Annual Report 2009


The results of audits carried out in 2009 show clearly that systemic shortcomings persist, above all in the management of state assets, the financing of major investment programmes and actions, in subsidy policy and in the auditees’ book-keeping.

Again in 2009, the SAO repeatedly drew attention to the fact that some long-term strategic and conceptual documents either do not exist or are prepared insufficiently, which has had a negative impact on the economy, efficiency, and effectiveness with which public funds are spent. Another serious shortcoming in the SAO’s view is the fact that the administrators of budget headings do not specify the relevant programme parameters in sufficient detail and that they do not evaluate the outputs (effects) of activities and programmes financed out the state budget in many cases. In addition, the SAO draws attention to serious risks that indicate a threat to the drawdown of EU funds earmarked for co-financing major investment events and programmes.

Although auditees have adopted systemic measures to remedy the identified shortcomings, these measures are not effective enough to prevent them being repeated. This state of affairs is documented by the fact, for example, that in three consecutive years the Ministry of Labour and Social Affairs’ financial statements did not give a true and fair view of the accounts’ subject matter. It is therefore necessary for auditees to ensure that their internal control system works effectively, with the emphasis on rigorous compliance with the law.

The results of audits have also shown that some legislation needs amending. The SAO repeatedly recommends that there should be systemic amendment of the rules for financing programmes through state funds – at present, such financing is not bound by the Act on Budget Rules. In addition, Act No. 218/1949 Coll., on the economic provision for churches and religious societies by the state, requires amending so that the terminological and material discrepancies with the Acts on the state budget are eliminated.

In line with the Audit Plan, the SAO will continue to scrutinise significant investment expenditure in the state budget, EU funds, and extra-budgetary finances of state funds in 2010. Moreover, subsidy provided in the context of selected mandatory indicators laid down by the State Budget Act will be subject to scrutiny. Following the entry into effect of the amendment of Act No. 563/1991 Coll., on accounting, on 1 January 2010, scrutiny of the closing accounts of budget headings will pay increased attention to both the application of the new accounting rules by auditees and to assessing the completeness and correctness of accounts compiled under the new rules applicable in 2010.

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