Financial Services, Latvia, Legislation, Real Estate

The two valuable properties – an office building at 46 Jomas Street and land plot at 12 Pilsonu Street – were sold in 2012, as the Audit Office's public relations officer Ilva Liepina-Milzaraja told LETA.

The agency said high maintenance costs was the reason for selling the properties. Both properties were sold at half-price, or for half the original price. One of the properties was then resold several times, with the price reaching the original price set by the agency. This means that the state has lost over EUR 1 million from the sale of the properties. The Audit Office notes that selling the properties also went against the Cabinet of Ministers' decision that the properties were to be kept as security for the agency's credit liabilities.

The Audit Office also criticizes the Justice Ministry that approved the sale of the properties by saying it did not need them. The Audit Office will turn to the authorities asking that actions of the officials involved in the case be investigated.

The Audit Office has also found out that more than half of properties rented out by Tiesu Namu Agentura generate losses, not profit, and these losses are covered at the expense of the state budget.

According to the Audit Office's findings, 67% of properties rented out by Tiesu Namu Agentura are unprofitable, and in some cases maintenance costs exceed rent by up to 60%. The agency compensates part of these losses by charging disproportionately high rent on the remaining one-third of properties it rents out.

The Audit Office points out that, given that 95% of these properties are rented by other state institutions, such a situation is unacceptable and solutions have to be found.

At the same time, the Audit Office notes several positive developments at Tiesu Namu Agentura in areas where other state-owned companies struggle – justification of costs, procurement procedures, and others.