The SAO audited funds in the Nuclear Account
Press Release – February 14, 2012
The audit aimed at the Nuclear Account and scrutinized whether the corrective measures suggested after previous audit operations had been adopted.
Act No. 218/2000 Sb., on budgetary regulations, stipulates that State Financial Assets (SFA) consist of financial resources, property interests, and claims, which are administered by the Ministry of Finance. The Ministry compiles an overview also known as the SFA balance. According to the balance, the amount of state financial assets reached over CZK 300 milliard by the end of 2010.
Budgetary regulations effective since 2001 followed the antecedent legislation and established a new practice, according to which the Ministry did not keep accounts of the assets but only kept auxiliary evidence records separate from other assets managed by the Ministry. In 2008, the Ministry started to take accounts of the SFA, which became a component of assets reported in the Ministry’s balance sheets as financial assets and amounts receivable. In violation of the law, the Ministry’s accounts of the SFA included funds that could not be defined as state financial assets. The SAO recommends reassessing the category and only include funds with distinctive purpose, for example funds gathered on accounts, which are specified by law.
During the audited period 2009–2010, the SFA financial resources were deposited on 19 bank accounts maintained by the Czech National Bank. The Ministry cancelled five of the accounts in years 2010 and 2011. When cancelling two accounts, the Ministry treated the residue funds in a way, which was not allowed by the law.
The “State Financial Assets Operations” state budget heading is different from other headings as it does not consist of budgetary revenues and other financial operations of the state budget heading administrator, but in line with Act No. 218/2000 Sb., on budgetary regulations, it is constituted by monetary operations on the SFA accounts, with the exception of those related to the state debt amortization. In 2009, the actual expenses of the “State Financial Assets Operations” state budget heading amounted to CZK 1,539.1 million, i. e. 43.65 % of the budgeted amount, while in 2010, the expenses made only CZK 261.7 million, i. e. 10.90 % of the budgeted amount. Substantial proportion of the expenditures did not count for actual expenses but included transfers to other state budget headings that followed budgetary measures’ adoptions as the “State Financial Assets Operations” state budget heading has been the funding instrument for other budget headings.
Within the audited period, „extra subsidies“ were provided to municipalities (CZK 166.1 million in 2009, CZK 97.48 million in 2010), which actually made „hidden“ budgetary reserves for the Ministry.
The fact that majority of the planned expenses were not realized in 2009 and 2010 is a testament to the said improper budgetary processes within the state budget chapter.
The Ministry did not take accounts of some revenues and other financial operations of the state budget heading and some revenues were included in wrong paragraphs and items of the budget structure of the SFA accounts.
During the audited period, the Ministry violated the effective legislation related to accounting when failed to keep clear and correct accounts of facts concerning the accounting centre, which had been established for the “State Financial Assets Operations” state budget heading.
The Ministry failed to establish the succession of individual SFA items in the new accounting layout and has not set up a binding methodology for compiling the SFA balance sheets. That is why it was not possible to confront the annual financial statements with the evidence of SFA items, which is described in the balance sheets and in the closing accounts of the state.
The auditors also checked whether the corrective measures suggested in 2009 as a result of the previous audit operation have been implemented. The SAO concluded that three out of the five corrective measures decreed by the Government were implemented only partially or were not implemented sufficiently.
The auditing operation was performed from May to October 2011. The audited period was years 2009 and 2010; where relevant, the preceding period and the period until the completion of the auditing operation were also scrutinized. The audited body was the Ministry of Finance. The auditing operation was included into 2011 Audit Plan of the SAO under No. 11/09. Eliška Kadaňová, Member of the SAO Board, managed the operation and prepared the audit conclusion as well.
Communication Department
Supreme Audit Office