Final Account of the State Budget Chapter the Czech Telecommunication Office
Press release on completion of the auditing operation No. 06/13
The auditing operation was included in the Annual Audit Plan of the Supreme Audit Office (hereinafter referred to as “SAO”) for the year 2006 under No. 06/13. The auditing operation was managed and the audit conclusion drawn up by Mr. Jan Vedral, Member of the SAO.
The aim of the auditing operation was to examine the accuracy of financial statements, which were base for the final account of the state budget chapter 328 – The Czech Telecommunication Office – 2005.
The audit was focused on operations that were the subject of bookkeeping of the Czech Telecommunication Office and influenced the value of closing balances in its financial statements as at 31 December 2005, as well as relevant connections in the previous financial years.
The audited body was the Czech Telecommunication Office (also referred to as “CTO”).
1. Credibility of the financial statements as at 31.12.2005
In accordance with the recommended INTOSAI international auditing standards, the highest level of bad reporting that the users of accounting statements can hold to be still acceptable was specified as 2 % of the value of revenues (i.e. at the CTO CZK 31,247,535.40), for this value most reasonably reflects an extent of the accounting entity’s financial activities. Seeing that the total value of inaccuracies in the CTO’s financial statements as at 31.12.2005 was found to be CZK 138,862,385.38, and it considerably overran the determined materiality threshold, it was evident that the CTO’s financial statements did not give a true and fair picture of the subject of the accounts for 2005 in all significant regards in accordance with the Act on accountancy and related regulations.
2. Final Account of the State Budget Chapter 328 – the Czech Telecommunication Office
The financial statements drawn up by the CTO as at 31.12.2005 was not a reliable basis for the closing accounts of the State Budget Chapter 328 – the Czech Telecommunication Office 2005 in accordance with the Ministry of Finance Decree No. 419/2001 Coll. on the extent, structure and terms of submitting data for the Draft State Closing Account, and on the extent and terms of working out of the Draft Final Accounts of the State Budget Chapters. All of above-mentioned irregularities were in the Closing Account aggregated into number data outputs.
Total of irregularities in the Final Account of the State Budget Chapter 328 – the Czech Telecommunication Office was found out to CZK 138,862,385.38; including CZK 130,882,126.38 in the balance sheet and CZK 7,980,259.00 in the budget fulfilling statement.
3. Breach of the best budgetary practice
The total magnitude of breaches of the best budgetary practice within the meaning of the Section 44 of the Budgetary Rules was found to be CZK 304,854.74.