Taltech internal report: Oversights not fraud

Taltech's internal inquiry report into alleged misuse of EU funds at the RNI.
Taltech's internal inquiry report into alleged misuse of EU funds at the RNI. Source: ERR

As reported on ERR News, Tallinn University of Technology (Taltech) published a report on Tuesday, with the findings from its internal investigations into alleged misuse of European Union funds at the Ragnar Nurkse Department of Innovation and Governance (RNI). In summary, the inquiry committee found no evidence of fraudulent activity, though it did say that processes at the department should be streamlined, including training for the relevant individuals.

Taltech issued a press release Thursday with the main conclusions of the committee report, which stated a variety of errors in reporting costs, documentation and communication, but found the allegations which first surfaced in daily Postimees on Aug. 22 to be without basis.

The article in question was based on reports from a whistle blower from inside the RNI who took his story to the paper after previous concerns he raised on the issue in March seemed to have gone unresolved.

The recent report was ordered by Taltech Rector Jaak Aaviksoo the day after the Postimees piece appeared. An interim report carried out by Taltech in early September took the same line as the latest, full report.

In its report, Taltech says the investigation committee found errors in reporting costs, whereby what should have been reported as indirect costs, were placed in the direct costs field.

It also stated that internal communications at RNI were inadequate, leaving project team members' roles unclear the makeup of research teams and their tasks not commonly understood.

Taltech added that members of the project team in question, the OpenGovIntelligence (OGI) had not sufficiently documented activities, with some publications lacking the relevant reference to the project, and time sheets for part-time employees incomplete, covering the first period of the project, and unsigned altogether for most employees working on the second period of the project. The report also stated the Aug. 22 Postimees allegations were unfounded.

Taltech report details

According to ERR's online news in Estonian, The report was prepared by Taltech Vice-Rector Renno Veinthal, Tõnu Pihelgas, Jaan Raik, Tea Trahov and Marika Lunden. 

The OGI was supported to the tune of €2.79 million, of which €267,500 came from Taltech itself, according to ERR's online news in Estonian, which contains a link to the report (in Estonian), and the project's estimated workload was 47 months worth of man-hours.

Project manager and RNI professor, Robert Krimmer, outlined in detail the work of researchers involved in the project, including work done by Carlota Perez, a British-Venezuelan scholar specialized on technology and socio-economic development. Perez was a part-time employee on the project, in a role of advisor and, while she was based in Tallinn, working with RNI staff and teaching.

Evidence was available that most of those who contributed to the project had been reported correctly, according to Taltech.

However, according to ERR's online news in Estonian, the report said Perez had been unaware she was expected to contribute to a specific project (i.e. the OGI) or that her duties had changed substantially compared with the previous period.

The report states that Perez expenses had been incorrectly reported to the European Commission, and that while her activities at RNI were relevant, they did not constitute a direct cost.

Additionally, Erik Reinert was involved in developing a methodological framework, according to the report, and was aware of the expected contribution to OGI. However, Reinert himself had said that he did not think he was involved in the OGI project and that his status had been inadequately communicated. Reinert is also a Postimees journalist.

The report also stated that: "The roles of the members of the team were not well understood and there was a lack of common knowledge of the composition and tasks of the team," according to ERR's Estonian news.

Developments following the initial allegations

Postimees published several articles following the original August piece, including one on Wednesday which contained a recorded conversation between the whistle blower, former RNI employee and current PhD student at Taltech Keegan McBride, and head of the RNI Erkki Karo.

This conversation had reportedly not been available in full to the Taltech enquiry committee while it conducted its work.

Karo is heard to mention that EU funds were accrued as a reserve, as standard practice, as a coping mechanism to enable to department to stay afloat in its current setup, and while conceding the practices were not right on some level, when prompted by McBride, urged stopping short of publicly referring to them as fraudulent.

According to ERR's online news in Estonian, McBride had refused to supply the recorded conversation to the committee due to ongoing criminal proceedings initiated by the prosecutor's office in late August.

Next steps

The Rector's Office issued requirements in the aftermath of evaluating the report, which included reviewing project management procedures at the university and making the necessary adjustments with the aim of ensuring smooth project management in compliance with the applicable rules, and contributing further to strengthening the support system for the university's project management affairs.

A comprehensive, university-wide project management software application should also be initiated, Taltech said.

A Postimees article in early September said that Taltech had already invested €60,000 on time management software in 2018.

A prosecutor's office spokesperson told ERR News Wednesday that it is conducting an ongoing investigation into the allegations. At the same time, since the funds in question came from the EU, a European Commission investigation is also reportedly likely.

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Editor: Andrew Whyte

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