Following the publication of the newspaper Phileleftheros dated. 21.1.2023, in which excerpts from a letter dated 21.1.2023 were published. 19.1.2023 of the Ministry of Finance to the Attorney General, today the letter has been posted in its entirety on the Stockwatch website. Although the letter states that our Department is included among its recipients, we have yet to receive it. In any case, it raises three important issues which we consider necessary to comment on:
a. On 2 January 2023, we informed the Attorney General of the possibility of committing criminal or civil offences in connection with the award by the Ministry of Finance of two contracts with financial consultants, one in November 2021 and one in July 2022, without available funds and by direct award, without an open tender, in violation of the relevant public procurement legislation. The relevant decisions were taken by the Minister of Finance and the Director General of his Ministry.
From the letter of the Ministry of Finance dated. 19.1.2023 shows that the Ministry, in October 2022, i.e. after we first raised the issue of the illegal direct award of the two contracts, obtained an opinion from the Attorney General of the Republic that the direct award was legal.
Already in our letter dated 19.1.2023, the Ministry of Finance and the Attorney General of the Republic issued an opinion that the direct award was legal.
Already in our letter dated 19.1.2023, the Ministry of Finance and the Attorney General of the Republic issued an opinion that the direct award was legal. 2.1.2023 we had recorded claims by the Ministry of Finance that at the material time of the conclusion of the two contracts they also had the consent of the Attorney General for this direct award. Indeed, this is included in a joint statement by the Departments of Treasury and Transportation dated. 27.9.2022.
What is confirmed by the letter of the Ministry of Finance is that the Attorney General is invited to investigate possible criminal offences of the directors of the Ministry of Finance who, however, acted on the basis of his own guidance and/or his own ex post facto cover.
The documentation of the illegality of the direct award is set out in paragraph 3 of our letter dated [URL=HTTPS:/WWW.PIO.GOV.CY/ASSETS/PDF/NEWSROOM/2023/01/20230123-ELEGKTIKIYPIRESIA_EPISTOLIGENELEGKTI_AEROLIMENES.PDF]. 2.1.2023 which is made public today.
Since the Attorney General obviously cannot objectively examine the matter and since the second award of €191,238 concerns a public contract which, based on the relevant legislation, should, due to its amount, have been advertised at European level, we will forward a complaint to the European Commission about the illegal direct award.
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In his letter dated. 19.1.2023, the Ministry of Finance lies about securing funds before signing the two contracts.
It is an undisputed fact that the Ministry of Finance signed two service contracts, the first (dated 18.11.2021) with the audit firm Ernst Young for €80,000 and the second (dated 14.7.2022) with the audit firm PwC for €191,238, without having secured the available funds beforehand.
It is an undisputed fact that the Ministry of Finance signed two service contracts, the first (dated 18.11.2021) with the audit firm Ernst Young for €80,000 and the second (dated 14.7.2022) with the audit firm PwC for €191,238, without having secured the available funds beforehand. In particular, the two contracts were signed while the necessary appropriations were committed in the State Budget. In the first case, the request for release was submitted to the relevant Parliamentary Finance and Budget Committee ex-post on 1.12.2021 and approval was given by the Committee on 7.12.2021. In the second case, the request for release was submitted retrospectively on 8.9.2022 and was never approved by that Committee. In neither of the two cases did the Ministry of Finance inform the Commission in question that the contracts for which it was seeking release of funds had already been signed.
The fact that, as the Ministry of Finance informs us, PwC has decided not to claim its accruals does not correct the problem but makes it even more serious.
c. The Ministry of Finance complains to us because in our oral briefing to the Parliamentary Committee on Finance and Budget we thought it appropriate to mention to it that any amendment to a public contract by definition involves risks of corruption issues, which risks increase the larger the amendment. In this case, the amendment with the management company concerns a direct award of work with gross revenues of €1.5 billion. The size is colossal. We also thought it appropriate to inform the Commission, so that it has a full picture, that an executive of Hermes had admitted in 2015 in the SAPA scandal that he had given kickbacks and that a draft of our report to the Ministry of Transport had been shared by them with Hermes without this being foreseen in the procedure. We stressed that in no way do we accuse the company or its executives or anyone else of corruption, but that, as auditors, we must always, when conducting an audit, adequately assess the risks that exist in order to take them into account when planning and conducting the audit.
The Ministry of Finance therefore denounces us for having informed the competent committee on these matters, which, of its own accord, had asked us for information. 21.1.2023[/URL].
We only add that, from their letter dated. 19.1.2023 that we now read, it appears that this unsubstantiated complaint against us relates only to events of September 2022 and not to any subsequent event. One wonders therefore why this was not filed then but two weeks after our complaint. Obviously for the reasons we have already explained: The "accused are being turned into accusers" on the basis of unsubstantiated allegations that constitute a "smokescreen and disorientation".
(MB/IK)
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