Audit report: Third of COVID-19 reserve unspent at end of year
One-third of the government's €86.4 million COVID-19 reserves remained unspent at the end of the year, the National Audit Office reported on Wednesday. A €56 million buffer was also created using EU grants
Nearly two-thirds, more than €58 million, of the government's emergency COVID-19 reserve had been spent by the end of last year. €26 million remained unspent.
Much of the spending was covered by EU grants which enabled the government to create a €56 million buffer which will now be used to cover this years' emergency expenditure.
The majority of the emergency reserve was spent on purchasing and transport of personal protective equipment and for coronavirus testing – which totaled nearly €39 million and €19 million was unused.
The largest contributors to the spending of the emergency reserve were the Ministry of Finance with €18.7 million and the Ministry of Social Affairs with €14.4 million. Both ministries also spend the most on PPA and testing.
By the end of the year, the Ministry of Social Affairs had spent €8.2 million from the COVID-19 reserve on purchasing coronavirus tests and testing, and €2.4 million on respiratory ventilators and other oxygen supply equipment.
The Ministry of Social Affairs spent €1.9 million from the COVID-19 reserve on personal protective equipment, while the State Chancellery spent €9.2 million. The biggest costs made by the Ministry of Economic Affairs and Communications were the transportation costs of repatriating Estonian citizens, which amounted to €3.8 million.
While the government initially estimated that all expenditure from the COVID reserve should be paid from the Estonian taxpayers' money received in the state budget, it became clear during the year that a large share of these can be covered with the European Union grants.
As a result, of the total €58.3 million expenditure incurred by the ministries, €35.1 million were paid out from the state budget and €23.2 million from the grants received from the European Union budget.
Due to the decrease in the actual need for funds, the use of the European Union grants and covering some of the expenditure with other funds of the state budget, a financial buffer totaling approximately €56 million was built by the end of the year, to the extent of which the government could make new decisions in 2021 to cover emergency expenditure.
The Riigikogu approved the state budget in the amount of approximately €12 billion for 2020. This also included the government reserve of €86.4 million that the government could use operatively, spending it at its own discretion. As the COVID crisis broke out, the Riigikogu increased the reserve by establishing a supplementary budget and amending the state budget to €360.8 million.
In order for the reserve to be used, the government authorized an entity, for example, a crisis committee, to establish so-called limits for use for the ministries. While the Riigikogu allocated €360.8 million to the government, the government decided to allocate €84.6 million to the ministries to cover the primary expenditure of the COVID crisis.
The ministries and the State Chancellery then started to take obligations and enter into contracts for the use of the funds.
As there was no overview of the status of using the reserve at the time of the outbreak of the crisis, the National Audit Office decided to publish the main facts about the use of the emergency reserve.
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Editor: Helen Wright