Changes to tax offices came into effect on 1 January 2023. The new organisation was intended to facilitate the conduct of preliminary proceedings in criminal tax cases. The number of tax offices conducting preliminary proceedings has been reduced from 400 to 16 – one for each voivodship. In those offices whose heads have been appointed to conduct preliminary proceedings and represent the authorities in court in cases involving fiscal offences and misdemeanours, fiscal criminal divisions have been established, comprising fiscal criminal units.

The reorganisation was intended to enable effective staff management and to even out the uneven workload between offices within a given revenue administration chamber. It was also intended to facilitate the exchange of experiences among staff within the new multi-member fiscal criminal affairs units and to ensure the continuity of operations in the event of staff absences. As a result, the organisational changes were intended to have a positive impact on the quality and efficiency of the tasks carried out and to improve the operational efficiency of the revenue administration without altering its resources.

The audit covered the years 2022–2024 and was the first to examine the issue of preliminary proceedings in criminal tax cases conducted by the National Revenue Administration. Its aim was to ascertain whether KAS had conducted its preliminary proceedings correctly and thoroughly during the reorganisation.

Thorough preparation for the reorganisation

During the period under review, the mission of the National Revenue Administration was defined as ensuring stable and efficient public finances and high-quality services. On the one hand, KAS was intended to be a supportive organisation, assisting honest taxpayers and businesses, whilst on the other hand

– it was to be efficient and effective in conducting criminal and fiscal criminal proceedings.

The preparations for the reorganisation were thorough – they were preceded by needs assessments, the legislative process for the regulation introducing the changes was smooth, and the directors of the revenue administration chambers generally implemented the changes to the relevant organisational regulations on time. The necessary measures are set out in the recommendations issued by the Ministry of Finance to the directors of the revenue administration chambers on 19 September 2022. They set out the scope of activities, particularly with regard to organisational matters, human resources and IT systems. With a few exceptions, the measures set out in the recommendations have been implemented in all the offices covered by the audit. An analysis of staffing levels was carried out, new job descriptions and authorisations were drawn up, training was provided, and staff in the fiscal criminal affairs units – designated to conduct preliminary proceedings – were granted access to the necessary applications and systems. However, despite the recommendations, not all offices have set up a team or position dedicated to key entities, a decision which was justified, among other things, by the fact that there were too few such entities. In two offices, it was found, amongst other things, that the job descriptions for staff assigned to conduct fine proceedings had been drawn up inaccurately or had not been updated, and that appropriate training had not been provided for some staff members.

Workload in offices

The reorganisation was intended to enable more efficient management of human resources and reduce excessive workloads. One of the tools for effective management was to be a workload assessment model. The Ministry of Finance has undertaken analytical work on its preparation, but this had not been finalised by the time the audit was completed. The heads of offices monitored and analysed the workload in the SKK units and took appropriate action in the event of an uneven distribution of tasks. However, a comprehensive analysis of the workload required taking into account, amongst other things, the significant caseload relating to the Accounting Act, the varying degrees of complexity of the cases, as well as the differing levels of competence and qualifications among staff. On an annual average basis, the figures per employee of the SKK unit for the years 2021–2023 were as follows: 41.1, 33.6 and 35.1 ongoing preliminary proceedings, and 44.4, 38.9 and 32.3 completed preliminary proceedings.

Achieving the planned results

An assessment of the initial effects of the reorganisation was carried out at the Ministry of Finance on the basis of an anonymous and voluntary survey of staff in the SKK units. Respondents mainly reported problems relating to the use of IT systems, including issues with hardware and software. Fewer than one in five respondents (18%) gave a negative assessment of their cooperation with non-designated tax offices in relation to tasks carried out in the area of criminal tax matters. Following the presentation of the survey results, the directors of the revenue administration chambers were obliged to report on the measures taken to improve the functioning of the SKK units following the reorganisation.

In April 2024, an impact assessment of the centralisation of fiscal criminal proceedings was carried out, which showed, amongst other things, that between 2022 and 2023 the number of staff employed in the SKK units fell by 8%, whilst the number of staff authorised to impose fines for fiscal misdemeanours increased by 15%. During the same period, the costs associated with the use of private cars by SKK units rose by 375%, whilst the amounts paid in allowances to SKK unit staff at tax offices increased by 158%. Furthermore, the number of proceedings initiated in cases involving offences under the Accounting Act has risen by almost 100%. The above analysis showed that the intended outcomes of the reorganisation had been achieved. Nevertheless, its negative effects have also been identified. 

During the period covered by the audit, there were personnel changes within the SKK units. Following an initial 2.7% decline in employment between 1 January 2022 and 1 January 2023, there was a 3.3% increase as of 1 January 2024.

A downward trend in some of the statistics relating to proceedings

The downward trend in the number of preliminary proceedings initiated and concluded between 2022 and 2023 was reversed in 2024, i.e. in the second year of the reorganisation.

It is true that in 2024, compared to the previous year (2023), there was an increase of almost 24% in the number of proceedings initiated and of almost 21% in the number of proceedings concluded, nevertheless, in the first two years of the reorganisation (2023–2024), compared to the preceding years (2021–2022), the total number of proceedings initiated was lower by almost 20%, and those concluded by over 33%. Therefore, trends in this area require monitoring, and the impact of the reorganisation must be analysed in the coming years.

At the same time, the value of tax receivables at risk or reduced in cases involving fiscal offences and fiscal misdemeanours rose by 36%, totalling PLN 6.2 billionbetween 2021 and 2024. Furthermore, in 2024, this figure fell by more than 8% compared with the previous year (2023). Between 2021 and 2024, the total amount of fines and sums paid under the voluntary settlement scheme amounted to PLN 226.5 million. In 2024, there was an 11% increase compared to 2023, whilst there was a decline of almost 22% between 2022 and 2023.

Following the reorganisation, the target set out in the annual action and development plan of the National Revenue Administration regarding the proportion of completed preliminary proceedings out of the total number of ongoing proceedings for 2023 and as at the third quarter of 2024 has been achieved. The target for the value of seized assets for 2023 was also achieved, but by the third quarter of 2024 it had not yet been fully met, partly due to the complexity of the cases and the need to carry out additional procedural and operational activities.

Irregularities in the conduct of preliminary proceedings

The audit revealed that, with regard to the grounds for refraining from initiating preliminary proceedings, in four (out of the seven examined) designated offices, the assessment of negative procedural grounds was carried out on the basis of internal regulations that were inconsistent with the provisions of the Fiscal Penal Code. Irregularities were also identified in relation to the unreliable documentation or lack of documentation of: negative procedural grounds identified, legal bases or circumstances taken into account when assessing the existence of negative procedural grounds, as well as instances of irregularities in the decision not to initiate preliminary proceedings or formal irregularities.

The audited authorities did not always conduct proceedings relating to fiscal offences and fiscal crimes correctly; however, in most cases, the irregularities identified were few in number and did not have a significant impact on the activities under audit. Only one of the seven audited offices received a negative rating in this area. The irregularities identified during the audit concerned, amongst other things: delays in initiating proceedings, failure to apply in a timely manner or failure to apply for an extension of the time limit for conducting an investigation into a fiscal offence or a fiscal misdemeanour, allowing the statute of limitations to expire, failing to notify a party to the proceedings of a change in the authority conducting the preliminary proceedings, and the improper conduct of preliminary proceedings (resulting in the premature discontinuation of proceedings where available evidence has not been exhausted, or the court issuing a ruling to refer the case to the head of the office to remedy significant deficiencies), delays in submitting applications to the court for permission to voluntarily submit to liability.

Recommendations

NIK is submitting a proposal de lege ferenda to the Minister of Finance and the Economy to regulate the transfer of materials necessary for conducting preliminary proceedings from non-designated to designated tax offices. It also calls for the effects of the reorganisation to be monitored and analysed in the coming years.

NIK requests the directors of the revenue administration chambers to:

• ensure that decisions are issued regarding the extension of preliminary proceedings and regarding the approval of orders to discontinue, suspend or refuse to initiate such proceedings before the expiry of the time limit within which, pursuant to Article 153 of the Fiscal Penal Code, the proceedings should be concluded;
• remove from current internal regulations the grounds for refraining from initiating preliminary proceedings that are inconsistent with Article 53(7) of the Fiscal Penal Code;
• strengthen oversight of preliminary proceedings conducted by heads of tax offices and ensure that decisions not to initiate such proceedings are made correctly.

NIK requests the heads of the designated tax offices to:

• ensure that applications for the extension of preliminary proceedings, as well as decisions to discontinue, suspend or refuse to initiate such proceedings, are forwarded to the revenue administration chambers for approval before the expiry of the time limit within which, pursuant to Article 153 of the Fiscal Penal Code, the proceedings must be concluded;
• strengthen oversight of representatives of the head of the tax office authorised under Article 118(3) of the Fiscal Penal Code, with regard to the prompt initiation of preliminary proceedings.

State special-purpose funds are a specific organisational form of public finance sector entities. They constitute an exception to the principles of unity and universality of the state budget by setting aside specific categories of revenue and allocating them to finance a precisely defined, narrow range of state tasks. In theory, this should lead to improved operational efficiency and ensure stable funding.

The Fund for Victim Support and Post-Penitentiary Assistance – the Justice Fund (the Justice Fund or the Fund) was established in 2012, primarily to assist victims of crime. Legal, psychological or financial support for these individuals, funded from sums awarded against the convicted persons, was intended, on the one hand, to be an expression of social justice and, on the other, to demonstrate the state’s concern for victims.

The implementation of these objectives has been regularly scrutinised by the Supreme Audit Office (Najwyższa Izba Kontroli, NIK) in recent years (Assistance to victims of crime under the Victim Support Fund – in 2018; Implementation of the state budget in 2018, part 37 - Justice and the implementation of the financial plans of the Victim Support and Post-Penitentiary Assistance Fund – the Justice Fund and the Fund for the Vocational Activation of Convicts and the Development of Prison Work Schemes – in 2019; Implementation of the tasks of the Victim Support and Post-Penitentiary Assistance Fund – the Justice Fund – in 2021), and the findings of the audit were forwarded to the Fund Administrator, namely the Minister of Justice. “The findings of these audits revealed that funds intended primarily for victims of crime were in fact spent on other purposes, and in an uneconomical and irresponsible manner,” says Paweł Gibuła, the acting deputy director of the NIK’s Department of National Security, who oversaw the audit. Given that those acting as Fund Administrators until December 2023 rejected requests/motions made by the Supreme Audit Office (NIK), either by failing to act on them or by implementing them in a manner entirely at odds with their actual content, the NIK Council, in August 2023, included a further audit of the functioning of the Justice Fund in the NIK Work Plan for 2024.

Circumstances surrounding the conduct of the audit

The audit by the Supreme Audit Office (NIK ), which began in May 2024 (covering the period from 1 January 2021 to 9 May 2025) was intended, in addition to summarising previous audits, to enable the development of recommendations that would systematically counteract the wasteful use of public funds and restore to victims of crime the funds due to them. The audit coincided with law enforcement activities in connection with an investigation into irregularities in the expenditure of funds from the Fund. It was therefore conducted under exceptional circumstances, which included: the seizure of documentation by law enforcement bodies; the detention of senior management from certain audited entities in a remand centre; and the refusal of those responsible for the identified irregularities to give evidence or provide explanations, invoking the threat of criminal liability. This resulted in the need to extend the audit at the audited entities, but did not affect the scope or significance of the findings made by NIK.

– As part of this audit, NIK once again conducted a comprehensive examination of all aspects of the Justice Fund operations, focusing on the proper and effective use of funds by the Fund Administrator and 22 beneficiaries: one university and 21 non-governmental organisations, with which 30 contracts were concluded with a total value of over PLN 260 million, representing just over 30% of the total value of contracts in force during that period – explains Paweł Gibuła. The audit covered all areas of the Fund activities:

• post-penitentiary assistance;
• assistance provided to victims of crime and witnesses;
• crime prevention.

The free and uncontrolled use of funds

Legislative changes introduced in 2017, which broadened the Fund objectives to include the broadly defined and vague concept of ‘crime prevention’, resulted in funds being allocated to such a wide variety of tasks that , in the opinion of the NIK, the Justice Fund has, in practice, ceased to function as a dedicated fund. By introducing the so-called non-competitive grant allocation procedure, the Minister of Justice has ensured that funds could be allocated to virtually any institution and for any purpose. Those who held the post of Fund Administrator until December 2023 consistently disregarded the assessments, comments and motions made following successive audits by NIK and awarded grants for projects that only appeared to fulfil the objectives of the Justice Fund. As part of crime prevention measures, funding was provided, for example, for: a construction project used for the Foundation’s own purposes; the development and maintenance of websites on which material supporting specific political parties was published; the purchase of a camper van (under the guise of providing, amongst other things, legal advice); mountain and road races; film festivals; and legal and management training for selected groups of people. As part of the support provided to victims of crime, over PLN 66 million was allocated to a project implemented by the Profeto.pl Foundation, which was required to provide such support for just one year (for more information on the use of public funds by beneficiaries of the Justice Fund, see The Functioning of the Justice Fund).

Contests in name only

“NIK’s negative assessment primarily concerned the way in which grants were awarded from the Justice Fund. When allocating these funds, the Administrator not only failed to ensure equal treatment of all entities applying for funding, but actually favoured certain applicants and made arbitrary decisions as to which of them should receive support” emphasises Paweł Gibuła. In doing so, the Administrator took steps to counter allegations that his decisions were arbitrary by securing favourable recommendations from selection boards for the entities he favoured.

A detailed examination of 15 open tenders (contests) for the award of contracts to non-governmental organisations revealed flagrant breaches of the principles of fair competition. These mainly involved staff at the Ministry of Justice providing informal assistance to certain entities in preparing their bids even before they were officially submitted, and even before the respective contests were announced. The selected bidders (Fundacja Mocni w Duchu, Stowarzyszenie Fidei Defensor, Fundacja Centrum Pomocy Pokrzywdzonym i Prewencji Przestępczości, Stowarzyszenie Przyjaciół Mediów, Instytut Prawa Ustrojowego, Fundacja Warszawskie Seminarium Aksjologii Administracji) were thus given guidance on how to amend or supplement their applications to improve their chances, whilst the Minister thereby had grounds to argue that he was indeed supporting the highest-quality bids.

Pressure on members of selection boards

Another mechanism used to subsidise bids favoured by the Ministry’s leadership at the time was to exert influence over selected members of the selection boards and the substantive assessments they made. The substantive assessment forms were reviewed by the management of the Justice Fund Department or other staff designated for this task, following which these individuals submitted their suggestions regarding changes to the assessments in order to achievethe scores for individual bids expected by the Ministry of Justice. This mechanism was applied, amongst other things, in the case of the Profeto.pl Foundation, resulting in that organisation being awarded a higher score, and the scores of the other participants in the contest being reduced.

