STATE AUDIT OFFICE
- Press Release -
Skopje, 05.05.2026
Construction of Capital Projects Without Properly Maintained Construction Documentation
The municipality’s assets have not been properly recorded, and no steps have been taken to register ownership rights. Local roads and streets were constructed without building permits, while the reconstruction of infrastructure facilities was carried out without project documentation. In addition, the allocation of funds for culture and sports was not transparent.
The State Audit Office conducted an audit of the financial statements, combined with a compliance audit, of the Municipality of Ilinden for 2024.
The audit identified irregularities and instances of non-compliance in the Municipality’s operations. Due to their significance, an adverse opinion was expressed on the fairness and objectivity of the 2024 financial statements, and a qualified opinion on compliance with the legal requirements, guidelines, and established policies for the Core Budget account (630). An adverse opinion was also expressed on the fairness and objectivity of the 2024 financial statements, as well as on compliance with the legal requirements, guidelines, and established policies for the Core Budget account (637).
The audit established that the ageing structure of receivables has not been determined, and no allowance for impairment has been made for receivables from prior years, amounting to 57.520.000 denars, for which there is uncertainty regarding collectability. Furthermore, the tax records and accounting records are not reconciled for an amount of 39.977.000 denars, or 648.000 euros.
Receivables arising from fees for determining the legal status of illegally constructed buildings and for construction land development are recognized upon collection, instead of at the time they are incurred. In addition, receivables were not recorded for public cleanliness maintenance fees and contractual penalties related to construction on undeveloped state-owned construction land.
The market value of real estate has not been appropriately determined, and the data in the real estate register has not been updated. Default interest on overdue payments is not calculated, and no enforcement mechanism has been established for the compulsory collection of property tax. In addition, taxpayers who have acquired additional or new property are not being properly assessed for tax liabilities.
In contracts for the sale of undeveloped construction land owned by the State, buyers fail to comply with the construction deadlines. In addition, until 2023, no contractual penalties were calculated or collected for non-compliance.
In procedures for determining the legal status of illegally constructed buildings, statutory deadlines are not observed. No action has been taken on the Council’s decisions regarding the adoption of urban planning documentation to integrate illegally constructed buildings. Furthermore, for buildings subject to rejection decisions, no measures have been undertaken for their removal.
In the Municipality of Ilinden, urban equipment is installed, and hospitality activities are conducted outside business premises without the required permits, whereby no revenue has been generated from the municipal fee for the use of public space.
Urban equipment
The Municipality’s assets, including intangible assets, land, and construction facilities, have not been properly recorded, and discrepancies exist across several balance sheet items.
In addition, for capital investments related to the reconstruction of the water supply system, sewage network, and stormwater drainage system, no actions have been taken to register ownership rights.
The inventory of assets and liabilities has not been conducted in accordance with laws and bylaws.
During the construction and reconstruction of local roads, streets, sports playgrounds, and urban equipment in the Municipality of Ilinden, with a total value of 98.385.000 denars (approximately 1.594.500 euros), we identified shortcomings related to: execution of construction works without building permits; reconstruction of linear infrastructure assets without approved design documentation; work orders lacking essential elements (technical specifications, quantities, unit prices, and execution deadlines); execution of works not included in the work orders; as well as the absence of final accounts and properly approved construction documentation.
Road reconstruction
Sports playgrounds in the settlements of Deljadrovci and Bujkovci
Cultural and sports program activities, amounting to 1.334.000 denars, were implemented without a public call, website publication, and predefined, clear criteria and conditions for the allocation and use of funds.
Irregularities were identified in the calculation of salaries for administrative officers, specifically regarding the base for calculating seniority allowance and pay during temporary sick leave.
Irregularities were also identified in the procedures for awarding public procurement contracts.
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]
Martin Duvnjak +389 75 268 517 [email protected]