The State Audit Institution (DRI) conducted a review of EPCG Solar-gradnja, resulting in a negative opinion on both the company’s financial statements and compliance for 2024.
Under the leadership of former director Milutin Marojević, recently succeeded by Sanja Žugić, and with Marina Jočić from the New Serbian Democracy party as Chair of the Board, the audit found several financial and operational irregularities.
Key findings include improper calculation of deferred tax assets, leading to an understated profit by €63,700. The company also reported higher non-deductible expenses of €22,300 related to unpaid liabilities. Additionally, EPCG Solar failed to account for employee-related provisions such as severance, jubilee awards, and other obligations, resulting in unrealistic financial reporting.
The audit identified numerous legal non-compliances involving internal controls, labor laws, public sector salaries, asset protection, public procurement, asset inventories, and employee expense reimbursements. For example, 357 employee contracts were converted from fixed-term to permanent without public announcements or meeting legal criteria, violating labor law. Salary funds were not reduced despite consecutive losses (€2.2 million in 2022 and €2.7 million in 2023), breaching public sector salary regulations that mandate salary fund reductions after losses.
Other issues included improper use of service contracts for roles that should be systematized, irregular spending on representation, deficiencies in asset inventories, revenue reporting, and delayed debt collection procedures. Public procurement laws were violated by splitting purchases to avoid limits, exceeding the €100,000 annual threshold for simple procurements.
EPCG Solar received 23 recommendations, with obligations to submit an implementation plan by July and a progress report by December. Reports have been submitted to EPCG, the Ministry of Finance, the parliamentary Committee on Economy, Finance and Budget, and the State Prosecutor’s Office.
In 2024, EPCG Solar generated €7.8 million in revenue, primarily (€7.4 million) from services provided to its parent company EPCG and subsidiaries. Costs exceeded €7.7 million, with €6.8 million spent on salaries, service contracts, board member fees, taxes, and contributions.
