One of the most important organs, which helps in a effective and efficient management of public funds, is the Supreme State Audit (SSA). Under the Article no. 162 of the Constitution of the Republic of Albania, SSA is the highest body of economic and financial control. It controls the economic activity of the public institutions and public legal persons, the use and protection of the state funds by the central and local government and also the economic activity of other legal entities, in which the state owns more than half of the stocks .

In this way, SSA controls if public funds are used in accordance with the law and effectively , it gives recommendations for measures if it finds irregularities or violations of the law and procedures , and also reports on the usage of public funds from the controlled entities .

According to these functions, Open Data Albania has conducted a research on the economic and financial damage reported by SSA, which was caused to the state budget in the 2008-2012 period. The following chart provides an overview showing the damage in absolute terms and as a% of the GDP and total expenditure of the budget for each year.

Source : Supreme State Audit, Ministry of Finance, the Council of Ministers
Processing and comments: ODA

2012 marks the year with the highest economic damage for the entire period takes under consideration , with about 13.5 billion ALL, while 2010 stands out as the year with less damage identified with about  1.6 billion ALL, disrupting the generally increasing trend of damage reported by SSA .

The company that seems to have influenced more the performance of this indicator over the years is Albpetrol JSC , which is estimated to have caused consistently a high damage to the Budget . Thus, in 2009, the damage from this company was about 2.6 billion ALL or about 35 % of the total damage reported for that year. In 2011, the damage from Albpetrol JSC was estimated at 3.9 billion ALL, or about 55 % of the total damage, while in 2012, the damage came to 9.1 billion, or 67.3 % of the total economic damage. And in fact, in 2010, which is also the year with the lowest economic damage coincides with the zero damage reported by SSA, resulting from monitoring the internal audit office of this company.

KESH is the second company that has had its share of influence in the economic damage to the state budget. For 2012, the economic damage resulting from the unpaid contractual obligations to KESH was approximately 2.4 billion or about 17 % of the total damage. This means that the damage that KESH JSC and Albpetrol JSC have caused together is about 86 % of all economic damage in 2012, with a total of 11.5 billion, or 1 % of GDP and 3.5 % of the total expenditures of the budget for this year.

And in 2011 , the damage caused to the Power Transmission Operator ( TSO ) from the lack of liquidation for the transmission of electricity service for the period from privatization of OSSH was 1.92 billion, to which, if added the damage from Albpetrol , the value constitute to 83.4 % of total damage.

In these conditions, it seems that the leading cause of the high economic damage has been the mismanagement of joint stock companies, therefore, a increased control of responsibility   in the management of these two sectors and related companies is set as urgent for a effective management of public funds in the country and the reduce of the economic damage to the state budget .

  1. Article no. 163 of the Constitution of the Republic of Albania. Legislative Basis of SSA is complemented by Law no. 8270, dated 23.12.1997 “On the Supreme State Audit”, as amended by Law no. 8599, dated 01.06.2000. In the Article no. 7 of this law the tasks of this institution are listed.
  2. Law no. 8270, dated 23.12.1997 “On the Supreme State Audit”, as amended by Law no. 8599, dated 01.06.2000, Article 6.
  3. Law no. 8270, dated 23.12.1997 “On the Supreme State Audit”, as amended by Law no. 8599, dated 01.06.2000, Article 16.
  4. Law no. 8270, dated 23.12.1997 “On the Supreme State Audit”, as amended by Law no. 8599, dated 01.06.2000, Article 8.
  5. The data on the economic damage for the years 2008-2012 were obtained from the SSA Annual Report for each  respective year

Total expenditure data for the State Budget were obtained from the Fiscal Bulletin of the last 4 months of each year.

The GDP data refer to DCM. No.1, dated 23.01.2013 “On the approval of the macroeconomic and fiscal framework for the period 2014-2016”.