Chamber of Control of Georgia to Carry out Audits in State Offices

Chamber of Control plans to take over the control of all state offices in 2010. Levan Bezhashvili, the chairman of Chamber of Control, has unveiled all offices, where an audit will be carried out in 2010.

Chamber of Control will carry out an audit in Georgian Public Broadcasting (GPB), the Road Department, Georgian diplomatic missions abroad, healthcare programs and the companies, which are united in the Enterprises Management Agency (EMA), as well as all budget companies in accordance with the Chamber statute.

The Georgian Finance Ministry takes a lead in the list. Chamber of Control plans to explore the whereabouts of the funds, which were disbursed for the development of Budget Code. According to the preliminary report, the Finance Ministry has spent USD 180 000 on the Budget Code Development from the 2009 budget appropriations. The Finance Ministry received the funds as part of a World Bank (WB) credit, Levan Bezhashvili noted.
"We have analyzed the Budget Code and concluded that the document contains several innovations, but it is not worth such an amount of funds ", Bezhashvili noted.
Chamber of Control will carry out a financial monitoring of 70m GEL GPB received from the state budget in 2006-2009.

Chamber of Control will also conduct an audit in Georgian diplomatic missions in Germany, France, Ukraine, Monaco and Portugal.

Moreover, a financial monitoring will be carried out in both civil and public registries, in the Interior Ministry, Tbilisi Technical University, Tbilisi State University (TSU), Georgian State Agrarian University (GSAU), Tbilisi Medical University and Ilia Chavchavadze State University.
Chamber of Control has launched negotiations with Chamber of Control of Germany to invite auditors and monitor activities of the Road Department jointly with road surface specialists, he added.
Chamber of Control plans to explore the privatization agreements, which have been concluded on state-owned companies. The Chamber has already applied to the Economic Development Ministry for required information. A revision group will examine all agreements, Levan Bezhashvili, the chairman of Chamber of Control, said.
In 2010 Chamber of Control will carry out audits in regional branches of the Economic Development Ministry too, Bezhashvili added.
"Auditor's conclusion will be developed for SakNavtobi Samgori, Oil Geophysical Service, Gudauri, SakAeroNavigatsia and Autobase companies. The Economic Development Ministry has no information on 700 companies of 1440, which are united in MEA. Revisions have shown up serious problems in management. As a result, state revenues were decreasing year by year. Following the October-November revisions and several arrests, the companies resumed paying dividends and the state budget has collected 3-4m GEL in addition", Bezhashvili noted.
According to preliminary report, the audit in the hotel of Gudauri will expose scandalous results. The Chamber doubts that the Gudauri management has illegally spent a state credit of 6m EUR in previous years, Bezhashvili noted.

Chamber of Control plans to expose one more scandalous report on preferential state loans, which have been issued as part of the Cheap Credit state program. The Chamber will also define whether winner companies have fulfilled the obligations they assumed before the state. Chamber of Control will carry out an audit in corresponding departments of the Economic Development Ministry in 2010.
Chamber of Control has examined several agreements and exposed several cases of unfulfilled obligations. The auditor office has forwarded an address to the Economic Development Ministry of Georgia, Bezhashvili said.
"We have applied to the Ministry to take corresponding steps in this respect and make the companies meet state liabilities", Bezhashvili noted.
According to the auditor's conclusion of the Chamber of Control, the Government of Georgia signed loan agreements with LLC State Procurement and LLC Urekhi. The agreements called for acquisition of wheat to prevent food product deficit following the Georgia-Russia hostilities in August 2008. Total value of the contracts made up 4.417m GEL, but the companies failed to fulfill the liabilities and inflicted loses of several millions of GEL to the state budget. The Prosecutor's General Office is also investigating these cases, Bezhashvili noted.
The Chairman of Chamber of Control refrains from naming the persons, who may be called to account for offences. Only several officials of them, who had been involved in the project implementation, remain on public positions. Namely, Ekaterine Sharashidze, the former Economic Development Minister, works as an economic counselor to the President of Georgia. Former Prime Minister Grigol Mgaloblishvili has been appointed as a Georgian Ambassador to NATO. Another ex Prime Minister Vladimer Gurgenidze has returned to the private business sector. Giorgi Arveladze and Lasha Zhvania, the former Economic Development Ministers of Georgia, also manage private business companies. It is worth noting that no loan was issued as part of the Cheap Credit program under the government of Lasha Zhvania. Moreover, Lasha Zhvania was dismissed under the pretext of the program frustration.

Georgian Agriculture Minister with “order” Bakur Kvezereli may have to resign. The issue has been actualized in backstage talks. The crop capacity has halved, as irrigation systems have been destructed in Georgia and it occurs that millions of GEL, which had been disbursed for the Melioration State Program implementation, has been embezzled without purpose.

Chamber of Control has carried out an integrated audit of the Melioration System Rehabilitation program and the Central Office of the Economic Development Ministry of Georgia.

The auditor’s conclusion has shown up that law enforcement structures are investigating offences in the Melioration System Rehabilitation program. The conclusion reads that works had been planned improperly. The program budget made up 4.8m GEL at the beginning of 2009, but during the discussions at the parliament of Georgia, the Government of Georgia proposed to increase budget appropriations for the program to 14m GEL. Under the auditor’s conclusion, 8.8m GEL, which was required for rehabilitation of four assets, had been included in the program without financial accounting.

Incompetent and low-quality technical supervision over the construction works inflicted looses of 20 000 GEL to the state budget. The auditing has shown up various violations, Chamber of Control says, including, the Ministry has not charged a fine of 1.949m GEL on JSC Erisimedi and JSC HydroSpetsGvirabMsheni for breach of the project implementation schedule.

At this stage, the General Inspection is conducting an audit at the Agriculture Ministry. The Ministry abstains from making comments concerning the offences, which have been exposed by Chamber of Control.