Submitting Reports for Financial Inspection by State Authorities, Individuals, and Legal Entities
Content of the Report, Rules and Procedure for Review, and Possibilities for Initiating an Inspection
1. Legal Basis for Initiating a Financial Inspection – Article 5, Paragraph 1, Item 1 of the Public Financial Inspection Act
One of the grounds for initiating a financial inspection is the submission of a report or complaint.
Reports or complaints may be submitted by state authorities, individuals, or legal entities. The allegations in the report or complaint must relate to potential violations in the budgetary, financial, or accounting activities of the entity concerned.
2. How to Submit a Report or Complaint?
You can submit your report or complaint through the following channels:
- Electronically, signed with a qualified electronic signature via:
• The PFIA Electronic Administrative Services Portal.
• The Secure Electronic Delivery System.
• The Electronic Message Exchange Environment.
• The official PFIA email address: adfi@adfi.minfin.bg.
- Via the physical mailbox for reporting irregularities, corruption, fraud, and misuse of budgetary funds, including EU funds, located at the entrance of the PFIA building.
- In person, at the PFIA Registry Office.
- By post, to the following address: 2 Lege Street, Sofia 1040, Bulgaria.
3. Where Can Financial Inspections Be Initiated Based on Submitted Reports or Complaints?
PFIA may conduct inspections based on submitted reports or complaints in the following entities:
- Budget-funded organizations.
- State-owned enterprises under Article 62, paragraph 3 of the Commercial Act, as well as municipal enterprises.
- Commercial companies with a blocking quota of state or municipal participation in their capital.
- Commercial companies in which an entity under items 2 or 3 holds a blocking quota.
- Legal entities with obligations guaranteed by state or municipal assets.
- Non-profit legal entities under the Non-Profit Legal Entities Act and unincorporated partnerships under the Obligations and Contracts Act in which the state or a municipality directly or indirectly participates in their assets.
- Aid administrators, recipients of state or de minimis aid, and entities financed with funds from the state or municipal budgets, international agreements, or EU programs, as well as entities financed by state-owned enterprises under Article 62, paragraph 3 of the Commercial Act — regarding the use of such funds.
Reports or complaints concerning entities outside the scope listed above are not subject to review, as PFIA does not have the legal authority or competence to conduct inspections in such cases.
4. What Should a Report or Complaint Contain?
Each submitted report or complaint must include the following three key elements:
Inspected entity: Information about the name and registered address of the entity where the alleged violations occurred.
Violations: Sufficient and specific details regarding violations in budgetary, financial, or accounting activities, as well as in the awarding and execution of public procurement contracts.
Submitter: Identifying information about the person submitting the report — name, contact address, and signature, along with an explanation of how they became aware of the alleged violations.
5. Which Reports or Complaints Are Not Reviewed?
A submitted report or complaint will not be reviewed in the following cases:
- The name and registered address of the entity are not provided.
- The statutory time limits for imposing administrative or financial liability have expired.
6. Rules for Reviewing Reports and Complaints
6.1. Initial Review by the Standing Committee
All incoming reports and complaints are reviewed on an ongoing basis by a standing committee of PFIA staff, appointed annually by order of the Director of the Agency. The committee verifies whether the submissions meet the requirements outlined in Section 4.
During its sessions, the committee assesses whether the report or complaint includes:
- The name and contact address of the submitter.
- A signature (handwritten or qualified electronic signature).
- Sufficient and specific information regarding violations in budgetary, financial, accounting activities, or in the awarding and execution of public procurement contracts.
Sufficient and specific information refers to clearly stated facts, personally known to the submitter, from which it can be established that a specific legal obligation has been violated in relation to: Budgetary and/or financial and/or accounting activities; The awarding and execution of public procurement contracts; Within a defined period.
Violations in budgetary, financial, or accounting activities may include breaches of:
- The Public Finance Act;
- The Accountancy Act;
- The Municipal Debt Act;
- The Government Debt Act;
- The Financial Management and Control in the Public Sector Act;
- The State Budget Act of the Republic of Bulgaria for the respective year;
- The Concessions Act;
- The State Aid Act;
- The Ordinance on the Conditions and Procedure for Granting Compensation for Reduced Revenues from Regulated Public Transport Fares;
- Decrees of the Council of Ministers implementing the State Budget Act for the respective year.
Violations in the awarding and execution of public procurement contracts refer to breaches of The Public Procurement Act and its Implementing Regulations.
6.2. Evaluation for Inspection Assignment
Reports and complaints that meet the requirements under Section 4 are further evaluated by the standing committee to determine the effectiveness of initiating a financial inspection.
The evaluation is based on the criteria set out in Article 5, paragraph 2 of the Implementing Regulations of the Public Financial Inspection Act (IR-PFIA), including:
- Public interest.
- Possibility of imposing administrative or financial liability or taking follow-up legal actions within the statutory time limits.
- Reliability of the information.
- Type and value of the alleged violations.
- Position of the potential offender.
- Other relevant factors.
Based on this evaluation, the committee prepares a reasoned proposal to the Director of the Agency either to initiate a financial inspection or to decline such action.
6.3. Notification of the Submitter
The submitter is notified in writing when a decision is made to initiate a financial inspection, as well as in cases where such inspection is declined.
If an inspection is initiated, the submitter may request access to the results in accordance with the Access to Public Information Act.
According to Article 8b of the Implementing Regulations of the Public Financial Inspection Act, inspections based on reviewed and evaluated reports or complaints are carried out in accordance with the administrative capacity of the Agency.
Priority is given to inspections:
- Assigned by the Prosecutor’s Office;
- Requested by the Council of Ministers, the Minister of Finance, or the AFCOS Directorate at the Ministry of Interior.