Investigation No. VIZSG/27/2024 closed – Szabolcsi Alma Centrum Nkft. investment project 

In the case of the investment project of Szabolcsi Alma Centrum Nkft. for the construction of a cold storage facility, the investigation conducted by the Integrity Authority identified several suspected irregularities, as well as suspected budgetary fraud and suspected use of forged private document. 

Based on its risk assessment, the Integrity Authority conducted an investigation into Szabolcsi Alma Centrum Nkft.’s (hereinafter referred to as the “Beneficiary”) project titled “MKSZN Nonprofit Kft.’s cold storage facility investment project” (VP-3199392712), funded as part of the Rural Development Programme (RDP). The relevant EU-funded portion of the grant received by the Project amounted to HUF 1.85 billion. Within the framework of its investigation, the Authority identified several inconsistencies regarding the cost elements referred to as prefabricated reinforced concrete structure, substructural and professional construction works and refrigeration technology, based on which it was assumed that the quotations were not prepared independently from one another. Some of the documents sent to the Managing Authority raised the suspicion that they contained false information. 

The Authority found documentary evidence suggesting coordination between successful and unsuccessful bidders’ quotations in terms of the cost elements referred to as prefabricated reinforced concrete structure and substructural and professional construction works, while in the case of substructural and professional construction works, the Authority identified substantive and formal commonalities between unsuccessful bidders’ quotations. The Authority maintains that these may justify grounds to suspect that offences of budgetary fraud and use of forged private document have been committed. 

Beyond the above, the Authority also examined the project in respect of conflicts of interest, and established that the risk of a conflict of interest between the Beneficiary and the Managing Authority might exist pursuant to Subsections (1) b) and f) of Section 39 of Government Decree 272/2014 (XI. 5.). 

No public procurement procedure was conducted during the Project. For this reason, and in light of Subsections (1) and (2) of Section 5 of the Public Procurement Act, the Authority thoroughly assessed the Beneficiary’s status as contracting authority, and examined whether a public procurement obligation existed. The Authority informed the State Audit Office (SAO) of the findings revealed during the investigation so that SAO could conduct an audit of the Beneficiary’s financial management and operational practices, and clarify the source of the portion of the financing that was not funded by the European Union (own contribution). 

As a result of the concerns regarding the bidders independence and the bidders’ non-compliance with the call for proposals, the Authority proposed measures and issued recommendations to the Managing Authority of the Project. For further assessment and management of the conflict of interest situation, the Authority also filed a report to the Directorate of Internal Audit and Integrity of the National Development Centre, and lodged a complaint to the National Tax and Customs Administration on suspicion of budgetary fraud and use of forged private document.