The Ministry of Defence’s accounting of the state assets inaccurate and incomplete

Press Release – July 7, 2009

From October 2008 to March 2009, auditors from the Supreme Audit Office (SAO) performed an audit of the state intangible assets managed by the Ministry of Defence (MoD) in 2007. The auditors concluded that the accounting of the audited entity was inaccurate and incomplete.

„The Ministry’s 2007 statement of balances contains a significant inaccurateness. Inventory of the intangible assets was not taken in accordance with the Accounting Act as the Ministry could account for assets worth over CZK 6.5 million, which had been on account No. 041 – Intangible fixed assets. The difference should have been entered in the books as a shortage within the 2007 accounting period“, said president of the SAO František Dohnal.

When taking the inventory on the date December 31, 2007, the Ministry did not notice that the records did not represent the real state of the assets and accounts payable. As a result, assets worth almost CZK 27 million were inaccurately shown in the statement of balances. This leads to the conclusion that the section of the Ministry’s 2007 accounting was not accurate.

The Ministry did not follow the Accounting Act while drawing an aggregate statement of balances together with another accounting entity (the Military siding authority) fro the year 2007. Such a statement of balances left out important details, which are necessary for an appropriate assessment of the accounting entity’s management.

“The Ministry failed to provide a complete set of accounts for the 2008 accounting period. Acquired intangible assets worth almost CZK 30 million was not brought to the accounting at all“, said president Dohnal.

The auditing operation was included into the 2008 Audit Plan of the SAO under No. 08/30. Jan Vedral, Member of the SAO Board, controlled the operation and drew up the audit conclusion as well.

Radka Burketová
Press Speaker
Supreme Audit Office

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