Closing of investigation No VIZSG/11/2025 – LEADER Projects and Nursery Investment in Tiszanagyfalu

The Integrity Authority’s investigation identified several suspected irregularities in relation to the LEADER projects and the nursery investment of the Municipality of Tiszanagyfalu.

Based on a whistleblower report, the Integrity Authority (“Authority”) has conducted an investigation into five LEADER projects supported under the Rural Development Programme (RDP) and one project supported under Call for Applications ID TOP-1.4.1-19-SB1, all linked to the Municipality of Tiszanagyfalu (hereinafter referred to as “Beneficiary”). The six projects were granted a total funding of HUF 192,375,605.

A common feature of the projects is that the same sole proprietor appears in all of them as tenderer: submitting a successful indicative tender in one case; emerging as the successful tenderer for equipment procurement, event organisation, marketing, and information obligation services in four cases; and handing in an unsuccessful tender in one case.

Based on available information, the Authority found that the sole proprietor and the council of the Beneficiary cannot be considered independent of one another in relation to the projects.

The Authority established, in relation to several LEADER projects, that there was an employment relationship between the successful tenderer and one of the unsuccessful tenderers at the time the tenders were submitted. In the case of the LEADER project for the construction of a walkway and gazebo, the head of the successful tenderer was simultaneously an employee of the working body of the organisation, acting as the local action group responsible for preparing the tender decision, which, according to the Authority, also constitutes a conflict of interest.

The successful contractor of the project for the construction of a modern playground purchased a significant part of the playground equipment from a domestic distributor for HUF 7 million gross and subsequently sold it on to the Beneficiary for HUF 12.5 million gross – thereby registering an approximate profit of 43.9%. The prices listed on the distributor’s website also confirm an overpricing of at least HUF 5 million.

The Authority uncovered several problems regarding the equipment purchased in the project for the construction and extension of nursery places. The Authority found that the successful tenderer was not independent either of the other economic operator invited or of the Municipality. Also regarded as suspicious was the fact that the successful tender was completely identical to a previous indicative tender. Another inconsistency arose from the fact that the successful contractor had already purchased part of the equipment prior to submitting the tender, including items that in fact were unrelated to its main registered activity.

In light of the presented inconsistencies, independence issues, and non-compliance with calls for applications, the Authority requested the Managing Authorities concerned to initiate and conduct, as part of the measures, irregularity proceedings to verify the independence of tenderers, the conditions for fair competition, the authenticity of submitted documents, and conformity with market prices. The gross amount affected by suspicions of irregularity totals HUF 46,109,039.