The government has begun transforming public interest asset management foundations (KEKVA), it said in a statement on Tuesday. That means the Hungarian state will get back its universities from the KEKVA foundations.
Hungarian universities under state control again
The goal is to create a clearer, more transparent, and accountable system for managing state tasks, state assets, and institutions funded by public money, the statement said. The 16th constitutional amendment and legislative changes have enabled the government to start restructuring the foundations, which manage state assets and perform public tasks. Different rules and deadlines apply to foundations maintaining universities and those performing other public tasks, the Hungarian news agency wrote.
The overhaul was necessary because the foundations had operated as if they were private entities while managing state assets and often pursuing politically motivated activities, the government said.
By 2024, more than 3,000 billion forints (EUR 7.8bn) in public assets had been transferred to these foundations, according to the State Audit Office. The previous government had also waived annual dividend payments worth tens of billions of forints when it transferred state ownership stakes in profitable companies such as oil and gas company MOL and Hungarian pharmaceuticals major Richter to the foundations.
Influenced by politics
The foundations’ decision-making bodies were heavily influenced by politics, with figures tied to the previous government, including ministers, appointed to their boards. Decisions were often made without professional or public interest considerations, and board memberships were frequently lifetime appointments, the statement noted.
As a result, significant public assets were removed from state oversight, and the operations of the institutions became uncertain, uneconomical, and unprofessional. This is why the government decided to dissolve the foundations and restructure the public tasks they performed, the statement said.
Non-university public foundations must be dissolved by July 31. For foundations maintaining universities, the law provides a longer transition period: they will cease to exist on August 1, 2027, to ensure the stable and uninterrupted operation of higher education institutions.
Timetable set
A government decree published in the Hungarian Gazette on Monday designated which minister will exercise the founder’s rights for each foundation. This creates the conditions for the state to manage the transition period with clear responsibility. By July 14, a government decree must regulate the details, including the exact dissolution date for each foundation, the future of the public tasks and other tasks they perform, and which non-mandatory public tasks the state wishes to continue performing, the statement said.
The decree must also designate the central budgetary body that will take over the tasks and exercise ownership rights over the company shares transferred to state ownership. It must also appoint a liquidation trustee, it added.
The government will also decide how individual public tasks and assets will continue to function within the state framework. The affected foundations must be instructed to prepare a report on their asset situation by July 14 and submit it to the ministry and the liquidation trustee by July 15.
Liquidation trustee
The liquidation trustee will oversee the financial and asset-related aspects of the foundation’s closure. Their role is similar to that of a final auditor: they must review the foundation’s operations and asset situation, ensure proper accounting, and protect assets returning to the state.
Special rules apply to foundations with non-state founders. In these cases, non-state founders can decide to continue operating the foundation. If so, assets will be divided. Non-state founders must declare by July 18 whether they wish to continue operating the foundation as a public interest asset management foundation or as a foundation under the civil code.
The rights and obligations of non-university foundations will transfer to the state on Aug 31, with the liquidation trustee acting on the state’s behalf. If a central budgetary body takes over a foundation’s tasks, this transfer will also occur on Aug 31 this year.
Meanwhile, university-maintaining public interest asset management foundations will cease to exist on August 1, 2027, but their transformation has already begun. New incompatibility, transparency, and asset disclosure rules have come into force to strengthen oversight of university foundations’ operations.
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Power to be transferred to university senates again
With the withdrawal of founder’s rights, clearer accountability will be established, and stronger guarantees will apply to the transparent use of public funds. Board members, many of whom were appointed over four years ago, will be replaced through open tenders. One of the most important changes is that decision-making powers previously transferred from university senates and leaders to the boards will return to the universities.
The one-year transition period ensures the stable and predictable operation of higher education institutions. During this time, the institutions’ operations will remain uninterrupted while broad consultations begin with university leaders, student organisations, trade unions, and higher education professionals. The government will decide on the future of Hungarian higher education in cooperation with the university communities, the statement said.
The government’s goal is to ensure that the transformation of public interest asset management foundations is orderly, that the performance of public tasks is not disrupted, that public assets are protected, and that universities gain stronger autonomy, transparency, and decision-making roles for their communities, the statement concluded.
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