Giorgi Vashadze, a member of the parliament minority asked Auditor General Irakli Mekvabishvili about the current practice of auditing state-owned enterprises on the example of Georgian Railway at the meeting of the Budget and Finance Committee.
“State-owned enterprises are big headache for the state. Have you audited Georgian Railway or are not they let you in?” - the MP asked.
Irakli Mekvabishvili replied that the Georgian Railway and the State Audit Office had a legal dispute over this issue.
“Georgian Railway considered that the State Audit Office did not have the right to check this organization and we had a legal dispute”, - said Auditor General.
Irakli Mekvabishvili explains, that Georgian Railway has declared that the audit is conducted in this organization by Deloitte, Ernst & Young, KFMG, and PricewaterhouseCoopers.
Mekvabishvili noted that the same situation was at State Electrosystem, but the issued was solved legally.
“We started inspecting state-owned companies and checked the State Electricsystem, the United Water Supply Company, the Mountain Resorts Development Company, the Georgian Post and the Republic Hospital.
As for the Georgian Railway, as I mentioned, we had a legal problem. The argument of Georgian Railway on why we could not check them as that organization was inspected by Big Four audit firms.
We believe that we have the right to inspect any state organization where the state holds 50 + 1 shares. The legal process has slowed down the inspection procedure, we are now making formalizing and getting back to this topic.
The situation was similar with the State Electrosystem, where we won lawsuits and then gained the right to inspect that organization. There were a lot of findings and the report was sent to the investigative agencies," Irakli Mekvabishvili said.
Giorgi Vashadze talked about the budget loss caused by Georgian Railway.
“Georgian Railway suffered a loss of 1.264 billion GEL since 2015, before that the railway had a profit. After 2015 something catastrophic happened that we lost that amount. We, the citizens of Georgia, have suffered a loss of 1.2 billion on our own railway. In 2018 alone, we received a loss of GEL 715 million. This is our money and we have all suffered this damage. I wonder what is happening in other state-owned enterprises? Is there the same practice in other state-owned enterprises do not you allow to conduct the audit, if only the railway has the exclusive right to impoverish the country and not allow you to enter ?!" - said the MP.
