Cyprus Mail

Taxpayer may have to return EU’s halloumi promotion funds

the audit office is questioning why all four programmes for which there was a total budget of €14m,were given to the same contractor

The audit office has called on the trade and commerce minister and the Commissioner for Agricultural Payments to order an administrative probe for possible disciplinary or criminal offences into procedures followed in four EU co-funded programmes promoting Cypriot produce and halloumi to EU and third countries, it emerged on Wednesday.

Discrepancies detected by the audit office could mean that taxpayers will have to foot the bill for the return of funds paid by the EU to implement these programmes.

According to the report on Wednesday from the audit office the audit of the financial statements of the agricultural payments organisation (Koap) for 2017, indicates that additional control is necessary.

The audit office scrutinised the selection procedure followed for the contractors to implement four campaigns for the promotion of Cypriot agricultural produce to third countries and other EU markets. These were: the ‘Snack a Fruit’ campaign for the promotion of agricultural products in third countries, the ‘Pan-Dora – Enjoy it’s from Europe’ programme, a campaign for the promotion of Cypriot potatoes in Germany, Austria and Belgium and a programme for the promotion of halloumi in the US, China and Australia. In total €1.5m was paid in 2017 for these four programmes.

The report said that all four programmes for which there was a total budget of €14m, and even after open tender competitions, were given to the same contractor.

The criteria to choose the contractor were such that it automatically eliminated all advertising agencies in Cyprus since they did not have the quality assurance certificate the competition requested, and as a result, there was no healthy competition that could have led to more financially advantageous bids, the report said. In one case only one bid was received.

The report said that another provision gave an advantage to Greek advertising agencies as they are obliged by law to have the quality certificate, and the tender competitions were announced only in Greek.

Citing the findings of the 2019 annual report by the European Court of Auditors (ECA) presented last November in parliament, the audit office said that one of these programmes was specifically mentioned. It emerged that the amount paid was not 100 per cent absorbable in terms of EU funding because procurement procedures were not fully applied.

This, the audit office said, confirms its own findings concerning the selection procedure for the contractor since the ECA drew the same conclusions.

“Consequently, the EU will probably need to recover this expenditure, which will have a significant economic impact on the Republic,” the report said.

It also said that the audit office last month called on the trade and commerce minister and the Commissioner for Agricultural Payments, as the competent authorities, to launch a probe conducting an administrative investigation for possible disciplinary or criminal offences.

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