Municipal associations are established to promote and protect shared interests across various areas, including waste management and environmental protection. They are non-profit public sector entities and, when managing public funds, are required to comply with financial management and control rules. Their role is to use public resources economically, efficiently, effectively and for their intended purpose.

As part of the audit, the SAO examined the activities of three associations whose principal activity was waste management and which, according to official registers, also operated municipal waste landfills: one interest association of legal entities (ZO Horného Turca) and two associations of municipalities (ZO stredného Liptova and ZO Vyšehradné).

The audit conducted by the national external audit authority revealed that the audited associations lacked a financial management system. Clear rules for financial operations were missing, some governing bodies were not functioning, member municipalities were poorly informed and only minimally involved in activities. Effective financial and internal controls were absent, and mandatory information was not published.

The result was formalistic governance, unreliable accounting and an increased risk of inefficient use of public resources.

One of the most serious findings concerned the Association of Municipalities Vyšehradné, which breached financial discipline in an amount close to €30,000. The association used public funds beyond its legal remit by granting a €25,000 loan to a civic association, which was unrelated to its statutory activities. The audit also identified inefficient expenditure, including €1,250 for 22-page minutes from a general assembly meeting.

“Compliance with financial control rules is essential not only for safeguarding public resources but also for maintaining citizens’ trust in how municipalities and their associations operate and how responsibly they use public funds,” said Henrieta Crkoňová, Vice-President of the SAO SR.

The audit further revealed a high degree of passivity among most member municipalities, reflected in their lack of interest in association affairs and limited engagement of founding members. In ZO Horného Turca, this resulted in decisive influence being transferred to its managing director. The statutes did not provide sufficient safeguards to protect the interests of member municipalities. Publicly available data in official registers were outdated and unreliable.

“By failing to actively exercise their supervisory powers, municipalities effectively relinquished oversight of the associations’ financial management. Without their active involvement, it is not possible to advance shared interests or ensure responsible use of public finances,” added the Vice-President.

Landfill management was a separate area of concern. The Slovak Environmental Inspectorate questioned the method used to calculate the earmarked financial reserve for future landfill reclamation due to a mathematical error in the formula. Although these funds are held in a dedicated account within the State Treasury, national auditors consider the amount to be risky and insufficient to cover all costs related to landfill closure and subsequent maintenance.

For example, auditors found that of the average annual maintenance costs of €10,000 incurred by ZO Vyšehradné for a closed landfill, only €2,400 were covered, while monitoring of landfill gas, groundwater and leachate alone amounted to €2,500 per year.

State auditors also noted that while the volume of landfilled waste decreased in all associations, members of ZO Horného Turca made no significant progress between 2022 and 2024, mainly due to lower landfill fees that did not incentivise improved waste sorting. At the same time, the association’s economic model was based on landfilling the highest possible volume of waste, meaning that any decrease reduced its revenues.

In order to ensure consistent oversight and prevent financial risks in addressing environmental burdens, the national external audit authority recommended that the Parliamentary Committee on Agriculture and Environment instruct the Ministry of the Environment to improve the environmental control system and reassess the method for calculating the earmarked financial reserve for the future closure of municipal waste landfills.