Audit Office finds oversight shortcomings in Finland's €4.1bn business subsidy system

Finnish government spending on subsidies for business increased in 2016, but the number of recipients fell, according to a new report from the State Audit Office. The report also uncovered deficiencies in oversight of the spending.

Finland paid out some 4.14 billion euros in business subsidies last year, according to a report from the State Audit Office (VTV) - and there were some discrepancies in how the payments were made - writes

The 4.14 billion euro figure is a hefty increase on the 3.27 billion spent in 2015, but the number of companies who received subsidies declined.

The compliance audit looked at twelve different types of support for businesses, and found that evaluation of impact was difficult because additional external funding will almost always result in some added value.

Compliance with EU regulations was found to be good, but the state agencies were found to be not as good at assessing the need for subsidy payments. In six cases payments were found to breach Finnish guidelines.

Written applications necessary

Wood production subsidies have been paid without the written applications required by law, business subsidies have been paid for projects started before the application period opened, and in some cases costs that should not have been covered by subsidies have been paid for out of state funds.

The audit office says that subsidies cannot be treated as an automatically-granted funding source.

"Legislation and associated criteria should be clearer, so that business subsidies do not become an automatically granted source of funds for the kind of companies who could fund their activities some other way," said the lead auditor on the report, Jenni Leppälahti, in a press release.

The report included recommendations for six different government bodies to ensure proper oversight of the grants.

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