Various Violations Worth Approximately 210 Million AMD in Yeghenasdzor Municipality

The State Oversight Service of Armenia has conducted a study on the reliability of information serving as a basis for the allocation of state resources in the Yeghenasdzor Municipality of Vayots Dzor Province, leading to ongoing monitoring of compliance with the legal requirements governing procurement processes. As a result, violations and discrepancies amounting to approximately 210 million AMD have been recorded.

Specifically, during the period from 2016 to 2019, various uncollected or under-collected taxes and duties were identified in the tax and fee collection process carried out by the Municipality. Additionally, the Yeghenasdzor 'BKT' LLC submitted performance acts that included services related to the maintenance of inter-state significance automotive roads, covering 14,801 sq.m.

During 2016-2017, financial assistance was provided to municipality employees, violating the second part of point 2 of Article 43 of the Law on Local Self-Government, which states that the community leader is responsible for implementing measures to improve the social conditions of disabled persons, families of the deceased breadwinners, and other socially vulnerable groups. Funds allocated for other purposes were inappropriately awarded to municipality employees and must be returned to the municipal budget.

Despite lacking authority for ordering marking works, the municipality ordered and paid for road marking services. Furthermore, during the same period, monthly performance acts submitted by Yeghenasdzor 'BKT' LLC indicated inconsistent pricing for sanitation cleaning services, resulting in overpayments to the company.

Several employees of the municipality and other organizations were absent from the Republic of Armenia while still receiving salaries. Payments were made for supplying goods for the municipality's needs without the necessary documentation justifying the expenses. Some funds disbursed as assistance to infants born between March 8 and April 7 at the Yeghenasdzor maternity hospital were not backed by any documents.

A contract was signed between the municipality and 'Yeghenasdzor JSS' LLC on February 3, 2016; however, services provided exceeded the contracted amount, which was fully financed by the municipality. During 2016-2019, part of the funds allocated for capital repairs of buildings under the municipal budget was spent on current repairs, leading to misallocation of fund budget expenditures.

Numerous violations and deficiencies were identified during the review of construction works carried out from 2016 to 2019. Specifically, there were discrepancies in the volume of construction and repair works completed, over-calculated amounts in documents, and price increases in the contract compared to the initial estimate. Some asphalt laying works were regarded as ineffective expenditures due to the failure to ensure adequate quality for the asphalt works.

In 2018, a contract was signed with one of the funding sources for the renovation of kindergartens and the corresponding payment was made. However, due to the negligence of the contractor, the works were halted, with no timeline set for their resumption, leaving around 122 children in the community without preschool education for months, while salaries were paid to kindergarten staff despite them not working.

Between 2016 and 2019, the municipality organized procurement procedures in violation of Armenian procurement legislation requirements. A letter was received from the Yeghenasdzor Municipality concerning the violations detected during the investigation, stating that the contractor organizations are obligated to rectify all existing deficiencies within a reasonable timeframe. The report compiled from the investigation has been sent to the Prosecutor General's Office of Armenia.