Auditing operation No. 04/42
State enterprises in the province of agriculture, which were retained for not yet resolved restitution claims or other statutory reasons
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. 04/42. The auditing operation was managed and the audit conclusion drawn up by Mr. Jiří Kalivoda, the Member of the SAO.
The aim of the audit was to examine the state enterprise’s management of the state property and of the funds provided from the State Budget, primarily from the point of view of purposefulness and economy.
The audited period covered the years 2001 to 2004 as well as previous periods in case of relevant connections.
The audited bodies were the Ministry of Agriculture (hereinafter referred to as “MA”); the Southern Moravian Bakeries, state enterprise (hereinafter referred to as “SMB”); Budějovický Budvar Brewery, National Company (hereinafter referred to as “BBB”); Water - Management and Engineering Works, Písek (hereinafter referred to as “WEW”).
Following findings resulted from the audit:
The MA did not fulfil its tasks of the state enterprises founder laid down by the Act on state enterprise No. 77/1997 Coll. The MA in particular:
- Failed to evaluate enterprises’ activities and properties situation;
- Underestimated importance of supervisory boards (in one case it did not established any supervisory body since the year 1992; in other cases, it paid no attention to their activity);
- Reluctantly ensured (particularly by its inaction) termination of remaining state enterprises’ activities in as short term as might be possible.
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The situation is exceptionally alarming in the WEW Písek, where the MA failed to carry out any reviewing activity and had available no information on a state of the enterprise for five years without it undertook any steps towards the termination of the remaining state enterprise.
The MF also knowingly did not amend a founding charter of the WEW Písek according to the Act on state enterprise No. 77/1997 Coll. Thus, it left the enterprise in regime of previous legal situation, which ceased to be valid by 30 June 1997. A Regional Court called the founder to rectify the situation but the MA remained to be inactive even after this official requirement.
The audited state enterprises operated breaching particularly the Act on state enterprise and the Act on Accountancy. Findings consisted in particular in deficiencies such as:
- Insufficient property records;
- Erroneous recording property transactions;
- Failing to verify financial statements and to submit them to the founder.