Czech Supreme Audit Office: People who are not disadvantaged at all are being awarded "social housing"

State-subsidized apartments are being leased by people in the Czech Republic who are not living with any kind of medical or social disadvantage. What’s more, the Czech Regional Development Ministry is not keeping track of who is actually taking advantage of such subsidized properties.

Those are the findings of the Supreme Audit Office (Nejvyšší kontrolní úřad – NKÚ), which is also criticizing the Regional Development Ministry’s expenditures on discounted mortgages for young home buyers. NKÚ spokesperson Olga Málková reported on the results of the audit today.

The office discovered that the state’s entire concept for supported housing had been developed for the State Fund for Housing Development by an external firm at a cost of more than CZK 2 million (EUR 74 000) – even though that fund has not been tasked with anything else besides addressing that issue. "The concept, however, does not include indicators for assessing whether its aims for supporting housing have been met or not," the NKÚ said.

The Czech state has invested more than CZK 8.3 billion (EUR 307 million) into supporting housing since 2011 and the European Union has contributed almost CZK 5 billion (EUR 185 million) more during that time. The Regional Development Ministry has allocated almost CZK 4.9 billion (EUR 181 million) to support the construction of 9 453 apartment units to be leased by people living with either medical or social disadvantage.

"Those applying to finance subsidized apartments for the disadvantaged do not have to subsequently prove whether the apartments are actually needed in a given locality. Once they get the financial support, the ministry does not follow up on whether the apartments actually are being taken advantage of by tenants living with medical or social disadvantage," the NKÚ reports.

Comptrollers from the NKÚ audited nine randomly-chosen projects. Those receiving subsidies for a total of 71 new or reconstructed apartment units were leasing them to people who did not qualify as part of the target group.

"One of the subsidy recipients audited, for example, was leasing just one of its nine subsidized apartments to a disadvantaged tenant, even though the recipient reported leasing all nine units to people from the target group," the NKÚ said. The audit also discovered suspicions that three subsidy recipients had broken the rules for budget discipline to the tune of more than CZK 8.5 million (EUR 314 000).

One subsidy recipient, for example, received funds that exceeded the actual project cost by more than CZK 100 000 (EUR 3 700). The audit also found that the Regional Development Ministry paid more to administer its program offering discounted mortgages to persons 36 years of age and younger than it ever disbursed in financial benefits to those taking out such mortgages.

From 2011-2015 the ministry did not provide any contributions toward mortgages for new applicants, but the banks received more than CZK 37 million (EUR 1.4 million) to administer applications from clients who were not entitled to claim a contribution because their existing mortgage interest rates were already low. Between 1997 and 2012 the Czech state had already invested almost CZK 138 billion (EUR 5 billion) into support for housing.