Auditors' Warning: 8 Million KM Available, SIPA Lacks Special Support Unit Base

SARAJEVO, (Patria) – The BiH Institutions Audit Office, in its report on the financial audit of the State Investigation and Protection Agency for 2019, once again warned that the project for the construction of the Base for the accommodation and training of the Special Support Unit, approved based on the Decision on approval of multi-year capital investment in 2012 for a total amount of 9,263,000 KM, has still not been realized. 

Although the project duration was set for 2012–2016, construction of the Base has not yet begun. The unrealized amount of 6,662,587 KM from the previous year was carried over to the 2019 Budget, with an additional 1,152,000 KM approved, making a total of 7,814,587 KM available in 2019.

Of this amount, 780 KM was realized for the preparation of a plot division study for the construction of the Base for accommodation and training of the Agency's Special Support Unit in the municipality of Istočno Novo Sarajevo. During 2019, the Agency managed to extend the validity of the bank guarantee for the advance payment made to the company with which a contract was concluded for the public procurement of services for the preparation of urban-technical documentation – the main project for the construction of the Base, for which over 142,000 KM was paid.

“However, the risk of further extension of the bank guarantee has increased because the selected bidder for the services in question is not at fault for the situation that has arisen, but, in good faith that the obstacles will be removed within a reasonable time, has cooperated and provided a bank guarantee with an extended validity period during 2019 and early 2020. The audit has also pointed out risks in previous audit reports that could jeopardize the continuity and efficiency of project implementation in the future,” the Report of the BiH Institutions Audit Office states. 

To date, the land purchase for the Base construction has been realized (441,126 KM), which has been accounted for in the General Ledger under the land account. The tender procedure for selecting the most favorable bidder for the conceptual design of the project has been completed, and the negotiated procedure without prior publication of a contract notice for the public procurement of urban-technical documentation services – the Main Project for the construction of the Base has been concluded, and a company has been selected to perform these services. The selected company submitted the urban-technical documentation – the Main Project to the Agency in electronic form within the agreed timeframe, after which the public procurement procedure for the revision services of the said documentation should have followed. This is a prerequisite for obtaining a building permit for the Base from the local community.

However, before initiating the procedure for procuring project revision services, it was necessary to secure location conditions from the local community (Municipality). The Agency has repeatedly contacted the competent Municipality for location conditions, which were not provided during the reporting period. After obtaining the location conditions, the Agency should undertake activities to implement the Main Project. As of the date of this report, conditions for the implementation of the Main Project have not been secured, as the Agency has not obtained the location conditions for the facility to be built, which are to be provided by the competent Municipality. 

“The delay in project implementation results in inefficient management of significant reserved financial resources for these purposes, as well as a potential risk of losing the advance payment. Furthermore, the Agency is facing the consequences of failing to fulfill obligations undertaken by concluding contracts for the public procurement of urban-technical documentation services – the Main Project for the construction of the base with the selected bidder,” the Report states.

Therefore, the auditors recommended that the Agency inform all competent institutions about the problems (consequences) it is facing due to the delay in the implementation of the multi-year capital investment in the construction of the Base for accommodation and training of the Special Support Unit, all in order to protect the interests of the Agency and the available budgetary funds of the Agency.

The auditors also stated that the Agency should inform the competent Municipality of all legal and financial consequences that the Agency is facing, or may face, due to the delay of the said project.

Why isn't the location for the Base being changed?

A few years ago, there was an active idea to build the Special Support Unit base at a different location, namely in Sarajevo, because SIPA's headquarters are in Istočno Sarajevo. Otherwise, after the Agency was established in May 2004, its headquarters were in Sarajevo. With amendments to the Law on SIPA in May 2012, SIPA's headquarters were moved to Istočno Sarajevo. 

Interestingly, the official website of SIPA still lists four Regional Offices: Sarajevo, Banja Luka, Mostar, and Tuzla, even though there is no facility in Sarajevo (FBiH) used for the needs of the Sarajevo Regional Office. All employees perform their duties at SIPA's headquarters in Lukavica (Republika Srpska).