Grants awarded from the proceeds of gambling activities – Appropriateness of their management and prerequisites for effectiveness

Discretionary government grants from the proceeds of gambling activities are awarded by the Ministry of Education and Culture, the Ministry of Social Affairs and Health, and the Ministry of Agriculture and Forestry. The grants awarded to social and health organisations are managed by an independent government grant authority, the Funding Centre for Social Welfare and Health Organisations (STEA), which operates in connection with the Ministry of Social Affairs and Health.

The National Audit Office audited the appropriateness of the management processes of government grants awarded from the proceeds of gambling activities and the prerequisites for effective allocation of the grants. The aim was to produce information that increases the transparency of the use of funds and verifies that grant funds are used appropriately. Another aim was to examine how government grant practices can support effective use of grant funds.

The grant management processes comply essentially with legislation, but there are shortcomings in the supervision of the grants, and the award process is not sufficiently transparent in all respects. The audit found that the procedures the government authorities apply in the management of the grants differ from each other in several respects. There are also differences between the government authorities in how they take the effectiveness of the supported activities into account at different stages of the grant process. The perspective of effectiveness is not integrated with the grant process so closely that it would significantly steer the allocation of the grants.

The government grant authorities should tighten the supervision of the eligibility of costs and compliance with the grant terms. On the basis of the audit, there is a clear need to harmonise the different grant management practices and to increase the transparency of grant activities. The effectiveness policies related to the grants awarded from gambling proceeds should be clarified.

The proceeds that the state has received from gambling activities have accounted for a significant part of the funding of many social activities. In recent years, however, the proceeds have decreased, which is being addressed by means of a new funding model that is under preparation. In the new model, the expenditure will be allocated in the budget process in the same way as other expenditure within the central government spending limits.