Last year problems with allocation of finances to overcome Covid-19 crisis were observed only in some cases, according to the report from the State Audit on correctness of the preparation of financial accounts of state institutions.
The audited amounts were transferred to the state budget. State Audit performed inspections for a total amount of EUR 1.64 billion, which is 85% of the total financing used in the accounting period.
State Audit performed horizontal evaluation of correctness of the preparation of financial accounts on Covid-19 aid in all sectors. For example, in the Finance Ministry State Audit checked the use of EUR 731 million of the total financing amount of EUR 850 million, in the Ministry of Welfare – EUR 399 million of EUR 404 million, in the Ministry of Healthcare – EUR 365 million of EUR 586 million. These are the sectors that received the biggest financing amounts during Covid-19 crisis.
State Audit also performed evaluation of financing based on forms of support as well. 54% of the financing was diverted towards supporting the national economy, downtime benefits, investment sin state companies, benefits to help cover real estate maintenance costs, and IT solutions in 2021. 32% was diverted towards benefits for residents, including single-time benefits and bonus pay to public sector workers.
14% of financing was diverted towards resolving the epidemiological situation, including efforts to expand Covid-19 testing and procure vaccines, protective gear and disinfectants.
State Audit outlined in the report as a problem in the use of financing by Ministry of Health the allocation of EUR 23.5 million towards beds, medical equipment and additional equipment. Auditors checked the components of costs behind procurements of beds and medical equipment at 17 random hospitals. State Audit confirmed that the financing provided was used to procure appropriate medical equipment in accordance to lists composed by the Cabinet of Ministers.
State Audit council member Maija Āboliņa said the beds themselves are not as valuable as the equipment they are fitted with, especially in intensive care. Additionally, technical requirements for equipment differ in each hospital. Additionally, it should be said that hospitals also used their own budgets to procure beds and necessary equipment. This is why it is not possible to determine the average price of hospital beds.
Generally, State Audit reports that hospital bed plans are over-accomplished, as a total of 1 661 beds of the 1 644 planned beds have been secured by the end of 2021.
The audit in the Ministry of Healthcare mentions that there is an unequal approach towards allocation of financing to hospitals in Riga and regions. Additional financing to hospitals is provided based on different principles – for large hospitals in Riga, which are capital associations of the Ministry of Healthcare, financing was invested into their capital, which made money available before procurements of equipment, whereas for regional hospitals, which are capital associations of municipalities, financing was provided from the budget for emergencies after procurements of equipment were already completed.
Āboliņa explains that this is correct in theory, but in practice regional hospitals had done all they could to raise their capacity in advance and medical equipment approved on lists composed by the Cabinet of Ministers was procured. However, some hospitals had not received their compensation for certain expenditures by 23 March.
This example illustrates that the government’s focus on a specific result is lost due to lack of cooperation and coordination in a crisis.
As for the Ministry of Welfare, State Audit concluded that staff of social care centres are provided with unequal bonus pay. The audit revealed flaws with calculation of bonus pay for staff involved in care of persons infected with Covid-19 and contact persons in state and municipal social care centres.
State Audit had informed the Ministry of Welfare of that in autumn 2021. Following the request from the ministry, social care centres performed a recalculation and compensated the difference to the staff that received small bonus pay when compared to their other colleagues.
For example, three state social care centres that did not calculate the bonus pay correctly and paid the difference to their staff worth a total of EUR 150 436.
Bonuses paid by municipal social care centres, however, remain below what is required by laws and guidelines. This means equal treatment is not ensured – people who do work that has the same amount of risk are paid smaller bonus amounts when compared to state social care centres.
State Audit came to similar conclusions in inspections if financing allocated for priority activities intended to increase monthly wages of social care workers was used appropriately in 2021. Monthly wages were increased only for employees who are directly involved in social care and rehabilitation process, as well as employees whose wages needed to be increased in accordance of changes added to the state minimal monthly wage amount. Wages of some of the support and administrative staff, as well as some healthcare staff, were not increased in appropriate amounts.
Āboliņa stresses that this is a paradoxical situation, because even though social care centres have experienced lasting shortage of human resources with wages being a contributing factor to this, the available funding is intentionally not used to help resolve this situation.
The bonuses paid in the sector under the Education and Science Ministry for work during covid pandemic to support staff and nannies for additional workload and increased workload – EUR 7.061 million – and bonuses paid for individual consultations – EUR 4.087 million – generally meets requirements of state regulations.
Among the problems uncovered by State Audit is the unequal approach when it comes to the payment of the single-time EUR 300 benefit.
Although the Ministry of Education and Science did plan that, considering each teacher’s individually assigned workload, multiple education institutions have not taken that into account. State Audit calculated that the amount of inappropriately paid bonuses is approximately EUR 35 355. To ensure equal approach from now on, State Audit suggests setting a clearer definition of money allocation rules in requirements of Cabinet of Ministers, as well as improving communication between the ministry and recipients of bonuses.
As for use of funding allocated to overcome consequences of Covid-19 crisis by the Ministry of Economics last year, State Audit notes that at the beginning of the pandemic financial aid was diverted to businesses active in the tourism and exporting sectors. After the second wave of Covid-19, aid was allocated to shopping malls and sports centres. According to State Audit, financing was paid appropriately, but provision of support continues in 2022.
The total amount paid to shopping malls is EUR 7.864 million, which is 39% of the available EUR 20 million.
The most important conclusion by State Audit is that initial estimates for necessary financing in 2021 or potential interests of owners of shopping malls and their ability to qualify for support were not accurate. In 2021 support was provided to 20 shopping malls. The average support amount paid to a single shopping mall was EUR 393 000.
As for sports centres – support was paid to 74 sports centres in 2021. EUR 6.4 million of the available amount of EUR 8 million was paid to them.
The Ministry of Agriculture used EUR 24.9 million on measures to overcome Covid-19 crisis and prevent or reduce consequences from the pandemic last year. The audit revealed that the financing was paid in accordance with regulations and the ministry took into account the recommendations provided in the audit of 2020.
Last year, to help overcome Covid-19 crisis, the State Revenue Service paid a total of EUR 681.7 million, including EUR 513.1 million was paid to companies to ensure current assets, EUR 135.9 million – as benefits for downtime, and EUR 32.7 million – as wage subsidies.
State Audit did not find any major problems in requests for financing amounts and financial aid. As for ensuring current assets, State Audit outlined two major factors.
First of all, in a time when benefits were available to companies of all sectors, there is a risk money may have been paid to businesses whose drop of turnover was not directly linked to the spread of Covid-19 in the country.
Secondly, in some cases authorities did not apply a consistent approach towards evaluation of companies.
Generally the evaluation of correctness of the preparation of financial accounts on Covid-19 aid in different sectors found that funding originally provided to help resolve Covid-19 crisis was also unjustifiably diverted towards unrelated goals. The difference in inappropriately used funding uncovered in the audit was transferred back to the state budget.
Results of the audit were sent to the Saeima speaker, Saeima Public Expenditures and Audit Committee chairman and the Prime Minister.