National audit report: 2.5 billion euros of financial losses from public administration misdoings during last three years

The last State Supreme Audit Institution (SAI) report for FY2016 has made a series of findings reflecting an overall worrisome situation such as:

• The economic damage to the state budget for 2016 is 820 million euros. In 2015, the economic damage to the state budget was 1 billion euros and in 2014 the economic damage was 777.2 million euros. In total the economic damage according to SAI was 2.5 billion euros for three years altogether.

• There have been 7013 public procurement procedures based on “negotiations without prior announcement of the contract notice” corresponding to 30% of the total public procedures. SAI findings suggest that only 105 of these procedures have been audited.

• SAI was forbidden for the first time ever to perform its constitutional audit function at the Energy Regulatory Entity as well as in the “Albpetrol” public-owned company.

• SAI argues that the Public Debt for 2016 amounted to 71.01% (although according to the World Economic Outlook is 72.4%) and is far from the targeted trend leading to the fulfillment of key public finance objectives. The external debt has faced an absolute value increase of ALL 13.626 million or 2.7% if compared to 2015.

• According to the SAI, as long as the Albanian public budget changes are carried out through Normative Acts, it is an indicator of government inefficiency and that the level of credibility of economic objectives is questionable.

• SAI reports that capital expenditures in 2016 are 94% lower than 2015.

• The number of private companies with debt for 2016 has increased with 63,366 entities compared to 2015. According to the SAI, it’s the General Taxation Directorate that holds the record for not collecting revenues and creating debt, especially the Tirana Directorate.

• The absence of revenues and the amount of expenditures carried out not according to the SAI recommendations, has reached the value of 288 mln euro. These spending shortages are usually noticed in infrastructure projects such as road, health, energy etc.

• SAI report argues that the final implementation of the territorial reform has not met public expectations as of the increase of the quality of services delivered to the community, the increase of financial revenues and local fiscal consolidation.

• SAI notes that violations in local governments have created an economic harm to the value of ALL 326.5 million from which only ALL 179 mln are revenue shortages (rent, local taxes, infrastructure impact tax, etc.). In the area of ​​expenditures, a loss of 147 million ALL was observed.

• According to SAI, there are 21 municipalities with a large public debt amounting to 1500 million ALL out of which the biggest municipalities are Fieri, Kavaja, Dibra and Devolli.