Paper/Speech Details of Conference Program for the 27th NISPAcee Annual Conference Program Overview WG5: Public Finance and Public Financial Management Author(s) Gyorgyi Nyikos Ludovika University of Public Service Budapest Hungary Soos Gabor, Title The Consequences of Public Procurement Irregularities in Hungary File Paper files are available only for conference participants, please login first. Presenter Abstract Public Procurement is an important aspect of the use of public funds, since beneficiaries who are contracting authorities must often carry out their purchases from external sources, in compliance with the relevant EU and domestic rules. An incorrect application of the rules can have serious financial consequences, including a withdrawal of funding from the project and ultimately suspension of the payment of funds to the Member State concerned, in case the procurement is financed from the European Structural and Investment Funds (ESIF). Hungary, being a significant net beneficiary of EU funds in the 2014-2020 period, has a high share of EU funded procurements. In 2017 the volume of EU funded public procurements amounted to HUF 1466.75 million (EUR 4.5 billion), while the number and value of public procurements co-financed by the EU was 27.58% and 40.41% of all procurements respectively. The paper aims to show how closely the use EU funds and public procurement are linked through regulation and practice and the potential adverse effects on the use of funds. It is shown from the perspective of Hungary how far public procurement procedures are affected by irregularities and what effect this has on the relevant projects. Data is presented on the irregularities and financial corrections concerning public procurement procedures, and this is contrasted with figures published at the European level, in order to put the data in a comparative perspective. The findings are expected to suggest that many public authorities that are beneficiaries of EU funds commit errors when carrying out public procurement procedures, which lead to financial consequences. This is caused by the fact that public authorities are often not careful enough in avoiding discriminatory practices when designing their procedures. In order to avoid errors, public authorities should seek expert advice and make more use of domestic and EU guidance to ensure that they apply the rules correctly and avoid the loss of funding.
