Zugdidi Municipality Should Not Allocate Funds to Zugdidi Agro Service LLC
Zugdidi Agro Service LLC in the Zugdidi Municipality gets its entire funding from the local budget, but the company doesn’t bring any value. Zugdidi Agro Service LLC received GEL 460,000 from the local budget in 2018-2019 and its budget has been set to GEL 350,000 for 2020. Zugdidi Agro Service LLC is the only company amongst three municipal LLCs in Zugdidi that has neither received any income in the previous years, nor has it any defined plans on receiving specific income in the future.
According to its statute, Zugdidi Agro Service LLC has the following functions:
- Production and sale of agricultural products
- Provision of services related to agro-technical procedures
- Combating disease in agricultural crops
- Educational and advisory services on agrarian issues
- Forest restoration, maintenance and protection, arrangement of nursery plantations, processing and sale of timber products
- Other activities that are not prohibited by law
It is not clear which of the following functions is carried out by Zugdidi Agro Service LLC. The representative of the company couldn’t present the information on the functions that the company performs to the Review Group for Legal Entities that was created in the Zugdidi Sakrebulo. The Chairperson of the Sakrebulo, Mamuka Tsotsoria, stated that Zugdidi Agro Service LLC is practically without any function. In practice, these functions are performed by the Ministry of Environmental Protection and Agriculture’s Territorial Unit - Information Consultation Center.
85-88% of the funds allocated to Zugdidi Agro Service LLC in 2018-2019 were spent on salaries.
The remaining money was spent on the acquisition of fuel: In 2018 – 4079 liters to a total value of GEL 7808, in 2019 – 4196 liters to a total value of GEL 9036 (total of 8275 liters in 2018-2019). There is only one car (Opel Vectra) on the registry of the LLC.
The budgetary funding of Zugdidi Agro Service LLC increased to GEL 350,000 in 2020. The number of employees increased as well; there were 21 employees in 2018-2019, and 25 employees in 2020.
It is noteworthy that in 2020, the Zugdidi Municipality planned the implementation of the “Agricultural Development Promotion Program” on the basis of the Zugdidi Agro Service LLC. However, four out of the five objectives defined under this project, namely forest restoration, developing relevant programs, forestation of eroded areas, presentation of the proposals for the use of the forest, is defined in the 2020 budget when the Parliament had already passed with the second hearing the amendments to the Forest Code of Georgia, which completely abolished the notion of municipal forests and made forest management fully centralized. The fifth goal of the program - "Providing environmental education to the population through the media" - may be implemented, if necessary, through tenders/public procurement. Zugdidi Agro Service LLC doesn’t have a website or a FB page.
Transparency International Georgia believes that the Zugdidi Municipality should make the decision to suspend the financing of Zugdidi Agro Service LLC, as the company does not have an income of its own nor does it fulfill its functions. Moreover, the majority of the activities defined as the company’s functions do not fall within the scope of the local self-government’s authority, while another part of its functions is already performed by other public bodies.