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Audit finds lapses in Business Finland's coronavirus funding scheme

An independent review found only a few "isolated cases" where recipients did not meet the criteria for funding.

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Business Finland's special funding programme came in for heavy criticism recently. Image: Vesa Moilanen / Lehtikuva

Some of the companies that applied for special coronavirus funding from state business promotion agency Business Finland did not meet the criteria for the aid programme, according to a report by audit firm BDO Finland.

The review of Business Finland's funding practices was commissioned by the Ministry of Economic Affairs and Employment, following public blowback over the target of the funding and concerns that some recipients of the agency's 800-million-euro aid package were not in real need of financial support.

According to the auditor, for the most part funds were distributed in accordance with the agency's criteria. However it said that the criteria were not met in "isolated cases".

"The audit found isolated cases in which funding was granted to non-eligible companies. However the shortcomings identified are not significant, given the number of grants and the amount of money [involved]," the audit report noted.

The report referred to cases in which grant recipients did not prove they had sufficient capital.

Ministry to "address" cases

According to the audit, Business Finland did not provide funding to companies that were in bankruptcy proceedings when their funding applications were approved or were in the process of restructuring because of insolvency. Additionally, recipients were not facing distraint procedures over tax debts and did not lose more than half of their share capital due to accumulated losses.

"On the basis of the audit, the main finding is that Business Finland has granted the coronavirus funding in accordance with regulations. The audit found isolated cases in which the funding granted did not meet that criteria. This will of course be addressed. However, the overall picture is that the support has reached applicants who have fulfilled the criteria and in accordance with the legislation," said Antti Joensuu, a director from the ministry.

Minister for Economic Affairs Mika Lintilä announced the audit of Business Finland's management of the special coronavirus funding scheme on 23.4. The grants were part of a new programme providing "funding for business development in disruptive circumstances".

According to Business Finland's funding guidelines, preliminary grants were intended for feasibility or exploratory studies, and covered 80 percent of approved project costs or a maximum of 10,000 euros.

The grant for development projects was estimated at 80 percent of approved project costs or a maximum of 100,000 euros.

Recipients do not have to repay any money, but the funding must be used only for salaries and professional services associated with the project. For example, the grant was not to be used to cover rental expenses.

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