26.05.2010. -

Substantial violations have been made in the dissolution process of the Police Academy of Latvia (PAL) under the Ministry of the Interior (MoI) and the State Audit Office (SAO) is not satisfied with the closing report by PAL.

No audit of material values or liabilities and claims was carried out before the dissolution. Several bookkeeping entries have been made without source documents for a total amount of LVL 46,180; there also have been errors in calculation and payment of dismissal and leave benefits. The expenses of LAP in 2009 were LVL 3,062,409, accounting for a major part of the consolidated report of the Ministry of the Interior.

SAO has revealed a risk of mismanagement of purchased material assets in the State Border Guard by dissolving the Valmiera office. Several fixed assets have been written off before the period of usefulness has expired, the evaluation of the most suitable alienation method has been inadequate and the maximum possible income from alienation of the written-off fixed assets was not gained. More than 70 fixed assets with the total residual value of LVL 8,826 have been disposed of by means of dismantling and scrapping and gaining only LVL 373. The assets disposed of include: a container-type boiler house with the area of 32m² equipped with boilers installed in 2001 and 2005, archive shelves, a tractor MTZ-82, a bulldozer blade, a lawn-mower, a drill, a semiautomatic welder, portable powerplant, a Jotul stove, a mower and two 351 Husqvarna saws.

At least LVL 913,442 have been used inefficiently because the MoI and the State Police have failed to optimise the use of rented vehicles and reduce the rental costs. SAO has discovered that the leasing companies have been offering to reconsider the terms and conditions of vehicle rental, however, having received LVL 461,791 for unforeseen expenses, the MoI did not pursue the matter further.

MoI has failed to ensure efficient planning of budget funds and permitted accumulation of debts by reducing the expenses for renting premises. As a result of that, LVL 3,418,995 were assigned from funds for unforeseen expenses and used for hiring the administrative building complex of the MoI.

The SAO points out that in 2009 the MoI received LVL 4,050,786 from funds for unforeseen expenses in addition to the costs previously estimated and included in the annual budget, which were used for hiring premises and vehicles and purchasing equipment for the State Police, although funds for unforeseen expenses are intended for eliminating consequences of natural and other disasters, compensation caused thereby, other unforeseen events and events of national importance.

As the MoI and the State Police have failed to provide efficient distribution of budget expenses by budget programmes in the expenses planning stage, certain cost items as at the end of 2009 display a debt – a total of LVL 1,896,186 for the State Police, including LVL 1,744,591 of unpaid taxes.

The financial audit was conducted on the accuracy of 2009 annual report of the Ministry of Interior. The State Audit Office and the officials in charge have agreed on the steps to be taken and deadlines for eliminating shortcomings revealed under the audit. The State Audit Office will continue monitoring the implementation of recommendations.