Another mechanism identified during the audit that influenced the outcome of the tenders was the referral of selected bids for re-evaluation. It was applied to at least four bids that had initially received a low score and were ineligible for funding. They were then forwarded to other assessors, who this time awarded them marks and scores sufficient to secure funding.

The lack of fairness in contests

The contests examined were organised in an unreliable manner and did not provide the conditions necessary for an objective and independent evaluationof the bids. First and foremost, the Administrator has not drawn up guidelines specifying which elements should be awarded extra marks and in which cases negative marks should be awarded. As a result, members of the selection boards made their assessments on a discretionary basis, evaluating, for example, identical bids and identical circumstances in completely different ways. This has even been sanctioned by the Administrator, who has introduced an additional, entirely subjective evaluation criterion in certain crime prevention tenders – the so-called overall (letter) grade. The letter grade took precedence over the official assessment criteria set out in the Fund Regulation and the number of points awarded.

Competitions for grants from the Fund, which were poorly organised, lacked transparency and were decided on a discretionary basis, were one of the main causes of irregularities in the other areas covered by the audit. – In the case of contests in the field of crime prevention, NIK went so far as to conclude that they were not designed to address real-world problems. Instead, they served as a pretext for using public funds to support a specific group of entities – they financed their day-to-day operations rather than the implementation of the Justice Fund objectives. This resulted in 16 out of the 18 grants in this area being awarded inappropriately, amounting to a total of PLN 98.7 million – adds Paweł Gibuła.

Unsecured contracts, unchecked funds

The Fund Administrator failed to adequately safeguard the interests of the State Treasury in the contracts entered into. He allowed a situation in which a significant proportion of contractors received unjustified, substantial revenue from administrative costs that were settled on a lump-sum basis and were not properly documented. He failed to prevent conflicts of interest involving those responsible for deciding on the allocation of public funds and the beneficiaries of those funds, and did not put in place effective mechanisms to oversee the implementation of contracts. Nor did he carry out a thorough review of the outcomes and costs of the tasks assigned to contractors under grant contracts. The findings of the NIK auditors indicate that the actions of persons acting as the Administrator of the Justice Fund between 2021 and 2023 were unreliable. What is more, such actions were often deliberate and stemmed from a desire to use the Fund resources to support a specific group of entities.

A similar situation arose in relation to activities designed to promote the Justice Fund – decisions regarding the focus and intensity of the promotion, as well as the communication channels used, were made on an ad hoc basis and were discretionary in nature. The contractors for the promotional activities were selected in an unreliable manner, in breach of the regulations, i.e. without applying public procurement law or by maintaining only the appearance of competition, and the activities themselves also served to promote the image of specific individuals. A particular surge in such activities was observed in 2023, during the election campaign for the Sejm and Senate.

Fund management costs have exceeded the limits

NIK also criticised the fact that the Minister for Justice, in breach of the provisions of the Regulation on the Fund, twice exceeded the permissible limit for the Fund operating costs. This happened for the first time in 2021, when the limit stood at PLN 6.4 million and was exceeded by almost PLN 1 million (15%). The service charge threshold was then raised from 2.5% to 4% of projected revenue, but this did not prevent the regulations from being breached again. In 2023, the limit had already risen to PLN 11.6 million, yet it was still exceeded by PLN 16.6 million (142%). This was primarily due to a drastic and unjustified increase in the costs of promoting the Fund during the 2023 election campaign and in the period immediately preceding it, and meant that funds earmarked for assistance to victims of crime or the rehabilitation of former prisoners were used contrary to the applicable regulations, including for the purpose of promoting the person and the circle of the then Fund Administrator.

Lessons not learnt from previous audits

NIK also gave a negative assessment of the measures taken by the Fund Administrator immediately following the conclusion of the audit in 2021 (Implementation of the tasks of the Victim Support and Post-Penitentiary Assistance Fund – the Justice Fund). Not only were the systemic irregularities, identified at the time, not rectified, but on the contrary, their scale has increased.

Furthermore, the measures taken by the Minister of Justice from December 2023 (until the end of the audit) have only improved the legal and organisational framework for the operation of the Justice Fund to a limited extent. – Although NIK welcomes the introduction in December 2024 of regulations designed to limit the risk of discretionary and non-transparent allocation of public funds, there is still neither a detailed list of the Fund tasks nor specific recommendations regarding changes to its operations. The situation was not improved by the establishment of the Council for the Victim Support and Post-Penitentiary Assistance Fund – the Justice Fund – specifically for this purpose, notes Paweł Gibuła.

Conditions for remedial action

During the period covered by the audit, the Justice Fund revenue showed a steady and significant increase – from nearly PLN 377 million in 2021 to almost PLN 470 million in 2024.

The vast majority of revenue came from payments of fines and financial penalties ordered by the courts. Despite steadily rising revenue, successive Administrators within the Ministry of Justice have failed to build up the human and organisational resources necessary to ensure the effective management of these funds. Furthermore, the Administrator was unable to plan the tasks he assigned to individual entities in a reliable manner, and significant amounts of unused funds remained in the Fund bank account (this situation occurred prior to 2017 and has clearly re-emerged since 2024).

Recommendations

The Supreme Audit Office has concluded that urgent, systemic remedial measures must be taken to prevent the wasteful and inappropriate use of Justice Fund resources in the future. NIK presented recommendations to the Fund Administrator of both a legislative nature (proposals de lege ferenda) and an organisational nature. They refer, in particular, to:

1. Implement the organisational changes necessary to ensure the smooth running of the Fund.   The Administrator should establish an effective system for managing tasks relating to the operation of the Fund. In particular, this system should include structures designed to: analyse and plan the Fund intended areas of intervention (e.g. identifying the types of crime to be targeted by prevention measures during a given period), organise calls for tenders, oversee and account for the funds allocated, and evaluate the outcomes of projects financed by the Fund.
2. Develop reliably the programme content, taking into account mechanisms for identifying the issues they address, as well as indicators for assessing the outcomes of their implementation.
3. Draft notices of open calls for tenders (contests) in a manner that clearly sets out the Administrator’s expectations, including, in particular, a precise description of the purpose and method of carrying out the task for which the grant is awarded, together with the expected outcomes and indicators.
4. Develop solutions and establish criteria to enable a substantive, comprehensive and objective evaluation of tender submissions, as well as provide selection boards members with the conditions necessary for a fair assessment of bids, including the development of guidelines enabling the independent assessment of individual bid items and tools for verifying the realism of market prices included in the bids.
5. Introduce legal and organisational measures to prevent conflicts of interest and the emergence of corruption-inducing mechanisms, both at the level of the Ministry and among grant beneficiaries.  The procedures adopted should prevent:
   • the recruitment of staff involved in the assessment and processing of applications who, immediately prior to their appointment, were involved in the implementation of projects funded by the Justice Fund;
   • the employment, on a commercial basis, by associations or foundations of members of the board of a foundation or association acting as the contractor under a grant contract, their close relatives, or members of the governing bodies of such entities;
   • the combining of executive and supervisory roles (e.g. the person carrying out the work and the person approving the expenditure), the roles of those providing support and those verifying their tasks, the provision of support to members of one’s own family, and to individuals sitting on the governing bodies of foundations or associations.
6. Strengthening the Administrator’s oversight of the proper implementation of grant contracts by contractors, in particular by verifying the objectives set, the indicators achieved, the outputs produced and the expenditure incurred for this purpose.

In the opinion of the Supreme Audit Office (NIK), the establishment of such mechanisms would ensure the rational use of public funds, inter alia by eliminating the duplication of funding for the same expenditure from different sources and by curbing the discretionary decisions of the Administrator regarding the allocation of funds in areas where he lacks sufficient competence or the capacity to act effectively.

The Supreme Audit Office has carried out an audit of the support provided by non-governmental organisations to people with disabilities and their carers. This support was financed from the Solidarity Fund, which was administered by the Minister responsible for social security (hereinafter: the Minister). The rules governing the provision of support were laid down by the Minister in the programmes adopted thereby (which were in force during the period covered by the NIK audit):

1. ‘Personal assistant to a person with disabilities’ and ‘Personal assistant to a disabled person’ in the 2022 and 2023 editions,
2. ‘Respite care for family members or carers of people with disabilities’ and ‘Respite care’ in the 2022 and 2023 editions.

 Personal assistance programmes were designed to ensure the availability of personal assistance services, i.e. support for people with disabilities in carrying out daily activities and participating in social life.  Respite care programmes, on the other hand, were designed to relieve the burden on family members or carers of people with disabilities by assisting them with their daily tasks. The respite care service was intended to provide periodic support in meeting the needs of people with disabilities, in place of family members or carers who provide their day-to-day care.

Non-governmental organisations received funding for the provision of these services under contracts concluded directly with the Minister or with local government units.

Lack of continuity in the services provided by non-governmental organisations

Contracts between the Minister or local government units and non-governmental organisations providing personal assistance and respite care services were concluded at intervals that did not ensure the continuity of these services. This is because these contracts were signed as long as several months after the expiry (in December of the relevant year) of the previous contract concerning the amount and method of transferring funds from the Solidarity Fund. As a result, non-governmental organisations faced difficulties in retaining staff providing services and in securing stable funding; consequently, they were unable to provide optimal care for people with disabilities and their carers during the first few months of the year.

It was clear from the programme specifications and the proposals submitted by organisations to the Minister that personal assistance and respite care services were to be provided from 1 January of the relevant year. In reality, however, until funding was secured, the activities of non-governmental organisations were essentially limited to preparatory work, including the selection of programme participants and the recruitment of assistants and respite care providers. Despite the possibility, as provided for in the draft contracts, of reimbursement for funds spent on implementing programmes from 1 January of the relevant year, non-governmental organisations remained uncertain as to whether they would receive the funds. One of the reasons was that the programme provisions stipulated that the Minister’s approval of the list of bids, together with the amount of funding allocated from the Fund, did not in itself give rise to a claim for the conclusion of a contract. To ensure business continuity, one of the NGOs audited had taken out loans (with the interest on these loans being charged to the organisation’s costs, as it could not be covered by the Solidarity Fund). In the case of contracts concluded with local government units, implementation took place once the contract had been signed.

As a result, during the first few months of each calendar year, those in need of support either did not receive it or the scope of that support was significantly limited.

NIK emphasises that the needs of people with disabilities and their carers are not time-bound and do not end with the current year. Practical support should be provided on an ongoing basis. The findings of NIK audit therefore point to the need to speed up the procedures for concluding contracts and, consequently, for the transfer of funds, in order to ensure the continuity of the services provided.

At the same time, NIK notes that the draft Act on personal assistance for people with disabilities was referred to the Sejm Committee on Social Policy and the Family on 21 November 2025. The draft includes, among other things, provisions regarding the granting of assistance for periods longer than one year, which will ensure the continuity of the services provided.

Inadequate provision of personal assistance and respite care

The organisations audited met the criteria for receiving funding from the above-mentioned programmes. They provided support to the number of people specified in the bids attached to the contracts. The support was generally provided to those entitled to it. The support was aimed, amongst others, at people with a significant degree of disability and those with multiple disabilities (the simultaneous presence of at least two types of disability in a single person), as well as at children who absolutely require constant or long-term care or assistance from another person. One organisation provided support worth PLN 35,600 to two people with disabilities as part of respite care, even though the carers did not live with them; furthermore, the carer of one of these persons had not applied for the support.

The provision of services by assistants and respite carers was confirmed by signatures on the service records from both the service providers and the persons with disabilities or their carers. However, the audit revealed that some of the services had not been performed or had been billed twice; instances of incorrect billing documentation were also identified. An examination of this documentation revealed that, at the same time:

• one assistant, working in two different locations, provided services to various people with disabilities;
• one assistant, in one place, reported services provided to the same person under different programmes (run by the same or different organisations);
• several assistants were providing services to the same person with a disability at the same location;
• several carers provided services to the same person with a disability in different locations.

During an audit by NIK, one organisation corrected 279 hours of personal assistance services worth PLN 11.2 thousand and repaid the funds that had been wrongly claimed – in this case, according to the service records for a person with a disability, the services were supposed to have been provided at their place of residence. In fact, the person with a disability stayed at a centre providing round-the-clock care as part of the ‘respite care’ programme – both services were funded by the Solidarity Fund.

A total of 79 hours of overlapping service, worth PLN 3.2 thousand, were also identified between various non-governmental organisations. In these cases, the organisations were unable to verify the expense claims submitted by the assistants to another programme implementer. This gave rise to a risk that the programmes in question would not be implemented correctly, as well as the possibility that funds might be spent in breach of the programmes’ rules.

Despite being required to deliver the personal assistance programme itself, one of the organisations audited outsourced the provision of the bulk of the services to other providers. The role of this organisation was limited to administration and acting as a sponsor for the project, whilst the support services were provided by subcontractors. The total value of remuneration paid to third parties amounted to PLN 2.23 million, representing 83.4% of the funding received by the organisation and 92.5% of the funds accounted for as direct costs of the project.

Contrary to the terms of the contracts, one of the organisations did not keep separate accounts for the funds received from the Fund, and in one year it did not keep any accounts at all, despite being required to do so. In its programme implementation reports, the organisation accounted for costs amounting to the sums specified in the individual contracts, even though it did not have documentation confirming that these costs had been incurred in full. In its progress reports, the organisation did not provide any documents evidencing that expenditure had been incurred (receipts, invoices, payslips). The total value of undocumented expenditure amounted to PLN 372.1 thousand. This was also due to the fact that a lower pay rate had been set for assistants, whilst in the project implementation report the organisation stated that it had paid assistants the maximum rate. This indicates that there is insufficient oversight of the correctness of the accounting for funds by both the Minister and local government units (as the entities commissioning the performance of these tasks).

An assistant at one of the organisations failed to confirm that he had provided the services he was allegedly supposed to have carried out for a person with a disability. The organisation paid this person a total of PLN 12.8 thoudand.

The total value of the audit findings amounted to nearly PLN 2.9 million. During the NIK’s audit and following the implementation of post-audit recommendations relating to the improper implementation of programmes, the organisations amended their previously submitted reports on the implementation of tasks and returned funds totalling PLN 86.3 thousand.

Recommendations and comments

Based on the findings of the audit, NIK formulated a total of 37 recommendations and post-audit comments. The key recommendations, addressed to non-governmental organisations, concerned the need to:

• ensure that non-governmental organisations carry out ongoing and proper verification of the service claim forms submitted by assistants, and take steps to investigate any irregularities identified;
• make corrections to expenditure reports for items not supported by source documentation, or which were used in breach of the rules of the programmes under review, and to make the corresponding adjustments to indirect costs;
• refund any funds that were unduly collected and misused, together with interest.

