State funds fail to fulfil their functions; the SAO recommended that some of them be dissolved or merged
Press Release – August 13, 2012
The Supreme Audit Office (SAO) scrutinized funds and the State property under the management of following four State funds:
- the State Fund for Housing Development,
- the State Environmental Fund of the Czech Republic,
- the State Fund for Czech Cinematography Support and Development, and
- the State Fund for Culture of the Czech Republic.
The audited period included years 2008–2010. Auditors concluded that the State funds failed to fulfil their functions. For example, the State Fund for Culture has not provided support to any cultural project since 2006, but according to the law such activities are among its main functions. The SAO recommends that some funds be merged or even dissolved. On top of that, significant management errors were revealed:
- For example, the State Environmental Fund failed to localize mobile phones, laptops, furnishing, and other possessions worth CZK 2.8 million. The State Environmental Fund decided to write off the properties without attempting to find them or penalize the guilty party.
- The State Fund for Culture leased the U Hybernů Palace (a preserved historical monument) on condition that the lessee performs a reconstruction of the premises, which would be finished by the end of September 2005. In case of a delay, the State Fund for Culture was authorized to demand a penalization in the amount of CZK 200 million. Only three days before the deadline, an amendment to the agreement was authorized by the minister of culture that postponed the term by one year and decreased the contractual penalization to CZK 38 million.
To some extent, the unsatisfactory running of the State funds has been caused by the shallow definitions of their establishing acts. Possibilities to ensure sufficient income have not been emphasized. As a result, the State funds depended on state subsidies, which should have been only exceptional financial sources. The law also lacks a fundamental specification of how the funds should be used.
For further details about the audit operation No. 11/33 (in Czech only), see the following link: http://www.nku.cz/assets/media/informace-11-33.pdf (pdf 477 kB).
Communication Department
Supreme Audit Office