The Justice Fund (Fund for Victims Support and Post-Penitentiary Support) is a state specific purpose fund. Originally, the Fund was to help crime victims and support persons leaving correctional facilities. In 2017, those objectives were extended by crime prevention. In line with the Public Finance Act, the revenue of the specific purpose fund derives from public money and costs are incurred to carry out selected state tasks. The Fund Administrator is the Minister of Justice.
Operations of the Justice Fund have sparked huge interest of citizens, media and public finance experts for many years now. In 2023, the Fund’s revenue exceeded PLN 424 million. The money should be used to help crime victims and persons who return to society after imprisonment. Unfortunately, the way the funds were used for many years was in gross contradiction to the core of the operation of specific purpose funds. Also, the scale and type of irregularities evoked justified outrage against wasting public money which should go to the most needy.
Profeto.pl Foundation
A glaring example of improper use of public funds was the construction of the facility “The Archipelago – Islands Free from Violence” by the Foundation. The costs of erecting the building were estimated at nearly PLN 100 million. In line with the investment assumptions, support was to be provided only for one year and only PLN 3.5 million (3.6% of the estimated cost of the facility construction) was to be earmarked for that purpose. In practice, in the remaining scope the building could be used for any purpose at the Foundation’s discretion.
The original subsidy contract of April 2020 to establish a specialist facility for crime victims totalled PLN 43 million and in subsequent years it was annexed several times: by PLN 16 million in January 2022, by PLN 12.7 million in November 2022 and by about PLN 27 million in May 2023. It needs to be added that the applications did not include a detailed calculation or reasonable justification of the costs increase.
The bid submitted by Profeto.pl was erroneous, did not comply with the law or the bid notice requirements. The Foundation itself was not prepared to carry out the task. It needs to be underlined that the Foundation did not have the right to freely use the plot where the investment was planned (it owned only about half of the investment).
The first general contractor was selected in a dishonest and non-competitive way and the construction works on the investment area started before obtaining the construction permit. For approx. 1.5 years the construction was unauthorised and so the amount of PLN 27.7 million spent in that period is non-eligible and should be returned. As part of the investment, a lot of materials and services were purchased at inflated prices which resulted in wasting over PLN 2 million.
The audit findings also indicate that while carrying out the construction investment by Profeto.pl Foundation, public funds of nearly PLN 477 million were embezzled. Besides, over PLN 7.2 million was paid for construction works which were not completed. Because of some problems on part of the general contractor, subcontractors needed to be paid PLN 4.17 million again for the same works. In June 2022, a new general contractor was selected who had his compensation raised by over PLN 14.3 million without reason, which NIK considers wasteful.
In the long run, the money coming from the Justice Fund subsidies was used to erect a building of over 6 thousand square metres with two underground floors and three on-ground floors.
NIK’s audits
In the audit completed in 2021, NIK negatively evaluated activities of the Fund Administrator. Besides, it questioned over PLN 280 million expenses incurred against the law, inappropriately or uneconomically. Following the audit five reports of possible criminal activity were filed with law enforcement bodies, as well as a motion to the Constitutional Tribunal on non-compliance of regulations on the Justice Fund functioning with the Polish Constitution and provisions of other acts.
The audit findings were provided to the then Prime Minister, the Minister of Justice and the Head of the Central Anticorruption Bureau.
In spite of that, the state authorities did not take effective steps to eliminate the irregularities found at the time or implement NIK’s audit recommendations. As a consequence, other, very serious irregularities were revealed.
The audit covered the Fund Administrator – the Minister of Justice and 22 beneficiaries of the Fund’s money with whom 30 subsidy contracts for over PLN 260 million were signed. The audited period was 2021-2025, though the contracts investigated by NIK were signed in 2019-2023.
Since the audit indicated a range of cases implying possible criminal activity, NIK President also resolved that complete audit documentation should be provided to the Public Prosecutor to use NIK’s findings in ongoing investigations.
Recommendations
As a result of irregularities identified in the audit, NIK has made over 90 audit recommendations. In 21 cases NIK demanded reimbursement of public funds spent against the law or contract, totalling over PLN 65 million (at this stage of the audit).
The findings mentioned above do not exhaust the full scale of irregularities. NIK will provide information about further action immediately after it is completed.
