5 June 2012

As the result of a successful cooperation between the Magyar Nemzeti Bank and Transparency International Hungary (TI), the anti-corruption organisation monitored a public procurement procedure by the Bank for the second time. TI found that the MNB conducted the procedure in compliance with the relevant law and in accordance with the highest standards of transparency.

Public procurement is one of the areas hardest hit by corruption in Hungary. According to international estimates, systemic corruption may increase the costs of public procurements by 20%–25%, as confirmed by the results of domestic research. Although the amounts involved are enormous, the control and review mechanisms in place are not efficient enough.

Transparency International has developed an anti-corruption tool which aims to enhance the transparency of public procurements, promote fair competition and reduce corruption risks. The integrity agreementis a trilateral contract which is made between the contracting authority, the bidders and an independent civil organisation.

As an institution operating with public funds, the Magyar Nemzeti Bank attaches great importance to fulfilling an exemplary role by making every effort to develop public procurement culture. For this reason, the MNB has been in cooperation with Transparency International Hungary since 2010. Within that framework, the MNB was the first institution in Hungary to use the transparency agreement developed by the anti-corruption organisation in its public procurement procedures.

The MNB involved Transparency International for the second time in the whole cycle of one of its public procurement procedures, this time the public procurement procedure for the purchase of computers (‘Procurement of client-side workstations – 2012’ (KBE/000115/2011)). During the procedure, the bidders signed an integrity agreement jointly with the MNB and the anti-corruption organisation. In the contract, the parties committed themselves to act fairly during the procedure and charged the civil organisation with overseeing the procedure and ensuring maximum publicity. Independent monitoring ensured transparency for all parties involved in the procedure and guaranteed the conditions of fair competition.

The integrity agreement strengthens the principles of law, clarifies the rules of the game and increases the transparency of procedures. Its objective is to enhance the efficiency of public procurement by ensuring real competition and thereby to provide better service to citizens. Successful implementation of the agreement means that public procurement procedures, contracting and performance are free from corruption and are transparent.

During the procurement, TI prepared a report on the adequacy of the procedures on four occasions – the latest following the conclusion of the contract. In all four cases TI found that the MNB conducted the procedures in compliance with the relevant law and in accordance with the highest standards of transparency.

The MNB and Transparency International Hungary hope that the integrity agreement will be a model for other institutions operating with public funds.

MAGYAR NEMZETI BANK                                        Transparency International Hungary