2 Billion Dram Violation at 'JRAR' LLC: State Audit Office

The Republic of Armenia's State Audit Office conducted an investigation into the 'JRAR' closed joint-stock company of the Ministry of Territorial Administration and Infrastructures' Water Committee. The investigation covered the period from 2014 to 2018.

Violations and deficiencies amounting to 2,103,987.7 thousand drams (two billion one hundred three million nine hundred eighty-seven thousand seven hundred) were recorded.

In particular, as part of spring preparation activities, unjustified and unreliable expenses totaling 1,001,433.3 thousand drams (one billion one thousand four hundred thirty-three thousand three hundred) were made without the necessary documentation substantiating the costs and performance acts.

Salaries amounting to 40,758.8 thousand drams (forty million seven hundred fifty-eight thousand eight hundred) were recorded in accounting documents under the names of contractual employees, yet those individuals were not paid.

The company incorrectly accounted for 318,618.0 thousand cubic meters of irrigation water, resulting in a failure to form revenue amounting to 321,804.0 thousand drams.

They requested and received an excess amount of 386,725.5 thousand drams (three hundred eighty-six million seven hundred twenty-five thousand five hundred) from the state budget to compensate for the impact of electricity price increases.

In violation of the established maximum acceptable levels of irrigation water loss, they exceeded acceptable water loss levels by 90,372.8 thousand cubic meters, which corresponds to a monetary value of 204,590.6 thousand drams (two hundred four million five hundred ninety thousand six hundred) under drip irrigation conditions.

Due to ineffective management, an excess of 1,145.0 thousand kilowatt-hours of electricity was spent, resulting in over 44,105.4 thousand drams (forty-four million one hundred five thousand four hundred) worth of subsidies received from the state budget.

Several employees of the company were absent from the Republic of Armenia, yet their salaries totaling 11,897.6 thousand drams (eleven million eight hundred ninety-seven thousand six hundred) were paid during that time.

The company withdrew 36 fixed assets valued at 55,242.1 thousand drams (fifty-five million two hundred forty-two thousand one hundred) without initial accounting documentation, and this withdrawal was made without a market value assessment, with no acts generated for their decommissioning.

According to the property transfer act of 2014 and the registration data from 2017, there is a shortage of pipes amounting to 5,097.6 thousand drams (five million ninety-seven thousand six hundred) and an excess of pipes amounting to 407.2 thousand drams (four hundred seven thousand two hundred).

As per the government decision on grant programs, 26,668.7 thousand drams (twenty-six million six hundred seventy-eight thousand seven hundred) allocated to the company remained unspent and was returned to the state budget at the request of the audit team.

The company released 5,204.9 thousand cubic meters of unaccounted water from the Aparan reservoir, which, when calculated at the rate of 1.01 drams for self-flow irrigation water supply, amounts to 5,256.9 thousand drams (five million two hundred fifty-six thousand nine hundred).

In violation of the “Procurement Law” and the government decisions from February 10, 2011, number 168-N, and May 4, 2017, number 526-N, the company made purchases of goods and services for its needs.

The findings of the investigation have been forwarded to the Prosecutor General's Office of Armenia.