The audit covered the Central Board of the Prison Services (Centralny Zarząd Służby Więziennej) in Warsaw (hereinafter: (Prison Service Board or CZSW). Its aim was to assess the proper implementation of selected projects financed by the Fund for the Vocational Activation of Convicts and the Development of Prison Work Schemes (Fundusz Aktywizacji Zawodowej Skazanych oraz Rozwoju Przywięziennych Zakładów Pracy) (hereinafter: the Activation Fund or FAZ) by organisational units of the Prison Service.

During the period under review – from 1 January 2016 to 30 June 2024 – 509 grant applications were approved, totalling PLN 940 million, of which 59 applications, amounting to PLN 275.9 million, related to the construction or renovation of production halls.

The Supreme Audit Office has covered by its audit

• 50 investment projects totalling PLN 216.8 million, of which 43 involved the construction of new production halls (100% of projects of this type) and 7 involved the refurbishment of halls (44%);
• two grants totalling PLN 70 million for the construction of two complexes of buildings to be used as temporary accommodation for Prison Service officers.

NIK has given a negative assessment of the Prison Service Board’s actions regarding the planning and implementation of selected investments funded by the Activation Fund, as well as its supervision of Prison Service organisational units in this area. Illegal, ineffective, inappropriate and wasteful practices have been identified. The total financial impact of the irregularities identified amounted to PLN 149.5 million.

Successive Directors-General of the CZSW, in their capacity as Administrators of the Activation Fund, have, in managing public funds, allowed the following in particular:

• the allocation and expenditure, in breach of the law — i.e. outside the scope of the statutory purpose of the Activation Fund — of funds amounting to PLN 70 million, through the granting of undue subsidies to two prison establishments for the construction of temporary accommodation (flats) for Prison Service officers;
• thewasteful spending of FAZ funds amounting to PLN 34.5 million on unprofitable (loss-making) investments, namely the construction of 14 production halls in which no prisoners were employed and which, as at 31 December 2024, were not in use, whilst the costs of their ongoing maintenance were incurred (in 2023 these costs amounted to PLN 102,430, and in 2024 to PLN 179,110). The process of assessing the market in terms of the actual needs of local contractors, which preceded investment decisions regarding the construction of new production facilities and their location, was carried out in an unreliable manner;
• thewasteful and inappropriate spending of funds from the FAZ and the state budget, totalling PLN 45 million, on the unjustified commencement and execution of the construction of temporary accommodation for Prison Service officers in Racibórz.

The audit found that:

• the investment projects were carried out despite the absence of a formally established programme for increasing prisoner employment, i.e. solely on the basis of a letter from the former Director-General dated 30 May 2016, which set out indicative targets for the programme; these indicators were not updated, despite the passage of time and the general rise in prices and the inflation rate, which constituted an unreliable conduct; the values of the indicators were repeatedly exceeded or failed to be met;
• no evaluation was carried out of the outcomes of the programme to increase prisoner employment, which has been running since 2016, even though the level of public funding and the scale of the investments involved were significant; this was deemed to be unreliable;
• applications for grants from the FAZ were processed without regard to internal regulations on investment planning;
• the terms of the grant contracts relating to the requirements for employing prisoners and the leasing of newly built halls were repeatedly breached.

The significance of the irregularities identified highlighted weaknesses in the management control mechanisms at CZWS.

In its post-audit statement, NIK presented recommendations to:

• the Fund Administrator to cease to award grants for purposes not specified in Article 8(1) of the Act on the Employment of Persons Deprived of Liberty;
• ensure that internal procedures relating to investment planning are followed regardless of the source of funding, in particular by carrying out comprehensive analyses of the merits of undertaking an investment project in a given location;
• implement control mechanisms to strengthen the oversight exercised by the Director-General and the organisational units of CZSW over Prison Service organisational units regarding investment projects planned and carried out on their premises, the leasing of production halls and the employment of prisoners therein, including consideration of strengthening the staffing of organisational units carrying out on-site control activities.

Following the findings of the audit, NIK issued notices to:

• the Prosecutor’s Office regarding the reasonable suspicion of an act constituting an offence under Article 296(1) and (3) of the Criminal Code, consisting in causing financial loss on a massive scale within the meaning of Article 115(6) of the Criminal Code (i.e. amounting to PLN 149.5 million);
• the Public Finance Discipline Ombudsman regarding a breach of public finance discipline due to the award of a grant (amounting to PLN 70 million) in breach of the rules governing the award of grants.

Real property management is a responsibility of the local authority, whilst starosts (mayors of cities with district (poviat) status) carry out government administrative tasks in relation to real property owned by the State Treasury. The rules governing the management of such properties and those owned by local government bodies are set out in the Property Management Act. 

The day-to-day management of the municipality’s real property falls within the remit of the municipality’s executive body. Matters going beyond the scope of day-to-day management fall within the remit of the local council, which may adopt rules governing the acquisition, sale and encumbrance of real property, as well as its lease with/without the right to collect proceeds.

The main objective of the audit conducted by NIK between 2 December 2024 and 30 May 2025 was to verify whether municipalities had sold and let land correctly and reliably between 2019 and 2025 (up to 30 May). A total of 14 municipal offices were audited, including seven voivodship capitals: Bydgoszcz, Katowice, Kraków, Lublin, Łódź, Olsztyn and Wrocław, as well as seven cities that do not have this status: Częstochowa, Giżycko, Piotrków Trybunalski, Toruń, Wałbrzych, Zakopane and Zamość.

Type of irregularity

The tasks relating to the sale and letting of real property in the 14 municipal offices audited were not carried out in a fully correct and reliable manner. The most significant irregularities identified during the NIK audit concerned breaches of the provisions of the Real Property Management Act and the Local Government Act, the Council of Ministers’ Regulation on the manner and procedure for conducting tenders and negotiations for the sale of real property, as well as the principles of sound financial management. This resulted in a number of negative consequences for municipal offices audited, including, amongst others:

• by foregoing the opportunity to sell the City of Lublin’s attractive properties at a profit in favour of exchanging them with estate agents (some of which were sold to developers on the very same day). Before giving their consent to the swap, the members of the council were unaware that the counterparties were estate agents, and that the valuation reports for two of the 17 plots had been commissioned by the estate agents, not the Mayor. As a result, the contracts benefited the estate agents, who sold the properties to developers at a higher price, and the owners of the properties purchased from them, as they avoided having to compete with other bidders in a tender. The potential amount lost by the City of Lublin from these two transactions alone amounted to PLN 395 thousand. An analysis of the location of the land under review revealed that 12 plots were situated in the immediate vicinity of properties already owned by subsequent purchasers (developers). Therefore, they could have been sold through a competitive process (tender), and the transaction prices could have exceeded the valuation;
• allowing resolutions that are inconsistent with the law to remain in force. In nine towns/cities (Wrocław, Wałbrzych, Bydgoszcz, Kraków, Zakopane, Lublin, Giżycko, Piotrków Trybunalski and Łódź), draft resolutions were submitted to city/town councils proposing that they assume powers reserved for the municipal executive body, or no action was taken to amend them. The general nature of the Act’s provisions regarding local legislation significantly increased the risk of irregularities;
• significant shortcomings in tender procedures (Wrocław, Bydgoszcz, Kraków, Zakopane, Giżycko, Olsztyn, Piotrków Trybunalski and Zamość) and non-tender procedures (Lublin, Zamość, Bydgoszcz, Zakopane, Piotrków Trybunalski, Wałbrzych and Wrocław), consisting, amongst other things, in a failure to comply with the principle of selling property by tender and the use of the non-tender procedure instead, which may result in the court declaring the concluded contracts null and void;
• failure to ensure a reliable valuation of the properties being sold (Częstochowa, Bydgoszcz, Zamość, Kraków, Zakopane and Lublin), which created a risk that the properties were undervalued;
• a lack of transparency in the management of property in all the municipal offices examined, and breaches of the principle of openness regarding the sale of public property.

Reasons for the irregularities

The main causes of the irregularities identified were: incorrect interpretation of the provisions of the Real Property Management Act and a failure on the part of staff at the audited entities to exercise due diligence when taking action regarding the sale and letting of land, as well as ambiguous provisions, open to arbitrary interpretation, governing the content of resolutions on the rules for the sale and letting of land, and the grounds for selling land in order to improve the development conditions of neighbouring land.

With the exception of one case (where a plot of land that had been unjustifiably designated for religious purposes was sold), land was sold for construction purposes in accordance with the adopted spatial planning documents. The terms of contracts for the sale or letting of public property were consistent with the outcomes of the proceedings. In fact, they also safeguarded the interests of the towns/cities.

Key findings of the audit

Although the audited offices had set up dedicated units and assigned them specific tasks relating to real property management, two of the offices had not drawn up any plans for the use of their property portfolios at all, whilst two others had drawn them up with delays ranging from seven months to almost two and a half years. In one town, despite this requirement, no plans had been drawn up for the implementation of the State Treasury’s property management policy, which, in the opinion of the Supreme Audit Office, was unlawful. The remaining irregularities concerned breaches of the principles of sound property management, mainly the inclusion of overly general provisions in resource utilisation plans, as well as delays in drawing up these plans and submitting them to voivods for approval.

Irregularities were identified in four local offices regarding the recording of properties forming part of the municipality’s property portfolio and those granted under perpetual usufruct. The misconduct included, amongst other things, the failure to include in the records information regarding the intended use of the property, claims made against the property, and ongoing administrative and court proceedings.

Irregularities in the wording of draft resolutions were found in eight offices and concerned, amongst other things:

• the inclusion in 20 draft resolutions of individual provisions granting consent to the sale of real property by tender or without a tender, which constituted a breach of the division of powers laid down in the relevant legislation;
• the draft resolutions on the rules for the sale of real property specified the form and procedure by which the property was to be sold, which contravened the law and led to the city/town council assuming powers reserved for the executive body;
• the introduction, in one instance, of a draft resolution on the rules governing the sale of real property, providing for a general exemption from the rule requiring the sale of real property by tender;
• provisions in draft resolutions concerning the rules for the sale of real property, granting general authorisation to waive the requirement to conduct a tender procedure for the conclusion of lease contracts for a term exceeding three years or for an indefinite period, which constituted an overreach of the powers of the city/town councils.

Similar irregularities, including instances where the city/town council encroached upon the powers of the executive bodies, were also observed in the letting of property in six municipal offices.

The executive bodies failed to take action to repeal or amend the provisions of the city/town council’s resolutions that were inconsistent with the Real Property Management Act, which constituted a breach of duty. In two cases, voivods lodged appeals seeking to have resolutions on the rules for the sale of property declared invalid. According to NIK, the provisions of the Act granting the relevant municipal council exclusive authority to determine the rules governing the management of real property are very general; they do not contain clear and unambiguous guidelines for the enactment of local legislation and, in their current form, make it difficult to correctly draft resolutions on the rules for the sale of real property. This results in numerous cases where they are declared invalid by supervisory authorities and administrative courts. As part of their supervisory role over the activities of municipalities between 2010 and 2025, voivods issued 790 final supervisory decisions declaring local council resolutions invalid in whole or in part. These rulings were most often justified on the grounds of a lack of a proper legal basis, exceeding the scope of statutory delegation, failure to publish in the Official Journal, infringement of the freedom of contract, the erroneous classification of resolutions as internal management acts, or the use of ambiguous and unclear wording.

Before giving their consent to the sale or letting of a real property, the members of local councils should be provided with comprehensive and accurate information by the local authority’s executive body regarding the land in question and the method and procedure for its sale or letting. Irregularities in this regard were found in two entities and concerned the provision of inaccurate information regarding who was interested in the properties being sold in exchange, as well as a failure to disclose the intended use of the plot being sold.

The property valuations (valuation reports) were carried out by qualified property valuers. In almost half (43%) of municipal offices irregularities were identified, including the failure of the town/city executive body to arrange for a property valuation and the acceptance of valuations prepared by parties interested in acquiring the property; the confirmation of the validity of valuation reports in a manner inconsistent with the law; failing to verify the valuation report thoroughly and failing to take into account current market data used in the valuation.

In three entities, it was found that rent rates had not been adjusted for inflation, which was unprofessional. The amount corresponding to the loss of rental income resulting from the decision not to implement comprehensive rent regulation amounted to PLN 1.3 million.

The regulations require the competent authority to draw up and publish a list of properties intended for sale or letting. Numerous irregularities were found in this regard in 13 offices. These included, amongst other things: a failure to draw up lists; the absence of required elements in their content; the unreliable publication in the local press of information regarding the display of the list in the locations specified by law; or the complete absence of such publication.

In the offices audited, there was a tendency to move away from the principle of selling or letting the property through a tender process. Of the 14 offices audited, only 1.3% of contracts of lease with the right to collect proceeds were awarded through a tender process, whilst only 0.5% of contracts of lease without the right to collect proceeds were concluded in this manner. For example, in Lublin, out of 10 tenders audited, only one bidder submitted a bid in nine of them. He submitted a single bid, and as a result, the purchase price was only 1% higher than the starting price.

Irregularities were identified in the tender-based sale of public property at eight municipal offices. The illegality or unreliability concerned, amongst other things:

• failure to meet deadlines that would have allowed the property sale procedure to continue without the need to draw up a new list (six cases);
• failure to introduce tender conditions for spouses participating in the tender (25 cases);

In seven offices (50% of those audited), 61 irregularities were identified in the sale of property and one in the letting of property without a tender. These related to the criteria of legality, reliability or economy and concerned, amongst other things:

• the conclusion of contracts for the sale of real property without a tender, despite there being no grounds for waiving the tender procedure;
• failure to safeguard the town’s interests in the report of the negotiations in the event that the other party withdraws from the contract;
• failure to document the outcome of negotiations with lessees.

The financial impact of the identified irregularities totalled PLN 2.3 million and resulted from the misappropriation of funds or assets in three municipal offices. Two cases involved the sale of property for over PLN 1 million, and one involved the letting of property for PLN 1.3 million.

Notices and recommendations

Following the identification of irregularities, NIK issued notices to the Office of Competition and Consumer Protection (UOKiK) and the Central Anti-Corruption Bureau (CBA) to investigate whether anti-competitive agreements had been concluded or whether there had been an abuse of a dominant position in relation to the fact that only one bidder had submitted a tender in four tender procedures, and the exchange of 17 properties, which potential loss to the city/town. 

These irregularities led to 97post-auditrecommendations and two proposals de lege ferenda concerning the inclusion in the Local Government Act of the criteria which the local council should follow when adopting a resolution on the principles of managing public property, and to clarify the wording regarding the impossibility of developing a property or a part thereof sold without a tender by specifying objective and verifiable circumstances determining the impossibility of developing the property or a part thereof as separate property.

