On the grounds of Article 20(3) of the Public Financial Audits Act, Report No FI 5 PI-005 of 8 March 2010 was submitted, which was drafted on the basis of the results of a financial audit carried out on Vitosha Hunting Estate, Studena area, within the boundaries of Kladnitsa village, Pernik District. The hunting estate, being a state-owned enterprise, is subject to financial audit in accordance with Article 4(2) of the Public Financial Audit Act and Article 62(3) of the Company Act.
During the period covered by the audit, and in particular 1 January 2005 – 30 June 2009, the Vitosha State Hunting Estate, Studena area, was managed and represented by the Director, Mr. Damian Iliev Damianov, Dipl. Eng.
During the period concerned the hunting estate received public subsidies in the amount of 4 048 878 BGN, which were respectively disbursed under the following headings:
• forestation activities – 323 228 BGN;
• hunting and other economic activities – 770 622 BGN;
• a specialist Help Desk of the National Forestry Service - 473 344 BGN;
• Management of forest stock land – 2 043 373 BGN;
• Purchase of motorcycles for the SFA system – 413 826 BGN and repairs to the Specialist Help Desk of SFA – 21 000 BGN.
The main conclusion reached on the basis of the conducted financial audit is set out below:
“The public subsidy and income from the operations of the hunting estate are paid into a single account, which does not allow a distinction to be made between different sources of financing for the purpose of ex-post controls with regard to received and disbursed amounts.”
In accordance with Article 9(8) of the Hunting and Game Protection Act, state hunting estates act as contracting authorities for the purpose of conducting their activities, and organise and conduct tenders under the Public Procurement Act.
The findings of the financial audit are set out below:
• In 2005, a total of 4 contracts were awarded on the basis of tenders and 3 contracts were terminated. There are irregularities under some of the contracts, some of which constitute violations of the provisions of the Public Procurement Act and the Regulation on the Award of Small Procurement Contracts for which no corresponding administrative documents have been issued not any sanctions imposed by the Director of Vitosha Hunting Estate, Studena Area, due to the expiry of the three-year statutory liability period provided for in Article 127(1) of the Public Procurement Act;
• In 2006, a total of 15 tenders for the award of public procurement contracts were held. Contracts were awarded under 4 tenders and 11 tenders were terminated. Under three of the concluded contracts no statements verifying administrative violations have been drafted due to the expiry of the three-year statutory liability period.
• In 2007, a total of 7 tenders were held and 6 contracts were awarded, whilst one of the calls was terminated;
• In 2008, a total of 14 tenders for the award of public procurement contracts were signed and 10 contracts were signed;
• In the period 1 January 2009 – 30 June 2009, a tender was launched and a contract was signed.
The financial audit established some typical and frequently recurring practices concerning the tenders launched under the Public Procurement Act and the Regulation on the Award of Small Procurement Contracts (NVMOP):
• failure to comply with the requirement laid down in Article 34(1) NVMOP regarding the sending of a notification to the Public Procurement Agency within 7 days of concluding a contract for the purpose of contract registration in the Public Procurement Register;
• failure to delegate authority to another official for the purpose of sending the notification under Article 44(1) NVMOP;
• in some cases notifications were sent with a significant delay;
• failure to consistently nominate reserve members of the evaluation committees, which represents a violation of Article 18(1) NVMOP;
• failure on the part of the participants in launched calls for the award of public procurement contracts to present statements verifying their criminal record status in accordance with Article 47(1)(1) ZOP;
• certificates issued by the respective district court concerning the presence of the circumstances mentioned in Article 47(1)(2) ZOP and verifying that no insolvency proceedings have been initiated against the participant;
• a document issued by the competent district court that no winding-up procedures have been initiated vis-à-vis the company as at the date of signature of the contract in accordance with Article 47(1)(3) ZOP;
No authority has been delegated to an official to terminate the open call for the award of a small procurement contract in case the circumstances mentioned in Article 24(1)(1) NVMOP are present;
• Failure to submit a good performance guarantee for concluded contracts in accordance with Article 47(9) ZOP; by concluding the majority of public procurement contracts with the selected contracts, Damian Damianov, in his capacity as Director Vitosha Hunting Estate, Studena area, has failed to comply with the obligations stipulated in Article 47(9) ZOP and Article 3291)(2) NVMOP. In connection to this, the Public Financial Audit Agency has issued 24 statements of administrative violations; one of the issued statements of administrative violations was issued on the grounds of Article 127(1) ZOP;
Four statements of administrative violations were issued against the deputy director of the hunting estate Mrs. Gergana Vassileva, Dipl. Eng. with regard to the same irregularities;
Within the scope of the financial audit, checks were conducted to verify the legality of concluded services contracts in the period 1 January 2005 – 30 June 2009. The results of these checks are set out below:
• A total of 155 contracts out of which remuneration in the amount of 60 989 BGN was paid are not accompanied by signed takeover protocols relating to the acceptance of the work carried out under the contract by the contracting authority;
Certain minor violations have been identified concerning the legality of expenditure incurred for business trips overseas (participation of experts of the hunting estate in international hunting exhibitions);
Violations were established in relation to the rental of a motorcar to be used by the hunting estate and there is no record of mileage, fuel consumption and corresponding expenditure;
Due to the failure on the part of Damian Damianov and SFA/SAF/EAF to conclude contracts for the period 1 January 2005 – 30 June 2009, which stipulate the conditions for the payment of rent and relating overheads and the rules for the calculation of such expenditure, the financial auditor has accepted the amounts paid by Mr. Damianov for rental and overheads to be accurate on statutory grounds. No irregularities were identified in relation to the accounting of the income from organised hunting events during the period covered by the audit;
No irregularities were established in relation to the financial reporting of income and expenditure both in terms of bank and cash transactions. No missing assets or cash were identified in the course of the financial audit.
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