Audit of the Ministry of Culture Reveals Abuses for Hundreds of Thousands of Levs Mind the horns!

Bulgaria’s National Security Agency (DANS) and the prosecution are on the lookout for the mayor of Nedelino, Stoyan Beshirov, because they want to prosecute him, announced recently the Chief Prosecutor’s Office. The grounds – repairs that have been invoiced on paper, but never carried out, as a journalistic investigation of Nova TV showed.

Invoiced, but outstanding repairs for hundreds of thousands of levs have been established by auditors of the Ministry of Culture at the National Museum of Bulgarian Fine Arts. The repairs have been carried out during the previous term in office of Vezhdi Rashidov. However, the audit reports are now “aging” under two governments, instead of DANS and the prosecution dealing with Rashidov, who recently solemnly moved into the ministerial office for a second term.

The scandal broke as early as 2011, after a publication in the Bulgarian “Trud” (Labor) daily under the headline “Jobbery with EU Funds Covered the Palace’s Floors with Laminate …” It emerged then that the designer – architect Konstantin Peev, a favorite in a number of bids of the Ministry of Culture – has been given 300,000 levs, which could have been spent on repairs.

The true amount of the damage, however, becomes crystal clear from the unpublished expert report and audit that Bivol obtained. The audit and the supporting expert report have been submitted in the summer of 2013. From what we read in them, we understand that in addition to the designer, the contractor also robbed the State through poor-quality repairs, which the construction supervision subsequently approved.

On February 23, 2010, a contract to implement the project ”Overhaul and Reconstruction of the Bulgarian National Museum of Fine Arts” has been signed between the Ministry of Regional Development and Public Works, represented by Minister Lilyana Pavlova, and the Ministry of Culture, represented by Vezhdi Rashidov. According to Article 1, item 1.4, the beneficiary – the Ministry of Culture – shall execute planned project activities accurately, in a timely manner and through quality works. The total eligible costs amounted to 3,625,196.12 levs.

Once the documentation was prepared, the consortium “BIGLA III – EVROPLAM” was selected to perform the repairs under the project of the company “ECSA” JSC. The supervision of construction works was assigned to “MODULE H” LTD. Under the contract, the repairs had to be completed within 49 calendar days from the date of the opening of the construction site. The documents seem more than fine, but alas, in reality, things are very different.

According to the documents, available to us, once the legal and predetermined deadline for repairs in the Bulgarian National Museum of Fine Arts (the former royal palace in Sofia) expired, an expertise and an audit have been conducted. The goal has been to assess the quality of the works and the compliance of the activities planned in the contract with the real ones. The expert reports of the individuals, who carried out the inspection, respectively Architects Stefka Stoyanova Stoyanova and Katya Stoyanova Drinova and the ”Internal Audit” unit of the Ministry of Culture, represented by its Head Nikolay Dulyanov, and Liliya Georgieva, Chief Internal Auditor, reveal huge discrepancies between the contractual agreement and the on-site work. The conclusions of the experts are that a significant part of the allocated amount had ”disappeared” because the repairs were carried out partially. However, the provided funds have been disbursed. The audit documents found numerous deficiencies:

The restroom for disabled people is unusable and has been turned into storage. 19, 114.55 levs have been invoiced for its repair. The inspection of the site found that construction activities on the facade of the building have not been carried out. Instead of making special window frames, close to the original ones, just glass of low quality has been mounted.
Parquet from the contracted type, worth 162,409.50 levs, has been delivered for the exhibition halls, which, under the contract, should have covered of 1,020 square meters. The inspection established that the actual quantity of the parquet was 517.00 square meters, worth 82,321.91 levs. The difference between what was paid and what was done is 80,092.69 levs.
81 square meters for ”Supply and Installation of Suspended Metal Ceiling in the Restrooms” have been invoiced for the total amount of 4,892.36 lev. The inspection of the site established that the actual repairs covered only 30 square meters, and the suspended ceiling is missing.

