Court of Accounts Report: Irregularities detected at the General Directorate of Foundations... 22 billion TL loss

The 2023 Audit Report of the General Directorate of Foundations by the Turkish Court of Accounts (Sayıştay) has been published. According to the report, it was stated that the accounting records regarding certain land and buildings, which were allocated by the General Directorate of Foundations to other institutions or allocated to the administration by other institutions as of 2023, were not kept in accordance with the regulations.

The report stated: "It is understood that the Land and Plots Account, Buildings Account, Accumulated Depreciation and Impairment Provision Account, and Net Value Account in the balance sheet were caused to appear differently than they should have."

The report noted that despite the fact that rents for some properties belonging to the General Directorate of Foundations and mazbut (managed) foundations were not collected when due, the legal procedures specified in the legislation for their follow-up and collection were not initiated, stating: "Within the framework of the legislation explained for the collection of rent payments for properties under the administration's management; it is considered appropriate to transfer the leasing files to the legal unit and initiate legal proceedings for the collection of rents that could not be collected when due, as well as receivables that were restructured under Law No. 7256 but were not paid when due."

'RE-RENTED TO THE SAME INDIVIDUALS WITHOUT A TENDER'

According to the report by ANKA, it was determined that: "It has been detected that properties leased by Regional Directorates were re-rented to the same individuals via a letter of commitment at the end of the lease term without holding a tender. In the examination conducted, it was found that there were properties with lease terms exceeding 10 years, and it was observed that even though the lease terms for these properties had expired, their tenancies continued through the renewal or extension of lease agreements."

The report stated that some purchases of computer software and programs, licenses, and copyrights, which are intangible fixed assets, were directly expensed instead of being recorded in the Rights Account, and that no depreciation was set aside for these assets, assessing: "The direct expensing of some computer software and program, license, and copyright purchases, which are intangible fixed assets, made by the General Directorate of Foundations Headquarters and some Regional Directorates in 2023 by recording them in the Expenses Account without using the relevant asset and depreciation accounts is contrary to the regulations, and this practice causes accounts 260 and 268 in the balance sheet, which is one of the administration's main financial statements, to appear 952 million 677 thousand 92 TL lower."

The report, which stated that expenditures for tangible fixed assets whose construction began in 2023 were recorded in the "Expenses Account" in violation of regulations, emphasized that "As a result of the irregularity, the 'Construction in Progress Account' in the balance sheet appeared 22 billion 463 million 411 thousand 62 TL lower."