The Hungarian State Audit Office's investigation: FISE's operation is regular! and effective
The Hungarian State Audit Office's investigation: FISE's operation is regular and effective
In July 2025, we received a notification that the State Audit Office would investigate the operation of Studio of Young Designers Association. This was surprising in the middle of the summer break, as there had been very few examples of an investigation of a creative artist’s civil society organization. For several months, they requested detailed operational, financial and application documents from us. The process gradually narrowed down, and finally, in addition to our operating rules and accounting for three years (2022-2023-2024), they checked the use of a specific 2022 grant (VIII. Budapest Contemporary Jewelry Week), right down to contracts, invoices and communication materials. During the five-month investigation, we were constantly given new data provision tasks, but by the end of the year the report was ready, which has now been published. It was determined that the grants were used properly and for the intended purpose, and that our projects were successfully implemented. Only three minor administrative deficiencies were reported, which were not considered serious errors.
The investigation was not public at the time of its conclusion, but our material entitled “Audit of the Use and Accounting of Grants Received from the State Budget by Associations and Foundations – Young Artists’ Studio Association” was published on the State Audit Office’s website in the “Reports” section on April 17, so we can now provide news about the process.
Findings of the report:
“USE AND ACCOUNTING OF THE GRANT
The Association prepared the report on the use of the audited grant in the form prescribed by the Sponsor, including the invoice summary (itemized accounting) as part of it, and submitted it to the Sponsor within the deadline. In the case of the Association, the SAO established the following with regard to the audited items of the grant use (10 items):
- the accounting settlement of the items was supported by documents in accordance with the provisions of the Accounting Act;
- all economic events were accounted for in accordance with the provisions of the Accounting Act, to the general ledger number corresponding to their content;
- the accounting documents of the items were provided with a clause in accordance with the provisions of the Sponsor’s document;
- the amounts stated in the accounting documents were the same as the values indicated in the invoice summary;
- the accounting documents of the items based on the economic events were fulfilled in accordance with the Sponsorship Document, until the end of the support period, according to the contract;
- the financial settlement of the items was completed in all cases by the usage deadline specified in the Sponsorship Document;
- the items were consistent with the usage rights specified in the Sponsorship Document and the cost plan, approved by the Sponsor.
The Sponsor decided to close the support included in the Sponsorship Document and accept the report on September 23, 2024, and the Association did not have a repayment obligation.
PURPOSE AND EFFECTIVENESS OF THE USE OF THE SUPPORT
The Association used the verified support in accordance with the provisions of the Sponsorship Document, for the purpose specified therein. The goal specified in the Sponsorship Document – “Preparation and implementation of the Budapest Jewelry Week” – was achieved. The event was implemented in accordance with the previously approved budget, and no cost reallocation took place. The program implemented as a result of the support was advertised and promoted on online and offline press platforms, radio and television programs, citylight posters, and the public was informed on social media platforms. Numerous photos and videos were taken about the event. More than 150 domestic and foreign artists were represented at the event, and the entire event series was attended by close to a thousand people. The project provided domestic artists with an opportunity to develop, within the framework of individual or group exhibitions.”
We received three reprimands, all of which related to accounting/administration, but none of them indicated a serious error, as they were always worded as something we would have to pay attention to in the future.
The three comments were as follows:
- Grants should always be recorded as other short-term liabilities during the interim period until the settlement is accepted, not as income.
- The amounts used should be presented in the notes to the annual report broken down by grant.
- We should not delay in submitting the simplified annual report.
In addition to the continuous monitoring, we spoke to the relevant authorities several times, asking how FISE was chosen? They said that 10 organizations from the field of culture were randomly selected based on a "risk analysis" to gain experience in the use of grants allocated to this area.
The result of the investigation is confirmation for us: FISE operates transparently and responsibly - something we can rightly be proud of.
Róbert Mascher DLA habil.
designer, industrial artist,
president
