The National Transparency Authority (ΝΤΑ), within the framework of its responsibility to carry out ex officio audits and taking into account the importance of the effective operation of the Municipalities and the Regions, is conducting two horizontal audits:
a) in Municipalities in the area of the Decentralized Administration of Attica, which concern the examination of the legality of the management of leases of municipal real estate to third parties
b) in Municipalities in the area of the Decentralized Administration of Crete, which concern the submission of the financial statements of the Municipalities and the Regions.
These audits aim to guarantee public revenues, improve decision-making and governance systems, avoid mismanagement and deficits, as well as foster a culture of transparency in the actions of Local Government Authorities towards citizens, in order to restore their confidence in the institutions of local government, to ensure the optimal use of the fees paid by citizens and to improve the services offered to them.
Α. The Authority, during its audits in the Municipalities of Attica, noted cases of inconsistency in the payment of rent exceeding in each case amounts of €500,000, €89,000 and €70,000 as well as the charging of the Municipalities with electricity and water supply costs of the tenants' businesses in amounts exceeding €4,000, €35,000 and €62,000.
Specific findings:
Indicatively mentioned are the findings from audits completed in 6 municipalities and their legal entities, concerning leases of 20 properties in total.
- Illegal extension of leases
- Inconsistency of the tenants in the payment of the rent with the tolerance of the competent departments of the Municipalities (134,00€ ,71.049,00€, 90.000,00€, 217.679,00€ and 500.199,00€ in each case
- Failure to deposit letters of guarantee with the acquiescence of the competent departments
- Charging the Municipalities with the costs of electricity and water supply to the businesses of the tenants (4.419,00€, 26.553,00€, 35.393,19€ and 62.483,13€ as the case may be)
- Failure or significant delay on the part of the competent departments to take action and impose enforcement measures to recover the debts.
It should be noted that the liable tenants made sure that they did not have any money available in their bank accounts or real estate, in order to make it very difficult to recover the amounts due.
The Authority also made recommendations to the competent authorities of the municipalities concerned, resulting in initiatives being taken in this respect:
- The termination of unlawful leasing contracts
- In the real estate tendering process that was delayed with a parallel unlawful stay of tenants of a previously expired lease
- On the validation of overdue rent arrears
- Taking compulsory measures, in accordance with the Public Revenue Code, for the collection of overdue debts from inconsistent wage earners
- To stop paying the utility bills of the tenants of municipal properties and to force them to pass the counters in their name.
Taking into account the findings of the audits, the Authority took the following actions:
- Disciplinary responsibility was sought, where appropriate, from the officials responsible for unlawful acts or omissions,
- The relevant reports were notified to the competent prosecutor of the Athens Court of Appeal and forwarded to the Court of Auditors.
Β. The first audit carried out in 24 municipalities of the Decentralised Administration of Crete regarding the approval and submission of financial statements revealed the following:
- In 16 Municipalities the City Council approved the Report, Balance Sheet and Profit and Loss Account for the 2017 financial year overdue
- In 2 Municipalities, the City Council approved the Balance Sheet overdue, while it has not approved the Balance Sheet and the Profit and Loss Account for the financial year 2017 (note that these Municipalities had not prepared a Balance Sheet and Profit and Loss Account since 2011, the year in which all Municipalities in Greece are obliged to keep a double-entry accounting system)
- In 1 Municipality, the Balance Sheet and the Results of the 2017 financial year were approved by the City Council before the deadline, but the approval of the Balance Sheet had not taken place
- In 1 Municipality the City Council had not proceeded with the approval of the Balance Sheet and Profit and Loss Account for the 2017 financial year
- 17 Municipalities transmitted the Report, the Balance Sheet and the Profit and Loss Account of the financial year 2017 to the Court of Auditors in due time, while 4 Municipalities had not transmitted the Report, the Balance Sheet and the Profit and Loss Account of the financial year 2017 to the Court of Auditors.
The NTA points out that compliance with public accounting rules is crucial for transparency and public accountability in the activities of local authorities. Citizens demand a timely and complete account of the financial functioning of their municipalities. For this reason, the competent bodies and services of the municipalities that have not completed the procedures for drawing up and approving the accounts of previous years must immediately take the necessary steps.
This horizontal and systemic audit is continuing in all the municipalities of the country and is expected to be completed within 2020.
National Transparency Authority
The Governor
Angelos Binis