Auditor: Rēzekne's financial issues will continue in 2024

Conditions in the city of Rēzekne suggest that financial problems for the municipality are also looming this year, State Auditor Edgars Korčagins told Latvian Television's broadcast "Today's Question" on January 3. 

Korčagins reiterated that the State Audit Office found a series of issues in its audit of the way the budget management process had taken place in Rēzekne. State Audit Office revealed that the city has EUR 13.7 million of non-reported financial liabilities, with resources for 3 months of 8.68 million missing from the city budget.

It is also known that funding for several projects of European Union funds was suspended for the municipality. “In cases where suspended funding will become not just suspended but withdrawn funding, then it is clear that the local government will have quite significant financial difficulties,” Korčagins added.

The Ministry of Finance has agreed with the local government that it will prepare the city's budget for the first reading by January 22. The Ministry of Finance will then approach the government with the creation of a special loan to ensure the operation of the municipality.

Finance Minister Arvils Ašeradens (New Unity) previously indicated that the municipality will not do without an emergency loan. Now Korčagins noted that potential emergency funding could amount to more than €3 million.

Similarly, the State Audit Office does not have information on whether Rēzekne has found a sworn auditor, which is mandatory for the local government to comply with the law. In particular, a sworn auditor is needed to accept an audit of the 2023 report, which, without an auditor, will not have credibility.

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