Ministry of Social Affairs sues Innove

Innove. Photo: Arvo Meeks

The foundation Innove, which mediates EU support funds, is reclaiming more than 350,000 euros from the Ministry of Social Affairs, which was allocated a couple of years ago for support services with handicapped children. The ministry refuses to repay the sum and has sued Innove over the claim.

The affair began in summer 2017 when the ministry received more than seven million euros support through Innove for a project concerning care of children with severe disabilities. The three-year project was handled by the Social Insurance Board, which organized a tender for finding service providers. The service contained, for example, babysitting and transport services. Estonia was divided up into 16 regions, the service providers were found and the process went on.

However, early this year, 1.5 years after the completion of the tender, the Ministry of Finance audit decided that the tender did not meet the requirements of the state procurement act. Allegedly one of the qualifying terms groundlessly restricted competition. The controversy concerned the requirement that the applicant must possess a license for child care issued by the Estonian state. This requirement eliminated applicants from abroad, which was illegal.

After the publication of the audit Innove decided to reclaim five percent of the support. This amounted to more than 350,000 euros. The ministry appealed to court and the Tallinn administrative court started the procedure in late July.

“The Ministry of Social Affairs went to court to protect the rights of the Social Insurance Board, since we are convinced that the terms announced by the board during the procurement were correct,” said the ministry spokesperson Riina Soobik.

Soobik pointed out that everything had been found to be correct during earlier audits carried out by Innove itself. Thus the ministry cannot understand how it was now suddenly declared incorrect. “We cannot comment on the issue in detail, since the court is handling the case,” Soobik added.

Innove in turn stated that it is hardly surprising that projects based on EU funding are checked repeatedly. “The fact that the first audit does not discover a violation does not mean that further checking cannot find them,” said Katri Oja, Innove’s legal advisor.

The Tallinn administrative court issued a ruling recommending the institutions to reach an agreement. However, Innove does not consider it possible. “Since this is a debate concerning structural supports, where the legality of use of public funds or the taxpayers’ money is assessed, it is not legally possible to make a compromise,” Oja said.

It is not yet clear when the court will decide on the conflict between the government institutions.

In this case Innove pays the ministry according to an account of expenses. According to the foundation, the ministry has not yet submitted most of the reports. This means that in case Innove should win the case, the ministry will receive 350,000 euros less. Since the ministry was unwilling to comment, it will remain open how it will plan to cover the deficit in case of losing.