Experts from the Bulgarian National Audit Office and the World Bank: lack of specialists in the municipalities obstructs public procurement

A working meeting with experts from the World Bank was held at the Bulgarian National Audit Office on 19 February 2025.  The topic of the meeting was "Municipal Administration Performance and Capacity Assessment Framework" in connection with the sub-national Public Finance Review in Bulgaria (PFR) and the Municipal Administration Performance and Capacity Assessment Framework (MAPCAF).

The meeting was attended by public sector specialists from the World Bank: Anya Vodopyanov, Izabella Barati, Jonas Fallov, Pedro Arizti and Dragos Dinu. The Bulgarian National Audit Office was represented by experts in the field of compliance audits of financial management and financial audits – Teodora Bakardzhieva-Lyutskanova, Velislava Valkova, Toma Donchev and Svetoslava Enimaneva.

A number of issues related to the management of investments by the municipalities, human resources management and local tax collection were discussed. Revenue management and public procurement were identified as major challenges at the meeting.

Public procurement is a problem due to the complex legal framework and the frequent changes in it. The audits carried out identified deviations in the planning and award of public procurement.

It was noted that the municipalities face difficulties in applying for projects funded by the European Union. The requirements to be met by the municipalities are complex and there is a lack of experts to prepare the applications according to the established rules. The admission of deficiencies leads to financial corrections in project reporting. Municipalities use external consultants to solve these problems.

The collection of local taxes and fees in the municipalities is gradually improving, but is still not at a satisfactory level. Companies contribute to the majority of unpaid local taxes and fees. It was recalled that the methodology for determining tax assessments in the municipalities has not been updated for many years. A new methodology for the municipal waste tax is to be implemented.

The issue of the Internal Audit units in the municipalities was raised. The representatives of the Bulgarian National Audit Office noted that not all municipalities have appointed internal auditors.

Regarding the recruitment policy, the Bulgarian National Audit Office experts confirmed that the municipalities follow the procedures. The municipal administrations adhere to the legal requirements when recruiting both civil servants and employees under labour law. There is a problem of building sustainable staff capacity in the municipalities. In small localities, recruitment and retention of qualified staff is a problem, which affects the quality of the performance of the municipalities.

Other specific issues related to the audits of the municipalities in Bulgaria and the Bulgarian legislation in this area were also discussed.