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Report 2018

16.07.2019

ON THE RESULTS OF MAIN ACTIVITIES CARRIED OUT BY STATE SUPERVISION SERVICE OF THE REPUBLIC OF ARMENIA IN 2018


Yerevan, 18.01.2019

Introduction

State Supervision Service (hereinafter referred to as the Service) is a body of the newly established Government operating under the supervision of the Prime Minister and the Head of the Service was appointed according to the decree N 533-A of the RA Prime Minister as of May 21, 2018. Since the mentioned date until the end of 2018 based on the violations discovered as a result of the examination carried out by the Service in total 761.064.000 AMD was restored.

Implemented main activities

  1. Based on the order N H/001-18 of the Head of the Service as of July 3, 2018 as a result of the examination in “BETS” CJSC:
  • For the activities carried out in 2017, 152.500.000 AMD was discovered and returned to the account of “High Voltage Electric Networks” CJSC and during the upcoming months 157.775.000 more AMD should be paid;
  • The total amount envisaged by the agreement “BETS-BMASHDZB-17/34” signed between “High Voltage Electric Networks” CJSC and “Montajtrnasshin” CJSC for the implementation of contractual works was reduced by 40.000.000 AMD;
  • The damage caused to the state because of the acquisition of land plots by the Head of the Tsakkar Community has been compensated to the Service account with the amount of 14.773.000 AMD;
  • During the examination in “High Voltage Electric Networks” CJSC it was discovered that for the period 2002-2014 as a result of the activities of Sahak Abrahamyan, the Chief Director of High Voltage Electric Networks” CJSC a damage of about 134.000.000 AMD was caused to “High Voltage Electric Networks” CJSC and a reference about this will be sent to the RA General Prosecutor’s Office for appropriate legal proceedings.
  1. Based on the assignment of the Head of the Service N H/004-18 as of 6 July, 2018 as a result of the examination in “Homeland-Diaspora Center” State Non-commercial Organization of RA Ministry of Diaspora 100.000.000 AMD was restored.
  2. Based on the assignment of the Head of the Service N H/008-18 as of 23 July, 2018 an examination of the activities of “Lusanshan” State Non-Commercial Organization for the period 2014-2018 was carried out. As a result of the examination it was found out that in 2016-2018 the State Non-Commercial Organization caused a damage of 209.787.000 AMD which was fully restored to the RA state budget. According to preliminary data, during the 2014-2015, a pecuniary damage of around 135.000.000 AMD was caused to the state which, however, the Director of the State Non-Commercial Organization for the reporting refused to restore, and a criminal case was initiated in RA Investigation Committee on the basis of the materials submitted.
  3. Based on the assignments N H/009-18 and N H/010-18 of the Head of the Service as of July 24, 2018 an examination was conducted on the supervision of legality and effectiveness of 3 contracts signed in 2018 by the RA Police and «Ukrinvest» LLC with the amount of about 1.000.000 AMD. As a result of the examination, it was found out that the above mentioned 3 contracts were signed with violations of a number of laws regulating procurement in the Republic of Armenia. Additionally, the study of the actual work has shown that they are incomplete and with poor quality, and the supervision of the authorized body responsible for the work, the RA Police, is inadequate and is purely formal. In order to determine the expediency of further activities of «Ukrinvest» LLC, the reference prepared by the Service was sent to the Prime Minister’s Staff with the accompanying letter E/303-18 as of October 25, 2018 but no information is available about processing the reference.
  4. Based on the assignment N H/018-18 of the Head of the Service as of October 8, 2018 an examination was carried out in “Support to the Convicted Person” foundation of the RA Ministry of Justice on its activities for 2016-2018. As a result of the examination carried out by the Service it was found out that the foundation has actually deviated from its main goals stipulated in its Statute approved by the RA Government. As a result of ineffective management, large-scale material damage was caused to the state and the foundation the detailed information on which will be presented to the Prime Minister in the near future, taking into account that the reference about the examination results is in the final stage.
  5. Based on the assignment N H/018-18 of the Head of the Service as of October 8, 2018, an examination is currently being conducted in the Penitentiary Service of the Ministry of Justice to oversee the legality and effectiveness of the procurement process. By the assignment, the deadline for the examination is March 20 of the current year.
