High debts plunge into crisis 42 municipalities of the country, 7 of them towards bankruptcy, figures are revealed

Local units in Albania are in poor financial condition. In each of its monthly or annual reports, the Ministry of Finance has indicated that the state coffers have received a severe blow from the municipalities due to high-level arrears and a pronounced lack of revenue. This has been verified by the Supreme State Audit in a recently published report. The analysis made by locals shows that 42 municipalities have very high debts and need time to be controlled, while 7 municipalities are in poor financial condition, without any investment opportunities. "42 of the local government units out of 61 in total, are in financial difficulties because they have short-term and long-term debts in over 25% of the approved annual fund, according to the provisions of the law on local finances, while 7 of them are in financial collapse, as they have higher debts than the annual funds available, where the most deteriorating position is held by the Municipality of Vora and that of Kamza ", the report states. While on a lighter scale, 35 municipalities are in "Financial Difficulty" where the stock of liabilities represents over 25-45% of actual expenditures. Of these, the largest municipalities are Tirana, Elbasan, Vlora, while other smaller municipalities are Lushnja, Berat, Tropoja, Lezha, etc. While the municipalities that have more arrears are counted 19. According to the report, this category is headed by the Municipality of Durrës, followed by Fier and other large municipalities. “Also, according to the definitions in the law on local finances, the municipality is considered with financial problems when in a certain month of the budget year there are delays of more than 30 days in the liquidation of financial obligations to third parties and when the established and unpaid obligations constitute 15 percent of approved annual expenditure. "Without financial problems where the stock of liabilities represents less than 15% of actual expenditures, there are only 19 municipalities, which include Durrës, Fieri, Korça, Gjirokastra, Kruja, Përmeti", the report states. According to the report, the debts accumulated by the municipalities are much higher than the reports they have made to the Ministry of Finance. It is already evident that short-term and long-term debts have reached over 17 billion ALL, or 137 million euros at the end of 2019.

The most problematic municipalities

Among other things, the report specifies that, in total, the stock of arrears only for municipalities at the end of 2019 is a minimum of ALL 12 billion, but may be even higher due to reporting problems identified by KLSH in relation to the expense account of future periods on the basis of which arrears are recorded. While "Serious financial difficulties", where the stock of liabilities according to the assessment of KLSH, represents over 80% of the actual costs are the seven municipalities as follows: Municipality of Shkodra, the stock of liabilities according to the assessment of KLSH, in the amount of 381.7 million ALL , represent 142% of actual expenditures in the amount of ALL 268 million. Municipality of Vora, the stock of liabilities according to the assessment of KLSH, in the amount of 1. ALL 4 billion represent 227% of actual expenditures in the amount of ALL 616 million. Municipality of Mirdita, the stock of liabilities according to the assessment of KLSH, in the amount of ALL 258 million represent 125% of the actual expenditures in the amount of ALL 206 million. The Municipality of Kavaja, the stock of liabilities according to the assessment of KLSH, in the amount of 911 million ALL represent 114% of the actual expenditures in the amount of 801.8 million ALL. The Municipality of Poliçan, the stock of liabilities according to the assessment of KLSH, in the amount of 177 million ALL represent 98% of the actual expenditures in the amount of 182 million. in the amount of ALL 911 million represent 114% of the actual expenditures in the amount of ALL 801.8 million. The Municipality of Poliçan, the stock of liabilities according to the assessment of KLSH, in the amount of 177 million ALL represent 98% of the actual expenditures in the amount of 182 million. in the amount of ALL 911 million represent 114% of the actual expenditures in the amount of ALL 801.8 million. The Municipality of Poliçan, the stock of liabilities according to the assessment of KLSH, in the amount of 177 million ALL represent 98% of the actual expenditures in the amount of 182 million.

Kamza Municipality, the stock of liabilities according to the assessment of KLSH, in the amount of ALL 1.48 billion represent 90% of the actual expenditures in the amount of ALL 1,636,820 thousand. Municipality of Ura Vajgurore, the stock of liabilities according to the assessment of KLSH, in the amount of 277,002 thousand ALL represent 81% of the actual expenditures in the amount of 341,769 thousand ALL.