Closing of Investigation No VIZSG_23_2024 – Palócföld Family Association

The Palócföld Family Association (Palócföldi Családok Egyesülete) was awarded a total of HUF 51,467,166 in funding as part of the Rural Development Programme for the implementation of four projects subject to an investigation by the Integrity Authority. The funds disbursed under the Projects were used for the benefit of the mayor of the municipality concerned and their close relatives.

The projects implemented by the Association included the renovation of the House of Crafts (Mesterségek háza), the establishment of a tourist office, the procurement of IT equipment, and the construction of an accommodation facility. The Integrity Authority found that a conflict of interest arose during the implementation of the projects, as the mayor, in their capacity as chairman of the Local Action Group issuing the calls for proposals, was able to influence grant decisions, while a senior official of the beneficiary was a relative of the mayor.

Furthermore, the related calls for proposals, as well as Granting Decisions, do not specify clear requirements for the maintenance of the projects. This means that the implemented investments could potentially be considered compliant with the funding objectives even with minimum levels of utilisation or operation.

The Authority initiated irregularity proceedings with the Managing Authority and made preventive proposals for the efficient and responsible use of EU funds. Furthermore, the Authority proposed that the Managing Authority tighten the grant criteria, specify operational criteria, introduce monitoring indicators and incorporate external data sources into controls, as well as place greater emphasis on preventing future conflicts of interest in the case of LEADER projects.