Deceased Citizen Prosthetized and Even Submitted an Application: Shocking Revelations from the Audit Chamber

The results of the financial and economic activities audit conducted by the Ministry of Labor and Social Affairs have been sent by the Audit Chamber of the Republic of Armenia to the Prosecutor General's Office. The decision was made at an extraordinary session of the Audit Chamber on March 30.

In response to a question from Sputnik Armenia about the specific alleged crimes presented to the prosecutor's office, the Audit Chamber reported that the entire audit, consisting of 266 pages, was submitted.

The audit revealed several intriguing facts that we briefly present to our readers.

75-year-old citizen prosthetized and even submitted an application:

A citizen who passed away on August 10, 2019, received two prosthetic shoes from “Planta Sana” LLC two days after death, on August 12, and not only received them but also filled out an application and received a personal card as a beneficiary.

This is not the only fact. It is merely one among the revelations stemming from the Audit Chamber's evaluation of the Ministry of Labor and Social Affairs’ activities.

Similar cases have been found in the state program for the procurement of hearing aids and wheelchairs. At the time of receiving supporting resources, 67 beneficiaries were not present in Armenia. Of these, 40 had left the country before 2019.

The same program also revealed that each prosthetic limb was charged at a price 59,000 drams higher than what was presented in the tender held in 2018.

According to the Audit Chamber's conclusion, the Ministry of Labor and Social Affairs did not have any justifiable pricing methodology while determining the value of supporting resource certificates, nor did it explore online price offers or the markets of Armenia and the EAEU.

Discrepancies were also found in state programs intended for the homeless. For example, temporary housing was provided to more than 22,000 persons beyond the anticipated number, resulting in an excess expenditure of 16,775,500 drams for food alone.

It was also revealed that 1,038 individuals received social services in home conditions and in geriatric day-care centers, exceeding the number stipulated by the program. Among them, 386 were not registered in the “Phoenix” system, 241 were minors, and 152 were workers, thus were not eligible for this program. As a result, there was an excess spending of 30,400,200 drams.

Excess spending incidents have also been recorded in 24-hour care centers for the elderly and disabled. At the number 1 nursing home in Yerevan, in 2019, an additional 9,818,900 drams were spent on food beyond the allocated budget. Interestingly, according to documents, 7,069 elderly individuals were fed in the home, while data for 7,138 individuals were submitted to the ministry.

The management of the home also displayed lavishness in the distribution of bonuses. According to the Audit Chamber, bonuses were paid 8,213,900 drams more than what was provided for in the budget.

It was also discovered that 30 employees of the institution were simultaneously registered with other organizations, with nine of them employed by three or more employers at the same time.

In return, the management of the nursing home made savings on supplies and services necessary for the care of the elderly. The need for toothpaste was met by only 14.9%, the requirement for toothbrushes by 50.4%, razors by 10%, and soap by 20.3%. Out of 40 necessary items, only 14 were purchased during the year, and out of the anticipated 10,734,000 drams, only 3,665,900 were spent.

Deceased Souls or Inactive Benefactors: The Lavish Inheritance of the Residents of the Home

The same situation has been recorded in the neuropsychological nursing home in Vardenis. Here, a centralized purchasing plan for sanitary and cleaning supplies has not been established or published. However, it was found that materials were purchased that were not prescribed by the minister's order, leading to an excess expenditure of 2,616,600 drams. Moreover, 45 employees of the nursing home worked in other organizations.

In addition to these widespread violations, suspicious cases have also been identified, the legality of which may be clarified by law enforcement. It was found that transactions regarding real estate were made in the names of 11 residents of the nursing home, ten of which occurred without the participation of guardians, constituting a legal violation.

For instance, a beneficiary residing in the nursing home since 2016, who according to the director's written explanation, has never left the premises of the home, engaged in real estate transactions at the Cadastre Committee on May 2, 2019, and August 15, 2020: He inherited 0.8993 hectares of arable land in the “Hovtashat” community of Ararat province and then sold it for 4.8 million drams.

