State Audit: At least €443,000 misspent in Ogre municipality, fraud risks found

The State Audit of Latvia has finalized an audit of Ogre municipality, finding significant shortcomings in public fund management. At least €443,000 was spent in violation of regulatory requirements. The audit also identified signs of fraud risk in procurement and funding allocations to associations, which have been reported to law enforcement authorities.

During the audit, the State Audit faced difficulties obtaining complete information from the municipality. Some documents used later for objections were submitted only after the draft audit report was prepared.

Development planning and project oversight were found to be inadequate. Investment decisions were not always based on residents' needs. For example, although surveys indicated infrastructure as a priority, only 6% of activities and 1% of projects were allocated to this area. Meanwhile, cultural infrastructure funding is set to quadruple, including €23.3 million for the Ogre Musical Theatre project. From 2022 to September 2025, 41% of projects worth €34.7 million were not implemented.

Procurement processes lacked transparency and competition. Documentation was incomplete, and some purchases were made from suppliers other than the winners, violating the Public Procurement Law. Conflicts of interest were also identified, e.g., a deputy participated in decisions to fund an association he had founded.

Municipal agencies showed serious financial mismanagement. The agency "Zilie kalni" spent €34,115 intended for forest restoration without council approval. Land lease transactions showed signs of conflict of interest.

Remuneration practices were flawed, with illegal payments of €13,996 and unclear bonus criteria. Debt management was insufficient, with bad debts exceeding €1 million.

Funding of €133,000 to the social enterprise "Ogres Zelta liepa" was used uneconomically, with part of digital solutions funds covering everyday expenses.

The State Audit has issued three recommendations, to be implemented by 2031, to improve governance quality and transparency.