Hungary: Indictment based on an OLAF recommendation

The Debrecen District Public Prosecution Office has submitted an indictment against two representatives of foundations that misused EU and national funds.

According to the indictment, the representatives of two foundations breached their obligation to account for grant money, thereby committing a criminal offence.

One of the foundations, based first in Kismarja and then in Budapest, was established in February 2016, with the younger perpetrator as the trustee in charge of managing its assets.The other was established in March 2016 in Budapest, with the older perpetrator as its representative and trustee.

A call for proposals was launched in March 2017 under an EU grant scheme, for which both perpetrators applied for funding on behalf of the foundations. The relevant ministry awarded both applicants non-reimbursable grants of HUF 450 million each, largely from EU and partly from national sources.

In the grant contract, the younger perpetrator undertook, on behalf of the foundation, to organise various leisure programmes in different regions, in a total of 469 municipalities, for a total of 22 000 inhabitants. The representative of the other foundation undertook to organise recreational sports programmes in a total of 372 municipalities.

In 2018, the competent ministry allocated half of the funding to both organisations, 225 million HUF each. The trustees received part of the grant and then submitted several requests for clearing and payment, which were rejected by the funding body for both foundations because the requests for use did not comply with the contract and the legislation.

In the meantime, the donor initiated irregularity proceedings against both organisations, which were found to be in breach of contract and the grant contract was cancelled. As a result, they were no longer required to implement the programmes, but the representatives of the foundations were ordered to repay the amounts already paid out.

The investigation revealed that the representatives of the two foundations had not complied with their accounting obligations under the call for proposals and had not provided evidence of the legal use of the funds paid.

The Debrecen District Public Prosecution Office charged the perpetrators with the felony of using budget funds for the purpose of the obligation to account at the Pest Central District Court. In its indictment the prosecution office moved to sentence the two women to suspended imprisonment and to be fined, as well as to ban them from holding office in a civil organisation.

The press release on the submission of the indictment can be found below (in Hungarian):

https://ugyeszseg.hu/vademeles-az-olaf-jelzese-alapjan-indult-buntetougyben-hajdu-bihar-varmegyei-fougyeszseg-sajtokozlemenye/