Inefficient expenditures amount to $44m in Azerbaijan's 2019 state budget

By Ofeliya Afandiyeva

Inefficient expenditures amount to $44.2 million in Azerbaijan's state budget for 2019, Chair of Chamber of Accounts (ACA) Vugar Gulmammadov said on April 28.

“We have reviewed some operations which we consider as inefficient expenditures during the reporting year. In total, we have evaluated these operations in the amount of $44.2 million,” Gulmammadaov said while addressing the meeting of the Parliamentary Committee on Economic Policy, Industry and Entrepreneurship during the parliamentary session.

Speaking about directions of inefficient expenditures chair of the ACA mentioned some aspects:

“Untimely use of the allocated funds throughout the year, procurement of goods in excess of demand and their long-term storage in warehouses out-of-use, non-implementation of the sale operations and services which could be procured at lower price, non-choosing of favorable conditions of the contracts concluded at the expense of the state funds during state procurements in the course of use of state funds, non-achieving and partial achieving of the targets specified in the state programs and etc.”

In addition, Gulmammadov said that in the reporting year, as a result of the external state financial control measures, the proposals related to improvement of budget legislation have also been prepared and sent to relevant executive power agencies.

“Each proposal has been included in the report along with indicating its purpose. Although a part of the budget proceeds has been executed in lawful manner, according to certain criteria, they are considered as inefficient expenditures,” he emphasized.

It is important to note that 28 out of the conducted audits were compliance audits, 7 finance ones, 8 finance-compliance ones, and 4 efficiency audits organized in the country for the first time.

Gulmammadov added that last year the ACA auditors identified 561 errors that means an average of 13.1 errors per audit.

Most of violations were related to non-compliance with the requirements of budget legislation (172), legislation in the field of accounting (119) and shortcomings in public procurement (136).

"In comparison with the previous year, the number of control measures decreased by 18.9 percent and the number of errors by 21.4 percent. Eventually, the reduction in the number of errors per audit made up 3 percent," he pointed out.

Furthermore, as a result of the monitoring in 2019, AZN 12.5 million, as well as AZN 11.5 million were restored to the state budget.

According to the ACA’s report, in 2019, $1.7 million worth of goods and materials were restored in-kind, $648 thousand of unfinished work was done and $1.6 million of overpaid funds were offset by subsequent payments.

At the same time, $3.1 million of receivables were repaid and the unfounded creditor debt in the amount of 221.6 thousand was canceled.

In general, the report summarized the results of 43 financial and compliance audits, classified the violations and identified the number and specific weight of the total audited entities.