EU endowment requests poorly controlled at the State Agricultural Interventional Fond administration
Press Release
July 10, 2007
Supreme Audit Office of Czech Republic (SAO) audited management of financial resources from the state budget and EU funds earmarked for realisation of common agricultural policy as planned in “Horizontal Plan of Country-side Development in Czech Republic from 2004 to 2006“ (HPCD).
The audited period responds to the realization interval of HPCD after Czech Republic admitted EU, including associated data from the adjustment period and until the audit was finished. The audited bodies were Ministry of Agriculture (MA), the central administration of State Agricultural Interventional Fond (SAIF) and its regional departments in Brno, České Budějovice, Hradec Králové, Olomouc, Opava, Praha and Ústí nad Labem.
Inadequacies found at MA and SAIF proved the fact that in some cases, money was granted against the rules and regulations of EU. A certain risk for loosing the EU endowments exists here. “We are dealing with poor administrative verifications of requests, which caused granting the endowments though all conditions were not legalized. Further inadequacies include wrong decrees on repaying the donations and poor utilization of control outcomes, which should have decreased the range of granted money,“ said František Dohnal, president of SAO.
Generally, the system does meet requirements determined by European and national legislations that are linked with the Common Agricultural Policy (CAP). Within the audited period, nearly CZK 15 billion were disposed on behalf of almost 45.000 endowment requests. “We uncovered some insufficiencies of legislative actions – late releases and contextual mistakes of the rules in particular. Consequently, these shortcomings were the cause of initiatory difficulties while implementing the HPCD programme. We miss a demonstrable rule for decision-making when administering the endowments. On the top of findings, auditors refer to the fact that MA did not carry out any inspection of the SAIF administration within a period of three years when subsidies worth more than CZK 14 million were granted, “ said Dohnal.
The auditing operation was included in the 2006 Annual Audit Plan of SAO under No. 06/26. Jiří Kalivoda, Member of the Board, controlled the auditing operation and drew up the audit report as well.
Radka Burketová
Press Speaker
Supreme Audit Office