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SAI published Audit Report of the Final Statement of Accounts of the Budget of Andrijevica Municipality for 2019

Podgorica, 5th February 2021 – The State Audit Institution has conducted financial audit and regularity audit of the Final Statement of Accounts of the Budget of Andrijevica Municipality for 2019.

The competent Auditing Board composed of Zoran Jelić (member of Senate - Head of Auditing Board) and PhD Milan Dabović – (President of the Senate - member of Auditing Board) has expressed adverse opinion on the  Final Statement of Accounts of the Budget of Andrijevica Municipality for 2019.

The financial audit has established that the Municipality of Andrijevica did not express the budget result in the Report, i.e. the deficit in the amount of -652,501.28 €, which is not in accordance with the Law on Budget and Fiscal Responsibility. The deficit reduced by interest compared to the budget revenues of the Municipality is 84.39%, which is 8 times higher than allowed by Article 27 of the Law on Budget and Fiscal Responsibility. On account 741 - donations, the Municipality showed donations below the line of the financial result, which would increase the deficit if the financial result was calculated. Due to the inconsistency of the records of the Municipality in accordance with the Regulation on the Unified Classification of Accounts for the Budget of Montenegro and the budgets of the municipalities, the stated expenditures were corrected in the total amount of 366,542.07€. Repayment of liabilities from the previous year is shown in the amount of 41,090.91€. The auditor could not determine the modified cash deficit which would provide a realistic fiscal overview of the Municipal Budget due to the fact that the Municipality does not record liabilities in class 2, as well as due to inaccurate records of liabilities from the previous year.

The regularity audit identified individual deviations and inconsistencies with the Law on Budget and Fiscal Responsibility, Law on Local Self-Government, Law on Financing Local Self-Government, Law on Management and Internal Controls in the Public Sector, Law on Tax Administration, Law on Real Estate Tax, Law on personal income tax, Law on Contributions to Compulsory Social Insurance, Labour Law, Law on State Property, Law on Public Procurement, Regulation on reimbursement of expenses of the employees in the public sector, Regulation on Unified Classification of Accounts for the Budget of Montenegro and Budget of municipalities, Rulebook on the manner of preparing and submitting financial reports of budgets, state funds and local self-government units and Instruction on the Treasury operations of the local self-government.

Having in mind the scope and character of the identified irregularities and shortcomings in the Municipality of Andrijevica, the competent Auditing Board has made a decision to submit the Report to the Government, the Ministry of Finance and Social Welfare, the Ministry of Public Administration, Digital Society and Media, Parliamentary Committee for Economy, Budget and Finance, Supreme State Prosecutor's Office and the Union of the Municipality of Montenegro in order to be informed about its content.