FBIH ENTITY AUDITORS SAY PUBLIC FUNDS SQUANDERED

SARAJEVO, Bosnia (September 23,2007) _ Tens of millions of Bosnian Marks (BAM), were misspent in the FBIH entity in 2006 due to lack of internal controls and violations of the law, according to an auditors’ report.A report released by the Auditor’s Office of the FBIH entity noted irregularities, and legal violations in all 10 cantons.

None of the cantons passed the audit with positive marks, but four of them received so-called “conditional assessments” which means they can get a positive evaluation once some corrections and improvements have been carried out, said Chief Auditor Ibrahim Okanovic.

“Breaching legal regulations on handling the budget was registered in two cantons.Internal controls also failed in some areas involving the payment of wages, allowances and commissions. This irregularity was registered in all cantons,” Okanovic said.

Violations of the law on public procurement are seen as one of the biggest problems in the administration.The ten cantonal budgets last year amounted to a combined total of 1.7 billion Bosnian Marks (867 million Euros), which is more than the FBIH entity’s entire budget.

Out of those funds, the cantons spent 21,5 million Bosnian Marks (nearly 11 million Euros) on public procurement.

“Major irregularities were noted due to the violations of the public procurement law, and obviously there are reasons why this was being done,” said Okanovic, adding that preferential status allowed even unregistered companies to participate in public works.

Okanovic complained that although the auditors informed the parliament about the irregularities three months ago, MPs have yet to discuss the report.

Auditors have been issuing detailed reports for several years, but analysts say no legal action has been taken by the authorities, and similar problems keep being reported year after year.