The State Audit Office Discovers Multiple Violations and Shortcomings

The Republic of Armenia's State Audit Office has identified several violations and shortcomings following an evaluation of the credibility of information serving as the basis for the disbursement of state funds by the Aparan community administration in the Aragatsotn province during the years 2016-2019. This included an examination of the subsidies and grants provided, the legality of procurement procedures conducted, and the effectiveness of ongoing monitoring.

Specifically, it was revealed that in the procurement processes organized for the needs of the community administration, the company that submitted the minimum price offer was not recognized as the winner, while the competition was declared invalid due to apparent fictitious decisions made by the council. Subsequently, in a newly announced competition, the only participating organization, which had previously submitted the highest price offer, was declared the winner.

Throughout 2017-2019, various construction works were carried out by the Aparan community, the Municipal Service of the Aparan community, and the Municipal Service of Aragat, violating the public procurement legislation in effect in the Republic of Armenia. Through fragmented procurement procedures, products, services, and works were acquired from a single source. In several cases, participants who occupied the first place in announced competitions had outstanding tax obligations to the state budget at the time of submission, yet contracts were still signed with them.

During 2016-2017, the Aparan municipality and its associated municipal services lacked approved and published procurement plans for the period; nevertheless, procurement processes were initiated and executed. There were no actions taken to judicially recover the outstanding property tax liabilities, local taxes, with a total of 340 million AMD outstanding as of October 23, 2019.

Various instances were reported where community budget funds were spent on the execution of current activities in violation of the requirements set forth in Article 282, Part 2, Clause 1 of the Law on the Budgetary System of the Republic of Armenia. The expenses incurred during 2016-2019 in this manner amounted to 49,071.2 thousand AMD.

In the indicators for 2016 and 2017, there were discrepancies in the information recorded in the automated accounting programs for land tax and property tax at the community administration and the funds entered by the 'Client Treasury' payment system for 21 community units. These discrepancies may be attributed to the mitigation of obligations concerning the collection of financial resources, posing financial risks in the process of land tax and property tax collection.

There have been recorded instances where the equivalence and effectiveness of provided services were questionable for the community administration; however, organizations managed to collect the stated amounts from the community budget through judicial enforcement based on corresponding court decisions without the community administration and competent officials taking steps to protect the community's interest.