Czech embassy buildings are in a poor or emergency condition. The Ministry of Foreign Affairs postpones or changes plans for reconstruction, which leads to additional costs
Press release on audit No 21/01 – 20 December 2021
The SAO examined the financial management of the Ministry of Foreign Affairs (MoFA) between the years 2016 and 2020. The audit focused on the construction and reconstruction of Czech embassy buildings, the acquisition of cars for official purposes, or the repatriation of citizens deceased in the first wave of the COVID-19 pandemic in 2020. The SAO audited a sample of eight construction projects amounting to CZK 225 million and four plans to procure 344 vehicles worth almost CZK 300 million. The SAO found that in the case of vehicle purchases, the MoFA discriminated against potential suppliers. In terms of construction and reconstruction of Czech embassy buildings, the MoFA did not follow a cohesive approach, instead, it often changed its plans or solutions to the problem at hand. Also, construction projects were not sufficiently prepared by the MoFA, which delayed or cancelled investment plans, thus, it caused unnecessary expenditure.
For example, the building of the Czech embassy in Berlin represents a large economic burden for the state budget. Since 2006, the MoFA has been using only 30% of the building, which is in poor technical condition and thus generates additional costs. The situation has been addressed by the MoFA since as early as the year 2000. In 2011, the Ministry wanted to sell the building and acquire a new seat for the embassy for over CZK 400 million. In 2017, however, the Ministry changed its plans and proposed to reconstruct the existing seat for almost CZK 865 million, which the government approved. However, even after 21 years, the issue of the Czech embassy in Berlin remains unresolved.
The MoFA has been planning to reconstruct the premises of the Permanent Mission of the Czech Republic to the United Nations in New York since 2013. The building is in an emergency condition — inspections have shown that, for example, windows are falling apart, it is infested with mice and cockroaches, and the wiring is faulty. Despite this situation, the MoFA did not start a reconstruction even after seven years. However, maintenance and repair expenditures amounted to CZK 32 million between 2016 and 2020.
In the case of the Czech embassy in Washington D.C., the MoFA decided on the construction of a new building in 2007, taking into account the emergency condition of the existing building. In 2011, the MoFA stated that the construction of a new building was a significantly more efficient solution than renovation, as investments into repairs, in the order of hundreds of millions of Czech crowns, would not eliminate all the technical and security problems. Despite this, since 2020, the MoFA has been planning a reconstruction amounting to more than CZK 280 million. However, the Ministry has already paid more than CZK 20 million for preparations related to the construction of a new embassy building.
The Ministry of Foreign Affairs had sufficient resources for investments. It has two financial programmes for asset replacement, from which it can draw funds. The SAO revealed that in the case of one the programmes, which contained substantial funds, the MoFA had only used around half of the prepared money in the period 2016-2020.
The auditors also focused on purchases of official cars. The MoFA infringed the principles of equal treatment and non-discrimination by indicating the specific make and type of the vehicle in the procurement documents. It failed to substantiate its requirements in a relevant manner. The Ministry acquired six vehicles for CZK 5.2 million, thus infringing budgetary discipline according to the SAO.
The Ministry also set a limit on the efficiency of the use of official cars with a minimal annual mileage of at 15,000 kilometres. The vehicles used at the MoFA headquarters did not cover even half of this value in the two years of the audited period. The Ministry did not take this into account when purchasing new vehicles. It is also worth mentioning that the vehicle traffic reports for the past several years, which are an essential prerequisite for the evaluation of the efficiency of official vehicles, have not been traced by the MoFA.
The SAO did not find shortcomings in the repatriations of citizens at the beginning of the COVID-19 pandemic in spring 2020. The Ministry spent a total of CZK 127 million on these repatriations.