BUSINESS
Control Chamber accuses government of state budget squander
07 October, 2010

Control Chamber of Georgia accuses Ministry of Finances of the squander of state budget and non-transparently conducted tender procedures. Ultimately the state budget suffered the loss of GEL 61 446 and GEL 322 600 was misused unreasonably. Corresponding papers will be sent to General prosecutor’s Office of Georgia.
Control Chamber of Georgia (CCG) having audited the Project on Support of the Financial Management of the State Sector came to conclusion that the Ministry of Finances of Georgia (MOF) spent state budget

unreasonably. CCG announced of its findings on September 23, 2010 and submitted due papers to the General Prosecutors Office.
According to Giorgi Jeranashvili, Head of Audit Department of CCG, MOF announced a tender for the Project on Support of the Financial Management of the State Sector on February 6, 2009 on purpose to raise transparency of budgetary procedures and to work out popular versions of the state budget-related papers. The project aimed to write 8500 booklets on popular language, as well as insure their printing, publishing and make available to society [free of charge]. But the tender procedures obviously were non-transparent.  Eleven companies expressed will to participate in the tender but only two companies Ltd Kongar and Ltd PMCG [Policy and Management Consulting Group founded by ex-finance minister Lekso Aleksishvili who served the office term within 2005-2007] bade for the tender ultimately. Irrespective PMCG proposed to implement the project by GEL 117 thousand less than Kongar, MOF named Kongar as the tender winner. 
“Based on this we can say MOF spent the state budget money unreasonably,” Jeranashvili told Georgian Journal.
Kongar had an obligation to implement the GEL 375 worth project in 21 months; however the contract between Kongar and MOF was signed on 17 months. “And yet the project term was reduced MOF did not demand to cut down the project budget either. MOF could save thousands but did not thus inflicting direct loss to the state budget,” Jeranahsvili stresses. GEL 322 out of the total GEL 375 was earmarked for intellectual work made on preparation brochures including making financial papers of MOF written on popular language, translation [in English] etc, and the remainder GEL 53 thousand was to be spent on printing alone.CCG compared the text of brochures with the text of financial papers of MOF and found out almost no difference – the text was just slightly shortened but the language remained similar and not popular.
“Otherwise, MOF could easily implement the text preparation work itself and announce tender only for translation and printing of the booklets,” Jeranashvili said.


Kongar printed and published brochures all in all but MOF instead of distribution booklets within wide mass of society sent 82% of them to Tbilisi City Hall, Parliament and within finance minister departments itself, to the structure that have a full access to the questioned accounts and were not considered as the Project’s target group.   
“The goal of the Project was to disseminate the information among population and not to structures that have full access to the information put in the brochures,” Jeranashvili elaborated.
As a result of the questioned tender, the state budget sustained a GEL 61 446 of loss and GEL 322 600 were unreasonably spent – saying in popular language: squandered. Jeranashvili promises to send the audit papers to the General prosecutors’ office of Georgia soon.


MOF shunned commenting the issue initially, but later on September 24, 2010, Kakha Baindurahsvili, Minister of Finances claimed that the questioned tender was held before he took the office term and he is unaware of the details. However MOF has already got the CCG audit papers and internal control service of MOF is scrutinizing the papers. Baindurashvili promises to respond after MOF internal control service will draw out its conclusions.
The point is that Baindurashvili officially was assigned to the post of the minister of finances on February of 2009 just on the very day when the ex-minister Nika Gilauri moved to Prime Minister’s office, and Baindurashvili took over the office. Baindurashvili does not elaborate this issue. At any rate the active Georgian government cannot escape responsibilities for the state money squander: either the incumbent head of government Premier Gilauri (who left the finance minister’s post for Premiership on the questioned tender-day) or minister Baindurashvili seem responsible for unreasonable outlays.

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