Transparent Use of Structural Funds in Hungary

Transparent Use of

in Hungary

The project of Transparency International is aimed at enhancing the transparency of the use of EU funds in Hungary. Throughout the programme our team implemented measures tackling the problems identified in the situation analysis of 2005 such as recommendations on better rules on conflict of interests, regulations of civil partnership, structured information related to EU funds, improvement of the situation of EU consultants and enhancement of communication among different actors of the implementation system (Monitoring Committees, public administration, media, beneficiaries, etc.)

At the end of the project an overall assessment and a list of recommendations were prepared in the fields of partnership, anti-corruption policies and access to information. We concluded that the Hungarian regulations and institutional systems are in line with EU norms. However, there are serious operational problems in the following areas: transparency of planning procedures, the uncertain legal and financial situation of beneficiaries, the over-regulation of the system of implementation and the complexity of the public procurement procedures. Since the National Development Office (main coordinator of planning and implementation of EU funds) and the majority of institutions taking part in the implementation are open to the criticism of the civil sector and are committed to incorporate their experiences into the system, we are confident that there is a sound basis for further development.

Partnership

The planning phase of the use of Structural Funds is not transparent in Hungary: neither the institutional system nor the procedures set are adequate. The principle of early participation is often broken and the way of the involvement of civil partners is not regulated. Due to lack of capacity and experience the civil side is not prepared enough for taking part in the planning and the accountability of civil partners is hindered by the fact that the content of the negotiations in working groups is qualified as non public. TI suggests the reformulation of the institutional system in which the institution responsible for the coordination would have proper authority over the planning working groups. We suggest working out compulsory legislation on the methodology of partnership, taking into account our set of recommendations elaborated throughout this project. We recommend the review of the relevant legislation on secrecy and the strengthening of the capacities of civil partners as well as the establishment of their information channels. It is a positive development that the quality of the public debate of the planning documents has improved over the last year: the methods used have widened, the number of parties involved has grown and feedback is provided on all opinions.

Anti-corruption policies

The vast majority of conflicts of interests of civil servants and independent consultants is properly regulated. The institutional system of implementation is operational, fulfils EU criteria and does not leave room for classic corruption. The main problem identified is the late payment of beneficiaries which increases the risk of corruption during the implementation. Adequate personnel and institutional capacities must be established as soon as possible. Over-regulation of the system leads to non-transparent operation, therefore we recommend rethinking the procedures and roles of institutions in a way that the fulfilment of the project content is also given proper emphasis. Another difficulty is the application of correct public procurement procedures: the law itself is very complicated and the beneficiaries are not prepared to use it adequately. Mixing up the second National Development Plan with the electoral campaign of the Hungarian Socialist Party raises questions on political corruption.

Access to information

There is enough information available in Hungarian on the EU, the Structural Funds and the grant possibilities. All calls for proposals are available through a uniform system and all compulsory materials can be downloaded. The lists of beneficiaries of all programmes are available and we can follow the use of Structural Funds by means of daily updated statistics. We recommend setting up a centralised database that can be searched by the names of beneficiaries. A document describing the implementation system in terms people can understand is badly needed.

Analysis from EU countries can be found here: http://www.transparency.cz/index.php?lan=uk&id=2817