State Supreme Audit finds endless violations in 2025 budget, economic and financial damage of 135 million euros

The State Supreme Audit Institution, in its report on the implementation of the 2025 state budget, has found numerous violations ranging from contracting procurement procedures with values higher than available funds; commitments above approved budget funds; significant increase in the stock of tax and customs debt; shortcomings in planning and detailing public investments; opening investment funds without detailing them into concrete projects; shortcomings in technical support for financial information systems, with budget execution continuing through physical submission of documentation to Treasury branches; revision of the 2025 budget plan even after the end of the budget year, until February 2026; considerable concentration of payments at the end of the year, where over 20% of annual expenditures were made in December alone.

According to the annex of the report, audits have identified 171.9 million lekë in economic damage and 12.3 billion lekë in negative financial effects. In total, the value of the two categories reaches about 12.5 billion lekë, or approximately 135 million euros.

Due to significant non-compliance with legal requirements, the State Supreme Audit Institution has issued a qualified conclusion on the implementation of the 2025 budget, highlighting problems in its planning, execution and reporting.

Procurements for 16.8 billion lekë with insufficient funds

One of the biggest problems relates to the management of public investments. The State Supreme Audit Institution has found that in 44 cases procurement procedures were launched for contracts with a total value of 16.8 billion lekë, although available budget funds were lower than the value intended to be contracted.

In 39 other projects, financial commitments were made that exceeded approved funds, with a difference of 4.28 billion lekë. Institutions have taken on obligations beyond the planned financing, creating a risk of lack of funds during contract implementation and an increase in arrears.

The audit has also identified cases where project funds were reduced after contracts were signed, as well as discrepancies between the total cost of investments and the financing distributed over the years. The problems have been accompanied by delays in the completion of works and shortcomings in monitoring contract implementation.

Violations were also found in advance payments. For three investment projects, with total advance payments of 1.15 billion lekë, the State Supreme Audit Institution did not find documentation justifying their treatment as cases of special importance.

For two of these projects, with advance payments of 841.7 million lekë, the documentation of prior approval by the Minister of Finance was also missing. In these cases, advance payments had reached 20% of the contract value, compared with the maximum allowed limit of 10%.

The problems are not limited to lack of funds. Audits in public institutions have identified shortcomings in drafting cost estimates, defining technical specifications and qualification criteria, fragmentation of procurement funds, as well as cases where economic operators that did not meet the required criteria were declared winners.

The State Supreme Audit Institution has also found unjustified changes to contract deadlines and cost estimates, delays in completing works, non-application of contractual penalties, and cases of payments for work not performed or without supporting documentation.

Billions of lekë in investments planned without concrete projects

Numerous shortcomings have been identified as early as the stage of budget drafting and public investment planning.

According to the report, during 2025 investment funds worth 5.26 billion lekë were opened without being detailed into concrete projects. The funds were made available without fully defining the investments for which they would be used.

Meanwhile, 32 contracts started in previous years did not have funds opened in the initial 2025 budget, even though they were ongoing investments and required financing to meet contractual obligations.

During the year, 17 projects were also added with contract values of 2.45 billion lekë, which were not part of the Medium-Term Budget Program and had not fully followed the required procedures for managing public investments.

At the end of the year, 188 projects had planned funds of 3.59 billion lekë, but had no implementation at all. Although these investments had not advanced, the funds were not redistributed to other projects that needed financing.

Planning problems were also accompanied by considerable under-implementation of investments. Capital expenditures in 2025 were 25.45 billion lekë less than the final plan, mainly due to delays in projects with foreign financing. Investments financed from foreign sources alone were 15.83 billion lekë below the projected level.

The 2025 budget was changed even in February 2026

Another problem identified by the State Supreme Audit Institution relates to the continuous changes to the budget plan, including revisions made after the end of the financial year.

During 2025, 28,412 changes to budget items were recorded in the Government Financial Information System, belonging to 3,106 separate revisions. About 17% of these revisions were made in December alone.

The State Supreme Audit Institution has also found changes after the legal deadline of 15 November, related to Normative Act no. 11, approved on 19 December 2025, just a few days before the end of the budget year.

