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CONTROL CHAMBER REVEALS OUTRAGEOUS BREACHES IN STATE PROCUREMENT
Lragir.am
Country - Tuesday, 08 April 2014, 23:32
The Control Chamber has discovered facts that indicate misuse of
state budget allocations last year.
In an overview of 2013 the Control Chamber reported that most
contracts are signed in accordance with the terms of references
but studies showed that the activities of establishing the system
are not full and complete. It has been reported that in the current
stage the expectations of efficiency and transparency of procurement
in the result of gradual introduction of electronic procurement are
not met yet.
In the result of the audit in 2013 the Control Chamber has
discovered innumerable breaches and shortcomings. In particular,
the representatives of the buyer agency discriminatively granted
contracts to some vendors with higher rates, in the result of which
the public funds are not saved, and some people get super profits.
Before procurement the assessing committees breach the government
decree 168 on procurement and do not study market prices. The needs
assessments are not properly done, and the acquired goods or services
later do not serve their purpose or serve partially. Procurement is
not sufficiently targeted and addressed. Cases were found when it
became known only after the acquisition of equipment that the relevant
government agency is unable to use it for one reason or another.
The companies that won tenders supplied certain products with similar
technical descriptions to nursery schools of different districts of
Yerevan for different prices.
Potatoes were supplied for 146-220 drams when the minimum market
price was 100 drams, sugar was supplied for 435-496 drams when the
minimum market price was 372 drams, buckwheat was supplied for 600
and 650 drams when the minimum market price was 420 drams.
The Control Chamber has found out that some mediator companies are so
"specialized" in state procurement that they apply for and win tenders
for absolutely different and supply products that differ dramatically.
As a result, rates go up without justification and state expenditure
is not effective.
For example, it has been found out that in 2012 and 2013 the ministry
of agriculture signed contracts with Agro Air Service for spraying
forests. Since the company did not have at least one plane, hang glider
or helicopter, the latter signed a contract with Arm Aero CJSC to
ensure presence of a plane or a helicopter. It also turned out that
the director of Agro Air Service is a staff member of the Ministry
of Defense, and some of the staff members of the company are staff
members of Arm Aero CJSC. Moreover, in 2012 100% of proceeds and in
2013 94.65% of proceeds came from contracts signed with the ministry
of agriculture. The Control Chamber concluded that the ministry of
agriculture would save 45,510,000 drams if it directly contracted
the company that provides the services.
The Control Chamber has identified more cases of procurement from
non-resident and offshore companies. Due to the type of organization,
the state control and monitoring bodies of Armenia cannot exercise
proper control over procurement from these companies. As an example,
the Control Chamber points to the non-resident companies Tisa
and Avangard which were contracted by the Ministry of Justice's
Penitentiary Service for building materials, clothing, household
appliances, detergents. The contracts were worth 127,619,600 drams.
498 contracts were signed for food procurement for 159 nursery
schools worth 2,577,746,400 drams, of which contracts signed with
the non-resident Tisa Company were worth 1,328,946,200 drams.
Studies of the Control Chamber showed that amounts in the state
budget lines of salary, grants, subsidy are spent through procurement
procedures.
- See more at:
http://www.lragir.am/index/eng/0/country/view/32245#sthash.BC11sdcJ.dpuf
From: Emil Lazarian | Ararat NewsPress
Lragir.am
Country - Tuesday, 08 April 2014, 23:32
The Control Chamber has discovered facts that indicate misuse of
state budget allocations last year.
In an overview of 2013 the Control Chamber reported that most
contracts are signed in accordance with the terms of references
but studies showed that the activities of establishing the system
are not full and complete. It has been reported that in the current
stage the expectations of efficiency and transparency of procurement
in the result of gradual introduction of electronic procurement are
not met yet.
In the result of the audit in 2013 the Control Chamber has
discovered innumerable breaches and shortcomings. In particular,
the representatives of the buyer agency discriminatively granted
contracts to some vendors with higher rates, in the result of which
the public funds are not saved, and some people get super profits.
Before procurement the assessing committees breach the government
decree 168 on procurement and do not study market prices. The needs
assessments are not properly done, and the acquired goods or services
later do not serve their purpose or serve partially. Procurement is
not sufficiently targeted and addressed. Cases were found when it
became known only after the acquisition of equipment that the relevant
government agency is unable to use it for one reason or another.
The companies that won tenders supplied certain products with similar
technical descriptions to nursery schools of different districts of
Yerevan for different prices.
Potatoes were supplied for 146-220 drams when the minimum market
price was 100 drams, sugar was supplied for 435-496 drams when the
minimum market price was 372 drams, buckwheat was supplied for 600
and 650 drams when the minimum market price was 420 drams.
The Control Chamber has found out that some mediator companies are so
"specialized" in state procurement that they apply for and win tenders
for absolutely different and supply products that differ dramatically.
As a result, rates go up without justification and state expenditure
is not effective.
For example, it has been found out that in 2012 and 2013 the ministry
of agriculture signed contracts with Agro Air Service for spraying
forests. Since the company did not have at least one plane, hang glider
or helicopter, the latter signed a contract with Arm Aero CJSC to
ensure presence of a plane or a helicopter. It also turned out that
the director of Agro Air Service is a staff member of the Ministry
of Defense, and some of the staff members of the company are staff
members of Arm Aero CJSC. Moreover, in 2012 100% of proceeds and in
2013 94.65% of proceeds came from contracts signed with the ministry
of agriculture. The Control Chamber concluded that the ministry of
agriculture would save 45,510,000 drams if it directly contracted
the company that provides the services.
The Control Chamber has identified more cases of procurement from
non-resident and offshore companies. Due to the type of organization,
the state control and monitoring bodies of Armenia cannot exercise
proper control over procurement from these companies. As an example,
the Control Chamber points to the non-resident companies Tisa
and Avangard which were contracted by the Ministry of Justice's
Penitentiary Service for building materials, clothing, household
appliances, detergents. The contracts were worth 127,619,600 drams.
498 contracts were signed for food procurement for 159 nursery
schools worth 2,577,746,400 drams, of which contracts signed with
the non-resident Tisa Company were worth 1,328,946,200 drams.
Studies of the Control Chamber showed that amounts in the state
budget lines of salary, grants, subsidy are spent through procurement
procedures.
- See more at:
http://www.lragir.am/index/eng/0/country/view/32245#sthash.BC11sdcJ.dpuf
From: Emil Lazarian | Ararat NewsPress