Audit Finds State Companies Often Lack a Long-Term Strategy ({{commentsTotal}})


The National Audit Office has concluded its study of nine large state-owned companies, finding that nearly half did not have a long-term strategy.

Tarmo Olgo, head of the Performance Audit Department at the Audit Office, told today that a strategy is a long-term document that explains where the company will be in five or ten years, and a number of larger companies, including Eesti Energia, do not have a strategy approved by their board.

The audit was released hours after Erkki Raasuke, an adviser to the Minister of Economic Affairs, proposed uniting all state enterprises under one roof, standardizing dividend and investment policies, and depoliticizing boards.

Raasuke said the umbrella organization could earn the state an extra 75 to 100 million euros annually.

The Audit Office's study also found that, of the state enterprises had an approved strategy, in many cases that strategy was not regularly reviewed by their boards. Of the nine large state companies audited, only one, Elering, met all the criteria.

The audit attributed many shortcomings to the shareholder, the state, not knowing why it needs to keep the companies.

A second cause for concern raised by the audit is the method, or lack thereof, of appointing board members, who often lack necessary skills and knowledge.

The office concluded that, regarding these problems, not much has changed since the last audit in 2007.

State-owned enterprises together have five billion euros worth of assets.

Finance minister skeptical

Finance Minister Jürgen Ligi told Äripäev today that he is skeptical of the idea to gather all state companies under one roof, adding that the idea is not a new one and would just add an extra layer of bureaucracy.

He said that state enterprises have far more means than the national budget, and it is a difficult task to extract dividends from them.

Common strategies for those companies can be implemented without a central agency, Ligi said.

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