Support provided under the crisis shield may help entrepreneurs to maintain liquidity during the economic downturn, but participation in such aid schemes entails a variety of conditions that may escape the attention of entrepreneurs. These, on the other hand, may serve as a feed for the control of the inspection bodies. In the event of such a situation, it is worth to have contact with an expert who will be able to secure the company during this process.
It is not to be expected that the control authorities will treat the entrepreneurs who spend public funds in a way that is not intended for them. It is therefore worth preparing as soon as possible for any checks which, due to the scale and size of the aid granted, may prove more stringent than before.
Prepare in advance for future checks by using a comprehensive legal audit
Resumption of the time limits by a warning signal
Viral epidemic SARS-CoV-2 caused radical action by the rulers. Another revision of the special law, commonly referred to as the shield 3.0 restores the functioning of courts and public administrations. More importantly, procedural deadlines are resumed. Could be. first a warning signal for entrepreneurs, announcing avalanche checks, to check first and foremost the appropriateness of the allocation of funds and how they are spent.
Aid solutions were introduced quickly to minimise the negative consequences of the pandemic, but by haste it was not possible to analyse all the consequences. In theory, the aid was to be implemented as quickly and as far as possible, and possible statements should be verified post factum. Many entrepreneurs blocked this assumption in action and, despite receiving the funds, did not decide to spend it in whole or in part, fearing possible controls.
State aid limits — surplus to be recovered
For example, let us look at the situation in which the entrepreneur uses many aid schemes. Any public funding shall be eligible. Measures granted from public aid as de minimis aid may reach the maximum 200,000 EUR during the period 3 calendar years.
The situation is different in the case of State aid to remedy the serious disturbance in the economy referred to in section 3.1 Communication from the European Commission – A temporary framework for state aid measures to support the economy in the context of an ongoing epidemic COVID-19, here the limit is 800,000 EUR.
It should be noted at this point that the individual measures do not cumulate with each other, so that the value of de minimis aid is not included in the limit of State aid to remedy serious disturbance in the economy and the limit of de minimis aid does not include the value of State aid to remedy serious disturbance in the economy.
In conclusion, the entrepreneur should monitor the state aid measures granted, as the surplus will be recoverable after the abovementioned thresholds are exceeded.
There is no doubt that the authorities will, as part of the audit, undertake to verify the actual decline in economic turnover caused by the epidemic. The actual reason for the fall in revenue will be an important issue, but this must not be the wrong business decisions. In the margins, it should be noted that the condition for the granting of adequate financial assistance is to make a statement, subject to penalty, on the reduction in revenue.
In conclusion, it is worth preparing in advance for future checks by using a comprehensive legal audit which will not only detect possible irregularities, but also create appropriate procedures to address the possible adverse effects of the visit of the inspection body.
We invite you to contact our experts.