The State Audit Institution of Montenegro has completed its financial audit of “Barska plovidba” AD Bar for the fiscal year 2024, resulting in conditional opinions on both the financial statements and the compliance audit. The audit revealed several significant discrepancies within the company’s financial reporting, leading to concerns regarding adherence to legal and regulatory standards.
In the audit, the responsible committee of the DRI, led by member Vesna Mihailović and President Siniša Čađenović, identified that the financial statements included material misrepresentations. These discrepancies were deemed significant but not pervasive enough to invalidate the financial statements as a whole. Consequently, the committee expressed a conditional opinion.
Among the findings, “Barska plovidba” failed to account for the value of various intangible assets, including artworks, photographic content, and library items, as recorded by the Commission for the Inventory of Intangible Investments. The company did not provide documentation to support the valuation of these assets, prompting the DRI to recommend that the company assess their value and properly record them in the financial statements.
Compliance Issues and Recommendations
The compliance audit highlighted that “Barska plovidba” had not fully aligned its operations with applicable laws and regulations. Specific deviations were noted concerning the Labor Law, the Public Sector Internal Control Law, the Law on State Property, and several financial reporting regulations. These issues, while materially significant, did not reach the threshold for pervasive effects on the financial statements, leading to another conditional opinion from the DRI.
Additionally, the audit revealed that the company had not prepared a business plan since 2022. The DRI advised that a comprehensive business plan should be developed to include short-term and long-term goals, market analysis, risk assessment, and financial projections. This plan is essential for guiding the company’s strategic direction and will need to be submitted to the relevant authorities for approval.
The audit also pointed out failures in establishing an internal audit system as required under the previous legislation. The company has been urged to rectify these shortcomings in accordance with the newly enacted laws governing management and internal controls.
Financial Obligations and Future Actions
In terms of financial obligations, “Barska plovidba” has faced liquidity challenges in repaying loans to the Export-Import Bank of China from 2019 to 2022. During this period, the Government of Montenegro intervened with four separate resolutions to provide the company with necessary funds to meet its debt obligations. However, the audit indicated that some short-term liabilities have not been reconciled with the government.
The DRI has mandated that the company reconcile its debts with the Ministry of Finance, particularly concerning an outstanding amount of €6,000,000 related to loan repayments due in 2024 and 2025. The company is required to submit an action plan addressing these recommendations by March 16, 2026, with a follow-up report on actions taken by July 31, 2026.
The final report has been forwarded to the Board of Directors of “Barska plovidba” for further action and is also shared with the Government of Montenegro, the Ministry of Finance, and the Ministry of Maritime Affairs for appropriate measures. The public can access the complete audit report on the DRI’s official website at www.dri.co.me.
