The current audit was carried out in twenty towns and municipalities with up to 10,000 inhabitants across all regions of Slovakia. Auditors focused mainly on whether local governments complied with legal requirements when selling or transferring ownership of real estate. They examined 207 asset transfers worth more than €6.7 million and found deficiencies or significant breaches of rules in almost 59% of cases. These problematic transactions involved assets worth over €3.9 million. Due to suspicions of unlawful conduct by representatives of the municipalities of Pukanec and Tornaľa, the office is referring its findings to law-enforcement authorities. On a positive note, municipalities – partly thanks to SAO SR recommendations – no longer sell assets for symbolic prices and increasingly seek to improve their property. In 2023 and 2024, the audited municipalities enhanced and increased the value of their real estate by nearly €16 million.

The most persistent problem remains the use of the so-called reason worthy of special consideration, which municipalities often applied incorrectly and to the detriment of transparent public tendering. This mechanism should be used only exceptionally – for instance, when a resident has long used a plot that the municipality cannot otherwise utilise. However, the audit revealed that municipalities relied on this method far too often – in more than 65% of cases, nearly identical to the 66% identified five years ago. The SAO therefore recommends that the Ministry of Finance and the Association of Towns and Municipalities of Slovakia define clearer rules for these transactions to prevent misuse and ensure an unambiguous, defendable process. Some municipalities could not justify why they used this method, failed to indicate the general market value of the assets, or did not provide transparent public information about their intention to sell property in this way. These issues were identified, for example, in Medzev, Turzovka, Marcelová and Trstice.

“If the law is not amended and conditions are not tightened, municipalities will continue to sell their assets under the special-consideration mechanism. The amendment to budgetary rules now allows them to use reserve funds from asset sales for routine operation. This could result in money meant for development and modernisation being spent on day-to-day running costs instead,”
said Henrieta Crkoňová, Vice-President of the SAO SR.

The audit also showed that public tendering, which can produce the highest purchase offer, was used in only 15% of transactions. In Tornaľa, the tender had serious shortcomings, lacked transparency and failed to ensure fair competition. The town council eventually approved a councillor’s offer that was 50% lower than the original winning bid submitted by his wife, who subsequently withdrew from the contract. In Pukanec, the municipality failed to return the purchase price despite the cancellation of the land-registry entry, acting in breach of the Civil Code. Instead of holding a public tender, the municipality deliberately amended its asset-management rules and carried out the transfer as a case worthy of special consideration.

The SAO SR further notes that municipalities have not updated their internal asset-management rules in line with the latest legislation and have not established precise criteria for identifying surplus assets. There was no clear definition of the process for assessing and approving surplus property, increasing the risk of unclear or non-transparent asset management. Internal control mechanisms were also weak: municipal chief controllers often carried out audits too late or not at all. Basic financial control was frequently conducted only after a contract had been signed, eliminating the possibility of preventing uneconomical decisions. Municipalities also failed to sufficiently protect their interests, omitting sanctions or rules for late payment in their contracts and failing to impose late-payment interest.

Given the persistent shortcomings in real estate asset management, the audit office recommends considering a model in which specialised asset management would be provided by central municipalities – larger towns with greater capacity and expertise.

“A professionally equipped team of specialists could provide services to smaller neighbouring municipalities that currently lack sufficient staff or experience. The aim is to ensure that public property is protected, managed efficiently and sustainably, and serves the interests of residents,”
explained H. Crkoňová.

The SAO SR also emphasises the need to strengthen internal control systems and the role of municipal chief controllers, who should review asset-transfer processes before sales contracts are concluded.

“Only then can we prevent wasteful decisions, strengthen public trust in local government, and ensure that municipal assets truly serve the public interest,”
she added.