Grants awarded from the proceeds of gambling activities – Appropriateness of their management and prerequisites for effectiveness
Follow-up completed: 17.11.2025Government grant authorities have managed grants awarded from the proceeds of gambling activities essentially in compliance with legislation, but there are shortcomings in the supervision. The grant award process is not fully transparent, and the effectiveness perspective does not seem to have a particularly significant steering effect on the allocation of the grants.
Discretionary government grants from the proceeds of gambling activities are awarded by the Ministry of Education and Culture, the Ministry of Social Affairs and Health, and the Ministry of Agriculture and Forestry. The grants awarded to social and health organisations are managed by an independent government grant authority, the Funding Centre for Social Welfare and Health Organisations (STEA), which operates in connection with the Ministry of Social Affairs and Health.
The National Audit Office audited the appropriateness of the management processes of government grants awarded from the proceeds of gambling activities and the prerequisites for effective allocation of the grants. The aim was to produce information that increases the transparency of the use of funds and verifies that grant funds are used appropriately. Another aim was to examine how government grant practices can support effective use of grant funds.
The grant management processes comply essentially with legislation, but there are shortcomings in the supervision of the grants, and the award process is not sufficiently transparent in all respects. The audit found that the procedures the government authorities apply in the management of the grants differ from each other in several respects. There are also differences between the government authorities in how they take the effectiveness of the supported activities into account at different stages of the grant process. The perspective of effectiveness is not integrated with the grant process so closely that it would significantly steer the allocation of the grants.
The government grant authorities should tighten the supervision of the eligibility of costs and compliance with the grant terms. On the basis of the audit, there is a clear need to harmonise the different grant management practices and to increase the transparency of grant activities. The effectiveness policies related to the grants awarded from gambling proceeds should be clarified.
The proceeds that the state has received from gambling activities have accounted for a significant part of the funding of many social activities. In recent years, however, the proceeds have decreased, which is being addressed by means of a new funding model that is under preparation. In the new model, the expenditure will be allocated in the budget process in the same way as other expenditure within the central government spending limits.
Recommendations of the National Audit Office
The audited government grant authorities should pay attention to the transparency of the grant process. There should be a clear continuum from the processing of a grant application to the grant decision and its sufficiently detailed justifications.
The audited government grant authorities should tighten the supervision of eligibility of costs and compliance with the grant terms. The Ministry of Agriculture and Forestry should also pay attention to sufficiently comprehensive monitoring of the effectiveness of the grants awarded to the horse industry. In addition to the supervision of compliance with the grant terms and cost monitoring, the Ministry of Education and Culture should pay attention to the adequacy of both the reports submitted on the use of government grants and on-the-spot inspections. On the basis of the audit, the National Audit Office also recommends that the Ministry should provide guidelines on appropriate internal control procedures in compliance with section 24b of the State Budget Act for government grants the use of which is divided over several years. The audit activities of the Funding Centre for Social Welfare and Health Organisations (STEA), which include performance and compliance audits, may partly serve as a good practice when audits of government grants are organised.
The audited government grant authorities should enhance their efforts to harmonise their grant management practices and to promote the usability of the information available on government grant activities.
The ministries responsible for distributing the proceeds should pay attention to the setting of objectives and indicators for the grants awarded and harmonise the requirements set by them in thematically similar activities in order to improve comparability.
The ministries responsible for distributing the proceeds should clarify the effectiveness policies linked to the grants awarded from gambling proceeds. The ministries should demonstrate more clearly that the grant awarded has priority over alternative allocation in achieving strategic objectives and lower-level objectives derived from them. The amount of the grant awarded should also be proportionate to the objectives. Attention should be paid to any overlaps between the activities supported in relation to the objective.
Follow-up
The follow-up has been completed. The report is available in Finnish only.
More information
Jaakko Eskola
Director, the Audit Unit, Authorised Public Accountant
Management