The SAO scrutinized management of the Railway Infrastructure Administration
Press Release – October 29, 2012
The Supreme Audit Office (SAO) aimed at management of the Railway Infrastructure Administration (RIA) and the General Directorate within the audited period 2009–2011. The auditors concluded that the RIA spent nearly CZK 12,000 million from the State Budget to purchase the property of the former Czech Railways joint-stock company in 2008, while the joint-stock company had previously obtained the property for free. From 2005 to 2001, the expenses of repaying the liabilities of the preceding state organization Czech Railways amounted to CZK 41,000 million. According to the law, the liabilities should have been paid off from profits that had arisen from economising on the property of the former state organization Czech Railways. But those profits would not be sufficient.
Auditors also revealed that the RIA had committed errors when leasing and purchasing cars, acquiring legal services, and securing some premises. Documents submitted by the General Directorate show that the average annual costs of services made nearly CZK 80,000 for each car during the audited period, which is more by 241 % than with other audited bodies of the RIA. Within the period 2009–2011, the General Directorate spent CZK 3 million on leased cars, which the SAO auditors found wasteful. The rent was paid according to the number of days when the cars were used and the RIA paid CZK 830,000 for one car that had been leased for 436 days. (In reality, that car was only used for 146 days.) The auditors could not scrutinize the use of other two leased cars (the amount spent on their rent made CZK 1.2 million) as someone from the General Directorate had “unintentionally scrapped” the corresponding documents.
In March 2010, the General Directorate spent CZK 2.3 million purchasing four cars, which had been previously leased for the total amount of CZK 1.9 million. The economic advantage of such a purchase is rather questionable. One of the purchased cars was produced in 2008 and drove about 113,000 kilometres. The General Directorate spent CZK 786,000 for the car’s rent and later spent CZK 595,000 on the purchase, although the car’s original value was CZK 905,000.
The SAO also criticized that the General Directorate of the RIA had entered uneconomical legal service agreements. On the grounds of a general agreement, the General Directorate concluded 26 legal service contracts within the period 2009–2011. Out of the number, 11 contracts were concluded without proper justification with a tender who had offered the highest price, i. e. CZK 4,800 per an hour. As a result, the individual contender obtained nearly CZK 17.4 million for provided legal services, which made 75 % of the amounts paid on the basis of the general agreement.
For further details about the auditing operation No. 11/31 (in Czech only), see the following link: http://www.nku.cz/assets/media/informace-11-31.pdf (pdf 223 kB).