Federal Ministry of Agriculture: Research project costs should be calculated in a comprehensible manner

The Federal Ministry of Agriculture implemented its own milestones for the current “Programme for Research and Development at the Federal Ministry of Agriculture, Forestry, Regions and Water Management, 2020–2025”. Nevertheless, there is a need for improvement, as the ACA ascertained in its report “Research at the Federal Ministry of Agriculture, Forestry, Regions and Water Management” („Forschung im Bundesministerium für Land- und Forstwirtschaft, Regionen und Wasserwirtschaft“)  published today. Between 2020 and 2022, the Ministry spent EUR 162.52 million on research. The auditors were missing uniform ceilings and consistently transparent cost calculations in the implementation of the funded projects.

The Federal Ministry of Agriculture awarded projects directly by using contracts for work and services or applying the exemption clause for research and development services in the Federal Procurement Act 2018. In this way, contracts worth more than EUR 100,000 could be awarded directly, without a formal procurement procedure. The ACA carried out the audit on the basis of ten selected research projects. The financial contribution per project ranged from EUR 20,000 to around EUR 735,000. In the case of a project financed by the Forest Fund (endowed with EUR 350 million), cost limits were circumvented by using subcontractors.

The research projects covered matters of agriculture, forestry and water management, the Forest Fund, and security and defence research. The auditors could not immediately comprehend the connection between security and defence research, on the one hand, and the responsibilities of the Ministry of Agriculture on the other hand.

The audit focussed on the period from 2020 to 2022. In this period, the three major contractors were the University of Natural Resources and Life Sciences (BOKU), the Austrian Research Centre for Forests (BFW), and the Austrian Agency for Health and Food Safety GmbH (AGES).

Inconsistent reporting obligations

With its coordinating Research and Development Department and its database on sustainable development research (DaFNE), the Ministry of Agriculture had a uniform, coordinated process in place. However, this process was not applied to a substantial part of the research projects, thus leading to a lack of consistency in reporting. Some departments used their own system for documenting research activities. The ACA recommends that the Federal Ministry of Agriculture implements a uniform, expedient reporting format.

No uniform limits for cost reporting

In the audited period, no limits for personnel and indirect costs were set up for the projects of the DaFNE platform. In case of eight out of ten audited projects, the ACA ascertained that different levels of personnel costs and indirect costs had been approved by the Ministry of Agriculture. The ACA critically points out that in 2020, the Ministry of Agriculture accepted considerably different personnel costs for the same persons involved in two different projects in 2020.

The ACA recommends setting up rules for a consistent evaluation of project applications via the DaFNE platform and establishing expedient cost limits for personnel and indirect costs.

Furthermore, some projects were mainly funded using lump sum payments, whereas the Ministry did not require any evidence of the use of funds in the final reports. To enable appropriate cost control measures, the ACA recommends setting up uniform criteria and requesting costs reports, as well as supporting documents where required.

Incomprehensible budget calculations

Contrary to the Ministry’s guidelines, the cost calculations of the ten audited projects were not consistently comprehensible. For example, costs for materials were indicated as a lump sum. Costs and services could not be assigned in a comprehensible manner. In case of seven projects, offers and cost estimates for material costs were incomplete. The ACA recommends to the Ministry of Agriculture that project proposals are only approved if all relevant offers/cost estimates have been provided and the costs can be assigned in a comprehensible way.

Forest fund: Threefold increase of personnel costs

In July 2020, a Forest Fund endowed with EUR 350 million was created to provide compensation for losses caused by bark beetles, support the creation of biodiverse forests resistant to climate change, and foster the use of timber. Regarding the relatively high fund volume, the ACA noted that funds were only available for a limited period of time. To allow for the entire sum to be spent and processed, the period had to be extended until 2027 for the time being.

Furthermore, under the rules of the Special Directive Forest Funds, personnel costs of subcontractors could amount to three times the personnel costs of project participants and costs limits could be circumvented by resubmitting projects. To ensure an economic and expedient use of resources, the ACA recommends to the Ministry of Agriculture that deviations from cost limits are only accepted induly substantiated exceptional cases.