And so on and so on, the above-mentioned data are only part of all deficiencies and inconsistencies as compared with the contract for repairs. According to the auditors, the designer – the company EKSA of architect Peev – has set in the draft a larger volume of works than those actually carried out, leading to payment of budgeted funds without reason. The total damage amounts to over 350,000 levs.

The auditor’s report ends with the conclusion that there is established lack of transparency in the spending of public funds and breach of the principles of sound financial management. The lack of any supervision has been allowed by both Slava Ivanova, Director of the Cultural Institute, and by Culture Minister Rashidov, who has appointed for Chairman of the Committee Engineer Pano Panov, Director of Directorate ”Property Management”. He in turn has not exercised any control over the repairs. This enabled the company-contractor to carry out repairs with extremely poor quality, despite payments that presumed a very high one. The differences between the allocated amounts and the amounts actually spent for materials are enormous.

Bivol contacted the press office of the Ministry of Culture and sent the documents with questions about the follow-up actions regarding the audit that established the violations. We asked for the filing numbers of the documents and for information whether further action has been undertaken. We asked if the prosecution has been notified.

The press office refused to answer journalists’ questions and requested from us to submit an application under the Access to Public Information Act (APIA). “The topics that interest you are within the scope and terms of this Act (these include all reports of the Internal Audit Unit and the Inspectorate of the Ministry of Culture),” explained the press office. Bivol sent an application under APIA. By law, the deadline for response is 14 days.

Unofficially, in early August 2014, Bivol presented the audit and the expert report to the newly-appointed Deputy Culture Minister Victor Stoyanov, who, however, did not offer an opinion and did not undertake any action.

What companies have been selected as designers and contractors?

The designer, the EKSA company, specializes in restoration construction, repairs and renovations and is listed in numerous associations, which in turn apply for and win public bids. The Procurement Registry shows that on May 23, 2014, ECSA has been entrusted with the restoration of the former royal palace and summer Black Sea residence Euxinograd in the amount of 6 million levs. ECSA has also built the tourist infrastructure at the Thracian sanctuary Perperikon. Its owners are architects Konstantin Peev and Vania Stankulova-Peeva. During the term of the government of the Triple Coalition, the company has renovated the buildings of the Council of Ministries and of the National Opera.

The contractor, BIGLA 3 – EVROPLAM, is a consortium between the company of Krasimir Shalev BIGLA 3 and the Plovdiv-based EVROPLAM of Zdravko Arnaoudov and Konstantin Konstantinov. In September 2013, BIGLA entered into a consortium with the Varna-based company HYDROSTROY, which is known to be close to controversial and notorious lawmaker Delyan Peevski. The consortium BIGLA – HYDROSTROY has not won any public bids.

The supervisor, MODULE H LTD, is the sole property of Boryana Mitova. Her company, dealing with design and construction supervision, is involved in several consortia and has “successfully completed projects under the Operational Program” Regional Development 2007 – 2013″, according to information on its website.

Our attempts to contact these companies by email to comment on the audit have been unsuccessful.

Public Initiative to Rescue the Home of Revival Hero Ilarion Dragostinov

A few weeks ago, Bivol raised the issue of the crumbling birthplace and memorial of Revival revolutionary Ilarion Dragostinov. The house is owned by the Ministry of Culture, after it has been donated by the descendants of the Apostle of the April Uprising to the State to turn it into a museum. Because of complete mismanagement and irresponsibility, it has been destroyed and plundered. The Ministry of Culture justified the above with lack of money to take care of the building. However, according to a resident of the village of Arbanassi, Stefan Stoyanov, 90,000 levs have been granted for the repair of the house-memorial and they have “disappeared” who knows where and there is no result whatsoever from this amount. Rashidov has personally promised to Stoyanov and to citizens of Veliko Tarnovo that he would do whatever it takes to preserve and restore the historic monument. There is no result, the house is in ruins, and the Ministry (the State) as owner demonstrates a cynical disdain for the memory of one of our greatest national heroes and for the will of his descendants-donors.

Nikolay Nedyalkov also contributed to this report.

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