Auditing operation No. 04/38
Management of the State Budget funds from the programme "Build-up and technical renewal of hospitals and medical facilities under responsibility of the Ministry of Health" within the Ústí region
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. 04/38. The auditing operation was managed and audit conclusion drawn up by Mrs. Zdeňka Profeldová, Member of the SAO.
The aim of the audit was to examine the provision, the drawing and the usage of funds for the programme “Build-up and technical renewal of hospitals and medical facilities under responsibility of the Ministry of Health” within the Ústi region.
The audited period covered the years 1998 to 2004 as well as previous periods in certain cases of relevant connections.
The audited bodies were the Ministry of Health (hereinafter referred to as “MH”), the Usti Region, the Masaryk’s Hospital in Ústí nad Labem, allowance organization (hereinafter referred to as “HUL”), and the Territorial Centre of Emergency Service in Ústí nad Labem (hereinafter referred to as “TCES”).
The audit detected:
The building-up of the HUL has been under way since 1985 and shall be finalized in June 2006. The total construction costs reached to CZK 3,885 million up to now. The object of the audit was the project “Completing of the HUL structure”.
The HUL concluded six contracts to elaborate construction projects. They also concluded numerous amendments to these contracts, by which the object of the project and also the terms of processing were changed. A vague concept of the whole project and its extent led in 2003 to a withdrawal from the same partial project whose design was ordered in 2001. The HUL thus spent CZK 4,311,000 in vain.
Although the MH changed its decision about the participation of the State Budget in funding of the action “HUL-Finishing of the building”, it did not find out that the financial resources of the State Budget under its responsibility were earmarked for a purpose, which had a poorly prepared planning intention. Even its own control activities failed to detect such a fact.
The action “HUL-Finishing of the building” was divided into two parts. The HUL breached provisions of the Act No. 199/1994 Coll. when it failed to exclude a bidder who did not fulfil material conditions of the contractual documentation of the public tender for the second part of the whole project amounting to CZK 1,255 million. The bidder did not support its qualifying preconditions with any evidence before signing the contract. Thus the HUL failed to ensure an environment competitive enough to get an optimised price. The contract was signed when the negotiable price for the work amounted to CZK 1,326 million.
Seven days after signing this contract, the HUL concluded an amendment to it. The price of the work was reduced by amount of CZK 400.16 million without the changed purpose of the contract being precisely specified.
The HUL breached the Act No. 563/1991 Coll. (or 218/2000 Coll. respectively) and its implementing decree No. 205/1991 Col., when it used the State Budget funds in amount of CZK 35,702,000 in the other than respective year; it also paid to contractors amount of CZK 10,916,000 without any material fulfilment being documented. It also breached the Act No. 563/1991 Coll. failing to file long-term tangible property into the usage in value of CZK 1,954,489,000 in the year 2003; and long-term tangible property or small long-term tangible property in value of CZK 31,713,000 in the year 2004; it also performed stocktaking at 31 December 2004 unless it listed the factual state of all assets and liabilities. The property in value in CZK 1,742 million was included into inventory without physical counting.
The TCES breached the Act No. 199/1994 Coll. failing to exclude those bidders who did not support with any evidence their qualifying preconditions when they applied in the public tender for engineering services and delivery of computing technology in value of CZK 6,907,000.