Former chairs of municipal councils and their salaried deputies are currently eligible for a monthly minimum allowance of two minimum monthly salaries when losing their offices. The right refers to local or regional government officials, who have held those offices for at least two terms, are of pre-retirement age or have reached retirement age, and are not employed. Taking into account the results of the previous audit and the audit of the annual consolidated financial statement of the state (ACFSS) for 2019, the State Audit Office doubts that such social support measures and the use of the funding provided for them are effective and create an equal treatment for all individuals employed in state and municipal institutions. Following the audit of the ACFSS, the State Audit Office has sent a letter to the Prime Minister and the Public Administration and Local and Regional Government Committee of the Saeima with an invitation to assess the need for such a statutory benefit given that there are many different types of retraining in the country if an individual ceases to perform the duties of a particular position.
The State Audit Office considers that the justification for determining the said benefit, which is related to the loss of competitiveness of an elected official and difficulties in returning to work in the previous speciality, is also questionable. According to the information gathered when auditing the ACFSS for 2019, 85 local and regional governments have calculated post-employment benefits for individuals out of all 119 local and regional governments in a given year by spending more than one million euros for that purpose. Besides, paying the benefit in future periods will require more than 11 million euros. For this purpose, local and regional governments have created savings, which are actually frozen and deprived of the funds for other vital needs of the community of local or regional government. According to the data compiled by local and regional governments, 722 individuals are or have been chairs of a council or salaried deputies for two terms in one local or regional government currently in the country; therefore they can apply for the benefit in the future.
“In our opinion, the amount of budget funds required for the payment of this benefit will increase significantly due to the forthcoming administrative and territorial reform when many heads of local and regional governments and their deputies will lose their jobs,” stressed the letters signed by Auditor General Elita Krūmiņa.
Currently, the draft law “Amendments to the Law on the Status of a Councillor of a Republic City or Town Council and Regional Council” is on the agenda of the Saeima, which proposes to exclude an article from the Law stipulating for the right of former chairs of local and regional governments to the benefit. Following the above and the audit findings on the ACFSS, the State Audit Office calls on the government and the Saeima to develop a sustainable solution regarding the specific benefit, especially taking into account that some local and regional governments pay this benefit from social protection expenditure. The State Audit Office considers that the proposed changes in the Law on the Status of a Councillor of a Republic City or Town Council and Regional Council can serve as an essential and timely step not only in improving the social support system provided by local and regional governments but also in perfecting the state post-employment benefit system, including service pensions.