What Did the State Audit Reveal?

The most interesting part of the report from the State Audit Office regarding the operations of the state in 2007 and 2008 certainly relates to the operations of state-owned enterprises and certain agencies. This is a document of about 300 pages, in which an entire chapter is dedicated to cases of corruption in Croatian Highways. Among them, tunnels stand out, reports hrt.hr.

Following the controversial coloring of the tunnels, for which part of the management is in custody, the State Audit revealed that HAC contracted the installation of a fire alarm system in the Sveti Rok tunnel worth 6.4 million kuna with the company Tehnomobil through a direct agreement, even though all conditions existed for the procurement to be carried out through regular procedures. The audit also questioned the printing of posters that inform drivers during the tourist season about highway construction. This job cost 153,360 kuna and was agreed upon through a direct contract.

HAC never explained why they opted for a direct contract, and the posters were only placed on July 19 instead of at the beginning of the tourist season. Given that this could have been anticipated, the Audit believes that the job should not have been realized through a direct contract. The audit also revealed that for certain buildings on the Zagreb-Goričan highway sections, which have been in traffic for many years, a certain number of construction and usage permits are missing. However, HAC is not the only state-owned company that received a conditional opinion from the audit. Due to errors in monthly calculations of mutual claims and obligations with HAC, the Rijeka – Zagreb Highway charged that company 4.7 million kuna less.

The Ministry of Economy, Labor and Entrepreneurship did not manage cleaning operations properly. It was determined that all services related to cleaning and maintenance were entrusted to one contractor based on a contract from 2007, and for this, they were paid 13.2 million kuna. The realized expenses were 2.4 million higher than planned. Here, the disputed amount is 769,596 kuna of price increase that was not stipulated by the contract. The same contractor was entrusted with the work of arranging three restrooms and received 839,373 kuna for this. The prices of the installed sanitary equipment are higher than the average market prices. For just 15 plastic toilet brushes, the Ministry paid 4,428 kuna. Urgent procurement of goods and services worth 3.7 million kuna was made even though there was no need for it.

There are also problems in Croatian Forests. For some jobs, there is no accompanying documentation, and the audit criticizes Croatian Forests for not taking any action to collect 47 million kuna in receivables. The demining company Mungos contracted jobs worth 4.3 million kuna without conducting procurement procedures. These are services for insurance, equipment maintenance, subcontractor services, long-term car rentals, accounting service, procurement of cars, and procurement of electronic computers.

Irregularities were also discovered in the Agency for Education and Training. When ordering from some publishers, they did not account for the discount for the procurement of school textbooks, even though it was contracted. This agency also did not comply with the Public Procurement Act in several cases. The Ministry of the Sea, Transport and Infrastructure entered into contracts for work to perform tasks within the jurisdiction of state officials. The Ministry explained that this concerns 71 cleaning personnel in port captaincies and branches where there are no permanent employees. They say it is more cost-effective than permanently employing someone. For the procurement of an expert information system in 2007, the Ministry of Agriculture spent 217,160 kuna, and for its expansion in 2008, an additional 2,901,498 kuna, thus avoiding the application of the open public procurement procedure. This Ministry did not reduce incentives greater than 78,000 kuna by 4 percent, which they were legally obliged to do. In 2008, 7.7 million kuna in incentives was paid out.

The Ministry of Justice did not contract translation, air conditioning, and vehicle maintenance services in accordance with the Public Procurement Act, worth 1.7 million kuna. The Ministry of Regional Development procured goods and services worth 1.1 million kuna without public procurement procedures. The Ministry of Health spent 1.7 million kuna on printing brochures without conducting public procurement. The Directorate for Commodity Reserves also procured goods and services worth 1.3 million without conducting public procurement. (www.hrt.hr)