PRAGUE, Aug 15 (Reuters) - The Czech Republic could lose as much as 25 billion crowns (968 million euros) in EU aid this year if it does not correctly administer and accelerate projects, the development ministry said on Thursday, acknowledging a potential hole in public finances.
The centre-left opposition Social Democrats, frontrunners in an election expected in October or November, have already warned that the European Union could refuse to reimburse large amounts of money pre-funded in this year's national budget.
The budget includes 99.1 billion crowns expected from the European Union this year, including funding for development projects and agricultural aid.
The ministry said 25 billion of this could be at risk due to delays in some projects and suspension of payments in nine out of 26 development programmes, mainly due to poor administration.
"More exact information about the absorption rate will be available in mid-September," the ministry told Reuters in an emailed response to questions.
In 2012, the government had to give up 11.2 billion crowns in EU funds in a deal that unfroze funds blocked by the European Union because of mismanagement.
Drawing EU funds has led to a number of scandals and police investigations. Several people have been jailed for seeking kickbacks in EU-funded projects.
Funds are paid from the national budget and later reimbursed by Brussels.
Losing this year's funds could jeopardise the current government's target to cut the budget deficit below the European Union's official ceiling of 3 percent of gross domestic product, or it could mean having to make savings elsewhere.
That would put further pressure on the economy, which is just beginning to emerge from recession and has been beset by policy uncertainty due to a political crisis following a spying and bribery scandal.
The cabinet resigned on Tuesday, clearing the way for early elections. The Social Democrats, if elected, have said they plan to increase a tax on utilities and banks to 30 percent from 19 percent, to shore up government revenues.
The European Commission views the distribution of EU funds as "rather satisfactory for the majority of the Czech programmes," spokeswoman Annemarie Huber said.
The state budget for 2013 forecasts a deficit of 100 billion crowns, or 2.6 percent of gross domestic product.
"The ministry together with management bodies (of the individual programmes) is trying to accelerate and raise the quality of drawing funds," the ministry said via email.
It said it expected to get the payments flowing again at most of the nine suspended programmes before the end of the year.
The Czech Republic can draw up to 26.5 billion euros in aid and development funds over a seven-year period ending this year. So far, 85 percent of that amount has been committed to individual projects and 55 percent paid to final beneficiaries, including pre-funding from the national budget.
The country has submitted requests for reimbursement from the EU for 32.6 percent of the total so far. ($1 = 19.4475 Czech crowns) (Reporting by Robert Muller; Editing by Susan Fenton)