The Minister for Finance and the Economy set out his position on the report on the audit findings, casting doubt on the proposals de lege ferenda contained therein. In his opinion on the Minister’s position, the NIK President noted that the findings made during the audit justify the Minister taking appropriate action to implement them, which is undoubtedly in the public interest.

The recommendations submitted to the executive bodies of local government authorities concerned:

• taking steps to ensure that the costs of preparing the real property for sale, whether through a tender process or without a tender procedure, are included in the sale price;
• the inclusion in draft resolutions of local government decision-making bodies of clear criteria for the granting of discounts;
• reviewing the current resolutions of the city/town councils concerning real property management and checking whether they contain any provisions that infringe upon the division of powers between local government bodies.

“Updating NIK’s work plan is an important step towards a more cross-cutting approach to audit planning, responding to current challenges the state is currently facing. Security has been adopted as a supreme priority, setting directions for NIK’s activities for 2026” – says Mariusz Haładyj, President of the Supreme Audit Office of Poland.

Security is perceived in a multidimensional way in this document: not only in military terms but it also refers to citizen security, economic stability, protection of infrastructure and resources, resilience of public institutions and social affairs. The work plan has been divided into thematic areas, which enables focusing audit activity on processes being fundamental for the state. Emphasis was also laid on assessment of the state activities aimed at strengthening public trust and effectiveness of the state functioning.

The 2026 work plan covers the following thematic blocks:

• National Security,
• Finance and Public Affairs,
• Development and Economy,
• Cohesion and Infrastructure,
• Social Affairs,
• Natural Resources.

This division makes it possible to carry out audits covering organisational, financial and social aspects and facilitates a more effective threat response.

Key subjects of audits planned for 2026

• Audits scheduled in the National Security area are to deal with the state’s defence capabilities, internal security and civil protection. They will involve, among others, assessment of meeting needs of the Armed Forces of the Republic of Poland in the field of large-calibre ammunition, functioning of the Central Cybercrime Bureau as well as preparedness and operation of the national security management system.

A crucial element will also be audits of human resources management in secret services and assessment of the adequacy and economy of using financial resources from the Armed Forces Support Fund.

The audit scope in this area will be complemented with an assessment of preparedness of the civilian healthcare system to operate in the conditions of an armed conflict, support of shooting training under government programmes and measures related to psychological aid and support for uniform service officers.

In the area of Finance and Public Affairs audits of key processes related to planning, execution and supervision of the state finance were scheduled. They will encompass assessment of the execution of the state budget and the EU funds budget in 2025, implementation of the monetary policy assumptions by NBP and planning of the state’s financial policy for 2026.

The audits will also address selected elements of the activity and financial management of the National Bank of Poland (NBP), efficiency and effectiveness of measures taken by the National Revenue Administration, recovery of receivables and management of free funds by local government units as well as financing of public tasks, including support of the Polish community and Polish people abroad.

• The Development and Economy area will involve audits of efficiency of using public funds and effectiveness of measures fostering the country’s economic development and structural transformation. The following areas will be taken under the microscope: spending of the Reprivatisation Fund, effects of implementing the country’s economic development strategy and implementation of the energy policy in terms of transformation of energy generation sources, taking energy security into account.
• In the Cohesion and Infrastructure area audits have been planned regarding resilience of critical infrastructure, technical and digital security and implementation of policies supporting territorial homogeneity. They will investigate ability to restore road infrastructure after disasters, security at civilian airports in the event of threats involving unmanned aerial vehicles and use of the State's Common IT Infrastructure by the public administration.

NIK auditors will also focus on the functioning of the construction supervision system, implementation of road investments by local governments and conduct of housing policy in selected municipalities. A significant part of audits will be devoted to cybersecurity and information protection, including cybersecurity of information systems and personal data in healthcare facilities, educational institutions and security of water and sewage infrastructure in the face of cyber-attack threats.

• The Social Affairs area comprises audits of quality and availability of public services, as well as effectiveness of the state’s activities in favour of health protection as well as support of families and persons needing help.

Audits in this area will also involve healthcare, including adverse events in healthcare facilities, prevention of HPV infections, implementation of oncology initiatives and financing of clinical trials, performance of social welfare tasks in crisis situations, as well as assessment of the functioning of selected public programmes and institutions, such as: the Institute of Solidarity and Courage, ‘A Good Meal in Hospital’ programme or Youth Sociotherapy Centres.

• Audits in the Natural Resources area will focus on adequacy, efficacy and economy of activities on part of the public administration in the field of environmental protection, agriculture and water management. The audits will cover the following topics: management of agricultural properties, implementation of the “Clean Air” programme, combating bird flu, noise and flood protection, reconstruction of infrastructure after disasters and flood prevention investments.

Additionally, measures supporting agricultural producers affected by natural disasters will be investigated, taking into consideration the social function of forests and implementation of projects increasing the potential of sustainable water management as part of the National Recovery Plan.

A full Polish version of NIK’s work plan for 2026 can be found at the following link: Plan pracy NIK na 2026 r.

Audit no.: I/24/002/LWR

Already in 2018, NIK negatively evaluated the way foreigners’ affairs were handled by the Lower Silesian Province Office. The auditors found at that time that the solutions implemented there did not comply with the principle of equal treatment of parties. They also pointed to untimely review of applications and ineffective supervision. The latest audit results revealed that a lot of issues identified then have not been solved until now. The number of complaints about the office’s inactivity and lengthiness of proceedings has gone up. In 2022-2024, it was 9.7 thousand. However, the internal register kept in the Department of Nationals and Foreigners' Affairs did not contain any data facilitating the control of the process and the dates of reviewing reported issues. Only ad hoc solutions were implemented. In the audited period, 6.8 thousand applications were left without recognition and in nearly 61 thousand cases, as of the end of 2024, applications were reviewed with delays. In the audited sample of issues the decision waiting time in some cases exceeded 3 years and 7 months, on average it was over 9 months, instead of 6 months maximum.

Following the full-scale aggression of Russia against Ukraine, special regulations for immigrants were implemented. Though, the opportunity to shorten the waiting queues was not used as the office did not take sufficient measures to identify cases governed by those regulations. Due to negligence or sluggishness but also improper organisation and control, the Lower Silesian Province Office incurred enormous costs of court judgements and risked incurring subsequent costs in the future. Besides, the documentation on foreigners’ issues kept at the office, also containing data protected by law, was not secured properly.

Potential conflict of interests?

The Director of the Department of Nationals and Foreigners' Affairs in 2024-2025 was a former representative of foreigners who applied for legal stay or work in Poland.

The situation at the Department of Nationals and Foreigners' Affairs was known to the department heads, directors general of the office and the governors who failed to take adequate remedy actions in the audited period. No anti-corruption procedures were developed or implemented, despite identifying a significant risk of irregularities of this kind. Also, adequate supervisory mechanisms were not created in the event of potential conflict of interest.

In legal terms it was not forbidden to appoint persons running business activity related to handling foreigners’ affairs for higher posts in civil service. The NIK audit showed, however, that the department director was hired for that position, although – despite such obligation – she was not screened for management competencies, the ban of taking managerial posts in public authority offices or fulfilling functions related to allocating public funds. Also, the department head was not given the security certificate or the consent to access confidential information, neither was she trained in the protection of classified information.

As a consequence, without having access to classified information the Director of the Department of Nationals and Foreigners' Affairs could not exercise full and effective supervision over issues handled by the department. In addition, no internal control of handling foreigners’ affairs and passport services was carried out, despite the office management being aware of the irregularities occurring in the department.

Foreigners in queues

The NIK audit revealed that foreigners. were not ensured equal treatment in the Lower Silesian Province Office in 2022-2024. The mechanism of setting appointments for foreigners in the office was non-transparent and prone to corruption. Employees of the Department of Nationals and Foreigners' Affairs exceeded their rights by accepting and reviewing applications outside the queuing system. In other words, the corruption-prone mechanism identified by NIK was in that case related to officials taking arbitrary decisions, beyond control.

The NIK auditors found that at the Lower Silesian Province Office and its branch in Legnica in 2022-2024 selected persons were treated in a privileged way, including “significant clients”, foreigners’ representatives and groups of foreigners.

Those persons were allowed to apply for temporary residence due to work and appointments in that matter were agreed with the office employees. In some cases individuals were served out of turn.

Following the audit, NIK highlighted the necessity to urgently and considerably bolster the management control within the scope audited by NIK, both on part of the governor and the management of the Department of Nationals and Foreigners' Affairs. The Governor of Lower Silesia did not raise any objections to NIK’s findings and communicated that NIK’s post-audit recommendations would be implemented.

The newly appointed Vice-Presidents will support the President of NIK in supervising audit activities, coordinating work, and day-to-day management of the institution.

Piotr Miklis, who served as Vice-President of NIK until now, will assume the position of Plenipotentiary for Audit Quality and will cooperate directly with the President of NIK.

Katarzyna Budnikowska

Since 2024, Ms Budnikowska has served as Deputy Director of the Department of Economy, State Treasury and Privatisation at the Supreme Audit Office of Poland. Previously, she supervised audits within the economic sector. She is a graduate of law and completed postgraduate studies in European Union Law at the University of Warsaw, as well as Audit and Control at the Warsaw School of Economics (SGH). An attorney-at-law by profession, she also completed the auditor traineeship programme. Her professional career has been tied to both the private sector and public institutions, specifically in the areas of supervision and audit.

"The motion to appoint me to the position of Vice-President of NIK is a great honour for me and is synonymous with a guarantee to implement the President's vision regarding the functioning of this institution," she said.

Sylweriusz Królak, PhD

Mr Królak is a graduate of the Faculty of Law and Administration at the University of Warsaw with a PhD in Law, a university teacher. Former Undersecretary of State at the Ministry of Justice, where he was responsible for EU legislative issues, including EU accession negotiations. Specialised in constitutional law, he held the function of Director of the Office of Law and Order at the Chancellery of the President of the Republic of Poland. Since February 2024, he has been a Member of the Council of the Supreme Audit Office of Poland. For many years, Mr Królak has been involved in activity related to public administration and the audit and control system.

“My whole professional path is related to the law in two roles: a public official and a barrister. This is 38 years of work, also as a nominated civil servant. In my work I have always laid emphasis on neutral and apolitical approach as well as seeking solutions over divisions. I would like to cooperate in the same spirit, realising the state’s interest and serving the citizens, not driven by my own preferences but by common good. I declare the broadest possible cooperation in this area” - emphasised Sylweriusz Królak, PhD.

NIK President Mariusz Haładyj, justifying the motion to dismiss Piotr Milkis from the function of Vice-President of NIK, underlined that this decision does not stand for the end of their cooperation. Considering the achievements, experience and year-long auditor’s practice of the former Vice-President of NIK, Mr Miklis agreed to take the function of Plenipotentiary for Audit Quality. His key tasks will involve – in cooperation with the President of NIK - developing a model to manage the audit quality and evaluating the compliance of findings with the evidence and reliability of conducted audits.

The positions of Vice-Presidents are now held by:

• Jacek Kozłowski, having experience in the central and local administration, including the areas of management and regional strategies;  
• Katarzyna Budnikowska, having legal and auditing competences;
• Sylweriusz Królak, specialised in constitutional and administrative matters.

The chief guest of the conference was Comptroller and Auditor General in Bangladesh Md Nurul Islam and the special guests were: Ambassador of the European Union to Bangladesh Michael Miller, Ambassador of Poland to India Piotr Antoni Świtalski, Vice-President of NIK Jacek Kozłowski and Secretary of the Ministry of Finance of Bangladesh Dr. Md Khairuzzaman Mozumder.

The project aims at improving supervision exercised by the Office of the Comptroller and Auditor General in Bangladesh (OCAG) over public revenue and spending in Bangladesh. This will translated into better management of public finance and more effective control of corruption and fraud, and also improved efficiency of collection, allocation and use of public resources. The budget of the said project is EUR 2 million and its implementation time is 39 months.

The project will cover three content components related to improving the OCAG capacity in implementing: [1] financial audit – institutionalisation of the financial audit of the central government’s financial reports, institutionalisation of the financial audit of the public authorities’ financial reports, integration of the financial audit with Audit Management & Monitoring System 2.0; [2] performance audit – continued institutionalisation of the performance audit, integration of the performance audit with AMMS 2.0.; [3] IT audit – development of IT audit strategy, conduct of IT audits (model audits).

Participation in the project is an important step in strengthening the position of the Supreme Audit Office of Poland as an experienced and reliable partner in international development initiatives.

Audit no. P/23/055/LKA

In the past years NIK has audited the activity of the state authorities with regard to the COVID-19 epidemic. One of the audits (P/20/062) revealed unjustified and uneconomic purchases of medical equipment and devices, e.g. incomplete, non-functional ventilators, which did not meet Polish requirements. In another audit (D/21/505) NIK identified delays in settling and managing equipment left after the liquidation of temporary hospitals.

Another audit of purchases related to the COVID-19 epidemic was needed because of their large scale and the absence of systemic mechanisms for estimating the demand and monitoring the use of purchased equipment, also after the epidemic. The auditees were: the Chancellery of the Prime Minister, the Ministry of Health, the Ministry of State Assets, the Government Agency for Strategic Reserves, seven provincial offices and seven hospitals.

Questionable legislation on strategic reserves

Strategic reserves are a crucial element of crisis management. Under the Act on Strategic Reserves they are created in case of an emergency, in particular pertaining to security, public health and order, natural disasters or crisis situations. They aim at supporting task performance in terms of the state’s security, alleviating disturbances in the continuity of deliveries serving the functioning of economy and satisfying citizens’ basic needs, also to save their health and life.  

During the COVID-19 epidemic the system of managing strategic reserves was modified. As a result a provision (Article 23) was added to the Act on Strategic Reserves, empowering the minister responsible for strategic reserves to provide paid specialist medical reserves directly to each entity undertaking healthcare tasks, also if there is no crisis situation. This enables using the resources gathered in an emergency mode (e.g. excluding open tender procedure) and designed for extraordinary tasks – to pursue ordinary objectives which should be achieved using standard procedures. NIK has critically evaluated this amendment.

During the pandemic also the Act on Prevention and Control of Infections and Infectious Diseases in People was amended in terms of providing strategic reserves by the Agency of Material Reserves (from 21 February 2021 the Government Agency of Strategic Reserves, or: Agency). According to NIK the issue of using strategic reserves to control or prevent crisis situations was comprehensively regulated in the Act on Strategic Reserves and Article 46d is a breach in the reserve management system. This provision gives more powers to the Ministry of Health, overlapping with the mandate to create and provide strategic reserves owned by the minister responsible for that area of the state’s activity (currently the Minister of the Interior and Administration). The NIK audit showed that as a result of the above unnecessary reserves in excessive amounts were created, excluding the Public Procurement provisions, which led to wasteful public spending.