Another resident conducted several real estate transactions in 2020 in the village of Arevatsag in the Lori province, selling his land, house, and barn for 9 million drams.

Furthermore, there was a case where a nursing home resident passed away on February 6, 2019, with the body handed over to relatives. However, according to information from the Cadastre Committee, this individual transferred ownership of an apartment in the Akhtala community of Lori province to heirs months after death on August 13 and October 2, 2019.

Another beneficiary, who was forcibly treated in the Nubarashen psychiatric hospital on April 9, 2019, also conducted a real estate transaction on the same day, transferring ownership of their apartment located in the Malatia-Sebastia community of Yerevan.

It should be noted that in all of the above-listed and other 11 cases, the residents of the nursing home had already been declared inactive by the court prior to these transactions.

Are the children's funds from the orphanage still being consumed?

After the “Velvet Revolution” in Armenia, one of the first revelations that shocked the public concerned the misappropriation of funds intended for the children in orphanages. The Audit Chamber has made a new disclosure showing that even after the revolution, the children's funds continued to be misappropriated.

According to the Audit Chamber’s findings, the Kharkiv Specialized Orphanage spent 846,300 drams beyond the allocated budget. Nevertheless, the children did not receive even the necessary clothing.

Throughout the year, 300 woolen sweaters and 300 boys' underpants were purchased for children aged 7-18, but only 10 pairs of winter shoes for boys and 30 pieces of sports clothing for girls were bought.

It was also established that 45 employees of the orphanage were working in other places, with 14 employed by three or more employers.

In the Mari Izmirlian orphanage, for example, the staff unilaterally increased their salaries and bonuses without entering into an agreement with the ministry, resulting in a bonus fund increase of 9,036,100 drams. The staffing list was also increased by seven individuals, leading to an additional excess of 14,793,600 drams.

This occurred while among the staff, 19 were also registered elsewhere, and six were employed by three or more employers.

Moreover, the director paid himself a bonus of around 50% in salary for June-December 2020, totaling 1,048,600 drams.

In return, the funds allocated to children attending school mysteriously disappeared. The audit revealed that 681,000 drams had been withdrawn from the orphanage's account while the chief accountant only presented reports for 442,000 drams. The whereabouts of the remaining funds could not be explained by the officials of the orphanage to the auditors.

They also made savings on children's caregiving supplies. Toothpaste was only provided at a rate of 15%, toothbrushes at 57%, toilet paper at 80%, and razors were purchased at just a rate of 19%.

Incidentally, auditors also found suspicious cases regarding the program for providing certificates for purchasing houses to orphanage graduates, which had been meticulously discussed and interpreted in management. According to the Audit Chamber’s findings, of the 196 orphanage graduates who received housing purchase certificates in 2019, 54 had not submitted their purchase agreements and certificates of state registration of ownership to the Ministry of Labor and Social Affairs as of January 14, 2021, despite the fact that a total of 44.1 million drams had already been paid to them from the allocated budget.

“The identified situations may contain certain risks,” states the document published by the Audit Chamber.

Simultaneously, the selection mechanism for 24 of the 157 rejected applicants under the program has been unclear for the auditors. In the opinion of the audit authors, thus, unequal conditions have been created among the beneficiaries of the program.

At the extraordinary session on March 30, the Audit Chamber decided to send materials regarding the actions characterized by signs of alleged crimes to the Prosecutor General's Office of Armenia, based on the results of the audit of the financial and economic activities of the Ministry of Labor and Social Affairs. It has not yet been clarified what follow-up actions have been taken at the prosecutor's office.

It should also be noted that the Audit Chamber's checks covered the period from January 1 to December 31, 2019, during which the Minister of Labor and Social Affairs was Zaruhi Batoyan (January 19, 2019 - November 20, 2020).