What are the risks and benefits for community foundations in undertaking EU contracts?
Alliance magazine reports:
In December 2006, with funds from the European Social Fund (ESF), the Slovak Ministry of Education contracted Prešov Community Foundation to carry out a two-year programme to improve access to education. In partnership with a local university, the foundation launched a programme in January 2007. This was completed in November 2008; the total budget was €375,000. However, under the terms of the arrangement, the community foundation had to fund the initial costs against later reimbursement by the ministry, forcing it to use its reserve funds, as well as those of other partners, which placed a severe strain on its finances. Compounding this, the government reimbursed virtually nothing in either 2007 or 2008, which resulted in Prešov Community Foundation having to take out a bank loan of €135,000 to complete the project. The final blow, however, came in April this year when the foundation received a letter from the ministry telling them that the contract had been cancelled because one of the consultants employed on the project had been late in submitting project monitoring reports, and that no expenses would be reimbursed for the entire project. Read more.