Allegations of unjustified expenditures and violations of the Public Procurement Act by the former administration of Blagoevgrad  Municipality

The Anti-corruption Fund Foundation (ACF) alerted the Public Financial Inspection Agency (PFIA) regarding potential misuse of public funds and conflict of interest in the municipal company Blagoevgrad Invest 2016 EOOD.

The company paid remunerations totaling tens of thousands (BGN) to employees of the former Mayor of Blagoevgrad, Atanas Kambitov. In addition to the supplementary payments on consultant contracts and the expenses for electronic equipment amounting to tens of thousands (BGN), ACF identified indicators for serious violations of the Public Procurement Act by the municipal company.

ACF’s research includes an analysis of media publications disclosing the results of an inspection of Blagoevgrad Invest 2016, commissioned by Rumen Tomov, elected Mayor of Blagoevgrad Municipality in 2019. According to the report, prepared by the leading expert in Blagoevgrad Municipality following the inspection, in the period 2016 – 2017, a number of employees in the team of the former Mayor, Kambitov, as well as certain high-ranking officials in the Blagoevgrad Municipality, received bonus payments totaling BGN 221, 000.

This is the publicly available information regarding the paid amounts:
1. Hristina Borisova Shopova, Deputy Mayor – BGN 50, 600
2. Antoniya Metodieva, Head of Legal and Procurement – BGN 50, 600
3. Ivo Todorov Nikolov, Deputy Mayor – BGN 35, 600
4. Yanko Dimitrov Yankov, Deputy Mayor – BGN 35, 000
5. Zornitsa Kraleva-Toncheva, Deputy Mayor – BGN 35, 600
6. Tatyana Borisova Nikolova, Head of Accounting – BGN 5, 000
7. Stoyana Venchova Ivanova, Head of Finance and Budgeting – BGN 5, 000
8. Elena Trampova, Lead HR Expert – BGN 3, 000

According to the results of the commissioned inspection, the payments were for various services related to the execution of the National Energy Efficiency Action Plan (NEEAP). However, the annual reports of the company do not contain any information about contracts signed with firms under the NEEAP.

“We are hoping that the PFIA inspection will identify on what grounds Blagoevgrad Invest 2016 paid remunerations for services under the NEEAP when no contracts were signed,” said Boyko Stankushev, Director of ACF. “Having in mind that the company is 100% owned by the municipality, it appears that the municipality used it to make bonus payments to selected officials in addition to their monthly salaries. It should also be determined whether there is a conflict of interest in this case.”

Furthermore, media publications share evidence of excessive and unjustified expenditures of public funds for luxury electronic devices. For instance, the former Deputy Mayor, Hristina Shopova, was given mobile phones and tablets worth over BGN 16, 300 within a period of two years. The total amount goes over BGN 20, 000 upon adding the devices given to the Head of the Legal and Public Procurement Department, Antoniya Metodieva.

“We only have information concerning two of the officials in Mr Kambitov’s administration, but even this information indicates practices that contravene the adopted standards for integrity and protection of the public interest,” Mr Stankushev said.

The ACF team was even more concerned about a number of contracts signed between Blagoevgrad Invest 2016 and certain private companies without conducting procurement orders in accordance with the Public Procurement Act (PPA). Based on the information from the inspection report, these include:

– several contracts with Extra Color EOOD for repair works on daycare facilities, parks, and playgrounds in 2016 and 2017, the payments for which amount to BGN 462, 574;
– contracts for repair works on two buildings in the area of the Blagoevgrad barracks, signed in 2017 with Urban Green EOOD for the total price of BGN 310, 400;
– contracts for financing the concerts during the Frankofolie Music Festival and BG RADIO concerts for the period 2017 – 2019, amounting to BGN 460, 742 and signed with only two companies — Stage Masters EOOD which received BGN 400, 742 in total and Muzikalen Center Ikonomov OOD who were paid BGN 60, 000.

Stage Masters EOOD was paid BGN 82, 450 to build a stage for the BG RADIO concert that took place on 16 June 2017. Only a day later, the same company was paid another BGN 87, 300 to build a stage for the Frankofolie Music Festival on the exact same location. This means that two contracts for the total amount of BGN 169, 750 were concluded on two consecutive days with the same company for the building of the same stage at the exact same location.

Another disconcerting fact is that the contracts for the professional lighting and sound at the Frankofolie Music Festival were assigned to the mentioned companies twice. This practice of duplicating contracts and transferring public funds to a particular circle of companies was identified as a recurring operation strategy of Blagoevgrad Invest 2016 by the inspectors. The company entered into contracts with firms without seeking multiple offers, which made free competition impossible.
“We urge PFIA to perform an inspection and exercise control over the expenditure of public funds by the municipal company Blagoevgrad Invest 2016, paying special attention to all circumstances indicating unjustified and excessive expenses, lack of accountability and appropriate control by the municipal administration, as well as other potential violations,” Mr Stankushev said.