Ceku Ministry scandal: 3.5m euros underreported subsidies, tax evasion and conflict of interest

Minister of Culture, led by Vetevendosje's Hajrlla Ceku, has been captured by the foreign audience spending money on the sports field through subsidies, the first of the state ark these for which there are no reports. In some cases it has been found to have given money without even a call. Auditors have also looked at sponsors and raised serious doubts about tax evasion from private firms, as well as interest from commissions within the ministry..

“Although sports organisations have received subsidy funds from the MRKS, they have not reported to the value of 3.5m euros of how they have spent these funds”, so it has ascertained the National Audition Office in a special survey that has only made for the sports field in the government funds of Prime Minister Albin Kurti.

In this report, the foreign audience indicates that these 3.5 million are for 2020-22, until it says that by 2023, an estimated 1 million euros have been found with the report - even though it was time to close reports, reports Insander.

After the auditing ended, we have received later notes from the MKRS that show that they figure out the unfinished advantage over 936 thousand euros that had deadlines for closure over the year 2023”, says the report in question, and adds that “is important to clarify that our revision process has ended with the conclusion of the audit, so any information received or developments that follow this period have not been subject to our assessment or test<3>.

Sports organisations in addition to regular financing with basic memorandums for subvention benefit additional memorandums (anex), “for which we have not found that this form of funding is regulated by administrative internal acts”, the report states.

In some cases the amount in annexes exceeds it in a basic memorandum, and according to the audit “this way of funding shows about the lack of transparency and accountability in reporting the expenses of sports organisations”.

Except for memorandum-and-call financing, The MKRS has financed sports organisations without public calls, only with requests directed to the ministry, which it does not pre-represent in laws and regulations. Although sports organisations have benefited subsidy funds from the ministry, they have not reported on the value of 3.5m euros in how they have spent these funds”, the report says.

Suspicions of Tax Avoidance

Part of the report, the foreign audience has also focused on financing sports through sponsorship, and has raised serious doubts about tax evasion from private firms.

“From the 45 tested samples we found that over 490 thousand euros were not transferred to sports clubs as sponsorship by private companies, even though companies in the Kosovo Tax Administration had reportedly provided these means for sponsorship”, the report reported.

Moreover, these private sponsorship companies have been released from taxes and, as a result, have not paid taxes to the state.

 In addition, according to the Auditor “sports clubs have benefited sponsorship over one million euros from private companies, and for which there has been no confirmation of MRKS” sponsorship, the report says, and finds that “co-ordination package between the Ministry ATK did not have enough control over the exact amounts to be taxed and released from the tax”.

Of the notes we have from the foreign audience, reports Insander, it turns out that 45 businesses that claimed in ATK sponsorships, about 490,347 euros have not been transferred to the accounts of sports organisations, nor have the state been paid as duty tax.

Also seen by this data analysis, 45 clubs selected samples have benefited sponsorship of 1,083,246 euros by failing to possess evidence from MKRS for sports sponsorship.

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For two other cases where companies have been ill-declared in ATK, as Insander writes, during 2021, neither ATK nor MKRS have been informed of these mistakes, even though by law, 30 days after the completion of the deal must be reported in ATK.

The foreign audience suggests that the MKRS and ATK have partially agreed with findings and audit conclusions, until it was disclosed in the report whether the ATK will investigate the possibility of tax evasion in cases where private firms obtained tax release for sports sponsorship, but did not send that money to sports organisations.

Possible interest conflict within MKRS in favour of private firms

The Practice That Is Applying The MKRS raises concerns about possible conflicts of interest within the commission responsible for issuing sponsorship claims and fund spending assessments, the ZKA report said.

When a single commission is loaded with both functions, there is a natural danger that the evaluation process is lacking impartiality and needed integrity. This potential conflict could jeopardise the credibility of the evaluation process and the integrity of the reported results”, says the report, Insander.

To address this concern, some countries or organisations approve practices involving separate commissions for these two essential functions.

This division serves to increase accountability, transparency and general credibility of the sponsorisation assessment process.

The MKRS resolution defines that the same commission will address the release of sponsorisation claims and fund spending assessments, however, the adoption of a better approach or practice that includes sharing these tasks can help ease potential conflicts of interest and reinforce the credibility of the assessment process”, says the report, and becomes aware that “of the tasks of the work complying with international standards and promotes transparency and accountability in the management of sponsorisation<3x>