Transparency of State-Provided Grants (CZ0041)

Brief Description of the Commitment

This is a follow-up to the Fifth Action Plan commitment to ensure transparency of grants provided by the state in a structured form for the public.

Problem Definition

1. What problem does the commitment aim to address? ● Unavailability of all information on grants in one place in a user-friendly form. There is no possibility to display the grant to a consolidation unit, for example a corporate group. ● Grant providers sometimes do not know about each other that they are granting the same entity. They lack a tool for this (for example, a recent case here). ● Insufficient public control – active citizens and organisations often still must request some information on grants under Act 106/1999 Coll. ● High administrative costs due to the large number of systems and formats for publishing grant information.

2. What are the causes of the problem? ● Disclosure of information on grants in many places and in different forms and to different extents. For example, grants provided by the State Agricultural Intervention Fund are not included in the ReD system. ● Establishment of user-opaque systems that contained information on grants only for specific grant providers. ● Failure to comply with the schedule: Mrs. Dostálová, a former Minister, announced in September 2019 on "Václav Moravec's Questions” that the central grant register is being completed and will be launched in 2020.

Commitment Description

1. What has been done so far to solve the problem? ● A central IS ReD grant system has been established at the Ministry of Finance. ● Some older systems (such as DotInfo) have stopped working. ● As part of the Fifth Action Plan, consultations were carried out regarding the further development of grant transparency (commitment "4.5 Consultation on the possibility of creating a comprehensive publicly accessible open-data aggregated database of providers and recipients of public funds from grant titles" under the responsibility of the Ministry of Justice): ○ two public consultations were held to which the stakeholders concerned were invited; ○ The first consultation took place on 21 June 2021 and was attended by representatives of the state administration (MI, MH, MF, MC, SAIF), local government (UTM CR) and the non-profit sector (Frank Bold, Hlídač státu, Transparency International CR). here: https://korupce.cz/wp-content/uploads/2022/10/2021-06-21-Zaznam-z-verejnych- konzultaci-k-zavazku-OGP-c.-4.5.pdf; ○ the second consultation took place on 30 September 2021, and in addition to the participants of the first consultation, it was attended by other representatives of the state administration (Ministry for Regional Development, MH, MEYS, MFA, MIT), local government (Association of Local Governments of the Czech Republic, Association of Regions of the Czech Republic), the non-profit sector (Oživení) and other concerned entities ( GA CR, Czech Academy of Sciences, TA CR), the record is available here: https://korupce.cz/wp-content/uploads/2022/10/2021-09-30-Zaznam-z-verejnych- konzultaci-k-zavazku-OGP-c.-4.5.pdf; ○ the output of the consultations was the final report, subsequently drawn up and published, now available here https://korupce.cz/wp-content/uploads/2022/04/Zaverecna-zprava- zavazek-4.5-OGP.pdf; ○ during the consultations, current information systems were discussed and two main possible paths to solve the problem were identified: ■ creation of a new grant system; ■ creating an open formal standard for subsidies and defining a common minimum set of data to be provided; ○ in case of creation of a new grant system: ■ a completely new information system would have to be created; ■ the option appears to be uneconomical and inexpedient in the context of existing functioning systems created by the Ministry of Finance, Ministry for Regional Development and Ministry of Interior, which export data in open formats; ○ in the case of an open formal standard for subsidies: ■ it would be an adaptation of existing systems to publish data in a uniform format, i.e., to create a single open formal standard; ■ on the basis of which all grant systems would provide the same information, or the same sets of information; ■ the definition of an open formal standard from 2015 (from the effective date of amendment No. 222/2015 Coll.) is set by Section 3(9) of Act No. 106/1999 Coll., on free access to information, as amended; ○ As part of this consultation, it was opted for an open formal standard for grants over the creation of a completely new information system; ○ part of the final report was also a proposal for further action: ■ approval of a common minimum range of data standardised by an open formal grant standard; ■ identification of the necessary technical modifications of the information systems and registers used; ■ defining an open formal grant standard; ■ publication of data in a uniform format – decentralized, catalogued in the National Open Data Catalogue; ■ discussion on the establishment of a grants portal ("signpost") combining unified exported data.

