Closing of Investigation No VIZSG/004/2025 – Correlations among five GINOP projects

The Integrity Authority (“Authority”) conducted a targeted investigation into the following EU-funded projects aimed at energy efficiency modernisation and business development: GINOP-1.2.9-20-2021-03621, GINOP-4.1.4-19-2021-03778, GINOP-4.1.4-19-2020-02661, GINOP-4.1.5-22-2022-00074 and GINOP-4.1.2-18-2018-00095.

The beneficiaries of the projects were granted a total of HUF 419,278,553 in funding. A common feature of the projects was that they were implemented partly by the same companies and individuals, resulting in the funding circulating within a limited group of economic operators. Furthermore, several projects were implemented on the same or adjacent properties.

The Authority found that a long-standing and extensive business and personal network of relationships existed among the economic operators acting as project beneficiaries or contractors. This network of relationships may have contributed to EU funding becoming concentrated within a small group of economic operators, which in itself is not unlawful but may have posed a risk to transparency and competition.

The Authority found that in three of the investigated projects, the relevant call for proposals did not require the conduct of any procurement procedure for the selection of suppliers or contractors. The beneficiaries were therefore potentially able to enter into contracts with companies with which they had maintained business and/or other ties extending back several years.

In relation to Project ID GINOP-4.1.2-18-2018-00095, the Authority found that in the course of the procurement procedure, the price quotations submitted to substantiate the market price were almost identical in terms of both content and form. The Authority maintains that this circumstance raises suspicions of a lack of independence and genuine competition. Consequently, the Authority requested the Managing Authority to launch irregularity proceedings.

Furthermore, the Authority found that the building subject to energy efficiency modernisation under Project ID GINOP-4.1.4-19-2020-02661, located on the property serving as the place of implementation, did not have a planning permission. Although the Managing Authority was not required to investigate this matter under the call for proposals, funding was nevertheless awarded for a building with unresolved legal status. Therefore, in addition to issuing a recommendation on the handling of similar situations, the Authority requested the GINOP Managing Authority to take measures in order to restore the lawful status of the property.

Based on available documents and the investigation conducted, the existence of personal connections between certain actors involved in the projects and employees of the National Development Centre cannot be ruled out. Therefore, following the Authority’s notification, the Directorate of Internal Audit and Integrity conducted a conflict-of-interest investigation, which ultimately did not establish the existence of a conflict of interest. To prevent similar cases from occurring in the future, the Authority issued a recommendation to the Directorate of Internal Audit and Integrity to establish internal procedures.

The Authority’s position is that although the rules in force at the time were not formally violated in several cases, the network of relationships discovered among the actors involved in the projects, the procurement practices, and the failure to examine the cadastral map extracts and verify the existence of the planning permissions of the properties serving as the place of implementation call for enhanced oversight and the tightening of procedural arrangements.

The Authority therefore proposed several measures and issued various recommendations to the GINOP Managing Authority and the National Development Centre to ensure that the use of European Union funds becomes more transparent and easier to monitor in the future.