Auditing operation No. 04/22
Management of the State Budget funds earmarked for financing the reproduction of the tangible fixed assets at the Czech Social Security Administration
The auditing operation was included in the Annual Audit Plan of the Supreme Audit Office (hereinafter referred to as “SAO”) for the year 2004 under No. 04/22. The auditing operation was managed and audit conclusion drawn up by Mr. Jiří Drábek, the Member of the SAO.
The aim of the audit was to examine the management of the State Budget funds earmarked for financing the reproduction of the tangible fixed assets at the Czech Social Security Administration.
The audited period covered the years 2001 to 2003 as well as previous periods in case of relevant connections.
The audited bodies were the Ministry of Labour and Social Affairs (hereinafter referred to as “MLSA”) and the Czech Social Security Administration Prague (hereinafter referred to as “CSSA”).
Auditing operation in the audited period examined State Budget funds earmarked for financing the reproduction of the tangible fixed assets at the CSSA totalling CZK 735,523,000 (building investment and computer technology), i.e. 71 % of the total volume of funds drawn for this purpose.
Auditing operation No. 04/22 followed up the SAO’s auditing operations from the previous period (No. 97/12 and No. 97/27), which focused on management of State Budget funds earmarked for financing the reproduction of the tangible fixed assets at the Czech Social Security Administration.
The results of the auditing operation No. 04/22 allow the SAO to state that there has been a pronounced improvement in the state of the CSSA accounting and recording of tangible fixed assets; the scale of uneconomical use of State Budget funds was much smaller than found in previous SAO audits.
The following shortcomings were detected at the MLSA, the programme’s administrator:
- Late submission of documentation for programmes 313 020, 313 060 and 213 110 to the Ministry of Finance for approval;
- Non-compliance with the specified deadlines for issuing a decision to register the action and decision on State Budget participation in financing the action;
- Release of State Budget funds prior to issue of a decision on State Budget participation in financing the action;
- Providing CZK 86,429,000 for an action that the CSSA did not ask the MLSA to cover;
- Allocating CZK 348,631,275 late, preventing the CSSA from using the funds in the appropriate budget year for the purposes they were intended for.
The following shortcomings were found at the CSSA, the participant in the programme
- Transferring undrawn funds earmarked for financing programmes to the reserve fund: in 2002 it transferred CZK 18,384,150 more and in 2003 CZK 290,651,015 more than Section 47 of the Budget Rules allows;
- Public procurement – using incorrect procurement methods for a total of CZK 55,499,600 (including VAT), not complying with its own procurement terms and failing to satisfy the legal conditions of public procurement;
- Uneconomical use of State Budget funds, when it had to spend an extra CZK 3,577,338 due to a dysfunctional LAN network in the acquired building;
- Using CZK 21,791,675 worth of budget funds without sufficient demonstration of material performance;
- In its accounting of assets, when it spent CZK 28,270,768 on technical amelioration out of operating finances, and incorrectly entered them as repair costs, which led to the acquisition price of the assets being distorted by the said amount in the accounts;
- In its book-keeping, when the legally prescribed terms were not complied with, in particular in stock-taking and valuation of assets;
- In failing to exercise the right to compensation for damages amounting to CZK 290,964, which led to the sum being forfeited.