Transport Ministry audit 'terrible'

  • 2008-05-22
  • By Talis Saule Archdeacon
RIGA - In a fresh blow to the reputation of the government, a recent Transport Ministry financial audit exposed widespread inefficiency and waste drawing fresh criticism from economists and politicians.
The audit found that the ministry failed to declare tens of millions of lats worth of property, assets and remuneration for employees. The ministry reportedly paid too much money for simple services, failed to collect money on its real estate properties and handed out huge bonuses to its employees.
"The results of the Transport Ministry are some of the most terrible… We'd like clear signals that money is being spent efficiently and they need to think seriously about their plans," Andris Vilks, chief economist at SEB, told The Baltic Times.

The results of the audit have sparked outrage amongst politicians and economists who see this sort of inefficiency as exacerbating an already poor economic situation.
"These audits show that resources are being wasted for no reason. We also saw that the enterprises building the roads are wasting resources and this is not right," former Regional Affairs Minister Aigars Stokenbergs, who currently spearheads the Society for a Different Politics, told TBT.

This was not the first time that Auditor's Office chief Inguna Sudraba and Transport Minister Ainars Slesers 's one of the most high-profile members of the cabinet 's have clashed in recent months. In early April the Auditor's Office and Competition Council accused the ministry of favoring certain companies for contracts. The row led opposition parties to call for Slesers' resignation and the minister to suggest the council be sacked.

In its most recent report, released on May 15, the Auditor's Office was able to put hard numbers to the amount of money that had been squandered through such backroom deals.
The Auditor's Office found that the ministry failed to declare over 15 million lats (21 million euro) of expenditures on road maintenance and 48.5 million lats in real estate. The report claimed that the failure to declare property assets indicated that the ministry was not collecting money from its tenants.
"The land properties under the jurisdiction of the State in the person of the ministry are not adequately managed and the ministry does not obtain its due revenues from the users of the land properties," the audit said.
Moreover, the audit found that ministry employees only received 40 to 75 percent of their total remuneration in on-the-books salary payments. The rest of the remuneration came in the form of bonuses, in some cases as many as 13 over the course of the year.
Employees were also allowed to use mobile phones and ministry vehicles without registering their use. The audit found numerous instances where employees were paid large sums of money ostensibly to organize events that had already been outsourced.
A spokeswoman said that the ministry was taking the matter very seriously and pledged to track down the people guilty of the inefficiency.

"There is always room for improvement in these matters and we have to hold the guilty parties responsible. We are doing our best to make sure those responsible for the allocation of funds use them properly," the spokeswoman said.
Vilks, meanwhile, said that while transparency issues were nothing new for the country people are finally prepared to hold the government responsible for its actions.
"People are getting more informed about the economic aspects and they then push for more information and more transparency to hold those ministries accountable for their actions. People are becoming braver now to do something," he said.

Vilks said the ministry was not handling road construction well and should focus more on forging Latvia into a transportation hub between east and west.
"They need to allow more [diversification] of Latvian transport systems. There is a demand in Russia to use Latvia as a base of exportation of their goods and the Latvian economy seems to be a magnet for EU investment, especially for road infrastructure," the economist said.
Slesers' critics have also highlighted the gross mishandling of Latvijas Pasts, the country's national postal service.

Latvijas Pasts is a state owned company under the auspices of the Transport Ministry. Last year it posted losses of 10 million lats, up from 4.8 million lats the year before. The company is now planning drastic layoffs, along with the introduction of a new postal banking service, to help boost profits.