NPO funds: Demand for repayment of around 800,000 euros to the Tyrolean “Unge Landboforening/Landsungdom” remains in place

Still pending decision from the Independent Party’s Transparency Senate, crucial to the Seniors Association exam

Vienna (OTS) The Federal Ministry of Arts, Culture, Public Service and Sport (BMKÖS) together with Austria Wirtschaftsservice GmbH (AWS) conducts in-depth investigations of a number of organizations that have received support from the NPO Foundation. The question is whether these organisations, which are formally non-profit associations and thus meet the application requirements for the NPO fund, are also to be considered part of a party on the basis of the Party Act and are therefore excluded from the NPO fund.

There are now further results from the last open investigations of associations of the Tyrolean “Jungbauernschaft/Landjugend” and several “Seniorenbund” state organizations:

1. Tyrolean “Young Farmers/Country Youth”

In the course of the audits, 120 local and district associations of the Tyrolean “Jungbauernschaft/Landjugend” submitted identical declarations and documents which showed that they belonged to the Tiroler Bauernbund, a sub-organization of the ÖVP Tirol, and were therefore themselves a sub-organization within the meaning of the party law to be qualified.

The main reason: The state organization of the Tyrolean “Jungbauernschaft/Landjugend” is a legally dependent section of the Tyrolean Farmers’ Association, which in turn is a sub-organization of ÖVP Tirol, both by its own description and according to the statutes of ÖVP Tirol. The 120 local and district associations in “Unge Landboforening/Landsungdom” describe themselves as branch associations of the main association, the Tyrolean Landboforening. Of these, essential elements of their statutes, which decisively limit their independent action, are mandatory.

On the basis of this legal assessment, AWS approved on September 12, 2022 grants from the NPO Fund totaling EUR 816,752.15 with a payment deadline of October 10, 2022 from the audited 120 local and district associations of the Tyrolean “Jungbauernschaft/Landjugend” recovered .

On October 10, 2022, and thus before the payment deadline, the Tyrolean “Jungbauernschaft/Landjugend” requested an extension of the deadline for the submission of additional documents.

On 27 October, the regional organization of the Tyrolean “Jungbauernschaft/Landjugend” forwarded documents on behalf of its trade unions in which the legal opinion of the BMKÖS was contested. In particular, a regulation on the relationship between trade associations of the Tyrolean Farmers’ Association and the state organization of ÖVP Tyrol is taken up for discussion. However, the legal assessment of BMKÖS does not aim at this relationship, but at the relationship between the trade associations and their main association – i.e. the Tyrolerlandboforeningen. The fact that the latter is part of ÖVP Tirol was never denied.

It is further argued in the documents that the described, legally close relationship between the main association of the Tyrolean Farmers’ Association and its branch associations, the local and district organizations under the “Jungbauernschaft/Landjugend” could be terminated by the latter. Although this is legally correct, the relationship between the main association of the Tyrolean Farmers’ Association and its branch associations at the time of the applications to the NPO fund is legally decisive.

All in all, the Tyrolean “Young Landboforening/Landboungdom” did not explain in an understandable way that their local and district associations are not attributable to the Tyrolean Landboforening. 119 local and district associations are therefore asked to repay again with the payment deadline of 17 January. In the meantime, one association has repaid the funds in full.

In the event that the affected clubs refuse to pay the refund, the BMKÖS is preparing a judicial clarification on the basis of a model lawsuit, where the Republic would be represented by the Finanzprokuratur.

2. The organizations of the Elderly Association

The investigations of “Seniors’ Association” state organizations in Upper Austria, Carinthia, Tyrol, Vienna and Vorarlberg concern associations that are formally non-profit and were therefore eligible to apply for the NPO fund. These associations have the same or similar names as the corresponding sub-organizations of the ÖVP at state, district and local level and also have other things in common. This allows the non-profit associations and the respective sub-organization to be considered as a unit. This would mean that the non-profit associations would be part of the ÖVP and excluded from the NPO fund.

In a first step, it was therefore checked whether the clubs and the respective sub-organisation with the same or similar name have a clear legal separation. The audited organizations were able to demonstrate this. For the Association of the Elderly Vorarlberg, this has happened on the basis of documents that have subsequently been presented.

A clear assessment is not possible on the basis of previous case law. In addition to the legal structure of the organizations, the question of whether to assume a de facto economic entity in the respective non-profit association and the corresponding sub-organization of the ÖVP is also crucial in this study.

As part of the corresponding test steps, the Association of the Elderly’s organizations submitted extensive documents, which were checked by BMKÖS. On the basis of these documents, however, it is not possible to make a final legal assessment of whether there is a de facto economic separation.

In the next step, a financial audit was to be carried out, during which the accounts of both the clubs and the relevant party organizations had to be inspected. Such an investigation would be associated with a very high level of administration and costs for the Republic.

At the same time, a case is pending with the transparency senate of the independent party (UPTS, responsible for imposing sanctions for violations of the party law). As this procedure examines legal issues that are essentially the same and therefore relevant to the decision to be taken by BMKÖS, a comprehensive and in-depth financial review would be disproportionate from today’s perspective. As a result, the BMKÖS, in coordination with the Finanzprokuratur, decided to await the outcome of the UPTS procedure before taking further steps.

To the NPO foundation

The NPO fund was established in the spring of 2020 and is a unique tool in Europe to support the socially important and also financially increasingly important non-profit sector in the COVID crisis. To date, over 57,000 applications have been approved, and around 800 million EUR in support has been paid out.

Payments from the NPO Fund are based on the NPO Fund Act, which excludes political parties and sub-organizations of political parties from the fund by reference to the Party Act (Article 2, paragraph 1). Organizations that are to be considered “related organisations” in the sense of the Party Act (§ 2 no. 3) or that have any other close connection to a party are not excluded from the NPO fund.

In accordance with the NPO Fund Law, funding from the NPO Fund is based on a civil law contract between the organization receiving the support and AWS, which manages the NPO Fund in the name and at the expense of the Republic. The Republic, represented by the Finanzprokuratur, will sue for repayment, which the organization in question does not comply with after repeated requests in a civil court.

Questions and contact:

Federal Ministry for Arts, Culture, Public Service and Sport
George Kehrer
The Vice-Chancellor’s Spokesman
+43 664 780 28 682
georg.kehrer@bmkoes.gv.at
www.bmkoes.gv.at

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