- Both the organizational form of this fund and its financing, as well as the criteria for distributing funds to local government units, were highly controversial - this is how the work of the COVID-19 Counteracting Fund was evaluated by auditors of the Supreme Audit Office. It turns out that most of the money for investment tasks went to the implementation of projects completely unrelated to the effects of COVID-19. The most glaring example is a project whose purpose was supposed to be... "to lighten up the grayness inherited by the post-peasant villages from the communist regime."
NIK on Covid-19 Countermeasure Fund: management of funds was ineffective
Published Sept. 28, 2023 14:13
fot. Piotr Wójcik
The auditors' doubts were first raised by the Fund's organizational and legal form.
- After just 18 days of operation, the organizational and legal form was changed to a fund operated by Bank Gospodarstwa Krajowego. As a result, the management of the funds ceased to be subject to the provisions of the Law on Public Finance and the control envisaged for public funds. This action, according to the NIK, violates basic budgetary principles, including the principles of openness, transparency, unity and completeness of the state budget," said Stanislaw Jarosz, director of the NIK's Budget and Finance Department, during the presentation of the report.
In response to these concerns, the Chairman of the Supreme Audit Institution filed a petition with the Constitutional Court to examine the constitutionality of the provision creating the Fund. As a result of the change in the form of the Fund, the Prime Minister became the de facto fund management body for the Fund, but in practice he did not recognize his role, as in his view these responsibilities belonged to the administrators.
- Omissions in this regard have led to the diffusion of responsibility and the irregularities found by the Supreme Audit Institution. The COVID-19 Prevention Fund, due to the very general formulation of its title and the purpose of its creation in the creating law, has become a de facto tool for subsidizing practically any range of tasks, from the purchase of health care services, medicines for medical equipment through the construction of roads or the purchase of garbage trucks, for example, as well as providing loans to entities in the gas fuel market, Stanislaw Jarosz mentioned.
Among other things, COVID countermeasure funds were used to finance investment tasks of local government units under two programs: Government Local Investment Fund and then Strategic Investment Fund.
More than PLN 71 billion has been distributed for local and strategic investments. Of this, as much as PLN 65 billion in the competitive mode. Under RFIL, more than 24 thousand applications were received for a total amount of more than PLN 100 billion, of which 13 billion, or slightly more than 13 percent of the amount requested, was paid out. On the other hand, under the Polish Order Fund, or Strategic Investment Fund, another nearly 20 thousand applications were received for a total of more than 174 billion zlotys, of which financing was granted to local government units for a total of 58 billion, or 33 percent of the value of the applications submitted.
According to the NIK, the decision-making process in this regard was not transparent. In both programs, the Prime Minister appointed committees to evaluate applications and make recommendations on the amount of funds to be awarded to individual applicants. The committees included representatives of the Prime Minister's Office, ministers, deputy ministers or people from BGK. However, representatives of local governments and experts were missing. Justifications for decisions made were not documented on paper. When the auditors checked the time in which the processing of applications took place, it turned out that on average it was from a dozen to several dozen seconds. There were also doubts about the expediency of investment tasks.
- In the justification of the application, on the basis of which the highest support was granted in the Podkarpackie region, to the amount of PLN 2 million, under "sustainable development", it was written: the construction of a modern tourism center in a Bieszczady post-peasant village will materialize the words of the Prime Minister of our government, who declared: "we want the grayness inherited by the post-Polish People's Republic villages to finally be illuminated by modernity, and will be our positive answer to the question of Law and Justice Chairman Jaroslaw Kaczynski, whether it would not be possible to build a Polish Bavaria on this land, as well as on the lands bordering to Podkarpacie?" - Stanislaw Jarosz quoted.
In the opinion of the Supreme Audit Office, both the difficult socio-economic conditions in which the Fund was established and the manner in which it was managed, as well as the occurrence of the emergency caused by the epidemic, do not justify the government administration's failure to comply with the law, including the failure to apply the principles of openness and transparency in the management of public funds. After the audit, the Supreme Audit Institution formulated a systemic proposal to extinguish the COVID-19 Fund. The NIK filed a petition to the Constitutional Court to examine the constitutionality of the provisions of the COVID Law, particularly the provisions under which the Fund was established. The NIK also noted the risk of corruptive mechanisms. The Chairman of the Supreme Audit Institution forwarded information on the results of the audit to the Central Anti-Corruption Bureau.
