European report finds: In Bulgaria, inspections of EU projects are manipulated

The European Court of Auditors has found that checks on EU projects in Bulgaria are not carried out randomly. This is stated in a report from July this year, which the BRRD has. Doubts are that systematically projects are “juris” while only those that are perfect and in which there is no corruption scheme fall for inspection.

The European Court of Auditors’ finding of weaknesses and vices in the work of the Audit Authority of the Republic of Bulgaria (EAEC) in applying a sample principle of checks are related to the Operational Program “Education”. However, it is applicable and valid for the overall work of the agency.

When expenditure is applied for certification to the EC, it is the task of the Audit Authority (Art. 127 of Regulation 1303) to ensure the legality of the costs incurred. Since the Audit Authority checks all programmes, it does not have the capacity to check all funded projects, so it checks on a sample basis.

In a November 2021 audit by the European Court of Auditors regarding the Education OP, the reviewers found weaknesses and vices in the sampling approach. In practice, there is no such approach.

Put in simple language, the examiners found no evidence (audit trail) that the samples were made at random.

“Djurkane” until the “right” projects come up

The facts and evidence presented, in the framework of the audit, failed to assure the examiners that the selection of projects for inspection was made once. The auditors’ concerns are that random towing procedures not inspection projects have been manipulated.

In practice, the European Court of Auditors has expressed suspicion that the samples generated were “djurcans” more than once, “djurcans” until the correct projects were “selected”.

The fact that, for example, guest house projects that are funded with European funds and for which our team found a lot of irregularities have not been included in the sample for inspection, also leads to such doubt. Although these projects are checked by a different authority than the EAEC, the facts suggest that the practice there is identical.

Indirect evidence of such manipulations is the inspection of OLAF, which concluded that practically all guesthouse projects have irregularities. This check was also based on a random sample, with 35 of over 300 projects checked. All sites in the OLAF sample had violations. And none of such a sample of the SFA, made before the scandal with the “mothers-in-law”.

Although the finding of the European Court of Auditors is under OP “Education”, it is “horizontal” and covers the entire audit process in Bulgaria for the last 15 years. Inspectors found a lack of specialized software to randomly select projects for inspection. In our country, the selection is done with the help of a program on the Internet. Separately, there are doubts that the order of the projects has been changed in the Excel tables so that the programs function smoothly and no irregularities are found.

For most of the time period referred to by the European Court of Auditors, the Audit Authority was under the leadership of Lyudmila Rangelova and Dobrinka Mihaylova. Mihaylova headed the agency from September 2009 to October 2014, and from December 2014 to November 2016 she was an adviser to Deputy Prime Minister for EU funds Tomislav Donchev.

After that July 2021, Mihaylova was Director of the Regional Policy Funds Audit Directorate at EAEC. This directorate is responsible for the largest OPs in Bulgaria – “Regions in Growth”, “Transport”, “Environment” and “Innovation and Competitiveness”. It was the return of Kiril Petkov Mihaylova, dismissed by Kiril Petkov’s government to the state administration, which became the occasion for “Continuing the Change” to refer the matter to the European Public Prosecutor’s Office. She was appointed Head of the Regional Policy Audits Directorate at the Ministry of Finance by Rumen Radev’s caretaker government.

In 2020, Dobrinka Mihaylova was elected to the supervisory board of OLAF. It is not clear how she is independent as a member of OLAF’s supervisory board, provided she is a political creature of GERB. In this line of thought, the question is also open where does PP GERB get preliminary information about OLAF’s investigations and whether Mihaylova is actually a source?

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