According to the Auditor General Odysseus Michaelidis, the total amount of public revenue losses due to the application of the onerous and/or incorrectly applied intergovernmental agreement governing the operation of OPAP in Cyprus amounts to tens, perhaps even hundreds of millions of euros, and on the other due to the delay in the replacement of this agreement by the legislation passed by the Parliament in 2018 on certain games of chance and which however has not yet been implemented by the Ministry of Finance.
Speaking today before the Parliamentary Audit Committee, Mr. Michaelidis referred, among other things, to losses in the order of 1 million euros per month due to the incorrect application of the 2003 heterobarous agreement, in a total of 35 million euros (7 million per year) at least lost by the public funds due to the non-implementation of the legislation passed by the Parliament in 2018, but also to a total of 29.63 million euros with which OPAP benefited in the period 2011-2021 (not including the two years 2014-2015) due to the practical calculation not of the profits actually paid to the beneficiaries but of the theoretical profits that result after sorting the tickets.
In fact, according to the Auditor General, while OPAP's collections from €38 million in 2001, rose to €97 million in 2004 when KINO entered, to €160 million in 2008, to €190 million in 2013 and approximately €225 million in 2021, the Republic's collections from OPAP started in 2001 with €13 million and remained close to this amount until 2013, while in 2022 they reached €15.6 million.
< p>Also, the Auditor General spoke about an opinion of the former Attorney General (2017) regarding the implementation of the 2003 interstate agreement, which the then Accountant General did not actually implement, an opinion which was overturned by a new opinion of the current Auditor General dated July 20, 2021 on the basis of which the interstate agreement is correctly interpreted and therefore no issue of lost revenue arises.
The whole discussion was held on Thursday in the context of the examination by the Committee of the Audit Service's Report on the General Accounting Office of the Republic for the year 2020, in the presence of both the Auditor General and the new Accountant General of the Republic Andreas Antoniadis.
In relation to the legislation passed by the Parliament in 2018 to regulate the whole issue concerning the OPAP's operating framework, the Report of the Audit Service notes that “despite the passage of more than four years since the passing of the Law on Certain Games of Chance, no the procedures for the selection of the appropriate provider have been completed, with the result that no relevant contract has been concluded to date”. This, as Odysseas Michaelidis mentioned, has the result that the “heterogeneous Cyprus-Greece intergovernmental agreement of 2003” is still used to calculate the amounts paid by OPAP to the state, resulting in significant, as he said, losses of public revenue.
At the same time, the Auditor General noted that the application of the heterobarous interstate agreement, in the way it is applied, leads to a continued loss of public money, which was calculated by the Audit Service to be in the order of €1 million at least for each month which passes.
In addition, Odysseas Michaelidis explained with regard to the calculation of the amount attributed to the Republic, that due to OPAP's practice of using “theoretical” profits instead of actual distributed profits during the period 2011-2021, OPAP benefited with an amount which is calculated at €29.63 million without including the years 2014 and 2015 for which no information is available on the distributed profits.
In its Report, the Audit Service says that the collections carried out by the General Accounting Office are incorrect and that despite the fact that there was not even a reversal of the opinions of the former Attorney General, the General Accounting Office continues to act in a way that leads to a loss of significant revenue and that the same was done for almost 3.5 years, from December 2017 until July 2021, “when he disregarded the then valid opinions of the former Attorney General on the subject of the actual (and not as a percentage) expenses of OPAP”.< /p>
“The then Accountant General should have listened to the then Attorney General and implemented the agreement as he had indicated to her, but she did not implement it and continued to implement the agreement as she believed was right,” said the Auditor General and added that still and if the current Attorney General is right today and the Agreement is correctly applied, in the event that the legislation was applied, the Republic would collect at least 7 million euros per year more than what it currently receives from OPAP.
“We lost 35 million euros in the last 5 years because the Ministry of Finance told us that it was too busy to deal with this issue and this is also in writing that they had other priorities,” said Odysseas Michaelidis.
“Why did the then Accountant General not implement the then Attorney General's opinion and why has the Ministry of Finance been obstructing since 2018 and not doing everything to implement the legislation in 5 months and 5 years have passed and we are still waiting for it to implement this new legislation ?” asked the Auditor General.
For his part, the Accountant General Andreas Antoniadis clarified that although he considers that the Interstate Agreement of 2003 is inconsistent, the General Accounting Office acts on the basis of the current opinion of the General Prosecutor's Office and as per therefore there are no amounts that should have been paid by OPAP and were not paid.
