In recent audit performed at Rezekne municipality, Latvian State Audit (VK) found major inconsistencies, a completely disorganised internal control environment, as we ll as a lack of clear accountability, non-transparency of processes, the impossibility of obtaining all the necessary work-related information, as LETA was told by the head of Latvian State Audit Edgars Korčagins.
It is also unclear how Rezekne approves and plans its financing.
“The emotional aspect is a sense of great disappointment, because we have cooperated with municipalities for a very long time, not only in audits but also in provision of various kinds of support,” said Korčagins, commenting on results of the audit in Rezekne municipality.
At the start of the audit there were two main questions. VK found answers to both.
The first, concerned the size of the municipality’s financial liabilities. VK found the annual audit did not contain liabilities worth more than EUR 13.7 million.
The second question concerned the assessment of the budget formation procedure. VK found a number of legal violations.
Korčagins mentioned in his interview that the Corruption Prevention and Combating Bureau (KNAB) and State Police were performing their own investigations in parallel to the audit.
At the same time, Korčagins said situations when results of audits are reported to law enforcement institutions are no exception. If there are suspicions of a conflict of interests, VK informs either KNAB or the Procurement Monitoring Bureau.
In situations when there are suspicions of criminal acts, VK brings in law enforcement institutions. Last year there were five criminal proceedings launched in relation to VK audits. The institution continued monitoring 44 ongoing criminal proceedings. 14 of them are in their trial stage.
The main violations uncovered in the audit and which result in criminal proceedings are crimes that result in causing serious damages to the country. Korčagins mentioned the responsibility of Riga Freeport officials in relation to the Krievu Island project, where VK uncovered damages to the state worth more than EUR 1 million.
As for whether or not the initiated criminal proceedings say anything about the entirety of state administration, Korčagins said he would rather not go that far.
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State Auditor: we found a completely disorganised internal control environment in Rezekne
