In-depth review of a municipality´s management

Following coverage in the national media and a change in the Municipal Council of a Czech municipality, the DABRICON team was asked to conduct a detailed review of the management and finances of the municipality’s property during the previous seven years.

As part of a detailed forensic investigation of legal documents and accounting data, using general microeconomic principles, the multidisciplinary DABRICON team documented irregularities in real estate records amounting to millions of CZK, and repeated violation of public procurement guidelines. The final report also described repeated breaches of the obligation to dispose of the municipality’s property with due diligence, manifested mainly in the sale or lease of the municipality’s real estate to the former mayor or affiliates for a fraction of the market price, systematic manipulation of the sales quantities and prices of wood harvested by the municipality, and, on the other hand, excessive expenditures for the maintenance of public spaces paid by the municipality to companies associated with the former mayor.

The municipality had regularly passed the inspections of the relevant regional authority without major findings. Nevertheless, the potential damage to the municipality identified by DABRICON’s analytical activities amounted to almost half the municipality’s annual budget and its recovery is subject to further proceedings.