  6. Based on the assignment N H/013-18 of the Head of the Service as of August 9, 2018, an examination was carried out at the National Agrarian University of Armenia foundation, the results of which were presented to the responsible party. The latter expressed readiness to pay damages of 350.000.000 AMD, of which 284.000.000 AMD has already been restored, and the remaining amount is planned to be restored by January 25, 2019.
  7. In order to eliminate the discrepancies and risks identified during the examinations for the conduction of which the Service was authorized by the legislation of the Republic of Armenia, the Service has proposed to suspend 7 competition procedures, with only one contract with the amount of 1,000,000,000 AMD. As a result of the monitoring conducted during the reporting period, the amounts in the contracts have already been reduced with AMD approximately equal to 1,500,000 USD.
  8. From 29 May, 2018 until the end of the year 1374 citizens have been admitted to the Service. 1003 applications, complaints and suggestions have been addressed to the Service from individuals and legal entities with the issues on the below mentioned fields:
  • state-juridical issues -354,
  • territorial governance and infrastructural issues- 197,
  • social issues -139,
  • economic issues- 47,
  • public service issues- 266.
  1. Based on the assignment of the Head of the Service N H/019-18 as of 15 October, 2018, an examination was carried out in Ani community of Shirak region, within the framework of which it was found out that in 2010-2018, the total amount of taxes, penalties and fines that was not charged from legal entities is 21.085.200 AMD. As a result of the analysis of information requested by the orders of the Head of the Service, it was found out that in 2013-2017 expenses of 4.327.300 AMD of salaries and fuel costs of 11.700.000 AMD are not justified and reliable.
  2. Based on the assignment of the Head of the Service N H/023-18 as of 22 October, 2018 an examination was conducted in Azatamut community of Tavush region, within the framework of which it was found out that in 2010-2018, the total amount of taxes, penalties and fines that was not charged from legal entities is 688.000 AMD. As a result of the analysis of information requested by the orders of the Head of the Service, it was found out that:
  • at the expense of state funds 182,696,500 AMD was spent inefficiently,
  • with a violation of the procurement process, without the procurement procedure, a contract with the amount of 3.500.900 AMD was signed,
  • the damage caused to the community budget during the study period is 2.530.000 AMD, the unjustified expenditure is 384.000 AMD, and the amount that was less entered into the community budget is 2.505.100 AMD.
  • the total fuel costs that were withdrawn extra is 3.447.000 AMD.
  1. Based on the assignment of the Head of the Service N H/028-18 as of 18 October, 2018 an examination was conducted in Nor Geghi community of Kotayk within the framework of which it was found out that in 2010-2018 the total amount of taxes, penalties and fines that was not charged from legal entities is 3.971.100 AMD and the municipality has not taken any measures to ensure revenues for taxes and penalties of 5.108.700 AMD from physical persons. As a result of the analysis of information requested by the order of the Head of the Service, it was found out that,
  • in 2013-2017 municipality has made an unjustified expense of AMD 140.618.000 AMD.
  • with a violation of the procurement process, without a procurement procedure, a contract with the amount of 724,000 AMD was signed.
  1. Based on the assignment of the Head of the Service N 012 as of 31 July, 2018 an examination was carried out in Ejmiatsin (Vagharshapat) community of Armavir region to assess the reliability of information provided as a basis for state funds and the legitimacy of management of state funds. Relevant materials on the results of revealed violations were submitted to the RA Investigative Committee and a criminal case was initiated. According to the information published by the RA Investigative Committee, the damage caused to the community as a result of recorded violations, according to preliminary calculations is 590.000.000 AMD in total.
  2. Based on the assignment of the Head of the Service N H/020-18 as of 15 October, 2018 an examination was carried out at “Maralik Craftsmen State College” SNCO it was found out that concerning the cost of tuition fees for 2015-2017, the amount exceeding the state budget makes 30.782.700 AMD.
  3. Based on the assignment of the Head of the Service N H/017-18 as of 1 October, 2018 a number of violations were registered during the examination in the Artashat Water Users Company, which resulted in a large amount of property damage caused to the state. The results of the examination were presented to the Prime Minister of the Republic of Armenia.
  4. The Service has provided relevant information to the RA law enforcement bodies regarding the circumstances known to it within the framework of the supervision by the Service, which include the features of the alleged crime and on some criminal proceedings have already been initiated.

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