BNAO will implement 335 audit tasks according to the adopted annual audit programme for 2022

The Bulgarian National Audit Office (BNAO) will implement 335 audit tasks according to the adopted annual audit programme for 2022. Among them, there are 285 audits of the annual financial statements of budget organisations and municipalities. The compliance audits for the financial management are 34 and they will review the legality of the management – compliance with normative and internal acts, public procurements, etc. There are 5 performance audits that will check whether public funds and activities are managed efficiently and effectively. There are 11 specific audits, which, along with the mandatory audit tasks under the NAO Act, include audits on trade companies and state-owned enterprises whose activity is of a great public interest and they are among the key focuses in the BNAO Annual Audit Programme for 2022.

The Programme envisages the following specific audits:

- Autotransport EAD. The company, whose sole owner of the capital is Sofia Municipality, reports an accumulated loss of over BGN 33 million as of 31.12.2020, which exceeds the share capital and receivables from related parties, including expected credit losses amounting to over BGN 10 million;

- State Enterprise "Port Infrastructure". For 2020, following a taxation, the loss of the company exceeds BGN 11 million, and it manages a significant public state property by amount and value.

- Bulgarian Development Bank (BDB) EAD. The BNAO audit on the activity of the Minister of Economy in exercising the state rights in companies with state participation in its capital identified that large enterprises are subject to a significant lending by the BDB amounting to nearly one-half of the BDB’s loan portfolio. The remunerations of the BDB Governing Board members exceed those in the Bulgarian National Bank.

- Saint Ekaterina University Multiprofile Hospital for Active Treatment EAD, Sofia. It has one hundred percent state share in its capital and is with a leading positions among the cardiological and cardiac surgical centers. This is the only hospital in Bulgaria granted a license for heart transplants. This audit is among the priority BNAO audit tasks, considering the fact that in Bulgaria, two out of every three people die from cardiovascular disease.

 - TPP Maritsa East 2 EAD. The sole owner of the capital is Bulgarian Energy Holding EAD. For 2020, the average number of the company staff amounts more than 2,300 people. As of December 31, 2020, the company reported nearly BGN 340 million in accounting loss before taxation, and the accumulated losses to this date exceed BGN 1.1 billion. There is an increased public interest taking into account the prices of electricity services.

- Audit of the activity of the Minister of Regional Development and Public Works for exercising the state rights regarding the commercial companies with state participation in their capital - 14 commercial companies with over 50 per cent state participation in their capital: 7 companies for water supply and sewerage; “Geoprotection” EOOD; “Automagistrali” EAD; Bulgarian Water and Sewerage Holding EAD; "Research Construction Institute - NISI" EOOD; National Center for Territorial Development EAD; Proinvex EOOD and Fund FLAG EAD. As of 01.06.2021, “General Directorate for Construction and Reconstruction” EAD has terminated its commercial activity and declared bankruptcy.

The selection of the BNAO audit tasks (besides the mandatory ones) is aimed at improvement of the management of public funds and activities. Among the criteria are: information about discrepancies, signals from third parties, possible negative consequences for society, indications of interest from the National Assembly. The increased public interest, the amount of public resources, the scope of public services are also taken into account.

For example, the planned performance audit "Optimization of the organization of the registers of the state administration" meets most of the above criteria. There are a total of 17,797 registers maintained in the state administration at central and territorial level as of 13 December 2017. More than 15,000 of them are related to the provision of administrative services, and the remaining ones - to other management activities. Almost 85% of the registers at central level do not allow automated data exchange. About 16 thousand registers identified of the territorial administration, almost 5% are maintined only in paper form, and over 80% are in formats that do not allow electronic data exchange.

The 2022 audit programme envisages 4 more significant performance audits:

- Ensuring continuity and quality of education in the system of preschool and school education in COVID-19 environment;

- European funds for research, innovation and digitalisation;

- The National Programme for Improving Maternal and Child Health 2021-2030;

- Priority Axis 1 under Operational Programme "Transport and Transport Infrastructure 2014-2020".

Among the financial management compliance audits are envisaged audits on: the Ministry of Science and Education; the State Agency for Refugees at the Council of Ministers; the Commission for Energy and Water Regulation, the State Agency for Bulgarians Abroad at the Council of Ministers; the Employment Agency, the Executive Agency “Maritime Administration”, the University of National and World Economy and the University of Mining and Geology "St. Ivan Rilski ”- Sofia.

The mandatory audit tasks under the NAO Act, under the the Law on Political Parties and the Election Code are:

- report on the implementation of the state budget of the Republic of Bulgaria;

- budgetary expenditures of the Bulgarian National Bank and their management;

- report on the implementation of the budget of the public social security scheme;

- report on the implementation of budget of the National Health Insurance Fund;

- financial activity and management of the property provided to the political parties;

- election campaigns for the parliamentary elections of 11 July and 14 November 2021 and for President and Vice-President on 14 November 2021.