A. In the Republic of Latvia the EU funds administration and control system is established at several levels, which during the audit period enabled detection of public procurement errors in the indicative amount of 1%from the total amount declared to the EC, however:
A1. There is a risk that the actions of institutions involved in management of the EU funds in clarifying of the principles and legal framework of public procurement, as well as the impact of the detected errors on procurement procedure are insufficient and ineffective, since:
1.1. The biggest part of the errors or 57% from the total number of errors detected by institutions involved in management of the EU funds, which were subject to proportional financial corrections during the audit period, in all operational programmes were pertaining to unlawful restrictions for selection of tenderers (for example setting specific requirements that favour a single businessman) or unequal treatment of tenderers in awarding of the contract (for example, unjustified preferential treatment given to one of candidates invited to negotiate), indicating that the beneficiaries are not completely aware of the procurement procedures;
1.2. In 45% of the cases the reasons of errors indicated by the beneficiaries do not correspond to the reasons indicated by the audit authority, the responsible and cooperation authorities; for example, in cases when beneficiaries have not selected any of the six reasons of errors, they have indicated to “other reason of error” and in 50% of cases they described these errors as differences in opinion with the institution which had detected the error;
A2. The procedure for data entering and classification of errors in the EU funds management information system is inaccurate — information on public procurement errors is entered without specifying the type of error, as well as the EU funds management information system does not aggregate information on procurement contracts in order to enable determining whether the contracts are subject, not fully or not subject to EU Public Procurement Directives and to apply a respective financial correction.

B. At the result of the audit three recommendations were issued to the Ministry of Finance as the managing authority aimed at:
B.1. Ensuring that detailed information is being entered and accumulated within the EU funds management information system on public procurement errors, so that institutions involved in management of the EU funds can analyse this information and perform sufficient actions to eliminate the errors;
B.2. Ensuring that institutions involved in management of the EU funds provide purposeful support to the beneficiaries in respect to procurement procedures and detailed explanation of the substance of the detected errors in order to reduce the number of public procurement errors within projects financed by the EU funds;
B.3. Reduction of the number of unclassified errors by ensuring accurate classification and evaluation of errors according to their type.