Seda Hergnyan

Up in Smoke: Armenia’s Ministry of Culture Misappropriated $1 Million in State Funds in 2014-2016

Armenia’s Ministry of Culture, and agencies under its administration, misappropriated AMD 521.3 of government funds during the implementation of various programs it supervised in 2014-2016.

These findings, recently released by the Ministry of Finance’s budgetary audit inspectorate, reveals that the ministry was woefully lax in monitoring the expenditures, totaling the equivalent of US$1.080 million at today’s exchange rate.

Of the AMD 521.3 million found to be misappropriated, the culture ministry must reimburse the government to the tune of 504.6million.

The inspectorate revealed that monies allocated for the “Cultural Events” program were used to pay the office rent of one the companies contracted to do the work. The company in question also used some of the money to pay for employee taxi rides, mislabeling the expenditures as “transportation costs” in its accounting records. Other money was used by company officials to lease cars and to buy gasoline.

The inspectorate also found that AMD 33.4 million was used by culture ministry staffers to go on business junkets without prior legal approval. (The minister of culture and deputy ministers were not found in violation in this matter.)

Other financial violations were revealed in a program designed to “Reinforce, Repair and Restore Monuments”. It turns out that those contracted to do the work did not fully perform their contractual obligations but were paid nevertheless.

In one case, a company used less expensive stones to complete the restoration of a monument but declared that it had used higher priced stones.

While the inspectorate uncovered the violations occurring in 2014-2016, many of the programs under review have been going on for years, thus leading one to conclude that similar violations have taken place in past years as well.

The report published by the Ministry of Finance names two State Non-Commercial Organizations attached to the Ministry of Culture as not fully providing the services it promised.

The two, the Tchaikovsky Specialized Secondary School of Music and the Yerevan Dance Art State College, were allocated state funds to provide classes to a set number of students but failed to meet the quota.

Another instance of financial shenanigans was found in a program designed to host foreign delegations to Armenia.

In one case, the culture ministry overstated the number of foreign guests to a luncheon reception. The actual number of guests was 89, but the ministry’s accounting statement reads 170.

Other programs in which violations were revealed include “Assistance to Literature Publishing”, “Library Services”, “Museum Services”, “Theatrical Performances”, and “Music and Dance Concerts”.

Based on its finding, the inspectorate has called for greater examination of estimated costs presented by contractors and better monitoring of state budgetary expenditures.

As noted, the inspectorate also found violations committed by five State Non-Commercial Organizations attached to the Ministry of Culture totally AMD 199.6million

The worst violator was the Alexandre Spendiaryan National Academic Theatre of Opera and Ballet. It was found to have misused AMD 106 million in state funds. It must now pay back 100.6 million.