SAO appreciated problem-free management and public procurements provided for Military Forests and Farms; minor errors were revealed in some agreements
Press Release – August 20, 2012
The Supreme Audit Office (SAO) performed an audit at Military Forests and Farms of the Czech Republic (MFF) and found no insufficiencies of the MFF management within the period 2009–2011. The organization’s annual profits kept rising (with the exception of 2010), as some expenses decreased and wood sales provided a high turnover. Wood sales made 58 % to 69 % of the turnover. During the audited period, the average cost of wood was ranging from CZK 1 073 to CZK 1 465 for a cubic meter.
Auditors also scrutinized 18 public procurements worth CZK 126.3 million in total and concluded that the procurements had been provided without serious errors. The MFF kept to the regulations when administering the financial resources as well. From 2008 to 2010, the MFF increased the profit by CZK 243.9 million. The organization deposited the funds on fixed term accounts; in one case they used a deposit bill. While doing so, the MFF followed “safe investing” rules and cut down the risks related to economization of such large sums – the funds were deposited at various banks and for different periods (from 6 to 12 months).
When scrutinizing 15 lease agreements, the SAO revealed partial insufficiencies. For example, three agreements omitted the general manager’s approval to lease the property for more than five years in spite such a long commitment requires it. Auditors also scrutinized 37 sales of useless property worth CZK 61.7 million. In some cases, the MFF only kept accounts of estates and failed to keep records of the buildings, which had been built on the sites. These included buildings abandoned by the former Soviet army, including the likes of bunkers and military quarters.
Auditors also scrutinized expenditures of the MFF. Consulting and legal services cost CZK 6.5 million in 2009 and CZK 4 million in 2010. Promotion costs made CZK 962,000 in 2009 and CZK 1.1 million in 2010.
After the completion of the auditing operation, the MFF received the audit report and implemented corrective measures to remedy the found insufficiencies. Some of the errors were remedied while the auditing operation was still being performed.
For further details about the audit operation No. 11/28 (in Czech only), see the following link: http://www.nku.cz/assets/media/informace-11-28.pdf (pdf 353 kB).
Communication Department
Supreme Audit Office