Excessive purchases

With regard to COVID-19 assets worth at least PLN 1.8 billion were purchased. However, the purchases proved excessive and thus wasteful in part.

The Ministry of Health did not provide NIK auditors with any documents confirming that analyses or consultations concerning the demand for medical equipment or devices to control COVID-19 were made. Therefore, it remains unknown how the Ministry of Health specified the number or type of medical equipment or devices mentioned in 16 orders to create strategic reserves.

The scale of purchases was so large that after the reported demand was satisfied, four months after the state of epidemic emergency was cancelled, the Agency still had medical equipment and devices worth at least PLN 350 million within its resources.

NIK stands in a position that the level of strategic and recoverable reserves should be constantly monitored and tailored to the actual demand. Excessive purchases and costs of technical maintenance at a later stage impose on the Agency additional costs from the public purse for storage, check-ups and repairs. NIK points out that these costs are in violation of the Act on Public Finance as the funds used to purchase and maintain unused or unnecessary equipment could be used for other purposes.

Purchasing specialist equipment under the pretext of the epidemic

Already after the Minister of Health lifted the state of epidemic emergency (1 July 2023) under the pretext of COVID-19 control, specialist medical equipment worth nearly PLN 70 million in total was provided to selected entities from strategic reserves. Since the crisis situation came to an end, these goods should be obtained as part of everyday operations of medical entities, not in a special mode by means of strategic reserves.

In terms of ensuring strategic reserves, the incurred costs represented excessive and unjustified expenditure. NIK points out that the information about providing high-value medical equipment to healthcare entities appeared in 2023 during the election campaign to the Sejm and Senate (lower and higher chamber of the Polish Parliament). In case of 14 of 19 provided medical devices (worth PLN 51.7 million in total), the information on transferring the equipment to service providers was passed on to local communities by the governors or other persons applying for a mandate from the district where the facility indicated in a given decision as the equipment user operated.

No guarantee of returning equipment to the strategic reserve

The decision on providing medical equipment and devices by the Prime Minister did not specify that the provided goods should be returned to strategic reserves after completing the objective. That was not compliant with the obligation set out in the Act on Strategic Reserves of 2020. As a consequence, after the state of epidemic emergency ended, it was not guaranteed that the high-value medical equipment and devices (worth at least PLN 1.2 billion) would be returned to strategic reserves. That was a responsibility of employees of the Chancellery of the President of the Council of Ministers, empowered by the then Prime Minister.

In 2020-2023, medical equipment and devices worth PLN 1.8 billion were provided from strategic reserves.

Inadequate monitoring of the use of strategic reserves

The governors partly unreliably analysed the use of medical equipment and devices by healthcare facilities. The audit showed that unused equipment worth PLN 7.7 million (found in seven healthcare facilities) was not relocated to other entities and also it could not be returned to strategic reserves. Since there was no information about the current use of equipment, other medical devices of the same kind were purchased while products having the same functions remained unused in another facility. That is why, the costs of purchasing more new devices were not justified from the viewpoint of economic public spending.

The lack of ongoing relocation of medical equipment and devices indicates there is no coordinated system in place to monitor and manage strategic reserves. In five of seven healthcare facilities covered by the audit there were cases of delayed technical check-ups of medical equipment and devices used to provide medical care to COVID-19 patients. According to NIK untimely technical check-ups of those devices may have an adverse impact on the adequacy of their operation and safety of use and thus proper diagnostics and treatment of patients. The situation caused by the COVID-19 epidemic does not justify a threat to the health and life of patients treated or diagnosed by means of potentially defective medical equipment or devices.

Unreliable management of covid purchases

The President of the Council of Ministers was responsible for securing the State Treasury’s property interests, for economic and expedient use of public funds entrusted to him or her (including financial resources of the COVID-19 Prevention Fund) and for the setup and disposal of strategic reserves. Nevertheless, the Prime Minister did not ensure developing procedures for governors setting out the principles and the mode of managing the medical equipment and devices purchased by the Agency from the financial resources of the COVID-19 Prevention Fund after the state of epidemic emergency came to an end. The governors were not informed about the principles of assessing the technical condition of the provided equipment, deciding on whether or not it should be left in strategic reserves or provided to healthcare entities as their own property.  

Also, the Prime Minister did not ensure establishing the principles specifying the way of managing assets purchased by the Ministry of State Assets and the Chancellery Head from companies responsible for establishing temporary hospitals. Besides, the Prime Minister failed to supervise the way those ministers enforced their decisions to liquidate the hospitals. Moreover, he did not demand information on the liquidation process, settlement of agreements on the establishment and organisation of temporary hospitals and the way of managing medical equipment and devices.

Recommendations

According to NIK the President of the Council of Ministers in consultation with the Minister of the Interior and Administration should initiate:

1. change provisions of the Act on Prevention and Control of Infections and Infectious Diseases in People by revoking Article 46d, empowering the Minister of Health to order establishing and providing strategic reserves so that they were set up and managed exclusively under the provisions of the Act on Strategic Reserves of 2020 which govern the said issues in a comprehensive manner.
2. change provisions of the Act on Strategic Reserves by revoking Article 23, empowering the Minister of the Interior to provide, by way of decision, paid specialist medical equipment as part of strategic reserves, in case it is necessary to support the implementation of healthcare goals. It needs to be highlighted that this provision allows for providing strategic reserves also in case there is no threat to the state’s security or defence, safety, order and public health as well as the natural disaster or crisis situation. The above undermines the purpose of establishing strategic reserves under Article 3 of this Act. Hence, Article 23 of the Act disturbs the structure of other provisions of this law.

Audit no. P/24/091/LWR

By assumption, the Government Housing Development Fund (or: the Fund) was set up in January 2021 as the state’s support of efforts aimed at satisfying the citizens’ housing needs. It was designed as part of a package of solutions to prevent adverse social and economic effects of COVID-19. The Fund was to stimulate housing investments carried out by companies – the newly established Social Housing Initiatives (SIM) and the already existing Social Housing Associations (TBS). The Fund was fuelled by the financial resources from the COVID-19 Prevention Fund and funds from the sale of Treasury securities. Municipalities received non-returnable financing of their expenditures to acquire shares in SIM/ TBS companies.

The Social Housing Initiatives were designed to build social apartments for rent/ lease for municipality residents with moderate, regulated rent. That was to be an attractive offer for individuals and families who have money to pay the rent regularly but whose income is too low to take up a mortgage for an apartment. The level of support granted to a municipality to acquire shares in a newly established SIM or in an existing SIM/TBS could reach, correspondingly, PLN 3 million and up to 10% of the value of costs of an investment and construction project or another project aimed at acquiring apartments for rent/ lease. The construction of apartments in line with the SIM formula did not require the municipalities to engage more of their own funds. As a rule, both municipalities and SIM companies could apply for additional funds for their implementation from the Subsidy Fund (non-repayable financial support granted to municipalities as part of the social and communal housing programme) and from preferential loans from Bank Gospodarstwa Krajowego (BGK).

The Minister’s statutory competence and abuse on part of KZN

The ministers managing the Fund did not execute their exclusive statutory competence to grant support to municipalities from the Fund. The entire process was carried out by KZN under the application review agreement signed with the minister managing the Fund. As a result, the Fund’s support of PLN 2.9 billion was granted to municipalities in violation of law.

Since the minister managing the Fund did not participate in the municipality’s grant process, he could not control it on an ongoing basis or exercise real impact on the management of the Fund’s resources. At the same time, the KZN President reviewed applications for the Fund’s grant in violation of binding laws (in case of every 10^th application) and using practices pointing to arbitrariness of proceedings (in case of over 40% of applications). Besides, the Minister of Funds and Regional Policy did not pursue claims from the municipalities due to their failure to complete tasks or meet obligations related to support received from the Fund. The NIK audit findings show that such claims could total up to PLN 203.4 million.

High expenditures and little progress

In 2021–2024 (until 31 March), over PLN 58 million in total was spent on investment and construction projects in 14 SIM companies audited by NIK. That was only 6.5% of the total amount of funds provided to those companies for investment purposes (over PLN 891 million).

In the same period, salaries of the company employees represented over 51% of operating costs of the audited SIM companies (over PLN 26 million in total). Half of that amount was absorbed by the costs of salaries of SIM management board and supervisory board members. Despite little progress in the companies’ investment processes, in 10 of 14 SIM companies the fixed part of the CEO’s salary was raised. According to NIK that did not comply with the principles of public property management. It needs to be noted that justifications for those pay rises were published only by 2 of 10 municipalities obliged to do so.

Wasteful and illegal spending at SIM companies

Irregularities in property management were found in half of the audited SIM companies. The Fund’s financial resources of over PLN 8 million were spent in wasteful and illegal manner. The funds were earmarked for preparation of the project documentation in violation of the public procurement laws, payments of excessive salaries to CEOs and supervisory board members, commissioning of consulting and marketing services as well as purchase and use of cars.

NIK questioned e.g. expenditures made for marketing services provided in the form of co-organisation of classes for children in the gym, mountain expeditions, beach volleyball games, support provided to a local sports club and the purchase of 3 thousand tickets to the amusement park. According to NIK these expenditures did not help the companies perform their tasks.

Defective preparation for housing investments

The municipalities applied for the Fund’s support without analysing the actual need of local communities for apartments built by SIM companies which NIK considered unreliable.

The municipalities transferred the funds they received to SIM companies which was related to the need to sign an agreement for services of public economic interest, required by the EU law. In most cases such agreements had formal defects. Those defects represented a statutory prerequisite to pursue claims against municipalities due to failure to meet the obligation to sign a correctly worded entrustment agreement. That situation posed a threat of losing the Fund’s financial support of PLN 203.4 million.

Excessive rights acquired by KZN in companies

The National Property Stock (KZN) participated in founding 47 new SIM companies. According to NIK in 19 cases setting up SIM companies with the participation of KZN was premature and unjustified since there was no contribution of State Treasury property to those companies (data as of July 2024).

In all the 47 newly founded companies KZN secured personal rights to appoint one to three supervisory board members and a CEO candidate.

NIK stands in a position that in case of 19 SIM companies to which KZN made financial contribution ranging from PLN 100 to PLN 1000, those rights were excessive considering the marginal capital commitment. KZN made financial contributions to those companies totalling PLN 9.2 thousand and thus acquired shares making up only from 0.0002% to 0.004% of the company’s equity.

The President of KZN in a non-transparent way indicated 58 candidates for CEOs and appointed 147 KZN representatives in supervisory boards of 36 Social Housing Initiatives and 2 Social Housing Associations. NIK established that KZN did not introduce any principles, procedures or guidelines concerning the appointment of supervisory board members or candidates for CEOs of SIM companies. The process was not an open recruitment and the recruitment information was not published anywhere.

KZN spent the total of PLN 3.7 million on salaries of its 147 representatives in SIM supervisory boards, of which nearly PLN 497 thousand was transferred to SIM companies with marginal capital commitment of KZN. Considering the low capital commitment of KZN in those SIM companies (financial contribution totalling PLN 3.7 thousand) NIK considered that spending unjustified and wasteful.

Besides, 18 persons were hired at KZN as SIM experts, consultants and coordinators for which they received remuneration of PLN 2.7 million in total. The tasks of those persons partly overlapped with tasks of the KZN Department of Ownership Supervision. In six cases those persons were not assigned any tasks in writing. NIK auditors were also not presented with any documents pointing to the tasks actually performed, except for the confirmation of business trips. Significant spending on KZN’s coordination and participation in SIM supervisory boards did not ensure effective or reliable supervision over those companies.

Limited effects and no monitoring of the Fund’s activities

Despite allocating almost PLN 3.5 billion, the effects of activities supporting social housing were not monitored.

In the municipalities supported by the Fund, the total of over 48.5 thousand apartments were scheduled to be built in 2024–2031, including: nearly 32 thousand apartments (approx. 66%) were to be erected as part of SIM investments, whereas 16.6 thousand flats (approx. 34%) were to be an outcome of investments carried out by TBS. Within three and a half years of the Fund’s activity (i.e. by the end of July 2024), only 2143 apartments were built (4.4% of the plan), of which:

• 23 apartments (0.07% of the plan) as part of the investments realised by the newly founded SIM companies, with the support from the Fund of over PLN 2.3 billion;
• 2120 apartments (nearly 13% of the plan) as part of the investments realised by the existing TBS companies, with the Fund’s support of PLN 0.65 billion.

The average support of SIM companies from the Fund per apartment exceeded PLN 72 thousand, whereas the existing TBS companies received only PLN 39.5 thousand on average.

That difference resulted from the systemic privilege of SIM companies which could use both the support provided to municipalities from the Fund for joining SIM companies (up to PLN 3 million) and for implementing other investment and construction projects by the company (up to 10% of their value). For comparison, the existing TBS companies could only count on investment subsidies.

Consequences of delays in housing investments

The audit showed that only in six of 14 audited SIM companies investments were started in due time.

In none of the audited SIM companies were the construction works completed by the end of March 2024 and in six SIM companies they did not even start.

Delays in executing investments in five audited SIM companies were a statutory prerequisite to write off shares acquired in SIM companies by municipalities and to return the Fund’s resources of up to PLN 120.7 million obtained for that purpose. None of the municipalities (shareholders of those SIM companies) did not initiate any action in that matter.

Little progress of housing investments in SIM companies and transferring them high amounts of support from the Government Housing Development Fund prior to the actual start-up of operations enabled the companies to draw additional benefits from depositing the Fund’s financial resources in banks, while there was no guarantee that they would be earmarked for housing purposes.

By the end of 2023, the audited SIM companies generated financial revenue from the said operations of PLN 59.7 million, which was more than those companies spent on investments (PLN 58.3 million).

A gap in financing investments supported from the Fund

Neither the Ministry of Funds and Regional Policy, nor the Ministry of Development and Technology, or BGK measured the SIM companies’ investment needs that should be satisfied from other sources than the Fund. Therefore, the SIM companies lacked information how much money from other available sources is needed for timely completion of investments conducted by those companies.

The estimates made for the needs of the audit indicated that the demand may reach nearly PLN 8 billion in the next five years. At the same time, financial resources of the Subsidy Fund and preferential loans of BGK will not allow covering this demand.

Defects of the legal framework establishing the Fund

NIK stands in a position that the legal framework establishing the Fund did not provide adequate conditions for its proper functioning. The laws on the Fund were not implemented using proper legislative standards. Also, they were not comprehensive, precise or clear.

