Auditing operation No. 04/10
State Budget funds earmarked for The National Programme Sport for All
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. 04/10. 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 management of the investment and non-investment State Budget funds earmarked for The National Programme Sport for All.
The audited period covered the years 2001 to 2003 as well as previous periods in case of relevant connections and the periods up to the conclusion of the audit.
The audited bodies were the Ministry of Education, Youth and Sport (hereinafter referred to as “MEYS”), The Czech Sokol Organisation, The Czech Sports Association, The Czech Association of Sport for All, The Auto Club of the Czech Republic and The Association of Technical Sports and Activities.
From 2001 to 2003, projects implementing The National Programme Sport for All were financed from the MEYS budget chapter. The total amount was CZK 2,389,849,000, with most of the state support – CZK 1,485,286,000 – taking the form of investment subsidies for the sport facilities construction and renovation.
Besides the MEYS budget chapter, budget chapter 398 – General Treasury Administration was also used to finance civic associations’ investment projects. During 2003, finances were released from budget chapter 398 for specifically designated investment projects on the basis of approved initiatives brought by parliamentary deputies. CZK 366,100,000 was expended in this way from the Universal Treasury Administration in 2003. This system of multi-source financing of investment projects meant that responsibility was fragmented; there was a greater risk of errors and possible duplicate financing without the possibility of appraising the social need for the investments in the given locality by means of the standard procedure for selecting projects through the MEYS and senior bodies representing civic associations.
The MEYS did not have proper grasp of the actual purpose for which the subsidies were being used, as it failed in Programme V and its individual sub-programmes to specify qualitative and quantitative criteria governing the drawing of non-investment subsidies in 2002 and 2003 and failed to define in its Decisions the magnitude and itemised composition of expenses (i.e. the purpose of use of the subsidy). Subsidies provided from the State Budget on the basis of the MEYS Decisions thus took the form of an unspecified contribution to a project without any material connection to the substance of the Programme.
The MEYS failed to monitor thoroughly the use of State Budget funds by beneficiaries and compliance with the specified amount of participation by the state in projects’ actual costs.
The beneficiaries (umbrella civic associations) failed to duly monitor whether the affiliated entities or organisational units used the non-investment subsidies for the specified purpose and project. The reporting of how the subsidies were used was merely formal in many cases.
In some cases, the beneficiaries of the investment subsidies did not proceed in accordance with Decree No. 40/2001 Coll. or with other legal regulations, in particular Act No. 199/1994 Coll., on public procurement.