Our first paper was published on 5 October 2020 (link), and the topic was discussed at the State Budget Control Select Committee of the Riigikogu on 16 November 2020. Today, the National Audit Office is presenting a brief overview of the use of the funds of the emergency reserve as at 31 December 2020 in the same breakdown of figures. In the text outside the tables, the figures are rounded off for clarity.

 

Priit Simson
Head of Communications of the National Audit Office of Estonia
+372 640 0102;
+372 5615 0280
Priit.Simson@riigikontroll.ee
press@riigikontroll.ee 
www.riigikontroll.ee

Table 1. Allocations from the COVID-19 reserve, contracts entered into and obligations assumed, and performance of contracts and obligations as at 31 December 2020 by areas of government and the State Chancellery in euros

Allocations according to purpose
by areas of government and the
State Chancellery

Amount of allocation

Contracts entered into and obligations assumed

Performance of contracts and obligations as at 31 December 2020

Ministry of Finance

34,400,000

23,849,746

18,697,924

Purchase of special COVID equipment

4,000,000

0

0

Arranging the storage of personal protective
equipment

168,000

168,000

0

Replenishment of the state’s central stock of
personal protective equipment for social welfare
institutions and storage and distribution of
equipment

2,500,000

0

0

To the Minister of Public Administration for the
purchase of personal protective equipment

23,432,000

19,381,746

17,361,066

To the Minister of Public Affairs for enterprise
support for Muhu and Saaremaa rural
municipalities

300,000

300,000

300,000

To commercial enterprises for proportional rent
support measure

4,000,000

4,000,000

1 036,858

Ministry of the Interior

8,857,680

8,544,648

6,884,009

To the Minister of the Interior for expenditure of
the emergency situation

8,700,000

8,436,018

*

To the Minister of the Interior for use by the Police
and Border Guard Board and the Defence
League in Saare County

125,000

75,950

*

To the Police and Border Guard Board to increase
patrols in Ida-Viru County

32,680

32,680

*

State Chancellery

10,193,454

9,443,184

9,443,454

For organising the campaigns “Stay home”
and “Stay healthy”

169,454

169,184

169,454

For carrying out the population survey

24,000

24,000

24,000

For purchasing personal protective equipment

10,000,000

9,250,000

9,250,000

Ministry of Economic Affairs and
Communications

6,185,200

4,206,999

6,141,260

For bringing Estonians home (expenditure on the
Sassnitz-Paldiski route, booking two emergency
trips on the route Tallinn-Helsinki-Tallinn, which
include the transport of passengers, vehicles and
goods, as well as booking tickets and organising
the sale)

3,823,200

957,000

3,833,724

To the Minister of Economic Affairs for compiling
a code of conduct for store chains

20,000

20,000

4,545

To the Minister of Economic Affairs for making
bus line service more frequent in Ida-Viru
County

270,000

270,000

100,391

To the Minister of Economic Affairs for an
information campaign on the prevention of cyber threats

72,000

59,999

59,999

To the Minister of Economic Affairs for transport
related to personal protective equipment

2,000,000

2,900,000

2,142,601

Ministry of Social Affairs

22,128,000

19,760,258

14,352,807

To the Minister of Social Affairs for the purchase
of personal protective equipment

4,000,000

2,100,525

1,919,949

To the Minister of Social Affairs for the purchase
and carrying out of tests

11,960,000

11,510,000

8,214,963

To the Minister of Social Affairs for purchasing respiratory ventilators and other necessary
equipment for maintaining the oxygen content in
the patient’s blood at an optimal level

3,750,000

3,750,000

2,443,700

For the ICT expenditure of the social and health domain in relation to the emergency situation
(incl. expenditure related to the temporary suspension of funded pension payments)

1,395,000

1,395,000

1,079,953

Development costs of the Social Insurance System (SKAIS) related to changes in unemployment
during the accounting period of parental benefit

63,000

63,000

0

For emergency costs of infection-related
instructions in nursing homes, and costs of victim support, psychological crisis counselling and serological surveys

960,000

941,733

694,242

Ministry of Education and Research

1,800,000

1,800,000

1,800,000

Ministry of Culture

850,000

850,000

850,000

Ministry of Foreign Affairs

200,000

200,000

179,724

TOTAL

84,614,334

68,654,835

58,349,178

 * Not possible to outline by contracts.
 

Table 2. Contracts and payments related to the purchase and transport of personal protective equipment and coronavirus testing using the COVID-19 reserve as at 31 December 2020 by areas of government and the State Chancellery in euros

Procurement
No.

