Банкеръ Weekly

Briefs

FINANCIAL AUDITS ESTABLISHED CULPABLE DETRIMENTS EXCEEDING BGL214MN

The audits conducted in 2000 by state auditors established culpable detriments exceeding BGL214.3MN. According to Tsvetan Tsvetkov, the Agency for State Internal Financial Control Director, the good news is that in 2000 the offences decreased by 30% compared to 1999. The decrease occures for the first time in 11 years, said Tsvetkov. Considerable part of this decrease is due to the preventive measures taken by the auditors for clearing of offences. The recovered funds have increased from BGL3,601,709 in 1999 to BGL4,789,071 in 2000.
The cases of detriment in the economic sector add up to some BGL173MN, or 80.7% of the all established offenses, while those in the state financed sector total over BGL41.4MN or 19.3%. In 1999 the ration was 92 to 8 per cent. The increase is due mainly to the offences registered in municipalities, resulting mainly from unprofitable contracts, low rent for municipal-owned assets and non-collected receivables. Part of the violations are related to privatisation deals and unlawfully paid wages.
The most frequent offences occured in municipalities, accounting for 34% of all state financed sector violations. Most problematic was the Varna municipality.
The ministries under the supervision of which the audited units operate have received 969 statements by which they are requested to hold 1,368 persons liable for losses totalling about BGL143MN. The 1999 data show 886 statements against 1226 persons for about BGL256MN. It seems that two years ago less people have breached the regulations, but the losses incurred were higher. The audits have proved highly efficient in additional budget receivables: in 2000 they amounted to some BGL147MN, out of which BGL60MN were recovered, or that accounts for 41% collectability, while in 1999 the ratio was BGL174MN to BGL18mn, or 10.55%. This proves the higher efficiency of the process of receivables recovery. The duration of audits in 2000 has also shrinked from 40 - 50 days to 36 days.
The most frequent offences in the state financed sector are inefficient handling of assets and violations of the Public Orders Act. Similar are the offences committed by companies, adding unfavourable contracts, sale of assets below their market value, violations related to privatisation and handling of state owned assets. The most frequent offences committed by Bulgarian companies registered abroad, mainly in Africa and the Middle East include the irregularly written off receivables and non-collection. Banks, which are declared insolvent, most often do not monitor the evaluation process, do not apply for court approvals of expenses and do not undertake attempts to collect receivables.
The ASIFC Director presented also the 2001 goals. The mid term goals include the implementation of stipulations and financial management systems, as well as monitoring of each state financed sector unit, including those handling EU credits. This will be supported by consulting aid and financing under the PHARE 2000 Programme by the French Ministry of Finance, Industry and Economy. Signing of Agreements for Cooperation with the Ministry of Interior, the Prosecutor's Office, Tax Administration, Customs Administration and the Auditors Office is also planned, gearing towards improved coordination of the functioning of these financial audit authorities.

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