Axed teacher academy doles out €1.4m in bonuses after liquidation

Employees of the state-owned Riga Teacher Training and Education Management Academy were paid €1.4 million in premiums and bonuses shortly after the government’s decision to reorganize the academy by merging it with the University of Latvia. The Education Ministry has asked prosecutors and anti-graft officials to start a probe.

Treasury data shows that Riga Teacher Training and Education Management Academy’s expenditure were planned at €6,713,468 for 2017, with €2,021,908 of that amount earmarked for extra payments, bonuses and premiums, which means that the teacher academy planned to spend about third of its annual expenditure on this purpose.

The practice to earmark a very large part of budget expenditure for premiums and bonuses is not commonplace among Latvian universities.

According to information from the Treasury, the average percentage of budget expenditures earmarked by institutions of higher education for premiums and bonuses ranged between 0 percent and 2.42% in April 2017, while Riga Teacher Training and Education Management Academy had earmarked 30.12% of its April expenditure for this purpose. This is nearly 22 times more than planned by other institutions of higher education.

In monetary terms, the amount of money earmarked by Riga Teacher Training and Education Management Academy for premiums and bonuses was also the highest among Latvia’s institutions of higher education and reached €2.021 million. The academy’s total expenditures have been projected at €6.713 in 2017.

Latvia's largest university, the University of Latvia, by comparison, plans to spend €83.952 million this year, with €1.243 million of that amount earmarked for premiums and bonuses, which is 1.6 times less than planned by the teacher academy.

The Education and Science Ministry has filed applications with the Prosecutor General’s Office and the Corruption Prevention Bureau (KNAB) asking the law enforcement agencies to assess the lawfulness of the premiums of bonuses paid to the teacher academy’s employees.

Education and Science Minister Karlis Sadurskis (Unity) told LETA that last year the teacher academy signed a collective agreement with its trade union. Under this agreement, the academy’s employees are entitled to monetary rewards in the size of one monthly salary per each year of work in case of the academy’s liquidation.

Sadurskis said that there are many respectable people among the teacher academy’s staff that have been working at the academy for much of their life and deserve to be rewarded, but that the bonuses were paid based only one criterion – the number of years worked for the academy.

The minister said that Riga Teacher Training and Education Management Academy is a state-owned institution and not a private higher education institution, but that by paying out nearly €1.4 million in premiums and bonuses to the employees, the academy has acted like a private, not a government company would.

“Although the money paid in monetary prizes is not budget money, the academy has earned its revenues exercising the rights and using resources granted by the state,” Sadurskis argued.

The minister said that in order to assess the legality of these payments, the Education and Science Ministry has filed a request with the Prosecutor General’s Office and KNAB to conduct an inquiry over possible violations of legislative acts or offenses.

“I believe that rector [Daina Voita] did not have the authority to conclude such a collective agreement. Once it has been signed, everything is in accordance with the agreement of course. What is not clear is the motivation for paying the bonuses,” Sadurskis said, adding that most of the former teacher academy’s employees will continue work at the University of Latvia and that the bonuses therefore cannot be considered severance pay.

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