The SAO audited funds earmarked for enhancing the quality of life in the rural areas under the Rural Development Programme
Press Release – April 2, 2012
The audit aimed at the state budget and EU funds spent on the quality of life improvement and the management of economic activity in rural areas (axis 3 of Rural Development Programme 2007–2013) and scrutinized whether the funds had been utilised in agreement with the defined regulations.
The audit focused on administration, realization and payment procedures related to 36 projects, which utilized grants in the total amount of CZK 301 million, i. e. 4.4 % from the financial resources drawn for axis 3 of the Rural Development Programme. Auditors also scrutinized the settings of the Programme’s regulations.
Except for minor shortcomings, the implementation of axis 3 of the Rural Development Programme was found working and effective. The auditing operation revealed shortcomings, which were related to activities of the managing authority (i. e. the Ministry of Agriculture) as well as the paying agency (i. e. the State Agricultural Intervention Fund). In general, the shortcomings included unsatisfactory settings of the monitoring criteria for the project selection process. The eligibility of expenditures was not sufficiently monitored, and that is why it was not possible to ensure that the claimed project expenditures would be consistent with the principles of effectiveness, efficiency, and economy. The audit concluded that the Programme’s regulations also contained minor insufficiencies.
Budgetary rules were violated by the State Agricultural Intervention Fund in the following cases:
- The State Agricultural Intervention Fund committed errors in the administrative audit of projects; as a consequence CZK 438,900 was paid out without justification.
- The State Agricultural Intervention Fund incorrectly applied the point-scoring criteria with one project; as a consequence CZK 4,323,028 was paid out without justification.
- The State Agricultural Intervention Fund committed errors in the audit of expenditure eligibility, whereby approved expenditures in the amount of CZK 3,552,214.
With measure III.3.1 aimed at the education support, it is difficult to ensure that the defined conditions are kept even after the support is provided.
The audit performed at beneficiaries revealed the following shortcomings:
- In violation of the Programme’s regulations, a beneficiary claimed ineligible expenditures related to two projects.
- The beneficiaries violated the Programme’s regulations during the entry proceedings in two cases and Public Procurement Act was violated in one case.
- Three beneficiaries accounted for acquired assets in violation of the Act on Accounting.
The total amount of revealed shortcomings made CZK 8,314,142 (i. e. 2.8 % of the audited amounts).
The auditing operation was performed from June 2011 to December 2011. The audited period was years 2009 and 2010; where relevant, the data from the previous period and the period till the completion of the auditing operation were also scrutinized. Audited bodies were the Ministry of Agriculture, 29 selected beneficiaries, and the State Agricultural Intervention Fund with its regional departments in Prague, České Budějovice, Brno, Olomouc, and Opava. The auditing operation was included into 2011 Audit Plan of the SAO under No. 11/15. Jiří Kalivoda, Member of the SAO Board, managed the operation and prepared the audit conclusion as well.
Communication Department
Supreme Audit Office