According to NIK, subsequent ministers responsible for climate issues as well as subsequent presidents of the Management Board of the National Fund for Environmental Protection and Water Management (NFOŚiGW) did not make sure the “Clean Air” Programme, scheduled for 2018-2029, was executed properly or effectively. The audit findings, based among others on expert opinions, reveal that it was prepared without the feasibility study and without indicating an entity responsible for comprehensive management of the Programme, including its proper implementation at all levels and all implementation stages.
The budget of the "Clean Air” Programme was not balanced: not all sources of its financing or its financing scale were properly defined. Although there was enough money in the audited period to settle liabilities contracted as part of the Programme, according to NIK the budget issues resulted from the slow rate of the Programme implementation.
A significant risk for the Programme completion is the uncertainty as to the sources of its future financing, especially considering the dynamic price increase in the market of construction services and materials. Besides, it was not specified how multiple changes in the Programme would affect the planned effects given that the budget has not changed since 2018. According to NIK in case of high inflation – which is being reported now – it is not very likely that the Programme objectives will be achieved. From March 2018 to March 2022, the prices of construction tools and materials went up by over 47% on average.
NIK also highlights little interest in the Programme, especially in its initial phase. One of the reasons were the investment financing conditions offered. No mechanisms were established in 2018 to enable low-income persons to use the Programme. First solutions of this type were implemented only in May 2020 and works on changes in this area were started only in 2021.
NIK points to the lack of a universal, coordinated information and education campaign related to the Programme. It was developed neither at the national, nor provincial, or municipal level. According to NIK the planned actions were insufficient. The lack of coordination resulted in NFOŚiGW financing the production of two instructional videos on filling of the subsidy request in the same version.
The survey made at NIK’s request in September 2021 showed that 95% of respondents heard about the “Clean Air” Programme but even 45% of them did not know much about it. About ⅓ of respondents believed that programmes subsidising the replacement of old boilers and thermal insulation bring about more problems than benefits and that heating a single house with an old coal-fired boiler does not affect the air quality in the surroundings. According to NIK, the survey results show that the information campaigns were not tailored to individual groups of recipients, depending on their ecological awareness, education and income. Most respondents learnt about the Programme from the media.
The Programme was prepared sloppily and without a database
The "Clean Air” Programme aimed at improving power efficiency and reducing air pollution by detached houses. It can be used until 2029 but agreements are to be signed by 2027.
NIK stands in a position that the Programme could not be implemented properly and efficiently, chiefly because no entity was appointed to manage the Programme on a comprehensive basis. NIK also has objections about the Programme budget. By assumption, over PLN 63 billion of PLN 103 billion was to be earmarked for subsidies and nearly PLN 40 billion for loans. Subsequent ministers informed the Chancellery of the Prime Minister that the funds are fully provided in the budget of NFOŚiGW. However, the NIK audit revealed that the Programme budget was not balanced, i.e. not all sources of its financing were properly defined, and neither was the financing scale. This is particularly alarming given that the amount of the EU subsidy for the “Clean Air” Programme is uncertain and the signing of the loan agreement with the World Bank depends on whether or not funds as part of the National Plan for Recovery and Resilience will be paid.
Besides, it was not specified how to measure ecological effects achieved thanks to taxpayers using the thermal insulation allowance which is an additional source of the Programme financing. As a consequence, it is impossible to monitor or to assess effectiveness of a large part of the state’s efforts to improve the air quality.
The management of the “Clean Air” Programme was hindered by the absence of an IT system that would represent a relevant database. In 1Q2020, works were started in NFOŚiGW to create such a database. They were interrupted, though, and renewed only in October 2021. In the long run, the system roll-out was scheduled for the second half of 2022.
The NIK audit showed that NFOŚiGW took efforts to streamline the Programme execution, but they did not bring about the expected results, which – according to NIK – was caused by the absence of the feasibility study. Frequent changes did not support procedural transparency, which may have discouraged potential beneficiaries. All in all, the programme was changed 11 times. The number of requests submitted with provincial funds for environmental protection and water management increased noticeably only after the changes were implemented in 2020 – from about 1 thousand to about 4 thousand. According to NIK this is not enough, though, for the Programme objectives to be achieved by 2029.
Dispersed competencies, fears for costs
The principles of cooperation between NFOŚiGW and provincial funds concerning the “Clean Air” Programme are governed by relevant documents. However, none of them clearly defines the split of roles and responsibilities for comprehensive management of the Programme at each stage of its implementation.
Municipalities were brought into the Programme implementation in July 2019. They were supposed to perform tasks being part of the Programme on an unpaid basis, under agreements signed with provincial funds. Only from October 2020, after municipality heads became obliged to issue income certificates to persons entitled to higher subsidy amounts, municipalities started to receive reimbursement of costs of those activities.
Nevertheless, from February 2021, only 39% of municipalities signed cooperation agreements. In February 2021, local governments were offered the so-called benefit package, including PLN 30 thousand for establishing and running consultation and information points for one year. Until September 2021, nearly 80% of municipalities signed the agreements but 11.5% of them did not sign the annexes. The municipalities were afraid that the opened points would be a burden for their budgets in years to come.
Poor effects, delays in reviewing requests
The NIK audit revealed that until 1 October 2021 about 254 thousand agreements were signed as part of the „Clean Air” Programme. Those were mainly subsidy agreements for over PLN 4.2 billion, of which over PLN 1.8 billion was paid. It means that after 3 years of the Programme implementation the amount specified in agreements with beneficiaries made up only about 4% of the Programme budget and the total subsidy amount paid was lower than 2% of that budget.
Eight audited provincial funds received about 160 thousand requests in total. The requests were verified and evaluated properly but 22% of them were reviewed with delays, in an extreme case 190 days after the deadline.
The funds explained that there were too many requests to process. Another reason were the COVID-related absences of employees. The long waiting time for subsidy payments made beneficiaries withdraw from the already signed agreements. In some cases the withdrawals were caused by very low earnings or even the lack of income as well low attractiveness of the subsidy as it had to be returned. In the audited period, beneficiaries withdrew from about 3.5 thousand agreements nationwide and provincial funds for environmental protection and water management terminated over 2.3 thousand of those agreements.
Key recommendations of NIK
To the President of the Council of Ministers to:
- consider changing the relevant Act to exempt NFOŚiGW from the obligation to make payments for the Government Road Construction Fund;
- take legislative and organisational efforts to obtain data necessary to calculate material and ecological effects being the result of taxpayers using the thermal insulation allowance.
To the Minister of Climate and Environment to take measures to:
- specify precisely the scope of supervision exercised by the minister responsible for climate issues over the operation of NFOŚiGW by amending the relevant Act.
To the Minister of Climate and Environment and the Management Board of NFOŚiGW to take measures to:
- clearly specify responsibility for the management of the “Clean Air” Programme as well as the management structure of the Programme, with the aim of achieving the Programme effects,
- make sure the entity responsible for managing the “Clean Air” Programme can give instructions to entities implementing the Programme,
- manage the “Clean Air” Programme, as an element of the “Clean Air” strategic project, in line with the strategic project management standards developed by the Chancellery of the President of the Council of Ministers.
To the Management Board of NFOŚiGW to:
- take education and information measures to make sure that information on the “Clean Air” Programme reaches potential beneficiaries and that this information is properly coordinated at all stages of the Programme implementation.
