Red tape and amount of work of the state institutions in the enforcement of administrative fines has generally increased, but the indicators of the payment of administrative fines have not improved significantly, as it was concluded after the audit by the State Audit Office of Latvia assessing whether the established system of enforcement of administrative fines functioned effectively and whether the enforcement of fines was ensured with as few resources as possible.
BRIEFLY
- The amount of work in the enforcement of administrative fines in state institutions has generally increased, but the results have not improved. After the changes in the regulation of enforcement of administrative fines, the work of the State Police was most affected because its amount increased five times.
- Due to the changed procedure for the enforcement of administrative fines for violations in road traffic, the already limited human resources of the State Police must be directed to administrative activities increasingly to ensure the enforcement of administrative fines, instead of involving police officers in areas more important to public safety and public order.
- The enforcement function of fines should be centralized to reduce red tape and save resources. Now, this function is performed by 1,570 employees, for 98% of whom it is one of many other duties, in 27 state institutions. By centralizing the performance of the function, it would require 73 full-time employees, which, according to the State Audit Office of Latvia, could be further reduced by half.
- E-services and automated administration of the enforcement of fines would eliminate the risk of errors in payments and save the resources of state institutions.
- The audit results confirm the importance of ex-ante impact assessment and ex-post evaluation when implementing and evaluating major changes.
The Law on Administrative Liability entered into force on 1 July 2020 by establishing several changes in the enforcement process of administrative fines. The audit findings highlight the importance of ex-ante initial impact assessment and ex-post evaluation when implementing new regulations and reforms. “Although the ex-ante initial impact assessment of the Law predicted that the new regulation would not affect the day-to-day functions of state institutions and courts financially and, therefore, they did not plan additional resources, the opposite happened in reality because state institutions required more resources than before and one could have forecasted that during the reform planning stage. Without evaluating the impact of the planned changes on the functions of state institutions and necessary resources, one did not assess whether the changes were proportionate compared to the planned benefits. Similarly, a timely ex-post evaluation of the new regulation would allow one to evaluate the effectiveness of the changes, identify deficiencies and improve the new regulation, having noticed that we were doing more, but the results were not improving significantly,” explained Ms Kristīne Jaunzeme, Council Member of the State Audit Office of Latvia.
After the reform, the work of the State Police was most affected, as the amount of work increased five times
Along with the new regulations, the amount of work in the enforcement of administrative fines in state institutions has generally increased. During the audit, 10 out of 27 state institutions that impose administrative fines (excluding local and regional governments) admitted that their workload increased.
Since 90% of all imposed fines are for administrative violations in road traffic, the work of the State Police is affected most. Previously, the State Police submitted fines for enforcement if they were not paid within a year from the day the decision on the fine was taken. Until its payment, a violator was denied certain services related to participation in road traffic. This arrangement ensured both effective enforcement of fines and economical use of state budget funds. In its turn, the new regulation of the Law on Administrative Liability envisages the transfer of fines to enforcement within a month and faster restrictions on receiving services at the same time. The State Police has to perform a series of administrative actions now that it did not have to do before. Voluntary payment of administrative fines is no longer encouraged by restricting the receipt of services that would allow payment of fines and the already significantly limited human resources of the State Police to be used to ensure public order and public safety.
Although the State Police invests significantly more resources, the results do not improve much: 79% of the imposed fines were voluntarily paid in 2018 and 2019 (incl. 85% of fines for road traffic violations), but only 71% of the imposed fines were voluntarily paid in 2021 and 2022 (incl. 73% of fines for traffic violations). There were 16% of all imposed administrative fines not paid at all in 2018 and 2019 (incl. 13 % for road traffic violations), while 14% were not paid in in 2021 and 2022 (incl. 12% for road traffic violations). After the introduction of average speed cameras on the roads in Latvia in 2023, the proportion of administrative fines for road traffic violations continues to increase. To ensure the transfer of fines to forced enforcement, the State Police involved 23 officials additionally from 2022; employees must work overtime and it is planned to attract additional resources. “The State Audit Office of Latvia considers that the issues of the penal system cannot be seen separated from the obligation to organize the work of the state administration effectively and to use resources efficiently. If the same results can be achieved with less resources consumed, the state administration is obliged to improve the process of implementing regulations and functions to ensure it,” emphasized Ms Kristīne Jaunzeme.
The fine enforcement function should be centralized to reduce red tape and save resources
Currently, the decentralized process requires a lot of resources from the state institutions, where 1,570 employees of various levels and competencies work with the enforcement of administrative fines in the direct state administration in 27 state institutions, most of whom (79%) are officials who ensure the basic functions of the institution. By centralizing the enforcement of administrative fines, only 73 full-time employees would be required to perform this function, and, according to the auditors’ estimates, their number could be further reduced by half. It could save state budget resources, accumulate the competences necessary for the performance of the function in one place and ensure fairer and more equal treatment of administratively fined people because an average number of days in which fines are transferred to forced enforcement after the expiration of the voluntary enforcement period varies from a few days to several months depending on the institution currently.
