Annual costs of external development cooperation exceed CZK 4,000 million; the SAO found only minor errors in bilateral projects

PRESS RELEASE on Audit No. 15/11 – February 8, 2016

The Supreme Audit Office (SAO) scrutinized funds that were utilised for the external development cooperation, which is aimed at poverty eradication, economic and social development, environmental protection, promoting democracy, and respect for human rights.

From 2012 to 2014, the Czech Republic participated in external development cooperation projects with an average annual contribution in the amount of CZK 4,300, which makes CZK 405 per one inhabitant of the country. The Czech Republic (CR) ranked third in the enlarged Visegrad Four Group , but when compared with other Member States of the European Union, the CR ranks as far as eighteenth. The number shows the proportion of the volume of the development cooperation expenditures and the gross domestic product per capita. When joining the EU, the CR committed itself to gradually increase its expenses on external development cooperation so that the proportion would make 0.33 % by 2015. However, the proportion was only 0.11 % in 2014 and had been falling since 2010. The Czech Republic has failed to comply with the former commitment since it does not even reach the minimum proportion of 0.20 %, which is considered by the OECD’s Development Assistance Committee as sufficient.

Out of the total expenditures on external development cooperation, around 70 % are used for the multilateral cooperation, which includes mandatory payments for memberships in international organisations including EU, OECD, and UN. Another form of external development cooperation is bilateral and is aimed at external development projects, awareness programmes, scholarships, humanitarian aid, and the like. Auditors selected and scrutinized 44 bilateral projects aiming at development cooperation, which cost CZK 495 million in total.

From 2012 to 2014, the Czech Republic’s bilateral development cooperation projects were mostly implemented in Afghanistan, Moldavia, and Bosnia & Herzegovina. The projects aimed at several priority areas, which were defined in the concept of development cooperation. Most funds were used for educational purposes: CZK 540.3 million, followed by the support for development of public administration and civil society, refugee aid, and water supply & sanitation. From 2010 to 2014, the number of bilateral projects increased from 38 to 123. At the same time, there was a decrease of the average annual amounts used in one project: from CZK 5 million in 2011 to less than CZK 3 million in 2014.

Auditors also revealed that some projects were not sustainable in medium-term horizon, and in practice, would not bring the planned outcomes in the future. One of the main reasons for this situation was non-compliance with the local partner’s obligations. However, it is hard to make those obligations enforceable, since there is no legal obligation to implement the Memorandums of Cooperation. With projects aiming at the support to water supply & sanitation, the sustainability is influenced by low costs of water, which regrettably do not cover the expenditures on repairs and operation. Similar problems related to the sustainability of projects were found in 2012 by the European Court of Auditors during an audit of 23 projects that had aimed at water supply development in the sub-Saharan region.

With some projects, auditors found errors in the indicators defined for evaluation of achieved objectives. The indicators could have been evaluated hardly or not at all. The Czech Development Agency failed to carry out a sufficient supervision of projects, which had been selected for implementation after an open competition.

The SAO concluded that in spite the above mentioned errors, the external development cooperation follows the concept defined by the Ministry of Foreign Affairs, and individual projects have positive impacts.

Communication Department
Supreme Audit Office

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