STATE AUDIT OFFICE

• Press Release –
   
• Skopje, 07.08.2025

Non-functional facilities, outdated equipment, and lost opportunities for providing services and generating additional income in favor of “Boris Trajkovski” Sports Hall

The audit of the Company for Construction, Management, and Leasing of the Multipurpose Hall "Boris Trajkovski" for 2023 revealed non-functional facilities and equipment, a closed Aqua Park, uncertainty regarding the future of the solar system, and missed opportunities for additional income.

The State Audit Office conducted an audit of the financial statements, along with a compliance audit, of Multipurpose Hall “Boris Trajkovski” LLC, a company for construction, management, and leasing, in Skopje, for 2023.

The company's primary activity is to sign lease agreements for the business space it manages and to generate income from rent.

The audit determined that in 2023 the company generated rental income totaling 10.901.000 MKD, based on 24 active lease agreements for business premises.

Three of the agreements were finalized between 2011 and 2013 and have a validity period of 10 to 15 years, as per the legal regulations in effect at the time. The other agreements were signed under the current Law on the Sale and Lease of Business Buildings and Business Premises of the Republic of North Macedonia. Leasing is conducted through an electronic public auction.
The analyses revealed the following:

• For two agreements, the final auction price was only slightly higher than the initial starting price;
• For five agreements, the final price remained unchanged from the starting price;
• For 14 agreements, the achieved price was lower than the initially estimated one, with reductions ranging from 6% to as much as 50%.

These contracts are signed for four years and are extended with annexes upon expiry, under the same terms and without revising the prices according to current market conditions.

The audit report states that the company also generated revenue from the sale of goods and services in the total amount of 48.812.000 MKD, which accounted for 74% of total sales revenue in 2023. Compared to 2022, these revenues decreased by 3%, while they increased by 33% compared to 2021.

In 2024, revenue from the sale of goods and services amounted to 55.182.000 MKD, which is 13% higher than the revenue achieved in 2023.

Revenue achieved in the period 2021–2024, by sales points

Analysis results show that revenue from the use of the swimming pool, ice skating rink, small hall, bowling alley, congress hall, and ping pong center has continuously increased over the past three years and continues to rise in 2024.

In contrast, the Aqua Park shows a declining trend, and in 2024, it ceased operations and generated no income.

The audit also covered the Aqua Park’s operations, revealing that in 2023, total revenue amounted to 4.290.000 MKD, which is 41% less than planned.

In 2024, the Aqua Park was closed due to economic unviability and because the 10-year warranty period for the installed equipment, components, and installations had expired—the period during which contractors guarantee the quality of works performed.

Additionally, auditors noted uncertainty regarding the continued operation of the installed "solar system", consisting of solar panels and heat pumps for heating the swimming pool.
The company paid 25.945.000 MKD for the procurement of the system, which is currently valued at 2.856.000 MKD according to the company’s accounting records. The system was commissioned in 2014 and operated intermittently until 2023. However, due to technical deficiencies in the solar panels, it is no longer operational, and no suitable replacement has been identified.

The report also highlights a missed opportunity by “Boris Trajkovski” LLC, Skopje, to generate revenue from managing the parking lot, over which the company has acquired usage rights. Despite this, no parking revenue has been generated for years.

During the OSCE Chairmanship of the Republic of North Macedonia from 30 November to 1 December 2023, the company, upon government recommendation, provided the Ministry of Foreign Affairs (MoFA) with logistical support and assistance in adapting and externally arranging the premises for the event, which was carried out by the MoFA. Following public procurement procedures, the MoFA signed several contracts with a total value of 124.234.000 MKD. The audit found that the MoFA submitted no reports to confirm the works performed and the goods and items installed, which remain in the company's possession. Furthermore, the provisions of the cooperation agreement between the two institutions have not been followed—the executed works and installed goods at the company have yet to be transferred to its ownership.

The report discloses that the “Boris Trajkovski” Sports Hall was built and equipped in 2011 through borrowing by the City of Skopje in the amount of 260.491.000 MKD.

The debt was to be repaid in three equal monthly installments starting in 2011.
Due to the company's unfavorable financial condition, debt repayment was postponed for eight years, and only began in 2019, with the final installment paid in 2023.

Considering that from 2019 to 2022 the company operated at a loss and its liquidity was impaired, all funds for debt repayment were provided from the State Budget, and the company's core capital was increased in favor of the state.

The audit also identified other issues, including weaknesses in cash management, deficient inventory recording of raw materials and supplies, incomplete stocktaking, unspecified responsibilities for the Supervisory Board, weaknesses in the job classification act and documents regulating salary calculation, and other irregularities and non-compliances.

These findings impacted the qualified audit opinion on the accuracy and objectivity of the 2023 financial statements and resulted in an adverse opinion regarding compliance with legal regulations, guidelines, and established policies.

To address the identified issues, recommendations have been provided for the competent persons and bodies to undertake measures and actions aimed at improving the situation.

Press Contact:

Albiona Mustafa Muhaxhiri +389 72 228 203 | [email protected]

Mijalche Durgutov +389 70 358 486 | [email protected]

Martin Duvnjak +389 75 268 517 | [email protected]