Auditing operation No. 04/24
State Budget funds and the management of the state property under the authority of the Ministry of Transport.
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. 04/24. The auditing operation was managed and audit conclusion drawn up by Mr. Jiří Adámek, the Member of the SAO.
The aim of the audit was to examine selected expenditures and the management of the state property under the authority of the Ministry of Transport.
The audited period covered the year 2003 and the first half of the year 2004 as well as previous periods in case of relevant connections.
The audited bodies were organizational units of the state: the Ministry of Transport (hereinafter referred to as “MT”), the Civil Aviation Authority (hereinafter referred to as “CAA”), the Rail Authority (hereinafter referred to as “RA”), and the allowance organization: The Road and Motorway Directorate of the Czech Republic (hereinafter referred to as “RMD”) and within its framework the Head Office (hereinafter referred to as “HO”), Divisions Praha and Brno, and Administrations Karlovy Vary, Plzeň, Hradec Králové, Pardubice, Ostrava and Brno.
The audit was focused on the financial resources and the state property management in connection with own activities of MT, RMD, HO, and their other divisions. Total expenditures for such activities amounted CZK 4,076,000,000 in the audited period; from it one third was actually examined. Volume of funds connected with irregularities amounted about CZK 224,000,000.
Irregularities ascertained at the MT concerned particularly with expenditures for traffic administration; auditors also found out some cases of circumvention the Public Tender Act No. 199/1994 Coll. Some irregularities of minor importance were ascertained at the RA and the CAA (except for testing flights financing for the Army of the Czech Republic).
As their number or size were concerned – more significant deficiencies were ascertained at the RMD. Above all, there were:
- Insufficiently prepared contract of two gas station grounds connecting to the motorway D1 and an opaque pursuance in the course of subsequent judicial proceeding,
- Ineffective and uneconomical spending for services and delivery,
- Deficiencies in ordering of public tenders,
- Deficiencies in monitoring and enforcement of claims,
- Disordered and inconsistent management of the training centre,
- Insufficient determining of financial benefit from leases, particularly concerning advertising opportunities.
A number of deficiencies carry over from past periods in case of the RMD. During the last two years, a couple of new internal guidelines were issued but some of them were not consistently implemented. Defects of the system of preparation and implementation of the projects indicate neglecting of the project management rules (however, the RMD prepared – in the course of the audit – some new guidelines to rectify this demerit). Findings also indicate insufficient internal controls.
A method of the own activities costs financing, which was applied at the RMD, has been opaque. A volume of these costs determines the RMD itself within the framework of the binding indicator “current expenses for reparation and maintenance of roads and motorways”, which is specified by the State fund of Traffic Infrastructure. Thus, a sufficiently effective pressure is not imposed to spend these funds economically.
Also other risks for the state property management were detected:
- The CAA must fulfil some tasks within the framework of its given mandate, for which it needs to lease some state properties from the Czech Airport Authority. It is important to resolve this matter particularly with respect to upcoming privatisation of this state enterprise.
- The RMD has badly arranged property records, inventory records, insufficiently evidenced secondary activities costs or business trips abroad paid by the roads or motorways contractors.