During five years, Air Navigation Services doubled their profit earning CZK 250 million a year
PRESS RELEASE on Audit No. 13/16 – March 17, 2014
The Supreme Audit Office performed an audit of the state enterprise Air Navigation Services of the Czech Republic (ANS) and its management in years 2011 and 2012. No serious shortcomings were found. Auditors also scrutinized the Ministry of Transport’s fulfilment of its duties as the state enterprise’s founder.
The Ministry of Transport failed to prepare an air traffic conception although the Responsibility Act requires it. The Ministry appoints four out of six members of the supervisory board who must protect the State’s interests in the state enterprise. The Ministry tolerated when one of the appointed members skipped six out of seven board meetings. Another member was not re-appointed or replaced when their term had already been up for 18 months. In contradiction to the managerial agreement, the Ministry failed to define conditions for unguaranteed remunerations for the general manager. In 2011, the general manager received an extra bonus for good economic accomplishments, while the bonus was not paid in 2012.
The SAO also found errors in approval processes related to several key documents. For example, the Ministry of Transport did not approve 2011 and 2012 annual reports of the ANS and failed to correct the Status of the ANS when its line of business had changed. On the other hand, the ANS failed to ask for the Ministry’s approval when rented one of its building premises to a catering company, in spite the rules stipulate that the founder has to give their assent to using the state enterprise‘s property by a third party.
Auditors also scrutinized the financial situation of the state enterprise. From 2008 to 2013, the profits increased by 266 %. For example, the ANS earned CZK 236.8 million in 2012 and divided the profits into four parts: CZK 156 million were transferred into the development fund, CZK 52.6 million into the cultural and social fund, CZK 20.3 million into the reserve fund, and CZK 8 million into the fund of other social expenses. The whole 2012 profit amounted to CZK 3,200 million, which means that average daily profits were CZK 8.7 million. More than 95 % of the ANS revenues came from flight operational services. Auditors elaborated a detailed financial analysis of the ANS, which concluded that the ANS was financially solid during the audited period.