Content of
the contract

Value of contracts related to personal protective equipment and virus testing

Payments according to contracts related to personal protective equipment and virus testing as at 31 December 2020

Difference of contracts and payments

Comment

Ministry of Finance

19,549,746

17,361,066

2,188,679

 

Arranging the storage of personal protective equipment

168,000

0

168,000

Contract is in progress

To the Minister of Public Administration for the purchase of personal protective equipment

221,403

Purchase of disinfectants

910,857

910,857

0

Contract completed

221,436

Purchase of surgical face masks

1,020,000

17,510

1,002,490

Contract terminated

221,513

Purchase of surgical face masks

1,590,000

1,510,500

79,500

Contract completed

221,559

Purchase of personal protective equipment (gloves)

65,910

65,744

166

Contract completed

221,623

Purchase of medical personal protective equipment

10,424,524

10,065,991

358,533

Contract completed

221,712

Purchase of face masks

1,072,000

1,091,107

–19,107

Contract completed

221,945

Purchase of medical face masks and coveralls

599,105

8

599,097

Contract completed. The majority of the items in the contract were paid for by a private person

221,955

Purchase of surgical masks

380,000

380,000

0

Contract completed

223,175

Purchase of smock-overalls and coveralls

3,225,000

3,225,000

0

Contract completed

223,177

Purchase of plastic aprons

58,800

58,800

0

Contract completed

223,410

Purchase of smock-overalls and coveralls

35,550

35,550

0

Contract completed

State Chancellery

9,250,000

9,250,000

0

 

221,526

Purchase and delivery of FFP3 respirators

9,250,000

9,250,000

0

Contract completed

Ministry of Economic Affairs and
Communications

2,900,000

2,142,601

757,399

 

222,864; 221,741

International logistics service for personal protective equipment

2,900,000

2,142,601

757,399

Contract completed

Ministry of Social Affairs

13,610,526

10,134,913

3,475,613

 

To the Minister of Social Affairs for the purchase of personal protective equipment

221,731

Purchase of respirators and surgical masks (Health Board)

631,200

631,200

0

Contract completed

221,403

Purchase of disinfectants (Ministry of Finance)

607,161

607,161

0

Contract completed

221,300

Purchase of FFP3 respirators (Health Board)

182,000

182,000

0

Contract completed

221,131

Purchase of 3-layer surgical masks (Health Board)

120,000

120,000

0

Contract completed

220,722

Purchase of FFP3 respirators

20,020

20,020

0

Contract completed

Joint procurement by the EU

Purchase of FFP2 respirators

540,144

359,568

180,576

Contract is in progress

To the Minister of Social Affairs for the purchase and carrying out of tests

223,116

Testing for coronavirus and notification of results (Health Board)

54,318

54,318

0

Contract completed

222,655

Taking coronavirus samples and testing (Health Board, taking samples)

837,532

837,532

0

Contract completed

222,655

Taking coronavirus samples and testing (Health Board, testing samples)

927,828

927,828

0

Contract completed

221,967

Purchase of DNA/RNA extraction robot and accessories (Health Board)

63,814

63,814

0

Contract completed

 

To the Ministry of Social Affairs for the purchase of tests

1,181,868

426,307

755,561

Contract is in progress

221,537

Taking coronavirus samples and testing (Health Board, taking samples)

635,900

635,900

0

Contract completed

221,537

Taking coronavirus samples and testing (Health Board, testing samples)

1,865,028

1,865,028

0

Contract completed

223,408

Taking coronavirus samples and testing (Health Board, taking samples)

1,566,111

1,566,111

0

Contract completed

223,408

Taking coronavirus samples and testing the samples (Health Board, testing samples)

827,602

827,602

0

Contract is in progress

 

To the Ministry of Social Affairs for the purchase of 50,000 Cepheid Xpert Xpress SARS-CoV-2 tests

3,000,000

651,200

2,348,800

Contract is in progress

 

Monitoring study

450,000

259,324

190,676

Contract is in progress

 

For the development of COVID-19 drug and finding tests

100,000

100,000

0

Contract completed

 

TOTAL

45,310,272

38,888,580

6,421,692

 

 

  • Posted: 4/28/2021 10:00 AM
  • Last Update: 4/28/2021 8:24 AM
  • Last Review: 4/28/2021 8:24 AM

At the end of the year there was over 26 million euros of unobligated funds in the COVID-19 reserve.

National Audit Office

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