State Audit Finds Ogre Municipality Misspent €434,000 and Signs of Fraud in Procurements
The State Audit has revealed that Ogre municipality illegally spent at least €434,000, and procurement processes show indicators of fraud. Auditors urge the municipality to recover the funds, otherwise a loss recovery process may be initiated.
A State Audit inspection has found that Ogre municipality misspent at least €434,000 in violation of legal requirements. The audit also identified signs of fraud risk in procurements, as well as serious deficiencies in internal control, financial management, and strategic planning.
Procurement Issues and Conflict of Interest
The procurement commission’s work was of poor quality – documentation was incomplete, calculations inaccurate, and in some cases contracts were awarded to mutually connected companies. For instance, in vehicle maintenance and repair procurements, requirements were set without considering actual needs, resulting in 54% of such work (€162,000) being performed by other vendors. Additionally, a municipal council deputy participated in decisions to grant funding to an association he had founded, creating a conflict of interest.
Development Program and Project Implementation Problems
The municipality’s development program is not properly linked to the budget, and 79 out of 191 projects (41%) planned between 2022 and September 2025 were not implemented, despite a planned budget of €34.7 million. The largest investment (€23.3 million) is earmarked for the Ogre Musical Theatre project, while only 6% of activities and 1% of projects are allocated to residents’ priorities – infrastructure and business development. For 84 out of 126 development indicators, no baseline or target values have been set.
Funding for Associations and Agency Operations
The municipality allocates around €1 million annually to associations but does not set specific outcomes. For example, no report was submitted for the €195,000 granted to the Ogre Basketball Club in 2022, and the club was liquidated, making recovery impossible. Serious shortcomings were found in municipal agencies – the “Zilie Kalni” agency spent €34,115 meant for forest restoration on other purposes without council approval. Land lease transactions showed signs of conflict of interest: an agency employee’s company leased 100 square meters for €0.02 per year, while another company leased 10,000 square meters for €100 per year.
Remuneration, Debt Collection, and Social Enterprise
Illegal remuneration of €13,996 was calculated for performing duties of a abolished position, and bonus awards lacked clear criteria – only one out of 189 eligible employees received a bonus. Debt oversight is weak, with bad debts exceeding €1 million. The social enterprise “Ogres zelta liepa” received €133,000 but funds were used uneconomically, including a €10,000 tax debt and digital solution funds diverted to cover daily expenses. The State Audit has informed law enforcement agencies about fraud risk indicators and provided three recommendations to the Ogre council, to be implemented by 2031.
Municipal Objections
Before the audit’s publication, the Ogre municipality issued a statement claiming that the State Audit recognized some of its objections as justified, but not all were reflected in the final report. Council chairman Andris Krauja emphasizes that disagreements concern water tariffs – the municipality opposes including full depreciation of EU-funded water infrastructure in tariffs, as it would increase costs for residents. The municipality pledges to continue adhering to good governance principles and defending residents’ interests.
