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“If you do not want to listen, you will have to feel it”

In order to promote honest handling of the taxpayers’ money and to ensure that the parties having committed infringements would be justly punished and would compensate the loss caused to the State, the State Audit Office is carefully monitoring how law enforcement authorities handle the provided information on offences identified in the course of audits.

The society might get the impression that infringements are discovered, but nobody keeps track of neither the imposed punishment, nor the compensation of the caused loss. Yet, a large part of the society is expecting and demanding this from us and also criticising us with regard to where is the result, where are the convicts and those put behind bars? Where is the “blood”?

Penal processes fall within the scope of responsibilities and powers of law enforcement authorities, they have such operational means to which auditors have no access to. There are no direct tools and powers at the disposal of the State Audit Office to penalise each official who has acted in bad faith. However, we care about the results of our work. It is our belief that those who have deliberately acted in bad faith with public assets must face a fair trial. Unlawful handling of taxpayers’ assets at all times must result in prosecution. Moreover, in such cases immediate action should be taken, without dragging this process on for years.

Since 2014, following the reports of the State Audit Office, the court has received 19 criminal cases against 21 persons, criminal sanctions and thus the judgment has entered into effect with regard to six persons, 13 criminal cases against 14 persons are still at court. In total 14 criminal proceedings are in the pre-trial phase whereof two are in the stage of criminal prosecution against 11 persons within the scope of criminal proceedings on SIA “Rīgas namu pārvaldnieks”.

Two examples:

  • a criminal case against the former officials of the Freeport of Riga Authority Leonīds Loginovs and Aigars Pečkans have been reviewed at two instances before the court in relation to the abuse of official position, and at the second instance it was ruled that those responsible must repay nearly one million euro the misappropriation of which was pointed out by the State Audit Office in its audit. The judgment of regional court in this case was recently appealed and we keep monitoring further progress in this case;
  • recently prosecution was started at a court against the former head of the State Emergency Medical Service Armands Ploriņš in relation to the abuse of official position, avoidance from tax payment and failure to fulfil the official duties thereby causing damages to national budget in the amount of one million euro. Also in this case the Corruption Prevention and Combating Bureau of Latvia (KNAB) initiated an investigation based on the report of the State Audit Office.

Furthermore, last year, following the reports of the State Audit Office, disciplinary action was taken against 36 persons at public authorities and local governments, i.e., their salary has been cut by one fifth for a period of one year, verbal remarks, reproofs, reprimands and warnings have been expressed concerning the detected violations of laws and regulations. By imposing a fine, KNAB held three persons administratively liable, whereas the Procurement Monitoring Bureau – one person.

The State Police has initiated multiple inspections concerning the infringements discovered in the course of financial audits at the ministries and their subordinate institutions. The Office of the Prosecutor General has sent information to the regional administrative bodies of the State Police for the purpose of initiating inspections regarding multiple infringements discovered in the financial audits of local governments.

However, it is to be concluded that officials are penalised insufficiently. For example, pre-trial investigation is delayed not only by problems in the qualification of investigators, but also by deficiencies in the work organisation at the State Police and drawbacks in monitoring the crucial pre-trial investigation conducted by public prosecutors. We have identified these problems also during the audit on the effectiveness of pre-trial investigation. An investigator does not carry out any investigation activities for years, although there is a suspect and frequently a preventive measure has been already imposed. The chief of the investigator does not use its power to control the progress of criminal proceedings since, apparently, the duties and responsibilities of officials have not been assigned clearly.

Still in many cases the review of the reports of the State Audit Office at the police is started by a decision to refuse the initiation of criminal proceedings which practically means a refusal to conduct investigation or the termination of criminal proceedings. The quality of these decisions raises concerns about the motivation of the decision-makers. Criminal proceedings were terminated because the official, at the moment of taking the decision, had not become acquainted with the provisions of the relevant regulations, because these regulations were written down in the lower part of the law, therefore the official did not read this. No loss or damages have been caused, because a lesser amount has been paid out in unlawfully granted benefits compared to what has been saved on the salaries of the fired employees. Fraud is not identified, because the head of the institution subject to the defrauded financial means was aware of the fraud. A criminal offence has not been committed by cutting trees without prior coordination, because these trees were removed by local inhabitants.

Yet, the situation in prosecuting those responsible improved after the amendments to the law initiated by the State Audit Office became effective in 2014. The mentioned amendments impose an obligation on the audited entity or the institution supervising its work to inform on the results of the assessment of the liability within a period of five months following the audit. We also hope that the Saeima will also submit for approval at the third reading the changes in the law which provide for the rights of the State Audit Office to penalise unlawful deeds committed by officials and employees if such action has resulted in losses to the State and if the institution itself refuses to impose a penalty without any justified reason.

We frequently hear that if we demand more active punishment of officials, public administration might collapse as officials would be afraid to take any decision. Let’s not scare the officials with the State Audit Office! We believe that the assessment of liability and punishment may cause fear only if unlawful decisions have been taken. Honest people should not fear the State Audit Office.

“If you do not want to listen, you will have to feel it,” somebody once said about the punishment of unlawful acts. We have clearly articulated this idea in our strategy: we will help those willing to be honest and we will carefully observe those who act in bad faith with public assets.

Let’s keep in mind that fair punishment for an infringement is an important way of how a country tells its population – you can trust your country. Therefore the professionalism of law enforcement and supervisory authorities and their readiness to collaborate with the State Audit Office carry a special meaning – responsibility towards the country.