The Ministry of Agriculture finances projects related to forestry, hunting, and fisheries from the state budget through historically established Funds by allocating almost two million euros per year.
A part of this amount is also allocated to non-governmental organisations and for implementation of various public awareness and educational activities. The State Audit Office has revealed during the audit that there are significant differences in the management of budget funds among those Funds by drawing particular attention to deficiencies in the management of the resources of the Forest Development Fund and the Hunting Development Fund. One cannot call the existing approach accountable, open, and clear.
The sectoral funds of the Ministry of Agriculture have historically stemmed from the special budgets established once. Ten years ago, the State Audit Office called for an evaluation of the expediency of the existence of those Funds, but this has still not happened.
The performed audit revealed weaknesses in the allocation and monitoring of funding in two of the three Funds. When evaluating the performance of the three Funds in general, one revealed unequal treatment of project applicants both as regards eligibility conditions, control of the use of funding and monitoring of achieved project results. In their turn, no significant deficiencies were identified in the Fish Fund.
The largest amount of funding and the activity of project applicants in the Forest Development Fund are related to the donation granted by JSC “Latvijas valsts meži” (Latvian State Forests). Since 2005, JSC “Latvijas valsts meži” has been donating annually to sports, culture, education and science, social assistance and environmental organisations in Latvia. In spite of the results of a public opinion poll calling to channel donation for social or charitable purposes primarily, a half of approximately four million euros a year or two million euros a year are channelled to sporting events, while the Forest Development Fund is contributed only 800,000 EUR for the development of forestry.
The audit concluded that the administration of the donation by JSC “Latvijas valsts meži” to the Forest Development Fund, the project eligibility conditions, and evaluation process is not clear and open, and the funding allocation principles are not traceable, including funding to donor-related associations for various outreach activities. In addition, the projects themselves do not envisage any co-financing by the associations themselves.
There are significant deficiencies found in the management of the Hunting Development Fund during the audit. Six of the seven members of the Advisory Board of this Fund, who evaluate project applications, represent or are closely related to the associations and authorities submitting project applications. The State Audit Office considers that such a high proportion of evaluators related to the projects submitted creates a “risk of cooperation” in supporting the projects. Approximately 70,000 euros are awarded to the two largest hunter associations every year, although an affiliated company carries out the projects of one association in fact almost entirely. This, in turn, prevents the possibility of verifying the actual costs of the project. This money is allocated by relying on the own insights of associations into the number and content of the measures to be implemented, and funding required for the projects mainly.
In the Hunting Development Fund, neither the Rural Support Service nor the Ministry of Agriculture audit the documents justifying project costs. Project promoters do not have to submit documents justifying the costs, no on-the-spot checks are carried out, and the information on the implementation of the projects in the documents is not complete and traceable. During the audit, the State Audit Office questions the validity and necessity of several costs. For example, the cost of organising a mission for one participant averaged 800 euros, regardless of the country of mission and the number of days spent. One organised experience exchange visits to Spain and Italy regularly for several consecutive years without information on planned objectives and results achieved. One established some cases where an external service provider issued several invoices for the same mission, which the Ministry accepted without justification.
Hundreds of projects, including films, broadcasts, books, workshops, and conferences, have been implemented over more than ten years of state aid for the development of forestry, hunting, and fisheries, but little or no information is available on the outcomes.
The State Audit Office has proposed the Ministry of Agriculture to improve the transparency of the activities of the Funds, the evaluation of projects as objectively as possible, control over the use of funds, and disclosure of the results of supported projects.