Provisions of the Act on social forms of housing development:

• did not specify the objectives or expected effects of the Fund’s operations and also did not impose any obligations on the Minister managing the Fund, related to their monitoring and assessment;
• did not provide the municipalities with equal access to the Fund’s financial resources, in particular to meet the demand for social apartments, reliably measured in the municipalities.

All that had adverse impact on the Fund’s activity and according to NIK that was the source of irregularities in the auditees’ operations revealed by NIK.

Key conclusions and recommendations of NIK

According to NIK the differences in the number of apartments built by Social Housing Initiatives and by Social Housing Associations identified in the audit highlight low efficiency of operations of SIM companies as compared with TBS companies but also – as a target – low efficiency of spending the Fund’s financial resources by new SIM companies.

The NIK audit showed that the Fund’s financial resources were chiefly used to establish organisational structures of 47 new SIM companies and to fill posts in a non-transparent way, while the scope of KZN’s activity was expanded without adhering to statutory provisions.

In view of the audit findings NIK has made the following recommendations:

To the President of the Council of Ministers to:

• take and coordinate measures aimed at implementing comprehensive statutory solutions on housing policy.

To the Minister managing the Government Housing Development Fund to:

• agree on the principles of KZN acquiring the shareholder’s personal rights in SIM companies, proportionately to the level of capital commitment and ensure transparent selection of KZN representatives and candidates for those companies’ authorities.
• ensure review of all investment and construction projects carried out by SIM companies with the participation of KZN in terms of the feasibility of their implementation in the planned material scope and deadline, and assessing the legitimacy of their continuation with the Fund’s support.

Audit no. I/24/003/LSZ

NIK audited the Directorate General of State Forests (LP) to evaluate the adequacy of planning, preparation and conduct of investments as part of the project “Forest of Energy”.

In July 2021, the State Forests and a private company signed a letter of intent in which they declared their willingness to cooperate on the construction of wind farms. Two pilot projects were planned in the areas under the State Forests’ management. The pilot programme “Forest of Energy” was implemented based on a decision of the then Director General of State Forests of October 2021.

The State Forests selected a private company as investor. The company submitted its cooperation offer in autumn 2020. The cooperation was to involve forest land lease for wind power plants. Local forest districts and the company were to be parties to the agreement. The company committed to covering all costs and obtaining all the necessary consents and permits. The company indicated potential investment locations along with the cooperation offer.

On 21 December 2021, the then Director General of State Forests requested six selected forest districts to sign an agreement to lease forest land for wind farms. The agreements were signed in December 2021 and January 2022. However, during the NIK audit the pilot activities were run in three locations (different conditions made it necessary to withdraw from some locations).

NIK has negatively evaluated operations of the Directorate General of State Forests in terms of planning and preparation of investments as part of the project “Forest of Energy”. The Directorate General of State Forests took measures to launch wind farms in forest areas managed by the State Forests, although the Act on Forests did not provide for the use of forest land to conduct such activity. The LP Director General’s request to forest managers from six forest districts to sign forest land lease agreements with the company for the purposes of design, construction and operation of wind farms was inconsistent with the forest management objectives and tasks set out in the Forest Management Plan. Participation in building wind power plants does not fall within the scope of the management of forests owned by the State Treasury, which was entrusted to the State Forests. It needs to be underlined that the State Forests manage land and movables as part of forest management, not e.g. energy management. The legislator defined forest management as: forest activity in terms of forest management, maintenance and expansion of forest resources and crops (...).

Forest management should be based on the following principles:

1. universal protection of forests;
2. sustainablility of forest maintenance;
3. continuity and sustainable use of all forest functions;
4. expansion of forest resources.

The Forest Management Plan did not provide for the exclusion of land from this management in the category of forest management objectives or tasks to invest in wind power plants. The legislator entrusted the State Forests with the management of forests owned by the State Treasury, so it should be considered unjustified to transfer this management to another entity (e.g. a company) to invest in wind energy. It is worth noting that the local land development plans effective in the areas covered by the lease agreements, as at the date of concluding these agreements, did not provide for the location of wind farms in the said areas. There was no change in the use of forest land. Nevertheless, in December 2021, the former Director General of State Forests sent a letter to the forest inspectors, requesting them to sign the lease agreements.

In view of the audit results NIK recommended ensuring the lease of forest areas in compliance with the forest management objectives and tasks set out in the Forest Management Plans. In addition, NIK pointed out that the implementation of investments in wind energy in forest areas would require statutory changes. This was also indicated by the Ministry of Climate and Environment.

The idea of building forest wind farms was also negatively reviewed by the Nature Conservation Council. According to the Council in our country’s conditions there is no economic, legal or environmental rationale for the location of such environmentally risky installations in afforested areas.

Audit no. P/24/078/LOP

The audit showed that in 2020-2024 (first quarter) the State Forests (from Polish: Lasy Państwowe or LP) improperly and unreliably managed their property and finance, also coming from the forest fund. On an annual basis individual forest districts transfer the so-called basic contribution for that purpose which is part of revenue from timber sale (the percentage rate is established based on planned revenue). The financial resources accumulated in the forest fund are mainly supposed to level financial deficits in the forest districts whose environmental and economic conditions are unfavourable for forest management.

The fund is also used, among others, to finance “joint initiatives of the LP organisational units” but since the term is not defined it is difficult to evaluate the purpose of expenditures and their compliance with the law.  

In the audited period, there was an enormous increase of funds gathered in the forest fund – from over PLN 812 million at the beginning of 2020 to more than PLN 3.2 at the end of 2023. Only in 2022, that increase was 268% which mainly resulted from growing prices of timber but also from raising – at the request of the LP Director General – the basic contribution from nearly 18% to 22%. The request was justified with the need to incur more expenditures. According to NIK, though, in reality it was about transferring free financial resources from forest districts to the forest fund’s account. The LP Forest Management Regulation implies clearly that the funds should remain at the forest districts’ disposal. As a consequence, the fund gained more money but at the same time the cost of the State Forests’ operations soared which lowered their financial result in 2022 by over PLN 556.5 million.  

The NIK auditors established that the State Forests spent the total of PLN 37.9 million from the forest fund to finance promotional and image-building activities, although the Act on Forests enables them only to “promote sustainable forest management and protect natural resources”. As part of that amount almost PLN 5 million was spent on organising competitions, picnics and family festivals, also held during the parliamentary elections campaign in 2023. Another PLN 9.6 million was the cost of promotional press materials. Over PLN 10.4 million was paid to participants of the competition “Timber comes from the forest” as part of which 115 entities were subsidised. The State Forests transferred the great majority of that amount – over PLN 7 million – to Catholic Church parishes.

Finally, the promotional and image-building activities fully financed from the forest fund were mainly organised by the forest districts but, among others, at the initiative of the Director General or Press Officer of the State Forests. Agreements in that matter were signed at the State Forests Information Centre whose operating costs were nearly in whole covered from that fund and which increased in the audited period by 331.5% - from PLN 18.8 million (in 2020) to PLN 81.3 million (in 2023).

The State Forests also subsidised road investments from the forest fund. PLN 14.4 million was spent on that purpose without reliable verification of measurable and direct benefits for the forest management.  

NIK also found significant irregularities in the way the State Forests managed funds beyond the forest fund. In the audited period, the State Forests considerably exceeded cost limits set in their financial and economic plans: in 2021 by PLN 583.6 million, of which PLN 213.4 million was allocated to salaries and in 2022 the limits were exceeded by nearly PLN 1.5 billion, of which PLN 196.7 million was earmarked for salaries. Increasing costs of salaries of the largest group of employees, i.e. the Forest Service, resulted mainly from the arrangements of the Collective Bargaining Agreement (CBA) on the so-called basic salary rate, much higher than the one provided in the ordinance of the Minister of Environment of 2003. In the ordinance that rate was PLN 950 and in CBA it ranged from PLN 1.5 thousand in 2021 to nearly PLN 2 thousand in 2024. Despite exceeding the limits, the State Forests did not update their financial and economic plans.

Another example of financing activities going beyond the State Forests’ tasks and forest management needs can be buying for nearly PLN 15 million 100% shares in an IT company, which previously supported an IT system used in the State Forests. Following the purchase the Directorate General of State Forests, as the only shareholder, paid another PLN 2 million to the company, which NIK considered wasteful and unreliable. Without justification for forest management, the State Forests also attempted to buy a palace and park complex for PLN 12 million. Ultimately, the transaction was not finalised but the State Forests spent approx. PLN 50 thousand due to that investment.

The irregularities identified in the NIK audit did not limit the capacity of the State Forests National Forest Holding to self-finance its operations. Its financial and economic standing in 2020–2024 was very good due to systematic growth in the revenue from timber sales, which in that period was the highest in the State Forests’ history. As a consequence, the State Forests’ financial result ranged from PLN 487.6 million (2020) to PLN 986 million (2022).

Recommendations

In view of the audit results NIK has made the following recommendations:

To the President of the Council of Ministers

To work out and undertake measures to implement legal solutions to ensure:

• protection of the State Treasury’s property entrusted to the State Forests National Forest Holding for management, considering the need for sustainable forest management;
• participation of the State Treasury in profits from public property management at the level reflecting its scale and benefits;
• mechanisms reducing the scale of wasteful and unjustified measures by limiting the shaping – under internal acts – of factors which affect the level of costs and revenue.

To the Minister of Climate and Environment

• to take legislative measures to further specify the principles of exercising supervision by the Minister of Environment over the State Forests. NIK highlighted that issue as early as 2015;  
• to take legislative measures to further specify the Act on Forests in terms of earmarking financial resources of the forest fund;
• to take legislative measures to specify the principles of preparing and updating financial and economic plans;
• to initiate inter-ministerial legislative measures to define the mechanisms of establishing the principles of selling timber by the Director General of State Forests;  
• to make an analysis of the reason for maintaining the possibility – provided in the Ordinance on financial economy – to earmark part of the forest districts’ profits for socially useful purposes.

To the Director General of State Forests

• to manage the property and finance, also from the forest fund, in compliance with the requirements set out in the Act on Forests and executive regulations to that Act;
• to verify purposes, tasks and principles of the functioning of the State Forests Information Centre, in the context of negative evaluation of promotional activities reaching beyond the State Forests’ statutory tasks.  

Audit no. P/24/094/LZG

Currently the so-called monocultures of coniferous trees are most threatened by the decay of tree stands because of climate change in Poland. Statistics point to a significant problem: more than half of Polish forests are pine forests – they represent 63% of the forest area managed by the State Forests (from Polish: Lasy Państwowe, or LP) and 55% of private and municipal forests. On the other hand, firs and beeches are predominant in the mountains. This is a consequence of forest management run by LP for many years and focused chiefly on productive timber harvesting. In case of large-size and medium-size timber, the harvesting almost doubled in 1996-2023 – from 20 thousand m³ to over 38 thousand m³, with simultaneous drastic afforestation decline – from approx. 12 thousand ha to 0.4 thousand ha. In the audited period, without valid forest management plans, i.e. basic documents ensuring sustainable forest management which involves e.g. beneficial impact of forests on the climate, the State Forests harvested the total of approx. 20 million m³ of timber worth nearly PLN 4.6 billion, also from the Nature 2000 areas.

In the audited period, all the analysed plans for 233 forest inspectorates in Poland (over a half) were approved by the minister supervising environmental issues already after the previous documents became outdated –on average after 9 months, or even after 2 years in an extreme case. In addition, the binding plans did not directly cover the issues and tasks related to the forest management adaptation to climate change.

The strategic documents effective at the time specified tasks for the State Forests related to reconstruction and adaptation of forest stands to climate change, e.g. increasing the forest cover. Those tasks, however, were either not carried out or were performed to a little extent. Consequences included, among other things:

• the share of dominant species (pine and larch) went down only from 68.8% of the total forest area in 2019 to 68.4% in 2023 r.;
• the current annual increment of timber resources, or the quantity of wood produced by trees in a year, fell from 4.35% in 2003 to 3.05% in 2023,
• the areas of newly afforested land in Poland were negligible –12.1 thousand ha was afforested in 1996, while in 2023 it was only 400 ha;
• the area of protective forests (that could also alleviate consequences of climate change) declined in 2019-2023 by 25.6 thousand ha;
• in 2022, Polish forests had one of the lowest healthy forest stand indices (14,5%) in Europe and one of the highest forest stand indices (70%) in terms of increased defoliation (defoliation is about plants losing their leaves due to external factors or chemical substances).

Already in 2013, the government obliged the General Directorate of State Forests to develop a full-fledged programme for the forestry adaptation to climate change. The General Directorate adopted the first document of that kind only after nine years, in 2022. Until then the initiatives carried out by the State Forests were fragmentary and of ad hoc nature. A subsequent document covering a comprehensive plan of activities until 2030 included an assessment of their consequences and was adopted in December 2023. It said that the tasks set out in the document were to prevent or minimise negative effects of rapid climate changes, including mainly large-area forest dieback.

However, the plan did not take into account 90% of comments of scientists and environmental communities. Besides, the programme preparation did not involve the measures, deadlines and financing sources of individual tasks, which made it impossible to evaluate their effectiveness and efficiency.

Forests versus climate change

According to scientists forests can play the pivotal role in preventing climate changes and alleviating their consequences. Almost 30% of our country’s area is occupied by forests which cover over 9.2 million ha (of which over 7.3 million ha are the State Treasury forests managed by the State Forests). In terms of afforested area, though, Poland occupies the 18^th position in the EU, with the average of 38.6%. The following EU countries have the largest forest areas: Finland, where they occupy 66.2% of that country, Sweden – 62.5% and Slovenia – 58.2%. On the other hand, the least afforested EU countries are: Ireland with approx. 11.6% of forest area, Netherlands – 9.7% and Malta – 1.4%.

The forest area expansion itself is not going to replace the elimination of fossil fuels but it may be one of the tools to compensate CO2 emissions. The National climate and development report Poland 2024 shows that forests managed by the State Forests are losing the CO2 absorption capacity. The decreasing trend of CO2 absorbed by forests managed by the State Forests accompanied by small, permanent increase of absorbed CO2 by other forests shows that the forestry model adopted by the State Forests was not optimal.

Forests also play the key role in stabilising water circulation, reducing the impact of both droughts and floods. In the audited period, the area of protective forests related e.g. to stabilising impact on the environment declined by over 26 thousand ha.

On the other hand, forests can also inflict climate changes as a source of greenhouse gases (mainly CO2), mainly because of deforestation, excessive use, delays of renewal processes, natural and paranatural disasters (e.g. fires).

Above all, forests may fall victim to climate changes, which results among others in:

• dieback of species susceptible to biotopic changes – forest dieback,
• aggravation of the health condition of forests,
• shifts in the occurrence of species of plants, insects and animals,
• increased activity of pests and pathogenic fungi,
• prolonged vegetation and trees growth rate,
• damage related to extreme phenomena – fires, hurricanes.

