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TI Turns to the Ombudsman Regarding Recent Government Audit

TI Turns to the Ombudsman Regarding Recent Government Audit

Transparency International Hungary continues to question the legal mandate of the Government Control Office (KEHI) to conduct any audits related to support received from the Norwegian Civil Support Fund, and complains about the lack of legal remedies against the action. For these reasons, TI-Hungary turned to the Ombudsman for protection of its rights. At the same time, having always been a strong advocate of transparent operations, TI Hungary has nothing to hide and handed over requested documentation to KEHI on June 25th.

Although TI Hungary views the audit initiated by KEHI as politically motivated, and its legal basis as questionable, it turned over requested documents to KEHI on June 25th.

Prior to complying with the request, TI Hungary turned to KEHI for an explanation of its jurisdiction in the matter. We believe the response still does dispel doubts about an unequivocal legal mandate to audit civil society organizations in their use of foreign donations not channelled through the state budget.

According to Article 63 (c) of the Public Finance Act KEHI’s control scope extends to budget support allocated from the central budget or from any other subsystem of public finance – including grants and subsidies received under international treaties. The word “including” is not a clear indication as to whether KEHI’s control powers extend to ALL funds which are coming into the country under international treaties, even when they do not enter any of the subsystems of the central state budget.

Financial support granted through Norwegian Civil Fund are not disbursed through the central budget or any of its subsystems, therefore it remains highly debatable whether KEHI has any legal basis to audit the distribution or use of any such funds.

In our letter to KEHI, we also inquired about available legal remedies and complaint mechanisms. The response only underscored our suspicion: no one is in control of the controller. We find it disconcerting that we cannot turn to the courts if we find KEHI’s intention to audit prejudicial, or intend to question KEHI’s debatable jurisdiction in the matter.

As KEHI can suspend the tax number of any entities refusing to cooperate with it, we see no alternative to complying with their request. Should TI Hungary’s tax number get suspended, we would cease to be able to operate any further.

KEHI therefore has very strong incentives at its disposal to compel cooperation. We object to a situation, as well as find it contrary to European legal norms that no effective legal remedies exist against such sanctions.

Furthermore, the lack of an effective remedy can hardly be reconciled with Article XXVIII. (7) of the Fundamental  Law of Hungary  which states that “everyone shall have the right to seek legal remedy against decisions of the courts, authorities or other organs of public administration which infringe his or her rights or legitimate interests.”  We cannot stay silent on infringements of fundamental rights.

Therefore TI Hungary turns to the Ombudsman to investigate KEHI’s actions and, if necessary, establish the incompatibility of the regulations on KEHI’s control scope with the Fundamental Law.

As TI Hungary has nothing to hide, we will continue to cooperate with KEHI in the meantime.

Transparency International Hungary used the funds received through the Norwegian Civil Fund for its national anti-corruption training program, “TI Academy”. As part of the program TI experts are giving lectures around the country, developing a 12-course curriculum that is delivered to university students across the country, encouraging them to combat corruption proactively and equipped with effective solutions.

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