Investigation No VIZSG/10/2024 closed – Kazár Nursery Project

The Integrity Authority identified serious overpricing, public procurement irregularities, and improper use of public funds in relation to a nursery project in the village of Kazár. Consequently, the Authority has initiated several proceedings and proposed further measures.

Subject and main findings of the investigation

The Integrity Authority has concluded its investigation into project titled “Construction of a Nursery in the Municipality of Kazár”), project ID TOP-1.4.1-19-NG1-2019-00005, supported under the Territorial and Settlement Development Operational Programme. The total grant amount awarded to the project was HUF 676,875,095.

The Authority found that the project – despite having been implemented – was significantly overpriced. According to the investigation, the construction of the nursery exceeded realistic costs by HUF 219,312,136 gross. Furthermore, the size of the facility was disproportionately large compared to the number of new places created (a total of 12), which likely constitutes a breach of the principle of effective and responsible use of public funds.

Public procurement procedure and irregularities

During the public procurement procedure, the contracting authority excluded the tenderer that offered the lowest price on the grounds of a disproportionately low price, resulting in the contract being awarded to a company whose offer was nearly 60% higher. In addition, the successful contractor failed to declare subcontracted performance exceeding HUF 97 million to the contracting authority.

Recommendations and further actions

The Authority recommended that the Managing Authority initiate the recovery of the grant amount affected by irregularity. Looking ahead, the Authority proposed that the Managing Authority and the Intermediate Body review the effectiveness of their control procedures.

As part of the investigation, the Authority submitted a request to the Public Procurement Authority for an official review, which was supplemented with evidence uncovered during the inquiry after the investigation concluded. Because of additional suspected infringements identified during the procurement procedure, the Authority has also initiated ex officio proceedings before the Public Procurement Arbitration Board.

In addition, the Authority has filed a criminal complaint with the Nógrád County Police Headquarters against unknown person on suspicion of mismanagement and notified the National Tax and Customs Administration concerning suspected failure to comply with invoice issuance obligations.