In 2019, representatives of the Ministry of Environmental Protection and Regional Development (MEPRD) met with residents of various parts of Latvia in public consultations on the expected outcome of the administrative territorial reform (ATR).
The MEPRD organised a part of all meetings itself. They entrusted the organisation of another part, that is, ten events, to an outsourced event management company, with whom they had already signed an agreement on the organisation of various ministerial events in 2018. During the financial audit, the State Audit Office established that all the presented estimates stated identical total amount for one such event regardless of the venue of such public meeting, that is, 3,460.95 euros with VAT, with slightly different amounts of expenditure items. The invoices issued by the company mentioned the total sum only. At the same time, the MEPRD had not considered necessity of checking the regularity of the expenses included in the estimates at least on a sampling basis. Thus, neither the auditors nor the public can verify whether one has spent 39,891 euros paid to this company in 2019 economically.
In 2019, the MEPRD organised events on administrative and territorial reform, including public meetings in two ways: the Ministry organised events itself or used the services provided by a company – event manager. In 2019, within the framework of administrative territorial reform, the MEPRD organised ten two-hour public meetings, one meeting with the leaders of Latvian local governments, and a conference “Discussion on Future Local Governments” by using the services of that company. Before the organisation of each event, the MEPRD approved the estimate prepared by the company but did not ever request invoices for specific costs.
The event manager provided the planning and organisation of public meetings, the moderation of discussions, the advertising and publicity of events, the rental of premises, and technical equipment. During the audit, the State Audit Office asked the company to submit documents substantiating the expenses for renting the premises, moderator, publicity, and other organisational issues of the event. One has established from the received invoices that the entire total sum of each event was transferred to a completely different company, which is a mass media outlet at the same time. The invoices issued by this company indicate the total sum only, which is 3,460.60 euros with VAT for every event included in the audit sample.
In all ten estimates submitted by the event organiser and approved by the MEPRD, the fee for renting premises and technical equipment ranges from 363 to 787 euros (with VAT 21%) per event. The auditors checked the validity of those costs on a sampling basis. They found that, for example, the fee for renting premises and equipment for a two-hour event is 85 euros (including VAT 21%) according to the price-list in Mālpils, where a public meeting took place in the Mālpils Municipal Cultural Centre. Still, the Ministry has paid 787 euros for it to the company according to the amount indicated in the estimate, which was nine times more. During the audit, the State Audit Office interviewed local governments on a sampling basis in whose premises public meetings were held, including the Mālpils Local Government. In local governments, such a question caused a real surprise, because they had not charged anything for renting premises or other services needed to provide those public meetings, as they had perceived it as the event organised by the MEPRD.
The State Audit Office will draw the attention of the Prosecutor’s Office to the facts revealed in the audit, which prevented the auditors from verifying whether the funds paid to the company for organising public meetings on administrative and territorial reform were actually spent economically.