Auditing operation No. 03/18
Funds earmarked for ensuring the implementation of the NATO Security Investment Programme
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. 03/18. The auditing operation was managed and audit conclusion drawn up by Mr. Jiří Kalivoda, the Member of the SAO.
The aim of the audit was to examine the drawing and usage of the funds earmarked for ensuring the implementation of the NATO Security Investment Programme at the Ministry of Defence.
The audited period covered the years 1999 to 2003.
The audited body was the Ministry of Defence (hereinafter referred to as „MD“).
One of the causes of the uneconomical and inefficient handling of the State Budget funds was the administratively demanding and rather inept manner of managing NATO Security Investment Projects with an insufficient flow of information and incorrectly set powers and responsibilities combined with a low level of legal awareness, especially on the level of some participating acquisition workplaces. According to the MD statement, the appropriate internal regulations will be modified in order to rectify the situation ascertained by the SAO audit.
The MD breached budgetary discipline when it unjustifiably used State Budget funds in the amount of 587 thousand CZK.
During the public procurement the MD did not respect the obligation of the most economical fulfilment of tasks covered by the State Budget due to the selection of suppliers on the basis of inappropriately set criteria for evaluating offers. According to the MD statement selected orders will be examined in relation to the ascertained serious faults in the area of procuring property in the activities of the MD economic section.
The MD did not sufficiently prevent the risks when closing contracts. This led to the breach of the obligation of the most economical fulfilment of the tasks covered by the State Budget.
The MD did not use property acquired in the framework of the implementation of NATO Security Investment Projects valuing 19.9 million CZK for the purpose for which it was acquired. The functionality of the equipment has not even been verified by the time of the SAO audit completion, even though more than a third of the overall warranty period had expired in vain. According to the MD statement, the Chief of Staff of the Czech Army tried out the SAO audit findings and adopted measures to rectify the unwanted situation.
When keeping the books, the MD did not fulfil the obligation specified by the law to keep the books properly, completely, with proper support, and clearly and furthermore did not sufficiently methodically provide a unified procedure of keeping the books. According to the MD statement, the SAO audit findings were analysed and the book keeping to the account fixed assets under construction about fixed assets acquired in the framework of the NATO Security Investment Project was methodically specified.