TI Georgia: corruption prevention mechanisms for state LEPLs weak, expenditures on rise

Transparency International Georgia says that It is a widespread practice in the country, when public institutions, at both central and local government levels, set up subordinate legal entities – Legal Entities of Public Law (LEPLs) and Non-Entrepreneurial (Non-Commercial) Legal Persons (N(N)LPs) – to perform those public functions, which these public institutions are charged with. 

In its recently published survey the organisation says that the number of LEPLs/N(N)LPs subordinated to government agencies is increasing from year to year, while the criteria for their establishment are obscure.

 
“Frequently, a question arises why it is necessary to set up a specific organization to perform the functions, which are directly within the competence of a supervising ministry or mayor’s office. The issue is especially problematic with regard to N(N)LPs, because the obligation to select employees through a competition does not apply to them,” TI Georgia says. 

It states that In response to their requests, they received full or, in some instances, partial public information regarding only 105 out of 150 LEPLs and N(N)LPs selected for the study.
“ According to the received information, in 2020, up to 100 organizations spent GEL 372,267,815.23 on remuneration paid to 28,948 permanent and supernumerary employees,” said the organization. 

It also said that in  2017, GEL 14,288,771.57 was spent on salaries paid to permanent employees working for LEPLs; by the end of 2020, this figure increased by 38.4% and amounted to GEL 19,777,021.63. 

TI Georgia says that a number of anti-corruption regulations do not apply to the state-founded LEPLs and N(N)LPs, most of these organizations do not have effective internal mechanisms to prevent conflict of interests and corruption that further increases corruption risks and complicates the introduction of effective control and integrity mechanisms in these organizations.