The Court of Auditors finally has reported on Silves council's accounts submitted during the presidency of former mayor Isabel Soares. All is not well.
This report follows an independent audit of Silves accounts commissioned by Mayor Rosa Palma which reported in October 2015 that there had been "gross procurement errors, including work commissioned that should have gone to public tender, work going ahead without the council going through the correct procedures and establishing the bona fides of the contractor and gross overcharging."
The Court of Auditors now is to publish its own report and notes irregularities in the council’s accounts for 2011 and 2012 specifically in the areas of 'procurement of goods and services, contracts, budgets and borrowings that exceeded the allowable debt limit.'
It seems at long last that an official State body has agreed that several financial offences have been committed at Silves council and that Isabel Soares and her successor Rogério Pinto are culpable.
According to the Court of Auditors’ conclusions, there have been serious violations at Silves council “due to the repeated non-compliance with the rules governing public procurement in the procurement of goods and services as well as the work contracted with the construction company Viga D'Ouro.”
The auditors add that the city accounts contained suspicious omissions dating back to 2011 which made the 2011 and 2012 accounts inaccurate and that the Viga d’Ouro contract led to the council incurring "significant extra costs."
The auditors state that the Viga d’Ouro case led to extra costs of €1,344,365 but that these should be recoverable from the person in charge at the time – Isabel Soares.
The Viga d'Ouro case involved Soares awarding a substantial range of projects to Viga d'Ouro Construções Lda for drainage, sewage and water supply work without the inconvenience of going to public tender.
The resulting €6 million in invoices sent to Silves council later were 'factored' by the builder with three banks. This meant the council then owed the money to the banks, not to the builder.
The council was sent 1,220 separate invoices, each for under a €5,000 limit that ensured the work commissioned would avoid the legal necessity of going to public tender.
Payments for the Viga d’Ouro work were suspended by the council in August 2006 and an inquiry opened into the precise circumstances surrounding the awarding of the work and the seemingly endless stream of small invoices from the contractor submitted to the council.
The council later ended up in court as the banks that had factored the invoices sued the council for payment - and won.
It is not clear why the banks took on this debt, but it is suspicious. The bankers must have known that the hundreds of small invoices must have been created specifically by their client to avoid his company having to compete in a public tender and that this might cause payment problems in the future.
Isabel Soares defended the council’s defiance of the procedural rules, and herself against accusations of 'abuse of power,' in a court case that mysteriously was archived in 2012. She said she knew nothing of the Viga d'Ouro deal payment terms and that she could not be expected to know everything that went on at the council.
Soares moved from Silves council to take up the presidency of the regional water company leaving Pinto as unelected president.
In a shock election result, the independent candidate Rosa Palma ousted Pinto and immediately commissioned a full audit of the ‘Soares years’ - tainted as they are by the suspicion of fraud on a grand scale and the alleged use of her presidency to grant lucrative favours to friends and family.
This Court of Auditors report is another step closer to a full court case and the repayment of the money wasted "due to gross procurement errors."
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