An examination by the Comptes Syndicate questions the handling of pandemic subsidies in the Community of Valencia. Last year, 2,300 grants were issued out of 43,000 aid applications linked to covid relief for companies and self-employed workers. The aim was to support recovery, but the review suggests that some procedures did not fully meet the requirements set in the call. An inspection report from the supervisory authority highlights gaps in control within the regional administration, noting that the Community of Valencia, formerly Servef, oversees subsidies disbursed by Labora, the public employment and training service. Attention is drawn to a lack of consistent criteria for approving aid across certain programs and to instances where oversight by the General Intervention of the Generalitat did not appear to be sufficiently defined.
Concerns were raised about the handling of files that were already guaranteed and later reviewed, with 52 cases identified as clearly erroneous. The Sindicatura’s criticisms point to Labora’s assistance as part of the measures designed to mitigate covid impacts, especially for sectors hit hardest by restrictions, such as hotels, travel agencies, and other leisure activities. Subsidies were granted across CNAEs that reflect the activity in which a business or self-employed person is registered, totaling 43,152 grants amounting to 50.6 million euros.
Data migration work revealed that as many as 2,289 beneficiaries could have received 1,376,700 euros more than they were entitled to. This occurred because subsidies were requested based on a responsible statement, and the administration had to verify the data against information provided by Social Security. In several cases, either the CNAE did not match a suitable category or it did not appear in the list.
Following a communication from the Sindicatura prior to the report’s publication, Labora stated that these records had been reviewed and represented real errors in 52 cases, which were corrected. Eva Hernandez, Director of Planning and Services, explained to the purchasers that three criteria must be checked to ensure eligibility for aid. First, that the IAE matches the applicant and aligns with a CNAE similar to the one envisioned in the call. Second, that, when a financial domicile is outside the autonomous community, workers employed locally are considered. Third, that the company CNAE does not match any listed CNAEs, but the CNAE where employees are registered corresponds to activities eligible for help, which could be different from the listed ones.
However, the Purchaser believes the sole valid criterion may be the second one. The first two are deemed reasonable but are not expressly outlined in the regulatory decree for subsidies, so a broader file review is still recommended. Attention is also drawn to 104 self-employed cases that are not even registered with SGK.
Lack of control
Beyond the call, the report notes significant violations indicating that the Generalitat General did not exercise adequate financial oversight of Labora’s subsidy management. This shortcoming could be attributed to the regional Treasury department.
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On the other hand, the report confirms that the employment service did not transmit job-related information for deals exceeding 600,000 euros, nor did it provide a certified list of agreements signed last year. The orders to record these contracts in the computer system were issued on December 20, 2021, meaning the signing likely occurred in 2022. The report also notes that all information should be accessible through the Generalitat’s register of agreements.
In another context, the recipient may also meet evaluation criteria for granting financial support, including targeted training subsidies for companies to train the unemployed with a later hiring commitment. These aspects are not explicitly defined, a shortcoming Labora attributes to the inspector’s focus on special features and the complexity of such grants.
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Finally, the report flags a violation related to employment workshops, noting that a backup list of positively assessed demands could not be addressed due to budget constraints at that time, but later, with a larger budget, those demands were reassessed and some were approved. Labora’s Planning and Services director explained that the agency did not anticipate increased funding initially, yet later expanded support to meet requests as feasible, with none rejected and no list left unaddressed.