On 31 October 2014, Parliamentary Majority MP for the Kharagauli Municipality, Nodar Ebanoidze, talked about the budget funding distribution in his constituency. According to the MP, only 10% of the allocated finances are spent for projects that are important to the municipality whilst 90% goes towards administrative spending. According to Mr Ebanoidze’s assessment, 90% is spent to do 10% of the job.
FactCheck took interest in Mr Ebanoidze’s statement and verified its accuracy.
We contacted the Kharagauli Municipality and requested information about its budget and expenditures from 2011 to 2014. The budget’s administrative spending includes remuneration and money spent on goods and services as well.
Chart 1: 2011 Kharagauli Municipality Budget
The Kharagauli Municipality budget amounted to GEL 4,632 thousand in 2011. A total of 40% of the budget was spent on remuneration, services and administrative expenditure. There are four main institutions in the Kharagauli Municipality: Kharagauli board, City Council, City Emergency Management Service and Defence Measures Service. According to the data of 2011, there were 145 public servants in the Kharagauli Municipality and a total of GEL 787,000 was spent on their wages. The purchase of office equipment and furniture and paying for business trips and other administrative expenditures were financed from the money allocated for goods and services. It should be noted that a large portion of money spent on goods and services – GEL 736,000 – was spent on “other goods and services;” however, the response letter from the Municipality does not specify the exact purpose.
Chart 2: 2012 Kharagauli Municipality Budget
The Kharagauli Municipality budget amounted to GEL 6,418 thousand in 2012 with administrative spending constituting 32% of the total budget. There were 11 more employees in the municipality as compared to 2011. A total of GEL 992,000 was spent on the remuneration of 156 public servants. As for the goods and services, similar to 2011, the largest portion of the allocated money, GEL 653,000 was spent on “other goods and services.”
Chart 3: 2013 Kharagauli Municipality Budget
The Kharagauli Municipality budget amounted to GEL 7,257 thousand in 2013. In addition, the number of public servants increased significantly after the local government elections with the amount of administrative expenditure increasing accordingly. About 39% of the total budget went towards administrative expenditure. A total of GEL 1,379,000 was distributed to 235 public servants in wages and GEL 1, 421,000 was spent on goods and services. Similar to the previous two years, the exact purpose of the GEL 785,000 spent on “other goods and services” is not stated.
Chart 4: 2014 Kharagauli Municipality Budget
According to the 2014 budget plan, the Kharagauli Municipality’s total budget increased significantly. The number of public servants in the municipality has also been increased. About 31% of the total budget is allocated for administrative expenditure. It should also be noted that about 55% of the money allocated for goods and services, or GEL 1,041,000, is planned to be spent on “other goods and services” although the exact purpose remains unspecified as in the previous years.
For comparison, it would be interesting to see the share of administrative spending in Georgia’s state budget from 2011 to 2014.
Chart 5: Administrative Spending in the State Budget (2011-2014)
As the analysis of Georgia’s state budgets from 2011 to 2014 shows, an average of 27% of the total budget is spent on administrative expenditure every year.
Conclusion
The share of administrative spending in the Kharagauli Municipality budget has not been more than 40% from 2011 to date. It should be noted that the amount of money allocated for remuneration and the purchase of goods and services has been increasing every year for the past four years; however, the number of public servants in the municipality has also been growing. The total amount of the Kharagauli Municipality budget has also been increasing accordingly since 2011.
According to the information received from the Kharagauli Municipality, administrative expenditure has never taken up 90% of the total budget as stated by the MP. However, it should be noted that the exact purpose of half of the money spent on goods and services is not stated. In addition, the Kharagauli Municipality spends 9% more on administrative expenditure than Georgia’s state budget.
FactCheck concludes that Nodar Ebanoidze’s statement: “Administrative spending constitutes about 90% of expenditure in the Kharagauli Municipality,” is HALF TRUE.
Editor’s note: The initial version of this article was published on 22 December 2014. The MP himself commented the article via Facebook. As he noted, the number mentioned by him might be exaggerated, although the problem concerning the high volume of administrative expenditures persists and he was referring to the existing trend while making the statement. Nodar Ebanoidze also added that most of the subsides made particularly in Kharagauli falls exactly on administrative expenditures, more precisely on salaries.
