Czech spending watchdog finds significant waste in forestry programmes

15-01-2018

The Czech Republic’s spending watchdog has roundly criticized the way state and European funds were used in connection with different projects to maintain and improve the country’s forests. It found that in many cases there was no real attempt to make sure that tens of millions of crowns were spent getting the best value for money.

Illustrative photo: archive of Radio PragueIllustrative photo: archive of Radio Prague Money grows on trees in not just a phrase. In the Czech Republic it appeared to be a reality. This time round the spending watchdog, the Supreme Audit Office (NKÚ), focused on spending on forests over a five year time frame between 2011 and 2016.

Forests cover around a third of the Czech Republic, and the forestry business is a big money spinner with both state, private, and local council forestry companies involved. A large amount of Czech timber is exported abroad, mostly to Germany and Austria. And the forests are also a much beloved and valuable leisure and environmental resource for many Czechs with their management therefore a sensitive topic.

The programmes investigated by the watchdog were both those administered nationally by the Ministry of Agriculture and the State Agricultural Intervention Fund (SZIF) and those flowing from European funding such as the programme for the development of the countryside.

Altogether, the watchdog examined a series of projects with a total value of 230 million crowns to get a grasp of the wider picture.

And the Supreme Audit Office found that while high priority appeared to be given to drawing a maximum of the funds on offers, value for money appeared to be very much a secondary consideration.

Jiří Kalivoda is one of the board members of the Supreme Audit Office, whose responsibility includes managing some of the audits carried out. He described in an interview on the watchdog’s web pages some of the flaws in forestry spending programmes that were discovered.

ʺThe Ministry of Agriculture structured it in such a way that the maximum amount of funds were used. But it did not establish any limits, any ceilings on the spending. And it also allowed 100 percent financing of projects. That meant that those who benefited from the funding did not have to resort to their own finances at all.ʺ

Jiří Kalivoda, photo: Czech TelevisionJiří Kalivoda, photo: Czech Television The watchdog found large differences in spending within the same projects. For example, the costs of an observation post for watching forestry birds and animals ranged from just under 300,000 crowns to 350,000 crowns. And there were even differences when other examples of spending were examined. Jiří Kalivoda again:

ʺSignificant spending differences were found in the reconstruction costs of forest paths. When no limit on spending was set the cost was found to be 13,000 crowns per metre. When a limit was imposed, the cost for repairing those paths came in at 3,000 crowns a metre.ʺ

In this case, the reconstruction costs were in the same locality and the money was paid out to same beneficiary. And the watchdog found other flaws in the management of funding. When money was spent on repairing forests severely damaged by high winds or other natural disasters, there was no obligation to provide photographs or put a price on the costs of the initial damages.

It also found that one ministry programme flopped altogether. The project was originally supposed to result in 37,000 hectares of new trees being planted. But there were eventually just 21 demands made for the funding and just 1,500 hectares of new forest resulted.

15-01-2018