Auditing operation No. 03/16
State Budget Revenue Resulting from Fines Imposed, Collected and Recovered by Administrative Authorities
The auditing operation was included in the Annual Audit Plan of the Supreme Audit Office (hereinafter referred to as “SAO”) for the year 2003 under No. 03/16. The auditing operation was managed and audit conclusion drawn up by Ms. Zdeňka Profeldová, the Member of the SAO.
The aim of the audit was to examine the state of the collection of fines, compare it with the results of the previous auditing operation and expand the audit on other selected administrative authorities that impose, collect and recover fines. The audited period covered the years 2001 and 2002.
The audited bodies were the Ministry of Finance (hereinafter referred to as „MF“), selected Tax Offices, the Ministry of Interior and its selected organisational divisions, six regional branches of the Fire Rescue Force of the Czech republic, the Czech Social Security Administration and its selected organisation divisions, followed by the Ministry of Culture, the State Institute for Drug Control and the Office for the Protection of Competition.
The results of this auditing operation indicated insufficiencies both in the so-called „division of fines administration“ and in the administration of a fine that is executed by one administrative authority from the imposition of the fine through to its collection. This state is influenced by the fragmentation of the valid legal regulations in the area of imposing, collecting and recovering fines.
The existing system of dividing the individual operations connected with the administration of fines between various administrative authorities is disorganised and inconsistent. The division of fines administration is also negatively influenced by the fact that the administrative authorities that impose the fine do not have a direct interest in the collection of the fine. The Tax Offices are overloaded with a considerable number of fines submitted by these authorities. According to the MF’s information, the Tax Offices received a total of 527,574 fines imposed by other administrative authorities for collection, amounting to 554 million CZK. By 31 December 2002 the Tax Offices recorded arrears on these fines in the amount of 1,541 million CZK. In addition to this, fines whose collection or recovery does not pertain to the Tax Offices according to the appropriate laws are still sent to them.
Fines issued by the organs of the Czech Police and submitted to the Tax offices for collection are the most common instances of division of administration. The level of the arrears on these fines amounted to about 1,157 million CZK by the end of 2002 and this shows that the existing method of imposing, collecting and recovering these fines is not efficient.
The collection and especially recovery of fines that are imposed, though not collected, on the spot by the Czech Police in their fine books is not legislatively resolved. Imposing fines to foreign nationals is also problematic since recovering a fine from the fine books but not paid on the spot is practically impossible.
The succession of the individual operations of imposing, collecting and recovering fines has a direct connection with the exchange of information between the authorities that impose the fines and the authorities that collect and recover them. In case of divided administration the possibility of transferring data between the individual administrative authorities in an electronic form would make the entire system more efficient.
The bookkeeping methods for the fines are not unified at the individual organs of the state administration. Though they are the same type of state budget revenue, regional branches of the Fire Rescue Force of the Czech republic and the Czech Social Security Administration keeps accounts of regulations and payments of fines while the State Institute for Drug Control and the Office for the Protection of Competition merely maintain records on the decisions to impose fines. The MF keeps files of gross revenue from fines in one cross-budget chapter (budget chapter – General Treasury Administration). However the MF does not keep accounts of debts on fines, nor does it keep records of them. The MF does not have an overview of the expected revenues.
If the administrative authorities do not keep accounts of debts on fines, there is no overview of all the debts whose yield is in the state budget revenue. During the audited period the state’s receivables amounting to a minimum of 28 million CZK were not booked into accounts. In the area of fine accounting it is necessary to modify the procedure so that it is in compliance with the Act on Accounting.