State Audit Office: Independent operation of the Migration Fund is absurdly expensive

Toomas Mattson | 11/26/2004 | 12:00 AM

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TALLINN, 26 November 2004 - The State Audit Office (SAO) considers that in the situation where the foundation called Estonian Migration Fund (EMF) spends over one-fourth of its total budget on its own maintenance, it would be economically reasonable to consider whether to maintain the Fund or transfer the payment of migration allowances to the Citizenship and Migration Board (CMB).

There is good reason for the pass-over of the important functions of the Fund to the CMB, especially with a view to the fact that the number of applicants has been significantly falling over the years. Right after the restoration of independence, in early 1990s, about 5,000 persons a year were awarded a migration allowance through the Fund, but in 2003 the Fund supported only 317 persons. The people concerned are either foreign citizens who left Estonia for their ethnic homeland or other countries, or ethnic Estonian migrating to Estonia.

In 2003, of the EEK 3.6 million of taxpayers’ money appropriated to the Fund, EEK 770,000 were forecasted to be spent on the Fund’s own support activities. Total administrative and operational costs of the Fund amounted to almost EEK 1 million in 2003. Of all Fund expenditures the support activities accounted for 25 % in 2003. In the 2004 budget, EEK 800,000 out of the appropriated EEK 3.6 million have been calculated for support activities.

The Fund has a 7-member Council, a two-member Board and two contracted employees. Accounting services are outsourced. The SAO doubts whether such a big Council and Board are necessary for the management of the Fund, if in addition to the Board members there is a separate Managing Director.

The SAO could not understand why the Fund applied for EEK 6.2 million from the state budget for the year 2004, of which 1.4 million was meant for return allowances, if in 2003 only EEK 350,000 were paid in return allowances to 37 people and there were no more applicants. Return implies the settlement of ethnic Estonians in Estonia and their number has been falling from year to year.

The Fund administration could not convincingly substantiate the use of monies, if the whole amount requested had been allocated to the. The Fund expressed an opinion that if the government gave them more money, a considerably larger number of people would be willing to re-migrate to their ethnic homeland and the Fund in turn would significantly activate its operation. To justify its existence, the Fund’s Council wrote to the SAO that the Fund’s activities are guided by the constitutional obligation of the government to guarantee the preservation of the Estonian nation and its culture through time, and the Fund helps the government to comply with that obligation.

According to the SAO, the Fund lacks the necessary vision as regards potential tendencies in the next few years. The Fund’s choices and criteria for supporting the migration and integration processes do not follow from any law or national strategy. The Fund itself lacks a strategy for the next years. The payment of migration allowances has decreased over recent years and no other funds except for budget allocations have been raised. The Fund has never been involved in integration activities and most probably never will.

The SAO also identified problems in the internal control structure. In carrying out the procedures, the principle of separation of duties had not been respected. The Managing Director employed by the Board single-handedly processed the applications and made decisions about awarding migration allowances. Similarly, the payment of allowances was arranged by the Managing Director, whereas part of allowances were paid in cash. At the same time, according to the parties concerned, collaboration between the Board and the Managing Director did not run smoothly.

The Estonian Migration Fund was set up by a Government Order in 1992. In 1998, the Fund was reorganized into a foundation under the same name. The founder’s rights are exercised by the Ministry of Internal Affairs.

The Minister of Internal Affairs agreed to most of the SAO proposals but did not share the opinion that it would be expedient to pass the functions of the Fund over to the CMB. The Minister, however, concedes that under the new circumstances (accession to the EU) it is necessary to change the target group entitled to migration allowances.

Toomas Mattson
Communication Manager of National Audit Office
Telephone: 6400 777
Mob: 51 34900
E-mail: [email protected]

  • Posted: 11/26/2004 12:00 AM
  • Last Update: 9/30/2015 11:14 AM
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