Moreover, according to the report, cases have been identified where the 2025 budget plan was revised until February 2026, after the financial year had ended.

The audit also found discrepancies between indicators approved by the budget law and those recorded in the government financial system. The differences include non-tax revenues, current and capital expenditures, undistributed funds, and deficit financing indicators.

The State Supreme Audit Institution has also identified non-compliance with deadlines for preparing budget documents, requests for financing above approved ceilings, and lack of supporting documentation for part of the planning.

Thousands of contracts and invoices registered late, financial systems without maintenance, still with physical submissions

Budget execution has also been accompanied by problems in the functioning of public finance information systems.

According to the State Supreme Audit Institution, the Albanian Financial Management Information System has operated without technical support since July 2024, while the Government Financial Information System has remained without maintenance and external functional support after the end of the contract in October 2025.

Under these conditions, part of the budget execution procedures have continued through physical submission of documentation to Treasury branches, instead of fully electronic administration.

Delays in administering financial documentation have involved considerable amounts. The State Supreme Audit Institution has found that 748 spending units submitted 25,793 invoices outside the legal deadline, with a total value of 64.24 billion lekë.

Contract registration also had major delays. During the year, 5,868 contracts were registered outside the five-day deadline, with a value of 119.55 billion lekë.

Contracts worth 25.24 billion lekë were also identified as having been concluded after the legal deadline of 15 October 2025, as well as late registrations of procurement orders and contracts from previous years.

Shortcomings were also found in the manner of making payments. In 40 cases, with invoice values of 3.26 billion lekë, the chronological order of settlement was not respected.

The rule requires that invoices be paid according to the order of registration, while the audit has identified cases where this order was changed.

Tax and customs debt exceeds 256 billion lekë

The administration of public revenues presents another significant problem. At the end of 2025, tax debt reached 194.43 billion lekë, increasing by 31.9 billion lekë, or 19.6%, compared with the previous year.

About 60% of tax debt consists of obligations older than five years, for which the possibility of collection becomes increasingly difficult.

Customs debt has also increased significantly. At the end of the year it reached 61.83 billion lekë, with an increase of 12.71 billion lekë, or 25.9%. About 77% of customs obligations are older than five years.

Together, unpaid obligations to the tax and customs administration reached 256.27 billion lekë, with an increase of 44.61 billion lekë within one year.

The State Supreme Audit Institution has found shortcomings in identifying and tracking debtors, delays in implementing forced collection procedures, and weaknesses in monitoring old obligations.

The problems also extend to tax audits. At the end of 2025, there were 793 unfinished audits, while in VAT refund procedures, the legal 60-day deadline was exceeded in 280 cases and the chronological order of handling requests was not respected in 160 cases.

In the customs administration, shortcomings were found in selecting controls based on risk analysis, documenting investigations, customs valuation of goods, and following up on obligations and penalties.

Over 20% of annual expenditures were made in December alone

The State Supreme Audit Institution has identified a considerable concentration of budget payments at the end of the year, although part of the expenditures related to invoices issued many months earlier.

In December 2025, budget expenditures reached 162.54 billion lekë, representing 20.3% of the annual total.

During this month alone, 14.96 billion lekë in invoices for capital investments and 8.9 billion lekë for operating expenditures were settled, which had been issued during the period January–November. In addition, 955 million lekë in investment invoices carried over from 2024 and previous years were paid.

The concentration of payments at the end of the year was accompanied by strong fluctuations in fiscal indicators. During the period January–November, the budget had created a surplus of 49.12 billion lekë, while in December alone it recorded a deficit of 96.21 billion lekë.

The annual deficit was 47.09 billion lekë, within the planned limit. However, the State Supreme Audit Institution has found inaccuracies in the recognition and classification of certain revenues and expenditures, which have affected the reported deficit level.

The audit has identified that a transfer of 16.59 billion lekë for the Pension Fund was included in general expenditures, which the State Supreme Audit Institution does not consider a budget expenditure. Operating expenditures registered as capital investments were also found, as well as discrepancies in reporting arrears. / Monitor