1. SCOPE OF THE REGULATION
This procedure is established in accordance with §2(4) of the Estonian Cultural Endowment Act (KultKS). It lays down the principles for processing, awarding, and payment of the Estonian Cultural Endowment’s (hereinafter "Cultural Endowment") prizes, scholarships, grants, and creative remuneration (hereinafter collectively referred to as "allocations"), as well as for contract conclusion, reporting, and recovery. The conditions for applying for and the rules for awarding allocations by the Cultural Endowment are set forth in the distribution procedures adopted by the Supervisory Board of the Cultural Endowment, sub-foundations, and county expert groups (hereinafter collectively "expert committees").

2. PROCESSING OF APPLICATIONS
2.1. Compliance Check of Applications
2.1.1. During the compliance check, the application and its annexes are reviewed for conformity with the requirements and conditions set out in the relevant distribution procedures.
2.1.2. Any deficiencies or issues of non-compliance are communicated to the applicant via e-kulka and/or email.
2.1.3. The Cultural Endowment grants the applicant up to 14 calendar days to correct the deficiencies.
2.1.4. For other non-compliance issues, the applicant must submit their explanations or positions by the same deadline.
2.1.5. The notice sent to the applicant shall state that failure to correct deficiencies in time or other non-compliance may result in the application not being processed further.

2.2. Substantive Evaluation and Allocation Decision
2.2.1. The primary basis for evaluation is the cultural or sporting value of the application, including importance, necessity, effectiveness, reliability, innovation, or sustainability of the described project, activity, or goal.
2.2.2. Based on the evaluation, the application may be approved in full, partially, or rejected (hereinafter collectively "allocation decision"). Decisions are based on submitted applications and available funding. If the distribution procedure sets a specific number or amount of allocations, those are followed.
2.2.3. The Cultural Endowment may exclude applications with uncorrected deficiencies or non-compliance from evaluation.
2.2.4. Such exclusions are recorded with justification.
2.2.5. Partial funding may be awarded if full funding is not justified or feasible. The assumption is that the goal can be achieved with partial support.
2.2.6. Expert committee decisions are recorded and communicated to the Director of the Cultural Endowment within one week. These records are treated as administrative acts under the Administrative Procedure Act.
2.2.7. If the allocation decision violates the KultKS or distribution procedure, the Director must notify the decision-maker within 7 days and may refuse to conclude a contract based on an unlawful decision.
2.2.8. Applicants are notified of the decision via e-kulka and/or email. Approved applicants receive a contract signed by the Director; rejected applicants receive a decision letter signed by the Director or an authorised person.

2.3. Annulment of Allocation Decision
2.3.1. The Cultural Endowment may annul an allocation decision in part or in full, retroactively or prospectively, if:
 2.3.1.1. The signed contract or data confirmation letter (for awards) is not returned in time;
 2.3.1.2. The allocation is declined;
 2.3.1.3. False information was submitted in the application or contract;
 2.3.1.4. Other grounds under the Administrative Procedure Act apply.
2.3.2. The applicant has 10 calendar days to submit objections or comments before annulment is decided.

2.4. Contesting Allocation Decisions
2.4.1. A recipient who believes their rights have been violated may file an objection under the Administrative Procedure Act or a complaint with a court.
2.4.2. The objection must be filed within 30 calendar days from the day the recipient learned or should have learned about the decision.

