Auditing operation No. 03/20
State property and the State Budget funds earmarked for the functioning of the Prison Service of the Czech Republic
The auditing operation was included in the Annual Audit Plan of the Supreme Audit Office (hereinafter referred to as “SAO”) for the year 2003 under No. 03/20. The auditing operation was managed and audit conclusion drawn up by Ms. Marie Hošková, the Member of the SAO.
The aim of the audit was to examine the management of the state property and the State Budget funds by the Prison Service of the Czech Republic.
The audited period covered the years 2001 and 2002 as well as related periods in case of relevant connections.
The audited bodies were the Ministry of Justice (hereinafter referred to as “MJ”) and the Prison Service of the Czech Republic (hereinafter referred to as “PS”).
The audit results revealed that the MJ’s supervision of the management of the PS is not sufficiently set out from a systematic perspective, it is conditioned by insufficient or obsolete regulation and takes place essentially without any effective input from the relevant specialized departments of the MJ. The MJ has, as yet, failed to create the optimum conditions for the proper performance of the activities of the PS in particular with regards to the management of state property and budget resources and in the area of the employment of imprisoned persons.
The results of the audit indicated that the measures adopted in the area of the financial and asset management of the PS after the SAO auditing operation completed in 1996 were not efficient enough as the deficiencies determined seven years ago are still evident:
- Differences between the applicable legal state and the actual situation with regards to management, in particular the lack of prompt linkage of associated departmental legal regulations to generally applicable legal regulations;
- The lack of thorough and complete accountancy on the part of the PS for the state organisational unit as a whole;
- Inconsistent and incomplete execution of the inventorying;
- Incomplete or inconclusive records of assets that do not correspond to the actual situation or, in the case of real estate, the situation as registered in the Land Register;
- Unresolved relationships with respect to the use of agricultural and forestry land by the PS;
- The payment of investment expenses from operating funds, in particular on the technical improvement of the tangible property of the Prison Service;
- The protracted process, sometimes lasting several years, for entering acquired or improved property into the asset accounts and into the records, despite the fact that these have already been brought into use by the organisational units of the PS.
The extent of the breaches of legal regulations is a consequence of system deficiencies both in the activities of the PS and in its management on the part of the MJ, particularly in the area of the management of state property and accountancy and failure to observe these regulations results in distorted balance sheet and financial statements of this state organisational unit.