Current conclusion of Audit Chamber regarding results of audit of 2022 state budget annual implementation in Ministry of Economy debated at joint sitting of committees
The aim of the joint sitting is to debate issues from a broader perspective, such as agriculture issues, water issues, as well as procurement issues, as they are directly and indirectly related to each other: the Chair of the Standing Committee on Financial-Credit and Budgetary Affairs Gevorg Papoyan stated this at the joint sitting of the Standing Committees on Financial-Credit and Budgetary Affairs, on Territorial Administration, Local Self-Government, Agriculture and Environment Protection, and on Economic Affairs held on May 18.
The sitting debated the current conclusion of the Audit Chamber regarding the results of the audit of the 2022 state budget annual implementation in the RA Ministry of Economy.
The member of the Audit Chamber Karen Arustamyan presented the results of the financial and compliance audit. According to the plan of the Chamber, four audits were carried out in the Ministry: three months, six months and nine months of 2022, and then also annual audits.
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According to the key rapporteur, the main purpose of the audit is to determine the credibility of the management of financial documents and the reports formed as a result of the implementation of the state budget in the RA Ministry of Economy, as well as the compliance of the entire process with the standards of the legislation and civil-legal contracts regarding the implementation of the state budget. Overall, 12 measures were audited. Sufficient information was requested and received from the Ministry to carry out an audit on them, except for two: state support for the modernization of the economy and measures aimed at improving infrastructure in the field of tourism in different regions of the Republic of Armenia supported by the World Bank. The information regarding the mentioned measures was not presented by the Ministry during the audit and there was no opportunity to carry out an appropriate audit. However, based on available and provided information, more than 30 inconsistencies were recorded within the framework of the audited measures. As a result, 12 cases of falsification of various reports and financial indices were revealed, totaling 601 million AMD. One of them has already been eliminated and three are in process. As a result of constructive cooperation with the Ministry in the main areas, it was possible to carry out an effective audit.
Karen Arustamyan touched upon the measures of state support for the establishment of intensive grape orchards cultivated with modern technologies in the RA. It was found out that the work performed by 36 beneficiaries, for which compensation of 611 million AMD was paid, do not meet the clarifications of conditions and requirements of the project provided by the Ministry.
According to the rapporteur, problems were recorded both before and during 2022, but the introduction and application of new standards and toolsets will help to solve them or at least mitigate them, and will allow to control the accuracy of interest rates and subsidized interest amounts within the subsidy framework.
The RA Minister of Economy Vahan Kerobyan gave clarifications regarding inconsistencies and distortions in his speech. He highlighted the cooperation with the Audit Chamber, which gives an opportunity to once again discuss and find solutions to correct the identified shortcomings. Vahan Kerobyan expressed his agreement with some of the conclusions of the Audit Chamber and stated that the law enforcement bodies have already made several inconsistencies the subject of investigation.
Vahan Kerobyan referred to the complications that arose during the state support programmes provided by banks. Among them are the programmes of subsidy and purchase loans, when researches become difficult due to bank secrecy and the lack of sufficient toolsets to evaluate the effectiveness of loans given by banks. Therefore, according to the new mechanisms, the banks are obliged to submit a report on the effectiveness of the loans granted under this programme by an independent auditor by July 2024.
The Minister of Economy also noted that the law on Bank Secrecy in many cases does not allow to obtain complete information about loans and borrowers. He mentioned that he considers the audit of the Audit Chamber to be effective. “We use the report as a future action plan,” Vahan Kerobyan said.
The Chair of the NA Standing Committee on Financial-Credit and Budgetary Affairs Gevorg Papoyan emphasized the fact that the Audit Chamber did not criticize the non-implementation of this or that programme, but directed the Ministry to increase the effectiveness of the implementation of the programmes with its proposals. Gevorg Papoyan interpreted the relatively lower growth of agriculture in the economy with such factors as, for instance, in the case of intensive gardens, mechanically planting traditional varieties more densely, rather than being guided by the correct selection of the newest types and varieties of plants characteristic of an intensive garden. According to him, in this case, the gardens cannot produce the necessary results.
The Chairman of the Audit Chamber Atom Janjughazyan spoke about the audit issues. According to him, the law on Bank Secrecy does not prevent obtaining information on loans and borrowers.
During the sitting, the Chairman of the Water Committee of the Ministry of Territorial Administration and Infrastructure Vahagn Gevorgyan also made a report presenting the problems of the sector and the ongoing works in the irrigation systems. According to him, 2023 is a year of scarce water. Insufficient water is stored in five reservoirs. The negative balance of the Lake Sevan is 15 centimeters. This year, it is planned to take 70 million cubic meters of water from the lake.
It was noted that it is necessary to define a differentiated tariff for water, and water users should be subsidized.
The Chair of the Standing Committee on Financial-Credit and Budgetary Affairs Gevorg Papoyan urged his colleagues that it is a year of scarce water, and the villagers should be informed so that they can cultivate such crops that require relatively less water.
The speakers of the day answered many questions of the deputies regarding the problems of the sector.
National Assembly of the Republic of Armenia