In 15 audited companies with the State Treasury share the non-production costs varied - they ranged from a part-per-thousand to as much as 30 percent of all costs incurred by the companies. NIK verified precisely what the companies had used PLN 360 million for.
The biggest part of that amount - PLN 197 million (55 percent) was spent on expertise, research and advisory services. The companies commissioned those services in line with their business. The irregularities discovered on that occasion pertained to the breach of public procurement regulations and internal provisions on the commissioning of such services. In Katowice Mining Holding [Katowicki Holding Węglowy: KHW S.A.] a peculiar situation occurred - although the company had an agreement with a law firm, it submitted legal advice requests to other law offices. Consequentially, KWH S.A. paid more for such requests than it would to the legal counsels it had selected before.
The costs that 10 of 15 companies incurred due to the activity of in-house trade unions were related mainly to financing salaries of the unions’ management board members. They were released from the obligation to provide work during the term of office in the management board, upon maintaining the right to remuneration. The NIK auditors revealed that in three companies such a solution had been provided to a bigger number of employees than allowed by the law. For instance, in Stalowa Wola Steelworks an additional amount of PLN 153 thousand was paid. Moreover, that amount was incorrectly recognised against tax deductibles. Other costs borne by companies were related to free-of-charge provision of rooms, telephones and faxes to the unions. It was KHW S.A. that spent most on the activity of the in-house unions - nearly PLN 7 million per year.
In line with the law, trade unions could also release employees from the obligation to provide work (upon keeping the right to remuneration) for the time essential to carry out ad hoc works for the union (e.g. renovation of rooms). The trade unions from KHW S.A. used that loophole. The employees were given long sick leaves, although the union works commissioned to them were not of ad hoc nature. A record-breaker took a sick leave for 452 days in two years.
All of the audited companies financed training programmes and conferences for their employees. In two companies the NIK auditors detected serious irregularities which pointed to uneconomical management and a breach of public procurement provisions. For example, KHW S.A. sent a group of 30 employees for four days’ seminar to Great Britain. The training part covered only one day, in the time between breakfast and lunch. The remaining time was filled with the tourist programme. The trip cost was PLN 133 thousand. The same company sent four employees to Cambodia for a two-week journey organised by a trade union. What for? The management could not tell the inspectors what the business objective of the journey was. And its cost for KHW S.A. was PLN 21 thousand. Another example of mismanagement is the Lublin Radio [Radio Lublin S.A.] which commissioned organisation of a congress and seminar without a tender for EUR 17.5 thousand. In that way it infringed the public procurement law.
Financing of the social, sports, charitable and cultural activities made up 30 percent (PLN 108 million) of the reviewed non-production costs. The Minister of State Treasury issued a regulation - due to the lack of provisions that govern the sponsoring activity of companies with the State Treasury share - defining the model principles of conducting such activity. The irregularities identified by inspectors were related to the non-observance of those regulations. The Minister of Economy did not take similar actions with regard to the mining companies where it exercised corporate governance. NIK points out that due to the lack of such principles the companies financed undertakings, of which usefulness and efficiency were hard to justify.
A striking example of such situation is that the inspectors questioned the agreement under which KHW S.A. paid PLN 440 thousand for the company promotion during a union jubilee. The audit showed that watches for the trade unionists had been bought for PLN 305 thousand (in reality they were worth PLN 64 thousand), and the remaining amount had been spent on food and alcohol. According to NIK, similar behaviours may point to corruption-prone mechanisms in the mining company.
The donations represented the smallest part of the analysed non-production costs, i.e. 1.9 percent (PLN 6.8 million). 12 of 15 companies granted such donations. Only in three companies internal procedures defining the principles of granting them were established. The minor irregularities derived from the infringement of those regulations.