2. What solution do you propose? ● Decision regarding further direction for disclosure of grants. ● Development of the Register of Subsidies at the Ministry of Finance, which currently serves as a record-keeping system in which data on subsidies, repayable financial assistance and other similar transfers provided from the state budget, state funds, state financial assets or the National Fund are processed. Their providers are obliged to record data on them and their beneficiaries in the central register of grants, or to transmit these data to the register from other registers, if they contain specified data (Section 75(b) of Act No. 218/2000 Coll. "Budgetary Rules"). The content and scope of the data recorded or transmitted to the central register of subsidies and the procedures and deadlines that providers comply with during this recording and transmission are determined by Decree No. 286/2007 Coll. ● Carrying out a technical and legal analysis and, based thereon, implementing further IS development in the following areas: ○ Information on all European and national grants paid by the Czech Republic (so far without funds from territorial self-governing units) - including all subsidies granted from state funds and provided by controlled or controlling organizations, (note that some of these data have already been sent to the system according to Section 75(b) of the Act on Budgetary Rules by obliged entities). ○ It will contain a sufficient overview of the individual grants - not only the aid amount, but also information about the grant title, decision or public law contract based on which the grant is provided (note that some of these data are already listed in the system according to Section 75(b) of the Act on Budgetary Rules). ○ The IS will be modernized to be intuitive and user-friendly. ○ It will be publicly available in a format for further use. ○ The possibility of automated consolidation of grants (concerns) will be examined and a suitable solution chosen. If necessary, a proposal to supplement the obligation for the parent company of the group to file data contained in the corporate governance report in a machine-readable format so that data on grants can be consolidated, will be considered. ○ The IS will enable other public sector entities to be connected. The possibility of their involvement in the IS as grant providers will be discussed with local self-government bodies. 3. What results do we want to achieve by implementing this commitment? ● Public control, thanks to which we will achieve a high level of transparency in the allocation of grants. ● Reduction of administrative burden in the publishing of information on grants. ● Verifiable data on the total amount of grants for consolidation units in public-interest entities. ● Assistance to grant providers who lack mutual sharing information between themselves for optimal and effective achievement of grant policy objectives.

Analysis of the commitment

1. How will the commitment promote transparency? In a very fundamental way, because information on grants provided by the state will be clearly published in one place.

2. How will the commitment help foster accountability? Grant providers will have better information for awarding grants.

3. How will this commitment improve citizens' participation in the development, implementation, and monitoring of solutions adopted? This is essential because the access by citizens will allow for better public control over the use of public money.

Commitment Planning (Milestones | Foreseen outputs | Estimated date of completion)

Decision on the technical implementation method and on how to take into account consolidation | Supplementing the methodology. Where appropriate, consideration in draft legislation. | 1 April 2023

Implementation of a version of the information system with complete information on grants provided by the state and its organizations | An information system that is intuitive to use and consistent with the methodology. | 1 December 2023

Action Plan Review

Commitment 7. State grants transparency

Ministry of Finance

For a complete description of the commitment, see commitment 4.7 in the Czech Republic’s 2022–2024 action plan: https://www.opengovpartnership.org/documents/czech-republic-action-plan-2022-2024

Context and objectives

Commitment 7 continues the efforts started in the 2020–2022 action plan to enhance state grants transparency by improving existing information system. The commitment envisions to develop a Register of Subsidies at the Ministry of Finance to record data on subsidies, repayable financial assistance, and other similar grants provided from the state budget.

In the status quo, information on state grants is available but scattered across different databases that are not interconnected, and the data cannot be easily compared. In the previous OGP cycle, two rounds of consultations were undertaken, and the stakeholders opted for an adaptation of the existing information system on state grants with the view to publish data in a uniform format so that all information systems on grants provide the standardised sets of information. [27]

Potential for results: Substantial

Standardisation of data format and content to be published in these information systems has potential to substantially enhance transparency and public control over the distribution and use of state finances. It will allow watchdogs and stakeholders to search and compare data of awarded grants as well as access grant titles and related documentation. CSO representatives interviewed by IRM also echoed this view. [28]

Creating a unified public evidence of state grants is part of the 2023 government program statement, [29] and also a priority of the civil society striving for a greater transparency of existing data on recipients of state finances and their use. [30] Based on technical and legal possibilities, it further promises development and modernisation of the information system on state grants to include all European and national grants and provide more detailed information on individual grants (i.e., aid amount, grant title, and decision or public law contract). Improvement to the information system would make it more intuitive user friendly to use, publicly available, and interconnected to the information systems of other public sector entities and potentially also self-government bodies. [31] For grant providers, the information system could be useful to share information on grant recipients with the view to optimise effective use of public resources.

Opportunities, challenges, and recommendations during implementation

The overall success of Commitment 7 would depend on the quality of data to be published in the unified information system on state grants and its user friendliness. Information on the use of state grants should be made available and easy to navigate to search for recipients and documentation of grants from different state entities. [32] The impact of this commitment will increase substantially if grant providers among self-governing bodies were obliged to also publish their data in the uniform database.

In their programme statement, the government promises to build a unified database of state grants, which means that the government is prioritising this commitment. However, successful implementation would also depend on the gradual progress of developing and modernising the database and its datasets. To meet the high expectations, IRM recommends the following:

• Allocate sufficient personnel, technical, and budgetary capacities to implement the commitment in the promised quality and in time.
• Consult civil society stakeholders regularly on the information system development. Seeking input from civil society could also be used to verify the accessibility, searchability, and comparability of published data with other information systems.
• Ensure that published data are of interest to relevant stakeholders and facilitate public control over the use of state finances in practice. While institutions could enable public reporting of suspicious contracts, implementation could be more ambitious and foster engagement with communities of civic watchdogs and activists to report suspicious public spending. The OpenCoesione ecosystem in Italy [33] and Dozorro community in Ukraine [34] are two good examples of such practice in OGP.