Czech Republic: Liberec Region demands Romani association return CZK 26 million

The Liberec Regional Authority is demanding that the Liberec Romani Association (Liberecké romské sdružení – LRS) return CZK 26 million because of poor management of a subsidy for its community center and field social work in the region. The association won a tender of about CZK 50 million with its projects and has not yet drawn all the money, Regional Social Affairs Councilor Pavel Petráček (Czech Social Democrats – ČSSD) told journalists today.

The Regional Authority withdrew from its contract with the association in December alleging gross errors in the association’s financial management. Police are also investigating the association’s accounting practices. The Czech Press Agency was unable to get a statement from the association today.

The poor results of an audit by the Czech Labor and Social Affairs Ministry are said to be the reason the region is ending its collaboration with the association. That audit reviewed the CZK 250 million provided by the ministry to Liberec Region for its social prevention project. “In the case of LRS, the audit turned up both minor and fundamental questions in the accounting statements,” Petráček said. The ministry audit uncovered deficiencies in the financial management of another five organizations as well, but none were as serious as the case of the Romani association.

Viktorie Plívová, spokesperson for the Czech Labor and Social Affairs Ministry, said the audit revealed serious flaws in LRS’s financial management. “In particular, the end costs were intentionally inflated, from staff salaries to subcontractors’ rates,” she said. Plívová alleged that the association was paying unusually high salaries, particularly to management staff, and that there is also a lack of documentation concerning the clients of its social services. Once the audit by the Revenue Authority is done and the entire matter is investigated, the amount involved will evidently be classified as an ineligible expense. The Regional Authority will have to return the money to the ministry in that event.

Petráček says the association’s financial management had been audited by the Regional Authority itself, which he says repeatedly pointed out the deficiencies to the association, including the unusually high compensation. “They were paying field social workers about CZK 50 000 when other organizations pay them CZK 15 000,” Petráček said. He also claims the association inflated its operational costs, including the cost of leasing vehicles. The region has also determined that the association paid CZK 1 000 annually to lease the community center space from the town hall in Tanvald but billed the region CZK 24 000 for the rent. The region is drawing up criminal charges against the association but has not filed them yet, as it is waiting for the association to provide it with final accounts and perhaps to return the subsidy.

The ending of the association’s work has caused problems in several towns where field social work with the Romani community has ground to a halt. Petráček acknowledges the failure of these important programs but says the region has issued a new tender for them and believes they will resume as of March. “We reached out to several other associations in Liberec Region to apply,” Petráček said. In the past, he says the Romani association was the only candidate in the tender, a situation the authority now wants to avoid. The project will end this November, but Petráček says the region is already negotiating with the ministry about continuing it beyond then.