Startup
Posted: 10 months ago

GITA Discontinues Seven Projects Due to Contractual Non-Compliance in Grant Funding

As of today, the Georgian Innovation and Technology Agency (GITA) has financially backed a total of 219 projects under its innovation co-financing (grants of 650,000 GEL) and startups (grants of 150,000 GEL) program.

However, seven of these ventures have witnessed contract termination due to failure in fulfilling the terms of the grant funding agreement, as informed to 'Business Partner' by the Agency.

GITA emphasizes its vigilant monitoring of the winning projects to ensure adherence to the specified terms.

GITA elaborated that all successful grant recipients undergo preliminary training in reporting and managing the grant to ensure efficient and effective utilization of the funds.

In cases where violations are detected, such as the identification of non-targeted spending, GITA grants the beneficiary a rectification window. If the errors persist beyond the specified timeframe, GITA reserves the right to initiate the contract termination procedure.

"Predominantly, the infractions are due to non-targeted spending and failure to meet obligations under the grant financing agreement within the stipulated timeframe. Most of the non-targeted expenses, approximately 90%, pertain to VAT payments. The majority of beneficiaries claim these from the Revenue Service following the procedures laid out in the Tax Code of Georgia.

When investigating the residual non-targeted expenses, it was observed that the funds were utilized in line with the startup project's objectives. However, they could not be recognized as targeted by the agency since these expenses were not previously negotiated and documented in the relevant budget," explained a spokesperson from GITA.

Up to the present, the agency has distributed over 36 million GEL in grant funds to beneficiaries since 2015. A total of 688 projects have been financed, including 457 small grants, 11 regional grants, 196 startup co-financing grants (also known as 150,000 GEL grants), and 24 innovation co-financing grants (up to 650,000 GEL grants).