The Ministry of Industry and Trade corrected material accounting misstatements. The 2020 accounts thus give a true and fair view of the subject-matter of the accounts.
Press Release on Audit No 20/34 – 18 October 2021
The Supreme Audit Office (SAO) examined the data of the closing account, management of the accounts and the preparation of the annual account of the Ministry of Industry and Trade (MoIT) for 2020. The auditors also focused on the data which the MoIT submitted for the assessment of the implementation of the state budget. The closing account and the data submitted by the MoIT for the assessment of the implementation of the 2020 state budget had no material misstatements.
The audit was being carried out in the open financial year 2020. Thus, the MoIT was able to immediately correct the accounting misstatements revealed by the auditors. The value of the corrected accounting entries amounted to CZK 45.1 billion. Subsequently, the MoIT drew up the annual accounts in which the auditors identified further material misstatements amounting to CZK 1.9 billion. The MoIT corrected these misstatements as well and prepared a new annual account for the year 2020 which, according to the SAO, gave a true and fair view of the subject-matter of the accounts.
Auditors found a persistent weakness in the management of the accounts, but this did not affect the 2020 annual accounts. However, that weakness had an impact on the accounting records compiled and transmitted by the MoIT on a quarterly basis. The MoIT does not charge advance payments on transfers, and until their financial settlement, they are considered as receivables from recipients of transfers. These are significant accounting cases, amounting to CZK 27 billion in the audited sample alone.
The auditors also found that the MoIT had entered into instalment agreements under which debtors would have to repay their debts to the MoIT for over a thousand years. These agreements did not contain certain requirements laid down by law, which, moreover, rendered them null and void.
The SAO also verified whether the MoIT had corrected the deficiencies from the previous audit. Of the 12 measures, the MoIT fully and correctly implemented 10 measures and two were implemented only partially.
Reliability of the annual accounts of the Ministry of Industry and Trade following corrections of the accounts
Communication Department
Supreme Audit Office