Transparency of municipal companies

Published September 25, 2015

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Accountability level of the largest Lithuanian municipal enterprises is only 35 points out of 100 possible, shows the latest “Transparency International” Lithuania study. From 40 companies, which are assessed in this study, most publicly accountable are UAB “Panevėžio energija“ (88 points from 100) and UAB „Dzūkijos vandenys“ (83 points). The least information is provided by UAB “Druskininkų sveikatingumo ir poilsio centras “AQUA” (0 points) and AB “Vilniaus šilumos tinklai” (0 points – no website available).

The study looked at how most earning municipality-owned companies publish information about corruption risk management, their corporate structure and financial information on their websites.

Evaluated companies just like municipalities themselves provide little information about their corruption risk management. Only a quarter (11 of 40) of companies publish their codes of ethics and only every fifth of them (8 of 40) publish their own gifts policy.  Every tenth company publishes how it is possible to report about probable corruption cases. The leader in corruption risk management section is UAB “Panevėžio energija” (85 of 100) which operates in heating sector.

Most detailed reports about company structure, its’ subsidiaries and associates are provided by UAB “Panevėžio energija, UAB “Dzūkijos vandenys”, UAB “Aukštaitijos vandenys”, UAB “Alytaus regiono atliekų tvarkymo centras”, UAB “Vilniaus apskrities atliekų tvarkymo centras”, UAB “Panevėžio autobusų parkas”, SĮ “Susisiekimo paslaugos”. All these municipality-owned enterprises received 100 points.

Enterprise AB “Kauno energija” which operates in heating sector provides the biggest amount of data on the annual budgets, income, tax, executives and staff salaries. Only three more companies publish accurate data on executive salaries.

According to the state enterprise “Turto Bankas”, in 2013 the biggest amount of income was generated in AB “Kauno energija” ( 93,356 mln. Eur) and the smallest amount of income was generated in UAB “Alytaus regiono atliekų tvarkymo centras” (3,06 mln. Eur). Both enterprises share 8th place in the ranking.

“Transparency International” Lithuania offers municipality owned companies to follow government approved “Ownership guidelines” and “Transparency guidelines”, which are dedicated to state-owned enterprises. Also taking into account the best global practices they should timely publicize the most recent annual financial statements, the composition of the boards and political affinities of their members, show in details their organizational structure, ethics and principles of conduct.

The study assessed whether municipality-owned enterprises publish not only mandatory but also additional information about their activities. The disclosure of this type of data could contribute to greater accountability about enterprise activities. When the website analysis had been performed, the results were sent to all companies so they could start publishing more key information and positively adjust their assessment mark.

Methodology of this research is based on private sector transparency study made by “Transparency International” Secretariat (TI-S) “Transparency in Corporate Reporting: Assessing the World’s Largest Companies”.

The study evaluated companies that were ranked as the municipal-owned enterprises with the biggest revenue in 2013 by state enterprise “Turto Bankas”.

Lithuanian municipalities in total own 282 enterprises.

For more information please click here here.