Ministry of Industry and Trade’s final account: Unreliable background for the statement of balances
Press release
February 20, 2007
The final account of Ministry of Industry and Trade (MIT) did not truly depicture the object of 2005 fiscal period in accordance with accounting laws. Auditors from the Supreme Audit Office (SAO) concluded this outcome during verification of the facts included in statements that had been put out as supporting documents for the final account of the state budget chapter.
Financial audits were performed to ascertain the validity and reliability of MIT financial statements which could influence the tested value of closing balance in the 2005 final account, including realia associated with 2006 and previous years.
“MIT’s 2005 final account was not a reliable source for drawing the final account of the state budget chapter 322 – Ministry of Industry and Trade. The financial audit resulted in a publication stating that the inaccuracy was worth 1.1 billion CZK. At the same time, a budgetary discipline breach was detected, with estimated value of more than 5.2 million CZK”, said František Dohnal, president of SAO. He also added that the amount of money referred to a delayed payment of revenues realized from MIT’s property disposal.
“In the face of the determined imperfections, it is necessary for MIT to ensure that inadequacies will be taken away by enforcing appropriate adaptations of their book-keeping. The largest amount of shortcomings lay in poor keeping of the returnable grants-in-aids“, said the president of SAO.
The audit report also concluded that the present state of obligatory regulation principles, which control presenting financial data on capital participation of the state in trading companies, markedly suggests various unacceptable interpretations. “This is the reason why the Ministry of Finance was proposed to try to find a solution so that we can clearly see which data can come out from single closing entries in the sphere of capital participation and how to interpret the statement of balances”, said František Dohnal.
The auditing operation was included in the Annual Audit Plan of SAO for the year 2006 under No. 06/20. Jan Vedral, Member of the SAO, controlled the auditing operation and drew up the conclusion as well.
Radka Burketová
Press Speaker
Supreme Audit Office