TALLINN - Estonia's public administration machine could definitely use an upgrade or two, according to an annual report on state property exploitation and preservation released by the State Audit Office on Aug. 31. For instance, imagine having a bank account in your name with a whopping 1.5 billion kroon (95.6 million euro) balance and not knowing about its existence.
This is exactly what happened at the Finance Ministry, according to the State Audit Office.
The Culture Ministry allocated over 1 million kroons to Eesti Naitemanguagentuur, an organization that was mistakenly considered as an NGO though it reality it was a joint stock company.
Furthermore, the Interior Ministry paid a private entrepreneur - who turned out to be the deputy head of the State Procurement Board - over 2,000 euros for a 12-page brochure of what was, in the state auditor's opinion, a questionable value.
In order for Estonia to keep its bureaucratic system in good shape, a more efficient use of assets owned or managed by governmental structures is a must, said the audit report.
Still, many of the flaws detected by the State Audit Office point to the same old problems.
For example, the Defense Ministry rented a number of residential premises out to its personnel at the price of 5 kroons per square meter in 2003, while the year before that there was no rent fee at all.
The Agriculture Ministry currently rents three flats in Tallinn's Old Town for just 3 kroons per square meter.
Weak control over state duty inflow and their collecting was also mentioned in the report.
According to Mihkel Oviir, head of the State Audit Office, another major problem with ministries is deliberately understating revenue forecasts, a device that is used to gain extra funds for the next financial year - without asking Parliament for extra budget means.
In all, the ministries underestimated their revenues by 52 percent in 2003 and as a result received 256 million kroons more that planned.
"Our report can never be positive. It's our mission to look for flaws and advise on how to remove those, so the reports are always negative," said Oviir.
"At the same time, if we look at the last three to five years the state administration has definitely improved in everything from accounting to property management," he added.
Oviir referred to the strategic reserve grain theft as the most dramatic event of the year. "Not only was there was material damage, but also moral, because the strategic reserve is a means for maintaining state independence," he noted.
About one-third of the state-owned real estate property is not in use and 80 percent of rent agreements are disadvantageous to the state. More specifically, the state uses 38 percent of its total 3.1 million square meters for the government authority's realization and about 18 percent for public use. Only 13 percent of the total area is rented and the rest stands unused.
In total the state owns about 6,800 buildings, the majority of which are divided among the Defense Ministry, Ministry of Interior, Education and Science Ministry and the Environmental Affairs Ministry.
"The mass amount of empty standing buildings show a poor use of land and space and low efficiency of property management," said Janno Veskimets, a specialist with the State Audit Office.
The audit agency recommended that the government concretely define the purpose of using the empty buildings and either sell or demolish excessive housing.
The ministries' remarkable mistakes, such as the phantom bank accounts and doubtful deals, are not systematic in Estonia and should be dealt with as standalone violations, Oviir said.
He added that the government has a positive outlook toward the work of the State Audit Office and understands the auditors' recommendations.
In October Oviir, who handed the report to Parliament Chair Ene Ergma on Aug. 31, will briefly present the report and a related recommendation in Parliament.
