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State auditors accuse Riga local authority of misspending over EUR 20 million through foundations
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    State auditors accuse Riga local authority of misspending over EUR 20 million through foundations

    RIGA, May 13 (LETA) - Over the past three years, the local authority of Riga has misspent over EUR 20 million worth of taxpayers’ money through municipal foundations and other organizations, the State Audit Office has concluded.

    The state audit into the lawfulness and expedience of municipal subsidies focused on two foundations established by the local authority – the Riga Tourism Development Bureau (RTAB) and

    The state auditors came to the conclusion that the municipal foundations have been receiving generous budget allocations without any grounds, spending the funding on dubious donation schemes, obscure branding activities, as well as salaries for possibly fictitious employees. The municipal foundations were also unable to explain the principles based on which they have been allocating money to various projects.

    The audit has found serious flaws in the planning, allocation and oversight of the funding granted to the municipal foundations, which has led to the conclusion that over the past three years the capital city’s local authority has misspent more than EUR 20 worth of Riga residents’ money.

    Of the EUR 26.5 million municipal financing, examined in the state audit, EUR 20.9 million had been provided to RTAB and

    RTAB, for instance, had received the requested funding without even having to explain how it will be used. From 2016 to EUR 2018, the foundation received EUR 17 million in municipal funding. The largest part of this money has been spent on promoting two trademarks – Live Riga and Meet Riga, which belong neither to the local authority nor the foundation. The trademarks, which are currently pawned, are owned by Air Baltic Corporation.

    According to the audit report, RTAB also acted as an intermediary in the local authority’s donations scheme. From 2016 to 2018, nearly EUR 1 million have been donated or gifted through RTAB.

    The auditors also suspect RTAB of having fictitious employees. As a result of the state audit, RTAB scrapped seven well-paid jobs.

    When looking into, the state auditors found that in the past three years the foundation had received EUR 4 million in municipal subsidies. Although the local authority was obliged to approve the foundation’s annual budget, it failed to do so in 2016, 2017 and 2018. Moreover, the foundation’s financial reports contained false data, the auditors said.

    The audit found that has effectively been republishing information from other sources, and the foundation’s contracts with authors were too vague to obtain reliable information about the costs and volume of the work done.

    The auditors were unable to receive a substantiated explanation as to why was established in the first place.

    • Published: 13.05.2019 09:17
    • LETA
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