State Property and the State Budget Funds Earmarked for the Administration of the State Material Reserves
Press release on completion of the auditing operation No. 06/04
The auditing operation was included in the Annual Audit Plan of the Supreme Audit Office (hereinafter referred to as “SAO”) for the year 2006 under No. 06/04. The auditing operation was managed and the audit conclusion drawn up by Mrs. Marie Hošková, the Member of the SAO.
The aim of the audit was to examine management of the state property and the state budget funds earmarked for ensuring of the Administration of the State Material Reserves tasks.
The audited period covered the years 2004 and 2005 as well as previous or following periods in certain cases of relevant connections (up to the conclusion of the audit).
The audited body was the Administration of the State Material Reserves (hereinafter referred to as “Administration”).
The Administration does not use funds of “special accounts” by means of the state budget and fails to report about money depositing and charging of them. The Ministry of Finance preparing the State Budget Draft or the State Final Account and the Chamber of Deputies of the Czech Republic Parliament have not available information about real budgetary needs of the Administration.
Taking into account future expenses of the Administration related with tasks resulting from the Council Directive 98/93/EC from 14.12.1998 imposing an obligation on Member States of the EEC to maintain a minimum stocks of crude oil and/or petroleum products as well as from Act No. 189/1999 Coll., on Emergency Oil Stocks, it is supposable that the Administration requirements to the state budget will considerably increase.
Legal regulations compliance review of audited activities found out for example:
- Act No. 218/2000 Coll., on budgetary rules and amending some related Acts (budgetary rules)
- The Administration opened the “special accounts” at commercial banks even though their funds as the State Treasury funds should have been deposited on accounts at the Czech National Bank.
- The Administration failed to fulfil assignments by the most economical way when it provided to a debtor further loading despite there had been after him payable outstanding in the total amount of CZK 8,040,320.
- Act No. 219/2000 Coll., on the property of the Czech Republic and its appearance in legal relations
- The Administration failed to claim contractual sanctions from debtors in the total amount of CZK 35,499,220.
- The Administration failed to use profoundly all legal tools to apply and protect the state’s rights as owner when it made contracts with suppliers unless these contracts contained any sanction provision for supplier’s failure to discharge his duty resulting from the contract. On the contrary these contracts contained the provision on late charges for the buyer (i.e. the Administration). The contractual relationship displays signs of imbalance.
- Act No. 563/1991 Coll., on accountancy
- The Administration conducted accounting procedures in 2004 and 2005 in such a way, that they did not present a true picture of the accountancy subject.
- The Administration did not record ascertained inventory differences into the accounting period, for which stocktaking checked a state of property and liabilities.