Croatia may have to return 220 million kuna (€29.6 million) of the EU funding spent on the renovation of two student dormitories in Zagreb, according to the Croatian agency for the audit of EU funding (ARPA).

The Ministry for EU Funds said that although oversights were made, a more appropriate amount to be returned would be only a quarter of the full amount, Jutarnji List daily reported on Saturday.

The final decision will be made by the European Commission (EC) once their revision of the project is completed. ARPA, as the external auditor of the EU funding system, reports directly to the EC, so it is unlikely that their findings would be ignored. The main point of contention is the 2015 decision to award the renovation project to the Projektgradnja construction company, owned by the indebted conglomerate Agrokor.

Projektgradnja was directly awarded the project after the regular tender fell through because none of the bids received were deemed acceptable.

This means that either the University of Zagreb or the government may need to return tens of millions kuna, or, in the worst case scenario, the full amount received from the EU for the project.

(€1 = 7.43 kuna)