Errors in the preparation of the reconstruction of the Army Museum Žižkov increased the construction costs by at least CZK 28 million
Press Release on audit No 21/02 – 22 November 2021
The SAO focused on how the Ministry of Defence (MoD) managed funds and assets in connection with the performance of the tasks of the Military History Institute Prague (MHI) between 2016 and 2020. The auditors focused, for example, on investment projects, the acquisition and registration of collection items, the use of real estate or the setting up of strategic and conceptual documents. The MoD managed the State’s assets and funds in the performance of the tasks of the MHI in most cases without significant deficiencies. However, in the case of the reconstruction of the Army Museum Žižkov, the SAO identified additional works amounting to at least CZK 28 million which could have been avoided. In addition, it identified shortcomings in the planning of the work of the MoD as well as in the evaluation of the objectives set.
One of the investment projects was the reconstruction of the Army Museum Žižkov, which, according to the 2018 contract, was supposed to reach almost CZK 724 million. The auditors found that the reconstruction entailed a number of additional works amounting to CZK 192 million at the time of the audit. This represents an increase by roughly a quarter of the initial price. A part of these additional works occurred due to objective and unforeseeable reasons which could not have been foreseen at the time of preparation of the project. On the contrary, additional works amounting to at least CZK 28 million stem from errors in the project documentation that could have been avoided by the MoD. Specifically, the errors were caused by a lack of or imprecise definition of the type and quantity of the construction works. The reconstruction had not been completed at the time of the audit, so there is a risk that the final price will further increase.
The deadline for completing the reconstruction of the Army Museum Žižkov was moved from November 2020 to September 2021 due to errors made during the preparation of the project.
Another investment project examined was the construction of four multifunctional halls at the Military Technical Museum Lešany. Although the MoD had a study which established a price estimate of CZK 280 million, excluding VAT, when registering the investment project, it set the costs to CZK 163 million (VAT excluded). The MoD terminated the project in 2020 due to a lack of funds and subsequently included the project in the 2022 financial plan.
The SAO also found that the MoD was failing to meet its objectives in order to fulfil its tasks connected with the MHI. Each year the Ministry’s plans were fundamentally modified and the investment projects did not meet the set deadlines. In addition, the MoD also did not set appropriate criteria for the evaluation of some of its objectives. In some cases, this was only done in a formal or factually incorrect manner.
The total expenditure by the MHI between 2016 and 2020 amounted to approximately CZK 1.3 billion. Out of this sum, current expenditure amounted to CZK 698 million and investments were worth CZK 620 million.
Communication Department
Supreme Audit Office