By transforming the Central Institute for Supervising and Testing in Agriculture, the Ministry of Agriculture wanted to save money and reduce bureaucracy.
Press release on audit No 19/24 – 7 September 2020
The SAO scrutinised the financial management of the CISTA in the period from 2014 to 2018. The SAO also examined whether, following the merger of the CISTA with the State Phytosanitary Administration in 2014, the CISTA was able to achieve the objectives based on which the Ministry of Agriculture (MoA) had acceded to the transition. Finally, the audit looked into how the MoA fulfilled its obligations as the founder of the CISTA. The financial management was scrutinised by the auditors on a sample of assets and funds amounting to CZK 625 million of the total assets of the CISTA which surpasses two billion Czech crowns. The effects of the transition — including the amount of money saved — were not known to the MoA even after several years, because it failed to evaluate the merger of the two institutions. The auditors did not find essential weaknesses in the CISTA’s financial management, they only revealed partial errors in the accounts, the recording of assets and in the publication of mandatory information.
One of the goals the Ministry of Agriculture wanted to achieve by merging the Central Institute for Supervising and Testing in Agriculture with the State Phytosanitary Administration was to save public money. The Ministry, however, did not evaluate the benefits of merging the two institutions and, even after several years, it had no information on how much money was saved, or what the cost of the merger was. In 2015, by when, according to the MoA, savings should have been achieved, the Ministry expected to save a sum of almost CZK 97 million as opposed to the year 2012. In fact, CISTA’s expenditures in the same year had increased by almost CZK 37 million.
In addition, the Ministry did not assess the other effects of the merger, for example, whether the duplication of the two institutions’ activities had been eliminated, or the bureaucratic burden had been reduced – these were the additional goals, apart from financial savings, which were to be achieved by the merger of the two institutions. To sum up, at the time of the audit the MoA was not aware of the overall impact of the transformation.
In terms of CISTA’s financial management, the SAO did not find any major shortcomings related to the handling of state funds and assets. However, in some cases, the auditors have found partial deficiencies in accounting, asset records, internal rules, and also in the publication of mandatory information. For example, in seven cases, the CISTA did not publish its contract or order in the contract register or in the contracting authority’s profile, or in some cases it did so with a delay. In addition, the CISTA kept a third of the audited buildings incorrectly in its accounting records.
Supreme Audit Office