TALLINN, 27 May 2004 - The State Audit Office audited the way of distribution of sums received as the gambling tax between projects relating to sports, research, education, culture, children, youth, families, medicine, welfare, the elderly and the disabled. As a result of the audit, the State Audit Office concluded that while the state has too many priorities, it is unclear why some projects are supported, whereas other projects, which have also been deemed to be priority projects, are not. Moreover, when decisions on payment of grants are passed, the funds allocated fall short of these applied for, yet it has not been ascertained whether the initial objectives are actually accomplishable with a smaller amount of financial resources.

According to Liisi Uder, the Audit Manager, the state has to decide as to what in particular must be supported out of the gambling tax: “The generality of priorities makes it possible for many entities to apply for support, whereas the majority receives a negative response due to the lack of funds even if the application conforms to the priorities. The establishment of clear priorities would simplify the work of both applicants and those making decisions. On one hand, applicants would have a greater sense of certainty as to whether it would be reasonable to apply for a grant at all. On the other hand, it would be easier for both officials of Ministries and members of the Gambling Tax Council to take decisions. All in all, it is difficult to justify decisions: the majority of applications conforms to priorities, but is still not supported.”

The State Audit Office finds that it would be more rational to set certain limits to the circle of priority spheres in accordance with the purpose of the support, and, e.g. to specify the priority topics each year. Such an approach would be flexible, as well as clearer and more transparent for participants in the process.

Funds are allocated on the basis of the decisions of the Gambling Tax Council, to whom applications are submitted through the Ministry of Social Affairs, the Ministry of Culture and the Ministry of Education and Research. Ministries submit their opinions on the necessity of support and the amounts of grants along with projects. It often happens that less money is allocated to projects than was applied for. However, as a rule, it has not been ascertained whether and how the objectives of projects are to be achieved with a lesser amount of money. The position of the State Audit Office is that the said issue must certainly be explored, because if Ministries fail to require an applicant to submit a new budget in the case of reduction of the amount of support, it would be unclear as to which expenses the funds would be used to cover. Moreover, the reduction of money might bring about the need of the applicant to re-plan or even cancel all of the intended activities.

In the opinion of the State Audit Office, the processing of applications is inefficient, too. Ministries are required to submit a written opinion on an application along with the application documents. Since no specific form of submitting such opinions has been established, Ministries have used different practices. Thus, the roles of persons engaged in the disbursement of grants and processing of applications are vague – while Ministries are required to submit their proposals, the Council is entitled to pass the final decision without taking into account the opinions of the Ministries or to explain its position if it differs from the opinion of the Ministries. Therefore, the State Audit Office suggested that a uniform practice of evaluation of applications in Ministries be developed and that the form of submission of opinions by Ministries be clearly established. The new rules of procedure of the Gambling Tax Council adopted in the course of the audit solved the abovementioned problems.

In 2003, 173.3 million kroons were received in the state budget out of the gambling tax. Of that sum, 46% will be allocated to the Cultural Endowment of Estonia, 3.9% to the Estonian Red Cross, and 12.7% will be allocated as support for investments in regional programmes relating to children, young people, families, the elderly and the disabled. The State Audit Office audited the way of distribution of the remaining 37.4% of sums between projects relating to sports, research, education, culture, children, youth, families, medicine, welfare, the elderly and the disabled. The audit report and the response of the Ministers and the Gambling Tax Council are available for examination on the website of the State Audit Office at www.riigikontroll.ee. The audit of the use of funds allocated to the Red Cross will be completed soon, as well.

Sven Soiver
Press Representative of State Audit Office
Telephone: (372) 640 0787
GSM: (372) 53 414464
E-mail: [email protected]

• Posted: 5/27/2004 12:00 AM
• Last Update: 10/1/2015 11:16 AM
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