2016-09-20
The Price of Inefficient Exercise of the Right of Recourse: an Increased Debt to the State Exceeding 100 Million Euros
Over 2013–2015, the state spent nearly 51 million euros to compensate damages caused by other persons, while the amount recovered on the basis of the right of recourse during the same period is only 1.6 million euros. Audit performed by the supreme audit institution revealed that difficulties in recovering the funds arise not only due to complicated and expensive process of exercise of the right of recourse, but due to the lack of initiative of institutions as well.
“Public institutions exercised their right of recourse to recover only 3 percent of the total amount spent to compensate damages caused by other persons in the relevant year. Failure to rearrange the process of exercising the right of recourse will even further reduce our chances to recover old debts,” said Ingryda Česnakevičiūtė, Chief Public Auditor of the Audit Department 4.
In 2013–2015, the Ministry of Justice spent a total of 2.4 million euros to compensate damages caused by violent crimes and recovered only 23.7 thousand euros through the exercise of the right of recourse over the period. The auditors note that the period of time from the payment of compensations to the presentation of the enforcement document to the bailiff is rather lengthy: it takes three to nine years. To compensate damages caused by unlawful actions of public institutions, the ministry paid out 4.2 million euros and recovered 0.08 percent of the amount through the exercise of the right of recourse during the period. One of the major obstacles in the process is the fact that public institutions failed to determine whether their employees were subject to civil liability.
Statutory institutions managed to recover slightly higher amount of funds during the audit period. In cases of damage to health or death of statutory officers, the institutions paid out 1 million euros in compensations and recovered about 16 percent of the funds through the exercise of the right of recourse. Children's Maintenance Fund Administration spent the highest amount of funds – 43.3 million euros – on the maintenance of children during the audit period; however, it recovered only 1.4 million euros, which is about 3 percent of the amount paid out. The auditors, furthermore, note that during the audit period, the fund administration took action to recover the funds from only 13 percent of debtors, while no recovery has been made from debtors who left the country, even though the necessary legal conditions were ensured.
By the end of 2015, the total debt to the state for the funds spent on the maintenance of children alone was 108 million euros. Other public institutions made no calculations of the amounts that are likely to be recovered, thus accurate amount of debt is not clear.
The supreme audit institution issued recommendations to the Government and the relevant institutions, which, if duly implemented, will help to rearrange the process of exercising the right of recourse, encouraging public institutions to be more active in recovering greater amounts of funds payable to the state from the responsible persons.