The Institutional Audit Office of the Federation of Bosnia and Herzegovina gave a positive opinion on the financial reports of the Federal Employment Agency for the year 2025, assessing that they truthfully and fairly depict the financial situation of the Agency.
However, when it comes to business compliance with laws and regulations, the auditors issued a qualified opinion due to established irregularities in the allocation of funds and record keeping in the field of employment.
According to the report, the Federal Institute had a budget of 207,070,427 KM for 2025. Realized revenues amounted to 119,783,179 KM, expenses to 101,683,160 KM, while the year ended with a surplus of 18,100,019 KM.
However, the execution of the budget amounted to only 49 percent, which means that as much as 105,387,267 KM remained unrealized.
Of particular concern is the fact that 183,513,627 KM was planned for active employment measures and joint projects, but only 85,607,414 KM, or 47 percent, was realized.
Of the funds planned exclusively for programs from 2025, in the amount of 116,369,458 KM, only 39,132,727 KM or 34 percent were realized.
At the end of the year, the Federal Institute had 67.1 million KM transferred and unrealized obligations from previous years, while free funds in the accounts amounted to 34.06 million KM. At the same time, new contracted and unrealized obligations of 63.9 million KM were transferred to 2026. During the year 2025, an average of 255,899 unemployed persons were registered, while at the end of the year there were 253,582.
The auditors issued a qualified opinion due to two key irregularities. The first one refers to the Program for co-financing joint projects with other legal entities, within which KM 6,502,200 was allocated without clearly defined and measurable criteria. The second irregularity refers to at least 647,200 KM allocated to beneficiaries outside the conditions prescribed by the Program. In addition, it was established that the consolidation and keeping of records in the field of work and employment was not in accordance with legal regulations.
The audit also showed that a total of 7,053,200 KM was contracted through the Joint Projects Co-financing Program, of which 551,000 KM refers to Module 1, and 6,502,200 KM to Module 2.
The federal institute did not issue a public call or apply minimum standards for the awarding of grants, including clear evaluation of applications and public announcement of the beneficiaries of the funds.
It is particularly problematic that what is considered a “specific project” was not defined for Module 2, nor was there any documentation that would prove the fulfillment of that condition. The auditors warn that in this way there is room for subjective decision-making when awarding millions of marks.
In the report, long-term uncollectible receivables are also singled out. In the position of doubtful and disputed claims, there is KM 14,246,046 from the period from 2001 to 2013, the collection of which is uncertain. Additionally, long-term unpaid receivables based on commission loans amount to 19,507,327 KM, while the Institute still does not have documentation on the ownership of the building whose book value is 3,414,445 KM.
The auditors also warned of the fact that the Government of the Federation of Bosnia and Herzegovina had not carried out the procedure for the final appointment of the Institute’s director, who will be acting as of March 2025, until the end of the audit.
It was also established that her employment contracts were concluded for an indefinite period of time, although she was appointed for a four-year term, which was judged to be inconsistent with the Labor Law.
When it comes to the internal control system, the audit showed that a functional Internal Audit Unit was not established because only its manager was employed.
At the same time, the head of internal audit was not regularly invited to the sessions of the expert panel, which, according to the auditor’s assessment, violated the independence of the internal audit function and reduced its efficiency.
During 2025, a total of 5,110,148 KM was spent on gross salaries, benefits and contributions of employees.
Of that, 4,148,530 KM refers to gross wages, 621,671 KM to employee benefits, and 339,947 KM to employer contributions. The average net salary of employees was 3,296 KM, the highest paid salary was 6,716 KM, while the lowest was 1,809 KM, it says. Factor.
