Ministry of Finance violated Act on Public Procurement while creating the system of State Treasure
Press Release – March 4, 2013
The Supreme Audit Office (SAO) audited the Ministry of Finance and scrutinized funds in the amount of CZK 2,400 million, which were spent on the system of State Treasure during the period 2008-2011. Auditors aimed at four operations included into the Programme for Integrated System of State Treasure.
Auditors revealed violations of the Public Procurement Act. The Ministry authorized five amendments to the procurement contract for provision of the Integrated System of State Treasure (IISST), without initiating the award procedures. The same error was found in case of another contract authorized in 2010.
In 2011, the Ministry of Finance also violated the budgetary discipline when paid two advance payments in the total amount of CZK 249 million to the provider of IISST for a period longer than three months. According to the law, three months is the maximum allowable term, for which an organisational unit of the state can pay an advance payment. In addition, the Ministry did not account for a part of the advance payments (in the amount of CZK 159.7 million) in the end of the accounting period as required by the law. These payments were not properly commented in the Ministry´s closing account.
The plan to create the system of State Treasure was approved by the Government in February 2005. According to the plan, the system should have started its operation in 2010 and the costs of its procurement should not have exceeded CZK 2,400 million. Through five amendments to the procurement contract, the finishing date was put off to July 1, 2013, and the pre-estimated costs doubled to CZK 4,800 million. The cost increase was (among other reasons) incurred by additional extending of the system´s functionality and by including the expenses of operation and maintenance of the system.
For further details about the auditing operation No. 12/09 (in Czech only), see the following link: http://www.nku.cz/assets/media/informace-12-09.pdf (pdf 220 kB).
Communication Department
Supreme Audit Office