As a result of the spread of COVID-19 and the restrictions imposed in its wake, Georgia's GDP decreased by 6.2% in 2020. The economic crisis has also had a major impact on the state budget, increasing spending on healthcare and various types of subsidies. On June 9, 2020, the Ministry of Finance of Georgia submitted a draft amendment to the Law on the State Budget of Georgia for 2020, based on which the maximum reduction of administrative costs aimed at financing the budget deficit was planned. The analysis of the bureaucratic expenditures of the emergency budget showed that the planned expenditures provided for goods and services were reduced by about GEL 58 million, which was largely due to the natural reduction in the number of business trips and representation expenses in light of the pandemic restrictions.
Representation expenses include expenses spent on receptions organized by agencies, formal dinners, and events, while the largest share of business expenses come from expenses incurred by officials during their visits abroad (travel, hotel, and daily expenses). Consequently, restrictions on event management and air travel in a pandemic were a significant precondition for such cost savings.
In the present study, IDFI examined the representation and business trip expenses incurred by legal entities under public law (LEPL) and other independent agencies before and during the pandemic. The Institute sent requests for detailed public information on relevant expenditures in 2019-2020 to 100 agencies. For the purposes of the study, complete information was received from 75 agencies, while in the case of other agencies, the requests for information on expenditures incurred in this period were left unanswered.
For example, LEPLs under the Ministry of Justice provided IDFI with only summary data on representation and business trip expenses for the second half of 2020, which does not provide adequate data to study spending policy in these agencies. In addition, the requests for the relevant data for the first 6 months of 2019 and 2020 were left unanswered by the National Tourism Administration, the Social Service Agency, the Treasury Service, and the State Agency for Care and Victims of Trafficking. Data for July-December 2020 were not provided by the Municipal Development Fund, the National Wine Agency, the National Wildlife Agency, the Technical and Construction Supervision Agency, and others. The present study is based on data provided by 75 agencies that have fully met IDFI public information requirements.
- According to the analysis of the expenses of 75 LEPLs, as compared to 2019, in 2020 the representation expenses decreased around four times - from 4,348,925 GEL to 1,198,429 GEL.
- Based onthe study, in 2020, representation costs increased in only 7 LEPL.
- According to the cost analysis of 75 LEPL, as compared to 2019, in 2020, business trip expenses decreased about six times - from 1,890,575 GEL to 298,982 GEL.
- The costs of restaurant services in some agencies were incurred during a period when certain restrictions were imposed on food outlets and other gathering places due to the pandemic.
- During the state of emergency, the National Wine Agency hosted 20 people at Decoretto Ltd.
- In 2019, the State Service for Veterans' Affairs spent 19,256 GEL on events organized by the “Georgian Dream - Healthy Future”.
- The head of the National Food Agency was on a business trip 11 times in 2019, for a total of 63 days, costing the agency GEL 54,202. Among them was a 4-day business trip to Moscow, the purpose of which remains unknown.
- In 2020, the National Energy and Water Regulatory Commission spent up to GEL 4,500 on restaurant expenses. Part of this expense, 1,876 GEL, was spent on a Memorandum of Understanding dinner with the National Food Agency held on October 16th.
The study showed that in 2020, the representation and business trip costs of LEPLs and other independent agencies have been significantly reduced, largely due to the pandemic and restrictions on travel around the world. It is also noteworthy that, in some cases, restaurant expenses incurred by agencies were observed during periods when certain restrictions on food establishments and gathering places were already in place.
Also noteworthy are those agencies that do not respond (fully or partially) to requests for public information on representation and business trip expenses. Such an attitude runs counter to the principles of transparency and accountability and raises doubts about inappropriate spending policies. IDFI believes that the State Audit Office should pay special attention to monitoring the bureaucratic costs (including representation costs) of those agencies that are characterized by opacity, including those agencies named in the present study that did not provide complete information.
At the same time, during the economic crisis, the state needs to optimize bureaucratic expenses, such as business trips and representation expenses. Given the scale of the economic damage suffered by the country over the past year, in parallel with the abolition and mitigation of existing restrictions, in the post-pandemic period, it would be advisable to keep representation and business trip expenses at a minimum.
The publication was prepared in frames of the project – Empowered Civil Society and Enhanced Beneficial Ownership Transparency Standards for Good Governance – funded by the Governments of Czechia, Hungary, Poland and Slovakia through Visegrad Grants from International Visegrad Fund. The mission of the fund is to advance ideas for sustainable regional cooperation in Central Europe.
The responsibility of the content of the article lies with the Institute for Development of Freedom of Information (IDFI). It does not necessarily reflect the opinions of International Visegrad Fund.
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