Some cantons grope sloppy federal government grants

Bern Schweiz Parlament EFK Eidgenössische Finanzkontrolle Hochschulen
Subsidy money is too loose from the federal government. (Image: Andreas Fischinger / unsplash)

The Swiss Federal Audit Office (SFAO) has once again put an area under the microscope. This time the auditors show how cantons are unnecessarily wresting money from the federal government.

The reports of the Swiss Federal Audit Office (SFAO) are usually explosive. The latest edition deals with investments in higher education institutions of the cantonal universities as well as for universities of applied sciences, whose realization the auditors took a much closer look at.

Specifically, according to the report released on Tuesday, the SFAO analyzed federal subsidies, which are supposed to be an additional contribution to the quality as well as competitiveness of Swiss universities.

State Secretariat in focus

Ten cantonal universities and nine universities of applied sciences in 16 cantons are eligible for contributions. The State Secretariat for Education, Research and Innovation (SERI) is responsible for allocating the funds.

From 2017 to 2020 the federal government pledged contributions totaling 231 million Swiss francs for 23 planned projects in accordance with the current law. The cantons’ own contributions in this context amount to around 1.11 billion Swiss francs. The federal government’s construction investment contributions thus finance an average of around 21 percent of the total costs, which is permissible.

In the same period the Confederation already paid out 333 million Swiss francs and thus an average of 83 million Swiss francs per year to the cantons for completed projects.

Basel City and Zurich

The SFAO auditors have now picked out three projects. These are: the new building for the Swiss Tropical and Public Health Institute at the University of Basel (federal contribution: 23.6 million Swiss francs), the expansion and conversion of the Cantonal and University Library of Fribourg (15.5 million Swiss francs) and the tenant fit-out of the Wädenswil laboratory building of the Zurich University of Applied Sciences ZHAW (6.9 million Swiss francs). 

And then comes the sentence with explosive power in the report: ‘The results of the three case studies provide evidence that the cantons would realize their projects even without financial support from the federal government.’

Simply taking the money

Furthermore, this does not correspond to the basic idea of the legislator, the auditors complained. SERI must therefore evaluate the extent to which the high quality of university buildings is achieved even without subsidies, the SFAO added. If necessary, the concept of the subsidy would have to be adjusted to minimize the risks of unintentional windfall effects.

In other words, the cantons are simply taking money from the federal government for something that they would undertake anyway.

Subsequent controls lacking

And there is something else that the SFAO has noticed. The multi-stage procedure for processing applications is ‘indeed expedient’ and is handled efficiently by SERI staff, it commented.

However, SERI should check the applicants’ forecasts about the future use of those buildings more systematically before granting subsidies. As the subsidy authority, SERI is also legally obligated to check after completion as to whether the university buildings are actually being used as intended.

Closing gaps

If, according to the SFAO, the earmarking is violated, SERI would have to reclaim the subsidy on a pro-rata basis. However, according to the auditors, the monitoring concept planned for this is only partially in place and not yet aligned with current subsidy law. Existing gaps need to be closed, they said dryly.

What was also exciting about the SFAO reports were the statements of the institutions concerned, as has already reported – for example, the case of the Corona pandemic rescue operation of the airline Swiss.

Soft defense

“SERI takes note of the suspicion of windfall profits expressed by the SFAO on the basis of the audit,” it politely stated. During the drafting of the law the cantons had repeatedly emphasized the importance of the federal government’s construction subsidies, the parties concerned elegantly continued.

A first evaluation also underlined their importance for new buildings and conversions. However, SERI is prepared to examine the effect of federal building subsidies in greater depth as part of the next evaluation, officials added.

Let us hope that this will be done and that the cantons will not unnecessarily draw easy subsidies from the federal government’s tax revenues.


Some cantons grope sloppy federal government grants

One thought on “Some cantons grope sloppy federal government grants

  • October 6, 2022 at 9:31 am

    I see this kind of thing happening in many countries. It’s not nice at all. Plenty of little businesses doing it tough and get nothing.


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