To minimise the impact of climate changes, preventive measures need to be implemented as soon as possible. In Poland they are delayed by nearly a decade against obligations under the Strategic adaptation plan for sectors and areas sensitive to climate changes until 2020 with the perspective until 2030.

What the State Forests failed to do?

In 2020-2022 (until the end of June), the forest area managed by the State Forests was expanded only by over 22 thousand ha. Also, the adaptation measures involving the forest cover growth were not effected. In 2023, only 0.4 thousand ha of areas owned by the State Treasury were afforested, while in 1996 it was over 12.1 thousand ha.

An important tool to ensure stability of forest stands should be the maximum possible use of natural processes, including promotion of natural renewals (occurring on forest land from self-seeding and suckers). In 2022, the State Forests carried out renewals on the area of 62.3 ha, of which natural renewals made up approx. 11.9 thousand ha, which is less than 20%.

The NIK audit revealed first of all that that the State Forests’ efforts in the audited period related to the reconstruction of forest stands and their adaptation to climate changes were not very effective. The share of dominant species, particularly threatened by dieback went down only a little. In case of pine and larch this share dropped in 2019-2023 from 68.8% of the total area to 68.4% and in case of fir it declined from 4.8% to 4.3%.

The State Forests also did not update – as they were not obliged to by law – the data obtained while taking stock of alien and invasive species in 2019. Then, based on information from 381 forest districts (77% of the total), over 14.3 thousand occurrences of invasive plant species were reported. The most common one – it occurred over 12.3 thousand times – was impatiens parviflora, which spreads fast and displaces domestic species. In case of animals, 395 occurrences of alien species were reported. In most cases (371 occurrences) that was the racoon dog.

The occurrence or spreading of invasive alien species in forests poses a threat to biodiversity and related ecosystem services or impacts them in a undesired way. In the audited period the area occupied by alien and invasive species was significant and increased as compared with the area listed in 2019. Also new threats appeared in that area, yet there were no mechanisms to handle them and no financing, either. The audited forest districts had nature reserves on their areas and had the existence of plant invasive alien species confirmed in the 2019 inventory. Nevertheless, they did not take planned activities in that matter.

Timber harvesting

According to the Central Statistical Office (GUS) the current annual increment of timber resources, i.e. the quantity of wood the trees “produced” in a year went down in 2023 to 3.05%, while in 2003 it was 4.35%. One of the reasons of that situation was increasing timber harvesting which went up in that period from approx. 51% of the annual increment to 75.6%.

The State Forests data on harvesting merchantable timber provided by the State Forests significantly differed from the data presented by the Bureau for Forest Management and Geodesy State Enterprise. As a result, it was impossible to establish if the data provided by the State Forests are correct. For instance, according to the State Forests the volume of net merchantable timber harvested in 2023 was 38.2 million m³ (without bark). On the other hand, in line with the five-year large-area forest inventory prepared by the Bureau for Forest Management and Geodesy State Enterprise (at the State Forests’ request) the average of over 52.2 million m³ of gross merchantable timber (with bark) was harvested annually in 2019–2023.

In the audited period, more and more timber was used for energy purposes. In 2008–2022, the share of timber in the primary energy balance (the amount of energy in power raw materials, such as fossil fuels, atomic energy or renewable energy – sun, wind or geothermal energy) more than doubled – from approx. 16 million m³ to almost 32.7 million m³. The GUS data show that in 2022 the total of over 6.6 million m³ of firewood was harvested, nearly in total from the areas owned by the State Forests – approx. 6.1 million m³.

The pressure on timber harvesting growth resulted from the use of biomass for energy purposes. The timber biomass in Poland is considered as a renewable and emission-free source of energy. The energy producers buying timber biomass were using public financial support under the mechanisms on renewable energy sources which caused an increase in biomass demand. However, according to the National Centre for Emissions Management burning timber emits more carbon dioxide per energy unit than burning fossil fuels. The reason is a much lower calorific value of biomass. CO2 emissions coming from biomass combustion are absorbed by regrowing trees, but it takes a few tens or even over a hundred years to level the net emission generated in the biomass combustion process.

Therefore, this way of using timber in fact contributes to an increased greenhouse effect. The State Forests had information about the sale of timber depending on its species, quality, size and purpose but they had no knowledge about final use of this raw material by national energy companies, heat plants or natural persons. Social organisations have long since pointed to the risk of ineffective protection of high-value timber against its use to produce electricity.

Fire and flood threats

In 2019–2024 (until mid-year), nearly 11.3 thousand fires broke out in the forests managed by the State Forests. The fires covered almost 2.8 thousand ha which caused losses of over PLN 30 million. At the same time, in forest management plans (updated every 10 years) the fire hazard category was lowered for 82 forest districts nationwide. Hence, formal requirements for forest fire protection were loosened. That approach was consistent with the law but in the period of increased weather hazards (long-term droughts, no humidity) fire threats should be categorised taking into account potential adverse changes in the future.

As a consequence of flood in September 2024 (particularly in the southern basin of the Odra River), the State Forests started to estimate damage to the infrastructure and the forests (September/ October 2024). According to the data of the General Directorate of the State Forests (as of 7 October 2024), over 22.4 thousand ha of forests were flooded. On the areas affected by the flood, mainly where the water remained, the risk of dieback of trees or the entire tree stands increased. Also the young forest generation was destroyed or damaged.

In the audited period, the State Forests did not estimate financial losses related to crisis situations (except for fires). According to NIK that knowledge could help expand the base of data needed to take decisions on the adaptation of forest management to climate changes.

Recommendations

In view of the audit results NIK has made the following recommendations:

To the Minister of Climate and Environment

• to initiate legislative work to amend the Act on Forests, directly obliging the State Forests to take action related to the forest management adaptation to climate changes and guaranteeing that the State Forests run forest management based on approved forest management plans;
• to implement solutions covering: improvement in timber recycling, monitoring of the use of timber biomass and elimination of the use of high-value raw material for energy purposes.

To the Director General of State Forests

• to consider isolating a unit as part of the State Forests specialised in implementing and coordinating activities related to the forest management adaptation to climate changes;
• to ensure compliance of the Forest breeding principles with the currently binding Comprehensive programme for the prevention of forest dieback processes in Poland and undertake mitigation measures in the perspective to 2030 in terms of retaining and increasing the intraspecies genetic variability of forests;
• to consider introducing an obligation in forest management plans ensuring:
  • a) increased stability of forest ecosystems by species diversification of forest stands, in particular species resistant to climate changes;
  • b) support of biodiversity protection to make forest stands more adaptable to climate changes;
  • c) water management, e.g. by water retention;
  • d) monitoring of climate change consequences and results of activities taken.
• to develop and implement a strategy to combat invasive alien species of plants and animals on the State Forests’ area.

Tax revenue represents the biggest part of the state budget revenue. In the period covered by the NIK audit (2019–2023), the share of tax revenue in the budget revenue ranged from 87.7% to 92.8% of the planned revenue and it reached approx. 90% of the executed revenue. As for tax revenue of the state budget the PIT played a significant role and it made up on average 15.1% of the planned revenue and 15.2% (on average) of the executed revenue.

PIT deductions and exemptions - reduced budget revenue

The PIT taxpayers often use tax deductions and exemptions in their tax declarations, which helps them reduce the tax amount. In 2019–2023, the tax due on taxable income went up from PLN 79 billion to PLN 87.7 billion. Income deductions (excluding deductions of social security contributions and deductions for eligible costs) in the audited period increased from PLN 8.1 billion to PLN 12.5 billion, and tax deductions (excluding deductions of health insurance contributions) declined from PLN 6 billion to PLN 4.6 billion.

The impact of PIT deductions and exemptions on the total tax due was significant. Therefore, it became necessary to check if the National Revenue Administration (from Polish: KAS) units properly verify the legitimacy of using those tax preferences by taxpayers. The audit was undertaken at NIK’s own initiative and preceded by in-depth analyses. Due to a large number of PIT deductions and exemptions provided in the law, the audit covered only selected ones.

Key audit findings

The NIK audit showed that, despite irregularities in the risk analysis area, the verification of taxpayers using selected PIT deductions and exemptions was adequate and reliable.  The analytical, forecast and research activity as well as risk analysis in terms of personal income tax related to using selected PIT deductions and exemptions was carried out under the Analytical Process Management Policy. The principles of splitting responsibilities specified in this document were not consistent with the National Revenue Administration Act.

NIK found irregularities in the analytical activity of KAS. The risk analyses were unreliable as they did not use not all the data available for the National Revenue Administration. As a result the risk assessment was underestimated. Only the analyses conducted in 2024 using full data led to an increase in the risk level from low to medium in some areas. Additionally, the risk analyses related to individuals who did not run business activity were based only on data from tax audits. That was incorrect because the tax audits usually did not cover this category of taxpayers.

By the end of the audit, the Minister of Finance did not estimate the PIT gap. As a consequence, he did not have the knowledge about the level of state budget losses in PIT revenue, incurred with regard to taxpayers misusing PIT deductions and exemptions.

The Minister of Finance and the Head of the National Revenue Administration properly and reliably supervised tax administration chambers and tax offices. NIK’s only objections were related to delayed response of the Head of the National Revenue Administration to systematically declining number of verification activities with regard to taxpayers using PIT deductions and exemptions while the number of taxpayers using those tax allowances remained unchanged or even increased.

In most cases the audited tax office heads properly conducted verification activities using PIT deductions and exemptions selected for the audit. As a consequence, they led to an increase in the PIT liability for 2019–2023 by PLN 2.6 million.

Recommendations

To the Minister of Finance to:

• develop effective mechanisms enabling reliable estimation of the actual value and structure of the PIT gap.

To the Head of the National Revenue Administration to:

• add a clause to the Analytical Process Management Policy in KAS obliging heads of tax administration chambers to conduct analytical, forecast and research activity related to phenomena occurring in the area of their competence and risk analysis.

De lege ferenda proposal to the Minister of Finance to:

• take efforts aimed at changing the National Revenue Administration Act, involving detailed specification of the scope of analytical tasks carried out by the heads of the tax administration chambers by tasking them with analytical, forecast and research activity related to phenomena occurring in the area of their competence and risk analysis.

During the meetings with NIK experts a lot of topics were addressed, related to auditing and standards of SAIs’ activity.

The key topics discussed at the workshops included:

• NIK’s mandate and competences,
• Application of IT solutions in auditing,
• Monitoring of the implementation of audit recommendations,
• Quality management system at NIK,
• Communication and cooperation with stakeholders,
• Compliance and efficiency audits – documentation of the audit process,
• Use of sampling methods in auditing,
• Preparation of competence plan,
• Auditing of public investment projects and public procurement contracts.

During the workshop a meeting was held with Vice-President of NIK Jacek Kozłowski who emphasised: The topics discussed at the meeting are now playing the key role in the functioning of SAIs. As public institutions obliged to promote transparency, accountability and good management, we not only have to conduct audits in line with the highest standards but also develop long-term strategies to ensure our future effectiveness in view of the constantly changing world and new challenges it brings. There is no better solution to improve the quality of audits than face-to-face meetings of auditors, training programmes and information exchange between institutions.

NIK takes all endeavours to support others SAIs in improving audit quality. E.g. we conducted a peer review at the State Audit Office of the Republic of North Macedonia. Its results were provided and presented in June this year and their content value was appreciated by the Management Board of the SAI of North Macedonia. The heads of our institutions met recently during the INTOSAI Congress.

The workshop was attended by 15 auditors from different audit units of the SAI of North Macedonia.

The meeting participants discussed current legal challenges faced by Supreme Audit Institutions with regard to their independence and the draft scope of tasks for the projected partnership support mechanism coordinated by IDI. The meeting also involved a discussion on the model which is to help SAIs provide efficient legal support.

The meeting was attended by representatives of the INTOSAI Development Initiative (IDI) and 11 SAI participants from 7 countries: Czech Republic, Georgia, Malta, Montenegro, Poland, Romania and Spain. The meeting was opened by Vice-President of NIK Piotr Miklis. A special guest of the workshop was Member of the Polish Parliament (Sejm) Przemysław Witek.

Legal departments and units play a special role in safeguarding SAIs’ independence. Their contribution includes legal counselling to support audits, advisory on institutional activities and active promotion of the institutions’ autonomy.

To foster Supreme Audit Institutions in strengthening this function, IDI has launched an initiative to fortify the role of legal units as proactive guardians of SAIs’ institutional independence. This initiative is also to enhance understanding of the way legal units operate in different countries – both proactively and reactively – and identification of good practices which help SAIs create and reinforce these units as part of the “independence safeguarding system”.  

As part of the programme experts’ meetings were held in Spain, RSA, Poland and Malta, attended by lawyers from OLACEFS, PASAI, EUROSAI and AFROSAI-E. Those meetings facilitated exchange of experiences and ended in a joint agreement on which priority topics should be addressed while implementing the initiative.

The following issues were discussed at the workshop held at NIK:

1. Analyses of good practices related to strengthening SAIs’ independence by legal departments and units.
2. A platform for legal experts facilitating cooperation and mutual learning.
3. A repository of legal documents to further knowledge sharing.
4. Evaluation of maturity of the legal function to identify the improvement capacity as part of SAIs.

In future IDI is going to start cooperation with law-making and judiciary bodies which play a pivotal role in ensuring and maintaining SAIs’ independence.

These efforts converge with one of NIK’s priorities which is to strive for improvement in citizens’ living conditions. Domestic abuse, especially against children, is a socially critical issue, repeatedly highlighted by NIK in its audits. In April this year during a press conference the Supreme Audit Office of Poland presented the results of its planned audit about the Prevention of domestic violence.

The NIK audit results revealed that in case of the most vulnerable persons: children, the elderly and persons with disabilities the biggest problem is underestimation of the scale of domestic abuse. It needs to be underlined that local programmes and systems for the prevention of domestic abuse and support for its victims should be developed only based on a reliable diagnosis. Those programmes and systems may not be schematic or superficial but respond to real needs. By assumption, such programmes should foster systemic solutions of the problem, serve as a source of information, recommendations and guidelines used when taking action but also when developing and executing assumptions of other documents on domestic abuse.

The World Day for the Prevention of Child Abuse has been commemorated for 13 years.

