Auditing operation No. 04/11
Funds of the State Budget chapter – the Ministry of Labour and Social Affairs spent and collected in the context of protection of employees in the case of employers’ insolvency
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. 04/11. The auditing operation was managed and audit conclusion drawn up by Ms Zdeňka Profeldová, the Member of the SAO.
The aim of the audit was to examine the economy and the efficiency of the funds provision and collection under the terms of Act No. 118/2002 Coll., on protection of employees in the case of employers’ insolvency and amending some Acts.
The audited period covered the years 2000 to 2003.
The audited bodies were the Ministry of Labour and Social Affairs and seventeen selected Labour Offices.
Between the years 2000 and 2003 inclusive, a total of CZK 1,109,716,000 was earmarked in the State Budget for expenses associated with implementation of Act No. 118/2000 Coll. CZK 684,498,000 were drawn and CZK 79,893,000 were transferred to the Labour Offices’ reserve fund. The audited Labour Offices’ involvement in these transfers amounted to CZK 30,145,000. Transfer to the reserve fund meant that these resources had lost their on-purpose character.
In the audited period, 12 of 17 audited Labour Offices paid a total of CZK 5,199,140 contrary to Act No. 118/2000 Coll.
Only 4 % of the finance drawn from the State Budget by 17 audited Labour Offices were returned to the State Budget.
Bankruptcy asset trustees categorised the debts announced by the Labour Offices in bankruptcy proceedings into various classes of debt, partly because the adoption of Act No. 118/2000 Coll., on protection of employees in the case of employers’ insolvency and amending some Acts, under which, up to the level of disbursed funds, the wage claim of an employee in respect of an employer passes to the Labour Offices and which the Labour Offices declare the debts owed to individual employees in bankruptcy proceedings, was not transposed into Act No. 328/1991 Coll., on bankruptcy and settlement.