Auditing operation No. 04/03
State Budget funds earmarked for construction and renovation of buildings of The University of West Bohemia in Plzeň and The University of Ostrava
The auditing operation was included in the Annual Audit Plan of the Supreme Audit Office (hereinafter referred to as „SAO“) for the year 2004 under No. 04/03. The auditing operation was managed and audit conclusion drawn up by Mr Josef Pohl, the Member of the SAO.
The aim of the audit was to examine the management of the State Budget funds earmarked for the construction and the renovation of buildings of the The University of West Bohemia in Plzeň and The University of Ostrava, including remedial measures stemming from the results of the SAO’s audit titled „Audit of the use of the subsidy for the construction of the building of The Machine Engineering and Electro-Technical University in Plzeň“, performed in 1994.
The audited period covered the years 2000 to 2004 as well as previous periods in case of relevant connections.
The audited bodies were the Ministry of Education, Youth and Sports (hereinafter referred to as „MEYS“), The University of West Bohemia in Plzeň and The University of Ostrava.
During the construction of new buildings for the The University of West Bohemia in Plzeň and The University of Ostrava, the MEYS:
- Did not perform due management, control and methodological work, which it is obliged to ensure as the administrator of the long-term assets replacement programme;
- Did not create effective tools and set conditions in respect of the substantive and financial direction of the work of the two universities as direct investors;
- Had no control over the implementation of both constructions and thus could not exercise the decision-making power it possesses as the programme administrator. The absence of control work by the MEYS was already stated in the SAO’s audit No. 94/20, which examined the use of State Budget funds earmarked for the construction of the building of The Machine Engineering and Electro-Technical University in Plzeň;
- During the registration of the project to construct the building of The Natural Sciences Faculty of The University of Ostrava, the MEYS did not demand submission of an investment plan as the basic document for defining the substance, function, financing and timing of the construction project;
- Wrongly issued decisions on State Budget participation in the construction of the building of The Electro-Technical Faculty of The University of West Bohemia in Plzeň, issuing the first decision at the start of the action and the second as the final decision that retroactively accepted all financial and substantive changes made during the course of construction without its knowledge and prior approval;
- Did not act to prevent changes in the building work during its course without its prior consent as the programme administrator;
- Did not update its methodological documents published in 1998 and 1999 concerning the acquisition of long-term assets. These methodologies were made inapplicable by Act No. 218/2000 Coll. and Decree No. 40/2001 Coll., which altered the rules governing the procedure of programme administrators and programme participants during preparation, approval, implementation and final evaluation of programmes and projects.
Both audited universities, as project investors and participants in the construction programme, made substantive changes to the construction projects, with impacts on the level
of State Budget funds, without the prior consent of the MEYS. The audit detected violation of
Act No. 199/1994 Coll., on public procurement, Decree No. 40/2001 Coll., and non-compliance with the provisions of contracts for work. The University of Ostrava breached good budget practice to a degree that amounts to a total of CZK 4,863,488, i.e. approx. 2.6 % of the audited funds.
Incorrect and lax procedure by the MEYS, The University of West Bohemia in Plzeň and The University of Ostrava led to an increase in the amount of State Budget funds spent on construction. A total of CZK 521,424,000 was spent on construction and renovation of buildings of The Electro-Technical Faculty of The University of West Bohemia in Plzeň and The Natural Sciences Faculty of The University of Ostrava, which constitutes an increase of approximately CZK 42 million over the original plan.