The key reason for poor air quality in Poland is “low emission” of pollutants (at the height of up to 40 metres), coming from house furnaces and boiler rooms which do not meet ecological norms. The key pollutants coming from the low emission having adverse impact on health include: particulate matter (PM₁₀ and PM_2,5) and Benzo(a)pyrene (BaP). According to WHO the PM_2,5 fraction has serious health consequences since such small particles (with the dimension below 2,5 µm) can easily filter in alveoli and the cardiovascular system which may cause ailments of variable intensity, functional disorders of lungs, even lung cancer and increased risk of death. At the same time, B(a)P is a strongly cancerogenic substance. It is generated chiefly by burning solid fuels at low temperatures, older-generation devices or incinerating waste in installations not intended for that purpose.

Since 2017, boilers have been classified under Polish law into classes 3 to 5, where class 5 covers the most eco-friendly boilers. Since July 2018, only boilers meeting class 5 requirements could be sold. Additionally, since 2020 there have been eco-design standards (EU Commission regulation), reducing the emissions of dust particles and nitrogen dioxides. These requirements assume the same emission of dust as for class 5 boilers but they should be met regardless of the boiler load.

The air protection system in Poland is a complex one. It involves cooperation of numerous participants at various administrative levels. There are four different groups of units accounting for key tasks in this system. Remedy measures are planned by provincial offices and carried out by municipalities. The financing is provided by the national and provincial funds for environmental protection and water management, whereas their implementation is audited by provincial inspectorates for environmental protection.

The provincial governments have taken efforts to improve air quality since 2008. But only in 2016–2017 the provincial assemblies were empowered to pass anti-smog resolutions (currently they are in force in 14 provinces).

Key audit findings

The audit covered four provinces, in which in 2023 acceptable levels of air pollutants, such as PM₁₀ and B(a)P, were exceeded. The entities selected for the audit were key on a regional scale. They were responsible for preparing anti-smog resolutions (marshal’s offices) and performing tasks ensuring their implementation (municipality offices). The NIK audit comprised four municipalities from each of the said province in which the normative values defined for PM10, PM2.5 or B(a)P were exceeded the most in 2022–2023.

Considering poor air quality all the audited provincial offices passed anti-smog resolutions which introduced bans and restrictions on the exploitation of fuel-burning installations. The resolutions specified precisely e.g. fuel quality requirements and elimination of the oldest, classless boilers, aiming at their gradual replacement with boilers complying with class 5 or eco-design requirements.

In each of the audited provinces tasks were set out in the Air Protection Programmes (APPs) involving the replacement of solid fuel boilers and the municipalities’ obligation to audit the compliance with air protection laws, including anti-smog resolutions. Provincial governments supported municipalities in executing anti-smog resolutions, by offering financial, content and training support.

A good practice used in Małopolskie Province, identified by NIK needs to be mentioned. To support activities of municipalities from this region, the Marshal’s Office of Małopolskie Province launched a free application Eco-intervention for mobile and land devices. It enabled anonymous reporting of irregularities concerning e.g. waste incineration or use of devices which were not consistent with the anti-smog resolution. The application helped the municipal services react quickly to emerging reports. It also allowed monitoring the way and the time of responding to the residents’ reports both via the Marshall’s Office and the municipalities. Over 30.2 thousand reports were noted since the application started to operate (March 2020) to the end of November 2024. Over 16.5 thousand audits were carried out following the reports, 71.4% of which were audits related to air protection.

All the audited municipalities reliably identified the air quality issue related to low emission and pointed out measures in strategic documents to lower the emission. In three municipalities the environmental protection programmes were not developed, though, and in three others the reports on their implementation were not prepared, despite the obligation to do so.

Another important aspect is the knowledge of heat sources used in houses and buildings. Poland has a special database called the Central Emission Register of Buildings which contains information about these sources. Since July 2021, all property owners and administrators have been obliged to submit declarations about heat sources. Sadly, many municipalities did not collect complete data – less than 80% of properties were registered in 8 of 18 audited municipalities. Nevertheless, the municipalities did not take effective steps to find the property owners who failed to file the declarations.

In 15 of 16 municipalities covered by the planned audit irregularities were found concerning illegal or unreliable conduct of audits in terms of observing and applying air protection laws.

The residents of one municipality were not held responsible for breaking the waste incineration ban or for violating anti-smog resolutions. In another municipality the air protection audits were discontinued after 2019.

As of 1 July 2024, there were still over 781 thousand classless boilers registered in five audited provinces and over 1.3 million boilers below class 5 which should be replaced with more eco-friendly boilers in three years, that is by the end of June 2028.

However, none of the audited municipalities managed to fully implement anti-smog regulations. In 18 municipalities covered by the audit nearly 29 thousand solid fuel boilers in total were replaced in 2018-2023. However, over 42 thousand boilers are still waiting to be replaced, of which 26 thousand are classless boilers, the least eco-friendly ones. The estimated replacement time for classless boilers, with the average replacement rate in 2018-2023, ranges from 2 to 24 years and for boilers below class 5 it is from 3 to 40 years. The Supreme Audit Office underlines that the emission of pollutants from solid fuel boilers is the main reason of poor air quality in Poland. Therefore, it is particularly important to eliminate classless boilers as they may emit nearly three times more particulate matter than class 3 boilers and ten times more than class 5 boilers. Apart from the nationwide programme “Clean air”, as part of which the replacement of heat sources was subsidised directly from the National Fund for Environmental Protection and Water Management in all 18 municipalities covered by the audit, subsidy programmes were launched to replace old boilers into more eco-friendly ones. The municipalities financed them with their own funds or used financial resources of the National Fund for Environmental Protection and Water Management as part of the nationwide programme “Stop smog”. In the entire audited period, i.e. from 2017, the residents of 16 municipalities covered by the planned audit replaced the total of 19.2 thousand boilers with the municipalities’ financial support.

All the municipalities carried out educational activities to increase the residents’ awareness of the harmfulness of air pollutants. In five municipalities, though, the measures were less intense than they should be. Additionally, in some of them e.g. eco-advisors were hired to help the residents with issues related to non-profitability of heat sources. Also, contact points were set up for the nationwide programme “Clean air”, as part of which the residents could receive subsidies.

NIK points out that the key barriers in effective implementation of anti-smog resolutions include: still insufficient social awareness of the impact of human activities on the environment and health consequences of air pollution, limited financial capabilities of residents and municipalities, limited effectiveness of implemented system solutions related to supervision of municipalities which do not execute provisions of the Air Protection Programmes as well as the lack of full, credible data about the heat sources applied.

On top of that, air pollutants are spread regardless of local governments’ actions but because of the lie of the land or climate conditions which vary across Poland. As a result, in the south of Poland much more intense remedy actions are needed to improve air quality.

Gradual improvement has been noted from the onset of anti-smog measures (limitations were introduced and the replacement of old boilers started). However, the air is still polluted and poses harm to human health. According to estimates the number of premature deaths in Poland  in 2022 caused by air pollution with particular matter PM_2,5  was nearly 35 thousand.

According to the information of the Chief Inspectorate for Environmental Protection, in 2023 in five provinces the number of premature deaths resulting from long-term exposure to PM_2,5  exceeded 11.6 thousand. Hence, in the light of new, more restrictive WHO guidelines and EU law changes (much lower acceptable air pollution levels from 2030), robust efforts are necessary to fully implement bans and limitations set out in the anti-smog resolutions.

Recommendations

To the Minister of Development and Technology (now the Minister of Finance and Economy) to:

take measures to introduce obligation for the municipality head, mayor or city president to verify the data and information in declarations about heat sources or fuel burning sources before entering them in the IT system supporting the Central Emission Register of Buildings.

To the Chief Inspector for Construction Supervision to:

ensure verification and improvement of the credibility of data in the Central Emission Register of Buildings, concerning the number of solid fuel heat sources, also in cooperation with municipalities.

Recommendations for province governments and municipalities:

• to municipality heads, mayors and city presidents – to fully implement and boost remedy measures specified in the Air Protection Programmes, particularly with regard to activities related to implementing anti-smog resolutions;
• to marshals – to use the potential of air protection programmes as broadly as possible to specify tasks supporting the implementation of anti-smog resolutions, including the setting of measures to enable the measurement of boiler replacement outcomes and inspections of individual heating systems. 

Audit no. P/24/040/KSI

Waste oils (so-called used oils) – are mineral or synthetic lubricating or industrial oils that are no longer suitable for their originally intended use. In the EU countries, the share of used oils is the largest in the stream of liquid hazardous waste. In 2017, approximately 4.3 million tons of lubricating and industrial oils were placed on the market in the European Union, and 1.64 million tons of waste oils were collected, i.e. 38% of the quantity of marketed oils. About 61% of collected waste oils is regenerated, while 24% is processed to produce fuels, 11% is used for direct energy recovery in cement plants, lime plants, steel mills and power plants, and the remaining part is incinerated as hazardous waste. It is estimated that about 18% of collectable waste oils is used illegally.

Without proper collection or treatment waste oils can pose a serious threat to people’s health and life and the environment. It applies to water, ground or air contamination in case of uncontrolled dumps into the sewage system or the ground. According to estimates one litre of waste oil can contaminate drinking water being an equivalent of a yearly demand for 12 persons.

The laws governing waste oil management have been in force for over 20 years. But still, estimates say that approx. 100 thousand tonnes of oils are incinerated in heating installations not accommodated to that purpose. In accordance with the law waste oils can be burnt only in installations designed for thermal treatment of hazardous waste. In 2004–2016, the amount of collected waste oils in Poland went up, whereas in Europe in the same period it declined. Poland took the ninth position in this category in Europe.  

The scale of problems in terms of proper management of waste oils indicates that the existing legal and organisational solutions do not provide a sufficient incentive for end users to handle this type of waste in accordance with the law. The illegal use of waste oils in heating installations, regardless of environmental damages, is also reflected in tax losses (annual tax losses are estimated at PLN 150 million). On the other hand, waste oil treatment in regeneration processes to produce base oils significantly limit the extraction of crude oil and is a vital element of circular economy.

In order to reduce negative impact of improper handling of waste oils on people’s life and health and the environment, the United Nations Global Compact Network Poland in cooperation with the government administration, NGOs and oil industry representatives developed a report in 2020 including, among other things, assumptions of changes to the laws on waste oils.

The NIK audit covering the period 2020-2024 was to show if proper and reliable waste oil management was in place.

Insufficient legal conditions

In the audited period, the Minister of Climate and Environment – despite being aware of the problem - did not take any efforts to develop draft changes to the law in terms of fighting shadow economy on the waste oil market.

In 2020–2024, no tasks, objectives or risks related directly to waste oil management were defined. In 2020–2024 (first half), the Minister of Climate and Environment and the Minister of Development and Technology did not order any analyses of the methods of receiving and collecting waste oils, their management possibilities or analyses of binding laws on waste oil management. Hence, it was impossible to plan tasks or activities to properly manage waste oils.

The only analysis (expertise) on waste oil management was related to an update of the National Waste Management Plan 2028 but its draft was developed based on incomplete data.

Wasteful expansion and closure of the bot fighting soot-spewing stoves

Since 2019, there has been an IT system in place at the Ministry of Economy to fight soot-spewing stoves. This tool was designed to enable automatic search of sales offers for solid-fuel boilers that do not meet emission norms. In June 2020, this system was expanded among others with waste oils and used oil boilers. The expansion decision was not preceded by any analysis to use new modules by the existing system users, though.  

As a consequence, the expanded system was not used at the Ministry of Economy or any other institution. Finally, after three years from the expansion, the bot fighting soot-spewing stoves was closed. NIK finds the expenditure of PLN 37 thousand for the system expansion wasteful.

Unreliable reporting and delayed submittal of reports on waste oil management to European Commission

In the audited period, the Minister of Climate and Environment developed two reports on the implementation of the National Waste Management Plan 2022: for 2017–2019 and for 2020–2022. The data in the first report were incomplete.

Also reports for the European Commission on mineral or synthetic lubricating or industrial oils brought into the market and on selectively collected and treated waste oils for 2020 and 2021 were submitted to the Minister of Climate and Environment with a delay of 21 and 9 months, respectively and the report for 2022 was not submitted by the end of June 2024.

Insufficient efforts of the Inspectorate for Environmental Protection

The Inspectorate for Environmental Protection did not issue any instructions or guidelines to verify reliability of data in the waste oil register kept by entrepreneurs, nor did he order any inspections in the area of waste oil management, despite irregularity signals.

In 2020–2024, in four Provincial Inspectorates for Environmental Protection only 198 audits related to waste oil management were planned. Issues connected with waste oil management were not the key objective but only one of 61 objectives pursued in those audits.

Annual reports filed by the Chief Inspector for Environmental Protection to the Minister of Climate and Environment about the Inspectorates’ activity contained factually incorrect data. The data on entities responsible for waste oil regeneration mentioned two entities which – in line with the Database on Products, Packaging and Waste Management – were not entitled to run such activity.

Incomplete functionality of the Database on Products, Packaging and Waste Management

The Database on Products, Packaging and Waste Management did not facilitate direct acquisition of data on waste oil management. Therefore, the Provincial Inspectorates for Environmental Protection and the Marshal's Offices lacked full or credible data on the number of entities operating on the waste oil market.

Financial support not for oils

In the audited period, activities related to waste oil management could be subsidised from the financial resources of the National Fund for Environmental Protection and Water Management as part of four priority programmes. The budget earmarked for those programmes reached almost PLN 10 billion.

None of the priority programmes referred directly to subsidising tasks in the area of waste oil management. The National Fund did not analyse or identify groups of beneficiaries from this area interested in using subsidies for that purpose, nor did it promote the possibility of granting the subsidy. As a consequence, potential beneficiaries submitted only 22 subsidy applications.

Activity in the area of waste oil management without permits

All the 42 audited entities dealing with waste oil management had an entry in the Database on Products, Packaging and Waste Management but it was not always up-to-date. In some cases the activity was run without required permits or in violation of them (4 of 42). In 16 of 42 audited entities the waste registration cards involved factually incorrect data.

Only in five of 12 audited entities the weight of waste oils was defined based on weighing. In other cases it was estimated based on conversion factors which did not make it possible to specify the weight of this waste in a precise or reliable way. The lack of proper calculations threatens the reliability of data in the waste register and in reports submitted to the Marshal by entities managing waste oils.

Irregularities in the way of storing waste oils were found in nearly half of the audited entities. The most frequent violations involved mixing used oils and storing them under a single code, the lack of proper marking of containers or inappropriately securing places of waste oil storage.

Recommendations

NIK has made, among others, the following recommendations:

To the Minister of Climate and Environment to:

• ensure effective supervision over waste oil management, in particular by carrying out a thorough analysis of the condition of this management and taking measures adequate to the analysis results;
• introduce a functionality to the Database on Products, Packaging and Waste Management ensuring current, reliable and effective monitoring of the waste oil market.

To the Chief Inspector for Environmental Protection to ensure effective supervision over waste oil management by organising and coordinating audits reaching beyond provinces and covering entities which produce and manage waste oils.