lack of oversight in covid relief programs explained
A review by the Comptes Syndicate questions a series of Covid relief measures. In Valencia, 2,300 of 43,000 aid recipients under Labora’s scheme last year were flagged for review to ensure compliance with the call’s conditions. The supervisory inspection report highlights that the Valencia Community, once Servef, oversees subsidies issued by the public employment and education service and notes gaps in control by the Generalitat’s General Intervention or unclear criteria for grant approval in certain programs.
Critics point out that some files were rejected even though they had been carefully reviewed, and the errors identified amounted to 52 cases, described as real mistakes. The Syndicate links these criticisms to Labora’s Covid response measures, aimed at cushioning sectors hit hardest by restrictions such as hotels, travel agencies, and other arts and leisure activities, with aid limited to specific CNAE activity codes. In total, 43,152 grants were approved, totaling 50.6 million euros.
A data migration study by the Syndicate found that up to 2,289 beneficiaries could receive 1,376,700 euros more than warranted. The subsidies are requested using a responsible statement, and the district administration must verify the data against Social Security records. In some cases the CNAE did not match or did not appear as suitable.
After the Syndicate communicated its findings prior to the report’s publication, Labora stated that these records had been reviewed and that the errors were real in 52 cases, corrected according to the Director of Planning and Services, Eva Hernandez. The director explained to the buyer that three verification criteria determine eligibility: first, confirming the IAE matches a CNAE aligned with the call; second, ensuring the financial domicile is within the autonomous community and that workers are employed there; and third, if the company or self-employed CNAE does not appear on the approved list, then that CNAE must correspond to activities eligible for aid.
However, the buyer argues that only the second criterion is reliably valid, as the first two are not expressly defined in the subsidy decree. As a result, a further file review is encouraged, and attention is drawn to 104 self-employed cases not registered with SGK.
lack of control
Beyond the immediate call, the report notes significant violations by the Generalitat General in financial oversight of Labora’s subsidy management. This shortfall points to the regional Treasury and the need for tighter controls over disbursements.
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On the other hand, the Syndicate confirms that the employment service did not transmit job-related information for deals exceeding 600,000 euros and failed to provide a certified list of several agreements signed last year. The orders to record these contracts in the computer system dated December 20, 2021, suggest that the signing occurred in 2022. All relevant information should be available in the Generalitat’s agreements register for review.
In another scenario, the evaluation criteria for grants under the customized training scheme — subsidies for companies to train the unemployed with a promise to hire later — were not explicitly defined. Labora denies this shortcoming and blames inspectorial complexities and the grant’s special features for the perceived gaps.
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Finally, the report identifies a violation in employment workshops that failed to maintain a backup list. Demands initially assessed positively could not be addressed due to budget limits but were later resolved through larger allocations or waivers of subsidies. Labora’s planning and services director noted that a broader donation was not initially planned but was later expanded to meet all requests, resulting in no rejections and no requirement for a backup list.