Answering journalists' questions after the end of the session in relation to whether the state should have collected more money from OPAP than it has collected, Mr. Antoniadis reiterated that there is a specific opinion on the issue of OPAP from the current General Prosecutor of the Republic, who opines that the Agreement is correctly applied, and added that the General Accounting Office of the Republic, as the competent authority for the implementation of the Agreement, had no choice but to follow the opinion of the current Attorney General.
“Now in relation to the reports that the Agreement is unfair, we completely agree with both the General Accounting Office of the Republic and the Audit Service of the Republic,” he added.
Called to clarify whether the Republic is collecting what it should be collecting , Mr. Antoniadis replied that “according to the opinion of the Attorney General, yes”.
To another question if this means that there is no question of lost revenue as the Auditor General says, the Accountant General repeated that “we have the opinion of the Attorney General which we follow to the letter”.
Called to clarify what he thinks that the agreement is unfair, he explained that the Agreement was made in 2003 and today we have 2023 and therefore it should be changed.
Asked to comment on the fact that there was an opinion from the former Attorney General that said otherwise and which was not implemented by his predecessor at the General Accounting Office, Mr. Antoniadis said that he was commenting on matters concerning his tenure and service and not matters concerning his predecessors . “I, as the Accountant General of the Republic, in matters concerning legal aspects regarding the duties I exercise, fully comply with the legal opinions of the experts who are the Legal Service of the Republic, and in order to have a derogation from the opinion of the Attorney General, I must have strong evidence, something which does not apply to this particular agreement,” he said.
In a clarifying remark that the question did not concern the persons but the institutions, that is to say “there was an opinion from the General Prosecutor's Office which was not implemented by the General Accounting Office, while today there is a different opinion from the General Prosecutor's Office which is implemented by the General Accounting Office” Mr. Antoniadis said that “in 2018 there was a previous opinion from the former Attorney General of the Republic, the General Accounting Office of the Republic under the leadership of the former Accountant General requested clarifications on the implementation of this opinion and the Legal Service had not returned before the new opinion”.
In his statements, the President of the Committee Zacharias Koulias stated that when OPAP recorded a turnover of approximately €35 million, the state collected approximately €10 million, while today, when OPAP's turnover amounts to approximately €225 million, the state collects approximately € 15 million.
“This is a lion's share of the agreement” said Mr. Koulias, indicating that both the Auditor General and the Accountant General consider that the Interstate Agreement being applied is unfair.
At the same time, he expressed the belief that with the cooperation of the Ministry of Finance, order will be brought to this critical issue, with the reinstatement and implementation of the legislation that has been passed.
He finally assured that due to its seriousness, the issue will return to the Commission as soon as possible and the Ministry of Finance will also be called, as the legislation must be implemented.
DISY Member of Parliament Savia Orfanidou stated that the General Prosecutor and not the Audit Service, which of course can express its opinion and its recommendations should to be taken seriously by all organizations and especially by the General Accounting Office.
And he added with regard to the specific issue of OPAP that the interpretation given by the Attorney General is the one followed by the competent authority, namely the General Accounting Office, and there can be no loss of state revenue with any other interpretations he makes some other organization that is not the Attorney General.
He also said that if there is, however, an issue of a heterogeneous agreement between the state and OPAP, the competent Ministry of Finance together with the Attorney General and the General Accounting Office should study and to evaluate the matter and if indeed they find that there is a loss of revenue to revise the agreement.
“However, following what the General Prosecutor's Office says, which is also implemented by the General Accounting Office, we consider that there is no such issue,” he said.
The Member of Parliament at the end of the Environmental Movement – Citizens' Cooperation Stavros Papadouris said that he completely agrees with the reports of the Auditor General, that is to say that there is a conflicting agreement, with which the Accountant General also agreed, but also that even if it is not conflicting, this agreement is not being applied correctly.
Either of the two and if it is true, he added, the result is that the Republic of Cyprus loses close to €1 million per month or at least €7 million per year.
“With simple math the result is there, yes money is being lost that could be used for immediate needs of the state, such as for example the installation of air conditioners in schools,” he added.
He also described as very tragic the part concerning the response of the Ministry of Finance to the General Auditor that “they did not have the time to seriously deal with this matter”.