Auditor-general Odysseas Michaelides on Thursday called for an overhaul of the way in which the state provides grants to various entities, as in many cases taxpayer money appeared to disappear into a black hole.

Indicatively, for the year 2021 the official said around €4 million was allocated in grants where the state “just gave the money away.”

Speaking at the House audit committee, Michaelides cited the example of the Rialto Theatre in Limassol, which he said the government should run since the theatre is on a ‘state diet’.

He said the cabinet approved an annual grant of €250,000 for the years 2022-2024 to cover part of the Rialto’s operating expenses, which until 2018 were covered by the Limassol Co-op Bank, as the theatre is housed in a building that now belongs to the state after it was transferred to the state-owned asset manager Kedipes.

“We allow them in [the grants scheme] without rent, this is unacceptable,” he said.

He also said that in 2021, a total of €455,934 was paid to the company by the cultural services, as an annual grant and as a subsidy for various events, state and non-state, and from the general accounting office another sponsorship of €270,000, with the total grant amounting to €725,934.

“This is a theatre on a full state diet. When something is maintained by the state, essentially the state should have the administration, like Thoc,” he said.

However, MPs argued for the need to continue supporting the Rialto so that it can continue its cultural work.

The auditor-general also raised another issue over grants given by the government to football club Ethnikos Assias. He said that the club received a state grant of €170,000 for the construction of a building in Strovolos, Nicosia.

A first instalment was then made of €59,000, without the state ensuring that club had the finances to complete the construction of the building. He added that later another letter followed from the club requesting an additional sponsorship of €170,000.

“You don’t give money to have endless projects. We are concerned because the project has only progressed to 23 per cent. And the club does not submit audited accounts, which creates additional concerns about money laundering issues and so on,” he said.

Meanwhile, in other comments the auditor general questioned the legitimacy of an agreement signed between the state and private betting company Opap.

Michaelides criticised the state aid given to Opap to cover part of the purchase of masks, noting that the company itself had made no request for financial assistance.

“Opap makes contributions with taxpayers’ money,” he said. and criticised the state for the agreement with Opap, from which, he said, the state loses €1 million a year.

The government watchdog drew particular attention to the Solidarity Fund, set up in 2013 to provide some financial support to thousands of people whose uninsured savings (over and above €100,000) got wiped out in the bail-in of Cypriot banks.

The finance ministry’s Panteli conceded that the €110 million said to be held by the Solidarity Fund was an amount on paper only – an accounting entry.

The Audit Office had also discovered that in 2022 the state budgeted €59 million for the fund – far above the normal amount – because due to an accounting error in the year prior to that it had paid €30,000 into the fund instead of €30 million.

The finance ministry promised that next year it would make available to the auditor-general the accounts of the Solidarity Fund.