STATE AUDIT OFFICE
- Press Release -

Skopje, 27.01.2026

 

Audit Finds Unauthorized Construction of Residential Buildings and Hotel Complex Without Paid Land Development Fees or Issued Building Permits

 

The Municipality has not adopted urban development plans for 20 settlements, has failed to take measures to remove illegally constructed buildings – particularly in protected areas – urban equipment has been installed without the required permits and payment of communal fees, and subsidies granted to public enterprises in the amount of 36.505.000 denars were provided without an approved Program and without prior consent from the Municipal Council

 

The State Audit Office conducted an audit of the 2024 financial statements, together with a compliance audit, of the Municipality of Ohrid.

The audit identified shortcomings, irregularities, and non-compliance issues in the Municipality’s operations. Due to their significance, a qualified opinion was issued on the fairness and accuracy of the 2024 financial statements, and an adverse opinion was issued on compliance with legal regulations, guidelines, and established policies for the core budget account (630). Similarly, an adverse opinion was issued on both the fairness and accuracy of the 2024 financial statements and compliance with legal regulations, guidelines, and established policies for the core budget account (637).

The Municipality of Ohrid has not recorded receivables from the public cleanliness maintenance fee. For years, the public enterprise “Ohridski Komunalec” has failed to transfer these funds to the municipal budget. For 2024, the public enterprise reported liabilities of 22.880.000 denars in this regard, while the Municipality has filed lawsuits for 2021, 2022, and 2023 totaling 53.831.000 denars.

Receivables for the municipal parking fee have also not been recorded. The public enterprise “Biljanini Izvori”, responsible for managing parking in the municipality of Ohrid, has repeatedly failed to settle this fee over an extended period, which, according to the enterprise’s records, amounts to 3.901.000 denars.

Without a decision of the Municipal Council, receivables from budget users amounting to 534.000 denars, related to invoiced communal expenses for 2017–2020, were written off. In addition, credit balances of multiple natural and legal persons, totaling 4.832.000 denars, were written off without adequate supporting documentation.

Taxpayers who acquired additional or new property in previous years were not assessed property tax, and interest was neither calculated nor collected on property tax liabilities not paid within the prescribed deadlines.

The construction land development fee is calculated based on Decisions from 1997, 1999, and 2011, which set the fee percentage by zones according to an average construction value per m² of net floor area amounting to 17.000 denars. The zones have not been updated in line with the level of development, which affects both the revenues generated and the funds required for the development of the construction land.

The Municipal Council has not adopted urban plans for 11 settlements, and although decisions approving planning programs were issued for 9 others, the urban plans have not yet been prepared. The audit also identified completed buildings and ongoing construction for individual housing and a hotel complex in some settlements, for which the construction land development fee was not paid, and no building permits were issued.

Buildings without building permits, both within and outside settlements

 

In procedures for determining the legal status of illegally constructed buildings, the statutory deadlines are not respected, and the collection of the legalization fee—approved for deferred payment in 12 equal monthly instalments—is not monitored, resulting in decisions being issued after only a single instalment has been paid. Although the Municipal Council adopted 1.748 decisions establishing the need to prepare urban planning documentation to integrate illegally constructed buildings, no action was taken on these decisions within the prescribed five-year period.

For illegally constructed buildings that do not meet the conditions for issuing urban planning consent, 4.847 decisions rejecting legalization were issued; however, no measures were taken to remove these buildings, despite authorized construction inspectors issuing 456 final and enforceable administrative acts between 2019 and 2024. As a result, the obligation under the “Cultural Heritage Protection Plan” to prepare a comprehensive inventory of all illegally constructed buildings and to assess their impact on the municipality’s outstanding universal value was not fulfilled. Furthermore, the requirement to remove all illegal structures, particularly those within Galichica National Park that, based on prior assessments, pose a threat to the property and the city’s integrity and authenticity, was not met.

No urban development plan has been adopted for the coastline (a 50-meter strip measured from the boundary of cadastral plot 1/1, “Ohrid Lake”). Additionally, for the 2024 Annual Program for the installation of urban equipment, no consent was obtained from the Cultural Heritage Protection Office.

In 2024, 23 hospitality establishments used public traffic areas without permits for the placement of urban equipment and without paying the communal fee for the use of public space. In addition, although the issued permits were valid for three months, they were used for twelve months.

The installed urban equipment (canopies that are structurally fixed to the public area with permanent construction elements, steel columns, and enclosed spaces with glass partitions) is not a lightweight, demountable structure and compromises both the space’s primary purpose and traffic safety.

The Mayor did not issue permits for hospitality activities conducted outside business premises in areas designated for such services, in violation of the Law on Catering Activity.

 

 

 

 

 

 

 

The municipality fails to collect communal fees for the use of campground areas, placement of tents, or similar activities, despite six auto campsites being registered in the Municipality of Ohrid.

Under an agreement from 2023, expropriation of construction land owned by a legal entity was carried out in the Velgošti Cadastre (КО Велгошти). According to the General Urban Plan (GUP), the land is designated for public-use facilities/cemetery development. As compensation for the expropriated land, state-owned construction land intended for a hotel complex is being provided. According to an assessment performed by a certified appraiser, the expropriated land was valued at 3.315.000 denars, while the land offered as compensation was valued at 2.622.000 denars. For the difference of 693.000 denars, another property has been proposed, for which the procedure is still ongoing. Since the compensation involves the exchange of expropriated land for other state-owned land, the matter was also submitted to the State Attorney’s Office of the Republic of North Macedonia (RSM). The office emphasized that, under the Law on Waters, land located in the immediate vicinity of the Ohrid Lake shoreline is prohibited from being subject to legal transactions.

Ownership rights have not been registered for capital investments in the water supply, sewerage, and stormwater networks, as well as the municipal building extension, despite these assets being in use for an extended period. Additionally, primary and secondary schools and one kindergarten transferred in 2005 were recorded in the name of the individual users without a decision by the Municipal Council.

For municipal road construction, wastewater treatment plants, and linear infrastructure projects, which under the Law on Construction fall into the second category of buildings, no building permits have been obtained. Construction activities are carried out without prepared project designs or documentation. The responsible municipal departments prepared the technical specifications and the bill of quantities. In 2024, a total of 49.431.000 denars were disbursed for these works.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cultural program activities were implemented without a public call or announcement on the Municipality’s website and without clearly established criteria for the allocation and use of funds. Sports clubs and associations that did not apply received 37.400.000 denars, representing 59% of the Program’s total funds.

The municipality disbursed 36.505.000 denars (592.000 euros) in subsidies to public enterprises without Council approval or an adopted Subsidy Program. The funds were intended for operational expenses, due obligations, and investments. Payments were made based on incomplete requests and documentation regarding the scope of activities in the public enterprises’ annual work plans.

The municipality has not established proper material and accounting records for the receipt and issuance of materials. Liabilities are not recorded on time, and the inventory of assets and obligations has not been conducted in accordance with legal and regulatory requirements.

Recommendations have been made to address the identified issues and urge relevant institutions and responsible persons to take necessary actions.

 

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]