Financial Crime World

Risk Management Lags Behind in Bulgarian Municipalities

A recent survey has revealed a concerning lack of risk management strategies among Bulgaria’s municipalities, highlighting the need for improved practices and increased transparency.

Risk Assessment and Mitigation

According to the survey, only 87.7% of municipalities have assessed their risks at least once since 2014, with 12.3% having never done so. Furthermore, many municipalities have neglected to include important issues such as immigration waves and social turmoil in their risk assessments.

  • Only 13% of respondents said they had taken sufficient measures to prevent incidents associated with identified risks.
  • Most municipalities rely on designated workgroups comprising administrators alone, rather than working groups with external experts.

Job Descriptions and Functional Characteristics

The survey also revealed that job descriptions in many municipalities do not comply with all formal requirements. Specifically:

  • Only 78% of job descriptions meet the necessary standards.
  • Just 49% of administrations have defined the functional characteristics of individual administrative units.

Transparency and Communication

While most municipalities (87.5%) publish online information about their strategic and operational objectives, as well as news and announcements, there are concerns about feedback mechanisms:

  • Only 54.5% maintain facilities for feedback from citizens on their official websites.

Implementation of COSO’s Internal Control Integrated Framework

The survey also highlighted concerns about the implementation of COSO’s ICIF in municipal administrations:

  • Only 25% have implemented it fully.
  • Many municipalities fail to carry out regular audits, with only 51% of internal audit units carrying out audits in 2016.

Correlations and Conclusion

The analysis revealed correlations between certain questions, including a strong link between the existence of written policies for documenting and archiving information and the mechanisms for familiarizing employees with regulatory documents. Overall, the survey highlights the need for improved risk management practices in Bulgarian municipalities, as well as increased transparency and accountability. Failure to address these issues could have serious consequences for the effective governance and public service delivery of these institutions.