AKP mayors leave ruin in their wake

Ozan Çepni
 
The Court of Account has contradicted Istanbul Metropolitan Municipality’s former mayor, Kadir Topbaş, who said on resigning, “I am not leaving an indebted municipality.” It has emerged from the Court of Account report that there were overdue debts of TRY 1.9 billion on the municipality’s 2016 balance sheet, including TRY 450 million to the public administration and TRY 953 million in foreign debt. Appearing on the balance sheet of the municipality run by Ankara Metropolitan Municipality Mayor Melih Gökçek, whose resignation is on the cards, was short-term domestic debt of TRY 941 million, TRY 367 of this owed to public administrations and an overdue TRY 1 billion in outstanding payments. The Court of Account has published its auditing reports into the 2016 municipal accounts. Even if Istanbul Metropolitan Municipality Mayor, Kadir Topbaş, a victim of “metal fatigue” in the AKP having resigned at President Tayyip Erdoğan’s behest, commented on standing down, “I am not leaving an indebted municipality. I wish in particular to state this,” the details in the Court of Account report have proven Topbaş wrong. As to Ankara Metropolitan Municipality Mayor Melih Gökçek, who is expected to stand down in the coming days, if he resigns he will leave Ankara saddled with hundreds of millions of lira in debt.
 
In the billions
 
On Istanbul Metropolitan Municipality’s balance sheet included in the Court of Account report, there was an overdue amount of TRY 1,892,856 in the Outstanding Amounts Payable Account under the head of Operating Debt used according to the Ministry of Finance General Budget Accounting Regulation “to track amounts that, even if assigned a payment order document within the financial year, remain unpaid to interested parties due to a shortage of funds or non-application by the payee”. A total of TRY 502 million was recorded in Istanbul’s short-term domestic debt accounts, comprising 450 million owed to public administrations and 52 million in bank loans. There was the notable amount of TRY 953 million in Istanbul’s Short-Term Foreign Financial Debt account, with this group of accounts described in the Regulation as being for “tracking the principal amount, and exchange rate differences added to or deducted from the principal amount, of foreign financial debt whose maturity date falls within the operating period along with long-term foreign financial debt whose time to maturity is less than one year at the end of the period.” Topbaş was also determined to have paid a total of TRY 94 million in interest, 11 million on domestic loans and 82 million on foreign loans, in 2016. From the results of municipal operations table, it was established that TRY 15 million was paid by way of subsidy and TRY 35 million due to “negative exchange rate differences incurred in drawing on foreign currency reserves.”
 
Gökçek’s performance
 
In the accounts of Ankara, run by Gökçek rumours of whose impending resignation have been doing the rounds for days, there was a noticeable increase in 2016 in certain debt items that had been eliminated in the past two years. On the balance sheet contained in the Court of Account report, Ankara’s short-term domestic financial debt rose in 2016 contrary to recent years to TRY 941 million. An amount valued at TRY 1.055 billion was recorded under the Operating Debt item in which the municipality’s overdue payments are tracked. Additionally, Gökçek’s long-term domestic financial debt was determined to total TRY 1.665 billion. The amount of debt in the long-term liabilities account fell over the past year from TRY 2.1 billion to TRY 1.685 billion. It was noteworthy that Gökçek paid TRY 174 million in interest in 2016 and that Ankara’s account tables were not sent in as much detail to the Court of Accounts as Istanbul’s. It was established in the inspections conducted that Gökçek took out a 60-month bank loan of TRY 200 million in August 2016, interest of TRY 114 million will be paid from the municipal budget on repayments due until February 2019 and these were booked to the wrong accounts. Also included among the findings were that the leases of immovable properties whose lease periods had ended were extended with former tenants when these should have been put out to tender again and re-leased, and inadequate measures were taken for the work health and safety of the entity’s staff.
 
Detected improprieties
 
From among the findings made by the Court of Account, the most striking in the case of Istanbul were the findings that staff who did not meet statutory requirements were appointed to the boards of directors of companies owned by the municipality. The Court of Account came to the conclusion that six engineers, three architects, one expert and eight consultants appointed to the boards of directors of municipal companies could not be deemed “staff with directorial capacity.” Also numbering among the findings was that the municipality was not receiving shares in the profits of its subsidiary companies, funds which pursuant to the Law on Squatter Settlements must only be used for the purposes laid down in this statute were transferred to the municipality’s general accounts and there had been improprieties in tenders conducted for the leasing of immovable property owned by the municipality.