A new report by the Audit Office has identified significant weaknesses in the procedures of the Cyprus State Scholarship Foundation (IKYK), including incorrect scoring of applications and financial commitments made without secured funding.
The audit findings cover the period 2019-2024 and examined the legality and accuracy of scholarship announcements, evaluation and awarding procedures, renewals, appeals and the adequacy of available funds.
Incorrect scoring affected scholarship decisions
The report highlights a review of a random sample of 23 applications. In five cases, the scoring of academic or financial criteria did not match the conditions set out in the relevant scholarship announcements.
According to the Audit Office, four cases were attributed to human error. In the fifth case, a systemic error was identified in the “HERA” electronic system, where incorrect parameters had been entered for the 2020/2021 academic year.
As a result, all applicants for Programme B2 were incorrectly scored. A subsequent review found that two applicants had been denied scholarships despite being eligible.
The Audit Office noted that no measures had been examined to restore the loss suffered by those applicants.
The report also found that, among 20 appeals reviewed, IKYK eventually approved five applicants following reassessment because their initial scoring had been incorrect.
344 additional beneficiaries without secured funds
Another major issue highlighted in the audit findings concerns the Board of Directors’ decision to award scholarships to all potentially eligible applicants under the “Excellence” programme for 2023/2024.
The decision created financial obligations for an additional 344 beneficiaries without the necessary funds being available in the budget.
The Ministry of Finance initially rejected a request for additional funding. However, following consultations and public and parliamentary debate, additional state funding was approved through a supplementary budget.
The Audit Office stressed that while the aim was to support more applicants, such decisions should be made with proper financial planning and prior coordination with the Ministry of Finance.
Need for stronger internal controls
The report also identified the absence of a second-level sample check of applications.
The Audit Office recommended introducing a risk-based review by a second person, allowing scoring errors to be identified before results are announced.
It also found that 17 of the 23 applications examined had contracts that were not stamped, while there was no clear separation of duties among IKYK staff. According to the report, this increases the risk of errors, omissions or even misuse.
Proposal for unified scholarship system
The Audit Office also raised concerns over the organisation of the wider support system, noting that state scholarships and student grants are currently managed by different bodies.
It suggested that the Ministry of Finance examine the possibility of creating a single organisation to reduce administrative overlaps and additional costs.
The Ministry’s Director-General acknowledged the connection between the responsibilities of the two systems and said a comprehensive feasibility study and organisational restructuring would be considered.
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