Financial audit: a number of deficiencies in the Harju County Government

10/27/2003 | 12:00 AM

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TALLINN, 27 October 2003 - The SAO audited the annual accounts for 2002 of the Harju County Government, but did not give an opinion in this regard, as the audit revealed a number of deficiencies in the accounting records. As a result, the auditors became uncertain as to whether the assets and liabilities as well as the revenue and expenditure of the County Government were indicated in the annual accounts in their entirety. Furthermore, the SAO is not assured that the assets and liabilities shown in the annual accounts actually exist.

The audit also revealed other deficiencies in economic operations, including the non-application of public procurement procedures and the incompatibility of the lease contracts with the requirements of the Government Property Act. It was established that the County Secretary had, under the authority of the County Governor, made a contract for services with the County Governor so that the latter would participate in the project “E-county”. The SAO found that the contract entered into with the County Governor violates the Anti-corruption Act, since it is not allowed to make transactions with oneself, including to empower other officials to enter into contracts with you. The SAO required the unlawfully paid remuneration to be refunded, which the County Governor did.

The audit revealed that the County Government had not registered in the accounts the instalments worth 135.6 million privatisation voucher kroons and 19.5 million Estonian kroons, which were receivable for the privatisation of land by means of privatisation vouchers, i.e. secured by a mortgage. Neither did the accounts show the related amounts of interest or the fines for delay.

In addition, it was established that the records of the different departments of the Harju County Government are not comparable. For example, the records of the Land Department showed that as of December 31, 2002 there were 15 valid contracts for constituting the right of superficies, but the Finance Department’s program for keeping account of these contracts showed 57 contracts, indicating also those, which were no longer valid, together with any arrears and advances. But the accounting ledgers and journals did not indicate the outstanding or advance payments for the right of superficies.

In the opinion of the SAO the described situation is a result of shortcomings in the organisation of accounting and weak internal controls. For accounting purposes, the cash method is used instead of the accrual method provided for by the law, receivables and commitments are not registered, and the program for keeping account of mortgages is not reliable.

Sven Soiver
Press Representative of State Audit Office
Telephone: (372) 640 0787
GSM: (372) 53 414464
E-mail: [email protected]

  • Posted: 10/27/2003 12:00 AM
  • Last Update: 10/2/2015 3:56 PM
  • Last Review: 10/2/2015 3:56 PM

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