The Ministry has prepared an informative report to the government on the financial situation of the municipality of Rēzekne city and a state budget loan for stabilization of the financial situation.
According to the Ministry, the City Council has created risks to the solvency of the local government.
State Audit Office has said that it, too, has been unable to obtain convincing and reliable information regarding the budget hole of the Rēzekne city in 2023.
State Audit Office has detected violations of several laws and regulations in the audit, including significant deficiencies in the budget implementation and control process, fragmented budget management, as well as deficiencies in the management of investment projects.
In order for residents of Rēzekne not to suffer from the actions of the local government and to restore financial stability in the long term, the FM report encourages the local government to be granted a loan of up to EUR 5 million for the fulfillment of the commitments made.
The proposed solution provides strict conditions for granting State budget support (loan) and supervision of responsible ministries.
If the local government does not cooperate and there is no progress in stabilizing the financial situation, or until February 21, 2024, a balanced budget for 2024 has not been adopted by the city council, the FM will ask the Ministry of Environmental Protection and Regional Development to evaluate the responsibility of the council, which could lead to its dismissal.
