City Council of Georgia member, Aleksandre Elisashvili, talked about the bonuses received by some members of the Council. He explained that the highest bonus at Tbilisi City Council, 300% of the initial wage, was issued under the chairmanship of Irakli Shikhiashvili and that he had already joined the Georgian Dream coalition by that time. According to Mr Elisashvili’s explanation, many Council members and high-ranking officials at the time received significant bonuses upon numerous occasions. As an example, Mr Elisashvili cited Jaba Samushia who, according to his explanation, held the record in the field of bonuses and now occupies the position of Chairman of the Finance and Budgetary Committee.
In 2012, after the government changed, the Georgian Dream coalition quickly managed to obtain a majority in Tbilisi City Council. On 26 July 2013, Irakli Shikhiashvili was elected as City Council Chairman. He became a member of the Council in 2010 within the ranks of the United National Movement and then moved to the Georgian Dream coalition after the government change.
In August 2015, the State Audit Service published its Audit Report on Tbilisi City Council’s finances from 2012 to 2014. The aim of the audit was to determine whether or not the Council’s financial accounting and budgetary expenditures from 2012 to 2014 corresponded to the acting legislation and other regulations. According to the report, Tbilisi City Hall’s 2012-2014 expenditures by its approved budget amounted to GEL 25,388,000 whilst the amount was GEL 30,989,500 according to the corrected budget. The increase in expenditures was mainly due to bonuses, remuneration for freelancers, representation costs and non-financial assets. City Council expenditures included the following points: remuneration, goods and services, social care and others. The indicators reflecting the aforementioned points from 2012 to 2014 look like this:
Chart 1:
Dynamics of expenses from 2012 to 2014 (GEL Thousand)
Source: State Audit Service
As the chart makes clear, the remuneration point was on the increase every year, going up by 74% in 2013 (as compared to 2012) and 29% in 2014 (as compared to 2013). The increase in the remuneration point of the budget was mainly due to the following reasons:
- Increased wages for employees;
- Increased amount of bonuses;
- Increased number of administration employees;
- Increased number of City Council factions.
The State Audit Service explained that according to the 2012-2014 budgetary legislation, a state structure was not authorised to increase the remuneration part of its budget by more than one-twelfth of the initially approved amount. Tbilisi City Council violated this law in 2013 and 2014. Specifically, according to the budget adopted in 2013, the remuneration part of the Tbilisi City Council budget equalled GEL 3,922,900 which was later increased by GEL 2,465,900 (instead of GEL 326,900 as permitted according to the law) and amounted to GEL 6,388,800. Hence, the remuneration part of the budget was increased by GEL 2,139,000 more than was allowed.
In 2014, the remuneration part of the budget was increased by GEL 1,379,000 instead of the maximum of GEL 579,900 as permitted by the law and amounted to GEL 8,338,000. In 2015, the remuneration article of the Tbilisi City Council budget increased by GEL 799,100 more than allowed.
The distribution of bonuses to Tbilisi City Council employees is regulated according to the rules set out in the 2008 No. 7-16 decision of the Council. Bonuses can be distributed every month. The amount of a bonus is not regulated and is calculated according to the contribution of a specific employee. The overall amount of bonuses distributed in Tbilisi City Council from 2012 to 2014 looks like this:
Chart 2:
Bonuses distributed from 2012 to 2014 (GEL Thousand)
Source: State Audit Service
As the chart makes clear, the amount of bonuses distributed at Tbilisi City Council in 2012 was equal to GEL 1,095,900 which constitutes 47.2% of the remuneration part of the budget. In 2013, the amount of bonuses equalled 81.55% of remuneration. In 2014, the amount of bonuses constituted 106.5% of remuneration.
The aforementioned State Audit Service Report explains that the documentation prepared for issuing the bonuses does not make it possible to understand the types of contributions or services for which employees were rewarded with bonuses. In addition, the City Council failed to explain the system used to calculate the actual bonus amounts.
According to the report, an especially high amount of bonuses, as compared to remuneration, was distributed in the following time periods:
- December 2012 – bonuses constituting 150% of remuneration were distributed to high-ranking officials whilst this was 18% for administration employees (a total of GEL 384.8 thousand);
- November 2013 – bonuses constituting 160% of remuneration were distributed to high-ranking officials whilst this was 130% for administration employees (a total of GEL 469.4 thousand);
- December 2013 – bonuses constituting 230% of remuneration were distributed to high-ranking officials whilst this was 215% for administration employees (a total of GEL 737.7 thousand);
- March 2014 – bonuses constituting 300% of remuneration were distributed to both high-ranking officials as well as administration employees (a total of GEL 889.3 thousand);
- April 2014 – bonuses constituting 300% of remuneration were distributed to both high-ranking officials as well as administration employees (a total of GEL 1,026.6 thousand);
- June 2014 – bonuses constituting 300.5% of remuneration were distributed to high-ranking officials whilst this was 210% for administration employees (a total of GEL 774.1 thousand).
In 2012, the Chairman of Tbilisi City Council received a total of GEL 17.3 thousand in bonuses. In 2013, the amount of bonuses was GEL 36.5 thousand. Bonuses comprised GEL 40.7 thousand for the first six months of 2014.
In 2014, newly-elected City Council officials did not receive bonuses as the Council moved to the mechanism of wage supplements. The wage supplement, in the amount of 60% of the wage for high-ranking officials and 30% of the wage for administration employees, has been distributed at Tbilisi City Council since January 2015.
The State Audit Service Report explains that according to the Directive of the Chairman of Tbilisi City Council, a total of GEL 36.4 thousand was distributed to high-ranking officials in December 2014. This practice continued in 2015 as well.
Conclusion
A total of GEL 1,095,900 in bonuses was distributed to employees of Tbilisi City Council in 2012. This increased by 161.2% in 2013 and amounted to GEL 2,863,200. In 2014, the amount of bonuses increased to GEL 4,249,800 (48.4%). The largest amount of bonuses to both high-ranking City Council officials as well as administration employees was distributed in December 2012 (150%-180% of their wages), November 2013 (130%-160% of their wages) and December 2013 (215%-230% of their wages). From April to June 2014, the amount of bonuses distributed to City Council officials and administration employees equalled 300% of their wages. In addition, according to the aforementioned State Audit Service Report, Tbilisi City Council failed to explain the mechanism used to calculate the bonuses or identify the specific contributions or services for which they were allocated.
FactCheck concludes that Aleksandre Elisashvili’s statement is TRUE.
