8.5 Billion Dram Violations at City Hall

The results of the study conducted at the Yerevan City Hall have been summarized by the State Oversight Service. "The State Oversight Service of the Republic of Armenia conducted a study from 2018 to 2022 with the aim of assessing the reliability of the information used as a basis for the allocation of state funds.

As a result of extensive, multi-faceted oversight and analytical work carried out within the framework of the study, violations amounting to approximately 8.5 billion Armenian drams were identified. These violations mainly relate to the bases for calculating subsidies allocated to the community from the state budget, current repairs and sealing of roads in Yerevan, road construction, improvement, and design work programs, the activities of the companies "Elektra Transport," "Yerevan Light," and "Yerevan Trans" under the city hall, the process of providing gasoline to city hall employees for official purposes, expenses related to foreign business trips, as well as compliance with regulatory legal acts governing the procurement process and general education programs.

Specifically, the following notable and significant violations were revealed:

• The information that serves as the basis for calculating the subsidy allocated from the state budget to the Yerevan City Hall was reported with inaccuracies amounting to about 7.1 billion Armenian drams in property and land tax base data.
• More than 5,000 vehicles were not registered in the corresponding databases, or were unjustifiably reported as sold, resulting in the non-collection of around 331 million Armenian drams in property tax, while about 80 vehicles were sold without settling a property tax obligation of 4.3 million Armenian drams.
• A total of 634 vehicles were sold in the context of forced auctions or confiscations, and no measures were taken by city hall officials to collect the existing property tax obligation of 124.6 million Armenian drams regarding these vehicles.
• In the framework of street and road repairs, sealing, and improvement works, around 542.7 million Armenian drams were reported as misuse of funds and payments for unperformed works, and about 288.6 million Armenian drams in asphalt slabs created from these works were not provided by the contractor organizations to the administrative regions of Yerevan, as outlined in the contract.
• For general education, education for children with special educational needs (inclusive education), and preschool education, an additional 90.4 million Armenian drams were allocated.

The results of the study conducted at the Yerevan City Hall have been summarized and sent to the Office of the Prosecutor General for a legal assessment and further action.

It should also be noted that based on the information and analyses received by the State Oversight Service, the processes of issuing construction permits and the sale of land parcels through direct sale from 2011 to 2018 at the Yerevan City Hall are also being monitored continuously. To date, violations amounting to approximately 7.3 billion Armenian drams have been identified in these processes. These primarily relate to cases of not applying administrative fines due to non-completion of construction within set timeframes, with a total amount of about 6.2 billion Armenian drams.

Five materials regarding specific violations have been sent to the Office of the Prosecutor General, based on which three criminal cases have already been initiated.

Oversight activities continue in the ongoing monitoring framework at the Yerevan City Hall, and additional information regarding the results will be provided later.