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Saturday 19.08.2017 | Name days: Melānija, Imanta
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State Audit turns to prosecutor's office in regard to violations at Riga Free Port

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Activities of Riga Free Port Authority (RFPA) have not followed principles of good management or requirements stated in regulations. As a result – there have been many illegal and irresponsible spendings and no sufficient revenue to present in return, the State Audit Office (SAO) has concluded.

All violations discovered during the SAO’s inspection have been reported to the Prosecutor’s Office of the Republic of Latvia, the SAO told BNN.

A total of 595 thousand LVL of funds belonging to RFPA have been illegally spent on bonuses, gifts and health insurance of Board members. They are also said to have wrongly calculated benefits, holiday payments and sick-leave certificates.

Regulations state – goals are to be achieved using the least possible amount of financial resources. However, when presenting entrepreneurs 1.08 million LVL for docking maintenance fees, RFPA had not determined the actual amount of money entrepreneurs had invested in accordance with their contracts.

The port has spent 145 thousand LVL on donations that do not comply with rules regarding financial squandering prevention acts. 745 thousand LVL were spent on natural and legal persons’ agreements for financial support as if signing contracts for purchasing advertisement services. Even though the procurement of such services was not planned, it was never coordinated and its possible affect on improving the port’s services and cargo handling was not evaluated.

The port administration’s illogical decisions and employees’ reluctance to complete their duties has resulted in losses worth at least 403 thousand LVL. Funds were spent on repairs of Varma icebreaker (354 thousand LVL), instead of investing them in the base capital of the ship’s owner.

Without following regulations the administration of the port relieved cruise ships from having to pay sanitation fees, losing a potential amount of 2.08 million LVL as a result. The administration also did not use the funds provided by tug boat lease in order to collect rent fees of 501 thousand LVL. It also failed to take action to return debts for a total amount of 124 thousand LVL.

The Board’s decisions during the Rīgas jūras līnija insolvency process have created additional costs of at least 5.3 million LVL. In the period between 2009-2011 the port was carrying out 22 million-LVL construction work to expand Kundzinsala’s railway and docks without first holding a proper tender. The SAO, therefore, points at the possible uneconomic risks that could be present because of this.

The port’s activities in regard to the territories it owns have not complied with relevant regulations as well. The port has also failed to provide equal, legal and open attitude toward all entrepreneurs operating in the port.

In contrast to regulations, the RFP included real-estate tax in the fees for dock rent in 2010 and 2011. As a result – rent fees were increased by 209 thousand LVL for 13 entrepreneurs.

The audit covers the period from 2009 to 2011. More than 20 different proposals on how to improve management of finances and provide equal and just attitude toward entrepreneurs have been submitted to RFPA.

Ref: 102.109.109.6603


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