The research conducted by FactCheck also points out that the administrative expenditures have a big share of the municipality’s budget, hence justifying the pathos of the MP. On these grounds, FactCheck’s verdict has been changed and Mr Ebanoidze’s statement has been concluded to be HALF TRUE instead of MOSTLY FALSE.
The Kharagauli Municipality budget amounted to GEL 4,632 thousand in 2011. A total of 40% of the budget was spent on remuneration, services and administrative expenditure. There are four main institutions in the Kharagauli Municipality: Kharagauli board, City Council, City Emergency Management Service and Defence Measures Service. According to the data of 2011, there were 145 public servants in the Kharagauli Municipality and a total of GEL 787,000 was spent on their wages. The purchase of office equipment and furniture and paying for business trips and other administrative expenditures were financed from the money allocated for goods and services. It should be noted that a large portion of money spent on goods and services – GEL 736,000 – was spent on “other goods and services;” however, the response letter from the Municipality does not specify the exact purpose.
Chart 2: 2012 Kharagauli Municipality Budget
The Kharagauli Municipality budget amounted to GEL 6,418 thousand in 2012 with administrative spending constituting 32% of the total budget. There were 11 more employees in the municipality as compared to 2011. A total of GEL 992,000 was spent on the remuneration of 156 public servants. As for the goods and services, similar to 2011, the largest portion of the allocated money, GEL 653,000 was spent on “other goods and services.”
Chart 3: 2013 Kharagauli Municipality Budget
The Kharagauli Municipality budget amounted to GEL 7,257 thousand in 2013. In addition, the number of public servants increased significantly after the local government elections with the amount of administrative expenditure increasing accordingly. About 39% of the total budget went towards administrative expenditure. A total of GEL 1,379,000 was distributed to 235 public servants in wages and GEL 1, 421,000 was spent on goods and services. Similar to the previous two years, the exact purpose of the GEL 785,000 spent on “other goods and services” is not stated.
Chart 4: 2014 Kharagauli Municipality Budget
According to the 2014 budget plan, the Kharagauli Municipality’s total budget increased significantly. The number of public servants in the municipality has also been increased. About 31% of the total budget is allocated for administrative expenditure. It should also be noted that about 55% of the money allocated for goods and services, or GEL 1,041,000, is planned to be spent on “other goods and services” although the exact purpose remains unspecified as in the previous years.
For comparison, it would be interesting to see the share of administrative spending in Georgia’s state budget from 2011 to 2014.
Chart 5: Administrative Spending in the State Budget (2011-2014)
As the analysis of Georgia’s state budgets from 2011 to 2014 shows, an average of 27% of the total budget is spent on administrative expenditure every year.
Conclusion
The share of administrative spending in the Kharagauli Municipality budget has not been more than 40% from 2011 to date. It should be noted that the amount of money allocated for remuneration and the purchase of goods and services has been increasing every year for the past four years; however, the number of public servants in the municipality has also been growing. The total amount of the Kharagauli Municipality budget has also been increasing accordingly since 2011.
According to the information received from the Kharagauli Municipality, administrative expenditure has never taken up 90% of the total budget as stated by the MP. However, it should be noted that the exact purpose of half of the money spent on goods and services is not stated. In addition, the Kharagauli Municipality spends 9% more on administrative expenditure than Georgia’s state budget.
FactCheck concludes that Nodar Ebanoidze’s statement: “Administrative spending constitutes about 90% of expenditure in the Kharagauli Municipality,” is HALF TRUE.
Editor’s note: The initial version of this article was published on 22 December 2014. The MP himself commented the article via Facebook. As he noted, the number mentioned by him might be exaggerated, although the problem concerning the high volume of administrative expenditures persists and he was referring to the existing trend while making the statement. Nodar Ebanoidze also added that most of the subsides made particularly in Kharagauli falls exactly on administrative expenditures, more precisely on salaries.
The research conducted by FactCheck also points out that the administrative expenditures have a big share of the municipality’s budget, hence justifying the pathos of the MP. On these grounds, FactCheck’s verdict has been changed and Mr Ebanoidze’s statement has been concluded to be HALF TRUE instead of MOSTLY FALSE.