One should mention that the Latvian government had set the goal of centralizing support functions in the state administration as much as possible more than 10 years ago. In 2009, the Cabinet of Ministers instructed ministries and central government institutions to evaluate the possibility of establishing centralized accounting and human resources management systems by eliminating these functions in subordinate institutions. According to the State Audit Office, the administrative fine enforcement function, which is essentially a support function, could be performed by the State Revenue Service, which already ensures the collection of taxes, fees and other mandatory payments administered by the State Revenue Service currently on the territory of Latvia.
E-services and automated administration of the enforcement of fines would prevent the risk of errors in payments and save the resources of state institutions
Unlike e-services, where all details are included in a payment order template, the risk of errors increases significantly when using most other payment methods. Abandoning manually created payment orders would improve the quality of payments and reduce the resources of state institutions that are consumed for manually linking fines to the payment made.
When the Law on Administrative Liability took effect (1 July 2020), a new information system began to function, that is, the Administrative Violations Process Support System (AVPSS). The goal was to provide an electronic process by automating the preparation of various decisions based on the data entered into the system, thus saving paper and postal expenses, as well as human resources. Currently, approximately 40 thousand payments require manual recognition. Both the State Police and the State Revenue Service indicated that there are often problems with identifying payments in the AVPSS. If a payment cannot be identified even manually, the fine is handed over to sworn bailiffs for enforcement.
In 2021, the State Audit Office of Latvia detected during an audit that there were significant problems with data quality in the AVPSS and that the manual work of the State Police had even increased. The implementation of the recommendations provided by the State Audit Office of Latvia is still ongoing. In 2022, the improvement of the AVPSS began to reduce the consumption of institutional resources and to ensure partial automation of the enforcement process of fines. According to the auditors’ calculations, the process will be faster and state institutions will be able to save up to 62% of the time in performing this function after the improvements.
Recommendations of the State Audit Office of Latvia #PēcRevīzijas
There are four recommendations provided after the audit: (1) The Ministry of Justice should evaluate the possibilities of promoting voluntary enforcement of fines by reducing the resources needed for the control of fine enforcement; (2) The Ministry of Justice, in cooperation with the Ministry of Finance and the Ministry of the Interior, should evaluate the possibilities for the centralization of the function of enforcement of fines; (3) The Ministry of Finance, in cooperation with the Ministry of the Interior and the Ministry of Justice, should evaluate alternative solutions for the payment of fines, including to evaluate the possibilities of renouncing the payment methods associated with manual typing of payment orders; (4) The Ministry of the Interior and the Ministry of Justice shall agree on a specific deadline for ensuring data exchange in order to organize work purposefully and introduce the functionality of AVPSS for the automation of the process of enforcement of fines. The deadline for implementation of the recommendations is until 1 February 2026.
On the reform of the administrative fine system
The reform was intended to address significant problems in the enforcement of administrative fines. The purpose of the development of the Law on Administrative Liability was to introduce a procedurally simple and fast administrative violation proceedings that complied with modern legal standards, which would ensure respect for human rights, procedural justice and the inevitability of punishment. It was also intended to ensure that the fine was enforced by providing for coercive mechanisms to encourage voluntary execution of the penalty.
Additional information:
- Audit report summary.
About the State Audit Office of Latvia
The State Audit Office of the Republic of Latvia is an independent, collegial supreme audit institution. The purpose of its activity is to find out whether the actions with the financial means and property of a public entity are legal, correct, useful and in line with public interests, as well as to provide recommendations for the elimination of discovered irregularities. The State Audit Office conducts audits in accordance with International Standards of Supreme Audit Institutions of the International Organization of Supreme Audit Institutions INTOSAI (ISSAI), whose recognition in Latvia is determined by the Auditor General.
100 years of AUDIT STRENGTH
On 16 August 2023, the State Audit Law turned 100 years old. With the adoption of this Law, the State Audit Office from a formal de facto institution founded on 2 December 1918 became a de jure independent, collegial supreme audit institution of the Republic of Latvia. The State Audit Office is one of the independent state institutions enshrined in the Satversme (Constitution) of Latvia. The Constitution was signed by Roberts Ivanovs as the secretary of the Constitutional Assembly, who was then confirmed as the Auditor General. He worked as the first Auditor General for 12 years. His signature confirmed the text of our Constitution alongside that of Jānis Čakste.
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