Thursday, September 23, 2004

State Audit rejects Lattelekom's appeal

The State Audit office rejected Lattelekom's appeal of its decision to audit aspects of the 51 % state owned company on the grounds that the appeal concerned an action of the State Audit board that was not subject to appeal.
In other words, while the decisions or conclusions of auditors are appealable, the decision by the board to do an audit and to assign it to a particular unit of the State Audit Office is not subject to review by the board itself under Latvian law.
The State Audit office also said that Lattelekom had not raised any objections to the substance of the audit findings (which have not been officially disclosed). Instead, Lattelekom challenged the standing of the State Audit to subject the company to an audit and to select a particular auditing subunit that audits privatization. Since that was a decision of the State Audit board (or council, however you translate "padome" in haste), it was not subject to appeal.
So there we are, more or less where this blog predicted things would be.
The actual auditors' report cannot be published until the next appellate procedure, going to the court known as the Senats (Senate) is exhausted. Lattelekom has 30 days to appeal and has not made any comment so far.
The legitimate question of how far a state audit can go in overseeing and, indirectly, approving or disapproving of business decisions in a specialized commercial enterprise remains unresolved. As I wrote before, Lattelekom's international auditors have found no fault with the company applying international audit standards. The State Audit, using different criteria, seems to be poking around in operational business decisions, examining the "utility" of some of them.
Will try to see if State Auditor Raits Chernajs remarks to Radio SWH are on the web, I was tipped off he may say something about the substance of the still confidential audit report.

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