STATE AUDIT OFFICE
- Press release-
Skopje, 18.11.2025
Identified irregularities in the operations of PHI General Hospital Prilep and unlawfully spent funds
The 2024 audit determined that the Public Health Institution General Hospital Prilep spent funds in breach of relevant legislation, particularly in public procurement procedures and cash handling, leading to irregularities in cashier operations.
The State Audit Office carried out an audit of the financial statements together with a compliance audit of the Public Health Institution General Hospital with Expanded Activity Prilep for 2024, issuing adverse opinions regarding the truthfulness and fairness of the financial statements, as well as the compliance of financial transactions with the legal regulations.
Several irregularities and weaknesses in the operations of the hospital were identified. Many obligations were recorded and paid late, selectively, and without proper controls. Advance payments exceeding 8,000,000 denars were made to certain suppliers without supporting invoices. Procurement obligations for the procurement of goods and services totaling 15,700,000 denars were undertaken without following public procurement procedures, and in some of the procedures conducted, we identified improper application of the Law on Public Procurement.
Medical equipment worth 26,900,000 denars was procured without a clearly identified need. Part of the equipment for biochemical analyses, valued at 14,000,000 denars, has not been put into use and was procured despite staff indicating that it was unnecessary.
The audit identified many irregularities in the Hospital’s cashier operations. Fiscal receipts were not issued for healthcare services, totaling 4,400,000 denars, and 5,500,000 denars received in cash were not deposited into the Hospital’s account but were paid out directly from the cash register, in violation of the Law on Payment Services and Payment Systems. The cash funds were used for payments to individuals without service contracts (4,460,000 denars), for fuel without proof of vehicle usage (449,000 denars), and for representation and other expenses without supporting documentation (597,000 denars). Although the Board of Directors had set a cash register limit of 60,000 denars, this limit was not observed, with cash register balances reaching up to 2,300,000 denars in certain periods from collected co-payments.
By the end of 2024, the Institution had receivables totaling 20.4 million denars that were over three years old, for which no collection actions had been taken. Approximately 29% of these receivables were recorded cumulatively, without specifying the individual debtor (legal entity or natural person), creating uncertainty regarding their actual collectibility.
During 2024, the Hospital engaged 131 individuals under service contracts with prior approval from the Ministry of Finance, for which 41.9 million denars were paid. In most contracts, the specific amount of compensation was not specified, and payments were made according to the Collective Agreement for the Health Sector, which is intended to apply only to employees in regular employment. This indicates non-compliance with legal regulations and creates the potential for irrational use of public funds.
In 2024, the Hospital paid 3.1 million denars for shifts worked by non-medical staff, while payments totaling 1.8 million denars for overtime work did not follow the required legal procedure. Additionally, the personnel files of 34 doctors did not contain valid licenses, which, according to the Systematization Act, are a prerequisite for the regular provision of healthcare services.
For part of the expenses totaling 730,000 denars, incurred for the transportation of hospital patients to other healthcare institutions in the country, appropriate supporting documentation was not prepared or submitted.
In 2024, the Hospital invoiced 67 legal entities for the lease of premises, totaling 6.74 million denars. However, a VAT liability of 1.21 million denars was not reported or paid because the Hospital did not comply with the legal obligation to register for VAT and obtain a tax liability decision for VAT purposes.
It was also determined that the accounting and inventory records of assets are not aligned, and a full inventory of assets, liabilities, and receivables has not been conducted, which hinders the verification of the accuracy and reliability of financial data. Additionally, a detailed record of material consumption per patient has not been established, as inventory consumption is fully recorded at the moment it is issued from the warehouse to the points of use/organizational units, without monitoring actual consumption.
The State Audit Office issued specific recommendations to the responsible persons and authorities to address all identified irregularities and weaknesses and to improve the Hospital’s financial and material operations.
We consider it necessary to emphasize that the relevant authorities were informed about the identified irregularities, unlawful use of funds, and the suspected illegal activities of the audited entity. Following this, on 22 October 2025, the authorities issued a statement announcing that the Basic Public Prosecutor’s Office – Prilep has opened an investigation against 32 natural persons and legal entities on suspicion of wrongdoing in public procurement procedures and the use of public funds at the General Hospital ‘Borka Taleski’.
The investigation is a result of the findings in the audit report of the State Audit Office, which identified irregularities and possible abuses that later became the subject of criminal proceedings.
Press contact:
Albiona Mustafa Muhaxhiri +389 72228 203 [email protected]
Mijalche Durgutov +389 70 358 486 [email protected]
Martin Duvnjak +389 75 268 517 [email protected]