3. CONTRACTING AND PAYMENT OF GRANTS
3.1. Conclusion, Amendment, and Termination of Contracts
3.1.1. The Director signs contracts with recipients based on the allocation decision, except for lifetime support and awards. Creative remuneration involves a contract for services. The contract includes the allocation terms, rights and obligations, and other conditions.
3.1.2. The contract enters into force upon signature via e-kulka or return by post/email. The effective date is the date of receipt.
3.1.3. Amendments require mutual agreement and must be based on expert committee decisions if altering allocation terms. The Director may amend other terms by agreement.
3.1.4. Requests to amend project/activity contracts must be submitted before the reporting deadline.
3.1.5. The contract terminates when:
 3.1.5.1. All obligations are fulfilled, including acceptance of the report;
 3.1.5.2. The allocation is repaid in full.
3.1.6. The Cultural Endowment may unilaterally terminate the contract if:
 3.1.6.1. Obligations for payment have not been met within 14 days of notification;
 3.1.6.2. The allocation decision is annulled;
 3.1.6.3. The allocation is misused, including:
  – Not used for its intended purpose;
  – Project outcomes not achieved;
  – Co-financing requirements not met;
 3.1.6.4. Allocation is used for ineligible expenses;
 3.1.6.5. Reports are not submitted;
 3.1.6.6. Monitoring is obstructed;
 3.1.6.7. Other contract terms are breached;
 3.1.6.8. Other legal grounds apply.
3.1.7. Except in clause 3.1.6.1, recipients are granted up to 30 calendar days to rectify breaches before termination.

3.2. Disbursement of Funds
3.2.1. Funds are disbursed within 14 calendar days of signing, unless otherwise specified.
3.2.2. If the recipient has outstanding obligations, the Cultural Endowment may:
 3.2.2.1. Withhold payment until obligations are fulfilled;
 3.2.2.2. Reduce the payment by the outstanding amount.

4. REPORTING AND REPAYMENT OF GRANTS
4.1. Reporting
4.1.1. Recipients must submit a report within 60 calendar days of completing the project/activity. The Director may extend the deadline for justified reasons. Non-resident recipients are exempt if the grant is paid after goal completion.
4.1.2. Reports are submitted via e-kulka.
4.1.3. Reports must include:
 4.1.3.1. A substantive report with supporting evidence (photos, media links, ISBNs, etc.);
 4.1.3.2. Financial report showing planned vs. actual income, highlighting Cultural Endowment funding;
 4.1.3.3. Expense report with budget and actual costs;
 4.1.3.4. Copies of supporting documents if requested. Cash expenses are generally not accepted (except minor foreign expenses).
4.1.4. Reports are reviewed within 90 calendar days.
4.1.5. Deficiencies are communicated via e-kulka and/or email.
4.1.6. Recipients have 14 calendar days to correct deficiencies.
4.1.7. The Cultural Endowment may audit accounting records or conduct on-site checks, even after the contract ends.
4.1.8. Recipients must maintain separate project accounts and retain documents: legal entities for 7 years, individuals for 1 year.
4.1.9. Individuals may not use the grant to pay themselves wages or similar compensation.
4.1.10. Recipients of creative remuneration must submit a report within 60 calendar days of the service contract ending. If the work is delayed or cannot be published/performed, the report must explain why.

4.2. Recovery and Rescheduling of Grants
4.2.1. The Cultural Endowment may reclaim grants in part or full if the contract is unilaterally terminated under 3.1.6.
4.2.2. The relevant expert committee issues the recovery decision.
4.2.3. Recipients must return the funds within 14 calendar days of receiving the recovery decision.
4.2.4. Repayments over €50 may be rescheduled for up to 12 months upon a justified request, if repayment causes significant hardship or there are other compelling reasons. Non-compliance with the repayment plan results in debtor status.
4.2.5. Late repayment incurs 7% annual interest for each overdue day. Legal and collection costs may also be reclaimed.
4.2.6. Payments received are first used to cover costs, then interest, and finally the principal.

FINAL PROVISIONS
This procedure, along with its annexes, was approved by the Supervisory Board of the Cultural Endowment on 27 March 2024 (protocol no. 2/2024-S09) and applies from the date of approval. Applications submitted before the implementation of this procedure are processed under the rules valid at the time of submission.
The procedure was amended on 2 October 2024 (protocol no. 6/2024-S09 of the Supervisory Board).