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The Senasis turgus municipal company was operating at a loss last year and the company was managed inefficiently. The then head of the market, Arvydas Gaudiešius, may have repeatedly confused public and private interests not only by half buying a government car, but also by renting his market facilities to his private company. This was made clear during the audit of the municipal controllers.
The report includes eloquent figures.
The sole shareholder of the company “Senasis turgus” – municipality of the city of Klaipeda for 2019 did not receive dividends from this company, not just one euro.
Last year, the “Old Market” operating loss exceeded 18,000. Although the market made a profit of 2,581 euros last year.
More than half (55%) of the company’s total expenses last year were wages.
14 of the 24 measures planned for 2018-2019 to achieve the established objectives were not implemented in the company and three real estate objects were not inventoried.
“The profitability of Senegal turgus net sales was positive only in 2018 (when the company made a profit), but even then every euro of the company’s sales brought in just 1 cent of net profit. Very low return on assets reveals that the company does not use its own funds efficiently and actively, “said the municipal controllers who carried out the audit.
Coincidence: Probably feeling that auditing municipal controllers will cause many inconvenient problems, A. Gaudiešius, director of the company “Senasis turgus”, resigned before the expiration of the employment contract. (Photo by Vytautas Petrikas)
Car scandal
Problems of “Old Market” activity began to emerge when the municipal Control and Audit Service began an investigation in early January this year, when it received a complaint about the actions of market manager A. Gaudiešius.
The complaint provides information that the director of the company continues to use the same car after the expiration of the Škoda Superb car lease.
And this suggested that he had bought this car for the residual value himself or a person close to him.
The worst part is that impunity also presupposes inappropriate behavior on the part of others.
“It was established that during the Board meeting on October 25, 2013, the head of the Old Market could rent and, if possible, buy a car by leasing,” wrote municipal controller Daiva Čeporiūtė to the Control Committee.
An examination of the payments made by the institution revealed that as of 2014. March to 2019 In April, under the car’s operating lease, the company paid 21.4 thousand. euros
The amount is almost equal to the value of the car.
At the conclusion of the automobile operating lease, a repurchase agreement was signed the same day, which states that after the expiration of the lease for the stated repurchase price – 5.8 thousand. The bank will offer a pre-emptive right to buy back the car to a company whose details are not available for some reason.
The municipal ombudsman said a buyback agreement is generally not concluded when a lease is signed, which has raised suspicions.
2019 April 19 The Old Market delivered the car to the bank-named buyer Company X.
And after 11 days he sold that car to the company “Alkas”, whose manager is A. Gaudiešius himself.
The operating lease establishes: the residual value of the property – 6 thousand. euros
Dilemma: The Municipal Control Committee will have to decide if someone will have to answer for the Old Market municipal loss company. (Photo by Vytautas Petrikas)
The inspector had doubts about whether the car was also used for purposes unrelated to the company’s activities.
After evaluating the facts and established accounting documents, in the opinion of the Office of the Controller, the method chosen to purchase the car was not favorable to the company, since the company spent 2,345 euros only on insurance and another 4,132 euros on maintenance.
“It can be concluded that the transaction made by the company” Senasis turgus “regarding the leasing of the automobile activity did not comply with the principles of rational, economic and efficient management of assets,” writes D. Čeporiūtė to the Control Committee.
It establishes that A. Gaudiešius did not agree with the conclusions of the Control and Audit Service and explained that it did not violate the legal acts.
It was after this investigation that it was decided to carry out an audit of the Old Market, which revealed even more “subtleties” in the management of the municipal company.
Leased to your company
When an audit report was also submitted two years ago to the Control Committee, which analyzed the use of official cars in the municipality of Klaipėda, it was revealed for the first time that the Old Market uses a car driven by the director under a lease agreement. operational.
The auditors had already pointed out at the time that the head of the Old Market was headed by another private legal entity, but that this had not been stated in the declaration of interests.
Furthermore, A. Gaudiešius, as manager of the “Old Market”, had concluded a sublease contract for the same car with a private company under his administration, the representative of which is the wife of A. Gaudiešius.
The auditors were also impressed by the fact that in 2017, when the car was used for non-commercial purposes, fuel costs (€ 326) were recorded in Old Market accounts as operating costs.
Then, two years ago, the municipal ombudsman recommended ending the sublet and declaring interests.
However, this was not done. Now, after an audit of the activities of the Old Market, something else has been identified.
“Analyzing the agreements concluded with the merchants, it was established that on September 30, 2015 the company” Senasis turgus “also entered into a lease with the company” Alkas “of the then manager A. Gaudiešius. Before concluding the lease , the leased part of the room was repaired. (repair value EUR 8,000 VAT included), “states the audit report.
Defenders of the town further added that the lease of the premises to Alkas was approved at a meeting of the Old Market board.
It is alleged that said company is adequately fulfilling its contractual obligations.
Does it improve the image of the market?
On what basis was the lease of the Old Market premises signed with Alku?
How did the Old Market benefit from this?
Does Alkas continue to rent these premises in the market? Has the market paid at least with the rent of the company “Alkas”?
Were there no differences between public and private interests at the end of the lease?
“The empty, abandoned and unused part of the room was repaired and equipped with 2 commercial spaces. It was not repaired especially for any particular company. The objective was to improve the image of the abandoned market, demonstrating that even the Old Market can have a attractive image and attract new merchants and increase buyers. flows “, – explained A. Gaudiešius.
