Ministry of Finance jeopardized the effectiveness of state budget expenses
Press release
May 10, 2007
The audit performed by the Supreme Audit Office (SAO) aimed at procedures of Ministry of Finance (MF) when budgeting and drawing from state budget chapter General Balance Administration (GBA). The audited period were years 2004 and 2005, including associated data from the previous time, and the audited body was MF. Auditors took the view that MF does not fulfil the duties of the chapter’s administrator.
GBA is a significant chapter of the state budget, judging by the amounts of financial resources (making more than 20% expenses and almost 60% of the income). “Great deal of its receipts and expenditures do not follow the budget law since most of the assets lie within other chapter’s administrations. The nature and characteristics of the programs, which were also included into this budget chapter, bring down the responsibility of the administrators and increase risks for ineffective budget spending,” said František Dohnal, the president of SAO.
As Dohnal added, the GBA chapter should not involve incomes from other budget chapters. “SAO has previously pointed out several defects. For example, SAO audit No. 03/16 (State budget revenue resulting from fines imposed, collected, and recovered by administrative authorities) revealed that some budget incomes are not booked at all. Audit No. 04/19 (Closing account of the Ministry of Justice State Budget Chapter) found out that courts kept accounts of law charges, but those incomes were not included in the GBA chapter,” said Dohnal.
During the audited period, the GBA budget was regulated by more than 1700 budgetary measures each year. It gives us the evidence that planned expenses had not been budgeted for a certainty. These frequent amendments may disparage the budgeting process, decrease transparency and efficiency of state budget expenses, and make auditing difficult. According to the budget law, the chapter administrators are responsible for managing the state budget resources and state finances and have to monitor and evaluate the efficiency and expediency of their expenses. “MF does not fulfil this duty in case of the GBA budget chapter, nor it performs their statutory duty to show the balance in managing these resources according to the accounting standards,“ said Dohnal.
The auditing operation was included in the Annual Audit Plan of SAO for the year 2006 under No. 06/24. Eliška Kadaňová, Member of the SAO, controlled the auditing operation and drew up the audit report as well.
Radka Burketová
Press Speaker
Supreme Audit Office