An audit revealed widespread problems at “Kyrgyzneftegaz”

The Audit Chamber identified financial violations and shortcomings in the operations of “Kyrgyzneftegaz” totaling nearly 968 million KGS. The results of the audit were reviewed at a meeting of the Audit Chamber’s Council.

According to the audit, the total amount of identified violations and shortcomings amounted to 967.8 million KGS. Of this amount, 135.9 million KGS are subject to mandatory recovery; however, only 8.9 million KGS were recovered during the audit.

The auditors attributed the largest losses to lost profits. Due to the untimely adoption of operational decisions by “Kyrgyzneftegaz” and its subsidiary, the company lost 494.96 million KGS in potential revenue.

The auditors identified another 281.4 million KGS in violations related to the distribution and processing of the payroll fund.

In addition, the Audit Chamber determined that the company’s management failed to ensure proper collection of current and long-term accounts receivable totaling 120 million KGS. Another 53.95 million KGS was spent on excessive and unjustified expenses.

The audit also revealed violations:

• 6.5 million KGS—in capital construction projects;
• 2.1 million KGS—in public procurement.

The only amount that was recovered during the audit was nearly 9 million KGS, related to violations of legal requirements during land reclamation.

According to the Chamber of Accounts, the audit results indicate an inefficient use of the company’s internal resources and a violation of the principles of prudent expenditure.

Based on the audit findings, the company’s management was issued mandatory directives to rectify the identified violations and return an additional 126 million KGS to the company’s revenue.

The audit materials will be forwarded to law enforcement agencies for a legal assessment of the identified violations.