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The need for the for-grants provided by the Ministry of Finance and the General Accounting Office to be put under a rational regime, suggested the Chairman of the Parliamentary Audit Committee, Zacharias Koulias.
At today's meeting of the committee, the special report of the Audit Service on grace grants paid by the Ministry of Finance and the General Accounting Office was raised, with Auditor General Odysseus Michaelides raising the issue of a more proper accounting treatment of the grants, since many of them relate to the repayment of VAT debts to the state, particularly of donors.
"We do not express an opinion on this decision to exempt donors, it is a matter of political decision. The point is purely an accounting issue i.e. where the line item should be debited," he said, explaining that these donations should be recorded in the statements of the Tax Department.
However, Finance Ministry Director-General George Pantelis said that from 2023 the sponsorships of the Ministry of Finance and the General Accounting Office will be consolidated under the Ministry of Finance.
In 2021, the extraordinary sponsorships in the budget were €29 million, of which €25 million to finance the National Solidarity Fund, while the remaining €4 million was used to finance the National Solidarity Fund.
"This extraordinary sponsorship has finally become an institution and it is time to rethink this system and put it on a rational basis," Mr. Koulias, also adding that some people became like "subscribers."
According to Mr. Michaelides, the majority was related to the payment of value-added tax (VAT) debts mainly by donors (i.e. avoiding paying VAT in the context of charity). He noted that the Audit Service requested an opinion from the Legal Service on the correctness of the procedures followed and for covering debts of legal or natural persons to the state.
The Auditor General also noted that there is overlap since many natural or legal persons receive donations from other ministries. "It is not right that a legal entity is given to a legal entity by various ministries and it is done without being audited," he said.
A spokesperson for the Auditor General replied that amounts found to have been paid by other ministries have been recovered. It was reported in the meeting that the Minister of Interior and the Minister of Transport also have funds for sponsorship.
"State-owned" Rialto Theatre
At the same time, Mr. Michaelides said that the state should take over the management of the Rialto theatre in Limassol, since, he said, the theatre operates thanks to the sponsorship of the Ministry of Finance.
He said the Council of Ministers approved an annual grant of €250,000 for the years 2022-2024 to cover part of its operating costs, which until 2018 were covered by the Limassol Cooperative, while the theatre is housed in a building now owned by the state after it was transferred to the perimeter managed by the state-owned KEDIPES as the successor entity to the Cooperative. "We have them inside without rent, this is unacceptable," he said.
He also said that in 2021 a total of €455,934 was paid to the company by the Cultural Services, as an annual sponsorship and as a grant for the various events, state and non-state, and an increased sponsorship of €270,000 by the General Accounting Office, with the total sponsorship amounting to €725,934.
"This is a completely state-owned theatre. When something is maintained by the state, basically the state should have the administration, like the THOC," he said, with the committee chairman referring to "the Limassol THOC."
However, MPs argued the need for continued support for the Rialto in order for it to continue its cultural work.
In response, George Panteli said that sponsorships to the theatre are presented in the budget as recurring sponsorship, while this year it had more income because it was assigned increased events by the state.
Sponsorship with questions to the Assia National
In addition, Mr. Michaelides expressed questions about the sponsorship to the Ethnikos Assias club for the construction of a building in Strovolos, Nicosia, saying that a sponsorship of €170,000 was approved, while the first instalment of €59 was paid.000, without the state ensuring that the club has the financial resources to complete the construction of the building, and there is also a letter to the President of the Republic, asking for an additional €170,000 in sponsorship.
"You don't give money so that there are endless buildings."
"You don't give money so that there are endless buildings. We are concerned because the project has only progressed 23%. And the association does not submit audited statements which raises additional concerns about money laundering issues and so on," Michaelides said.
On this issue, the DG of the Ministry of Finance said the decision to support the association was taken in 1998, adding that half of the sponsorship was indeed paid, while the association did not proceed with the implementation of its commitments. "We will look into the matter further," he added.
Fire on State OPAP deal
In addition, the Auditor General criticised the State over the concession of assistance to OPAP to cover part of the purchase of masks, while he said no request for financial assistance was identified.
"OPAP makes contributions with taxpayers' money," he said, and criticised the State for the agreement with OPAP, from which, he said, the State loses €1 million a year.
As he said, "we get about €10 million a year when OPAP's turnover was €40 million, he said, adding that with the introduction of the KINO game it had shot up revenues to €200m
Source: CNA
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