According to the former market director, the repair costs have been worthwhile and exceeded the installation costs even with the rental of a commercial space.
“Another equipped commercial space is vacant, which can be rented by anyone who wants it,” added Gaudiešius.
However, if A. Gaudiešius did not see the intersection of his own public and private interests in this local rental story, he did not respond.
He left early
A. Gaudiešius, the director of a company owned by the municipality, left his job three weeks before (at the end of February 2020) that his employment contract expired.
It is possible that this withdrawal is related to an investigation carried out by the Control and Audit Service “on the possible loss of municipal funds.”
The board of the company “Senasis turgus” then complied with the decision regarding A. Gaudiešius’ request to resign immediately.
However, even then, A. Gaudiešius, who was interviewed by the newspaper, did not open up too much, prompting him to leave before the deadline.
“I am retiring, because the employment contract ends on March 20. So I decided to leave. Thank you, everything, there will be no further comments,” said A. Gaudiešius.
It was now clear that there were probably serious reasons for this, as the recent audit revealed.
This time, A. Gaudiešius was also speechless at first, when he heard reporters calling, he simply said “Thank you, thank you, thank you” and ended the connection.
After several days of trying to contact the former market director by public phone, A. Gaudiešius then sent written explanations about the salon repair and the rental of the premises.
The contracts are questionable.
The audit also revealed more oddities in Old Market activities.
2014 May 5 The municipal company entered into an accounting agreement with a private company. The value of the contract is 1,013 euros per month.
According to the drivers, this contract does not specify what specific functions it will perform.
In the “Old Market” there was an accountant-accountant position, which also provided functions related to accounting management.
2016 April 15 A contract was signed for the provision of legal services with a private company at a price of 150 euros per month plus VAT.
Neither the current director nor the manager of the company “Senasis turgus” could explain the services and how often they were provided.
The auditors questioned whether such continued legal services were necessary for the company.
The contract for the provision of legal services ends on March 30 of this year.
Didn’t pay himself bonuses
Judging from the audit documents, the Old Market did not become a dream job for ordinary company employees.
At the beginning of 2018, there were 15 of them in the company “Senasis turgus”. at the end – 13.
Last year, the payment terms for employees in 4 markets changed, although no changes were made to employment contracts.
During the audited period, 12 employment contracts were terminated in the Old Market.
In all cases, only layoffs were paid for unused annual leave in the event of layoffs.
In one case, the employment contract was terminated at the employee’s initiative for important reasons, but the dismissed employee was not paid severance pay of two average wages, which violates the provisions of the Labor Code regarding the payment of severance pay. by dismissal. This was stated during the audit.
The salary of the then head of the Old Bazaar was last approved in 2015, when from October 1. it was decided to pay him a monthly salary of 1,750 euros.
The remuneration of the market manager was fixed, regardless of the performance of the company and the achievement of the established objectives (in 2017 the company incurred a loss of 33 thousand euros, in 2018 a small profit was achieved, in 2019 it was operating with losses again).
It is true that no bonuses or bonuses were paid to the manager during the audited period.
“The remuneration of the head of the company was not linked to performance, which does not promote the effective implementation of the tasks,” the audit documents state.
Did the blackboard imitate the work?
After this audit, Klaipėda’s municipal controller, D.Čeporiūtė, admitted that there is a lack of control and efficiency in the management of municipal companies.
“Boards of companies should work harder. Only after the audit, something moves, and until then only the reports are formally approved, and much of what is hidden within them is not seen. There is a lack of transparency and efficiency of company control, “said D. Čeporiūtė.
She also received the support of Elida Mantulova, vice-president of the Control Committee, who recognized that the role of collegiate management bodies in municipal institutions should be more significant.
Elida Mantulova / Editorial Stock Photo
“Until now, the municipality only recognizes the consequences of a failed management, but it does not manage its assets. And we should start managing, and then there would be no consequences that would lead to sometimes painful, sometimes unpopular decisions. The worst part is that the impunity presupposes the misconduct of others. ” – said E. Mantulova.
In accordance with the Statutes of the company “Senasis turgus”, the Board is made up of 3 members, but as of 2019. From the beginning of January to the end of September, the company’s board of directors consisted of only two members, one of which was A. Gaudiešius, the head of the Old Bazaar.
In other words, the market manager controlled his own work.
Is it possible to recover damages?
Ms Mantulova believes that the damage possibly caused by the former market manager to the municipal company could only be claimed if it was shown that the damage was and was done intentionally.
“The existence of damages is not the only circumstance that can be the subject of a civil action. We hope that the findings of the audit in the Old Market will be presented to the Control Committee, as well as to the market management bodies: the board and the board of shareholders represented by the director of the municipal administration, the authorities should decide what measures to take to recover the damage, if applicable, “explained Ms Mululova.
On Tuesday, the results of the audit in the Old Market will be presented to the Municipal Control Committee, which will decide what to do next.
It is too early to say what decisions will be made, because until now politicians have seen no direct link between the Old Market economic assessment and the damage.
After A. Gaudiešis resigned, Vyacheslav Karmanov, the director of another municipal company, Naujasis turgus, took over the management of the Old Market from the beginning of March. He is convinced that the market in the city center can operate profitably.
“All we have to do is kick-start marketing and check prices. The old market must be geared towards tourism and vacations. We are trying to revive the old market, we have attracted a dozen more farmers with our products. But we do not expect earnings yet, it will recover, it will be another time, “predicted V. Karmanov.
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