Negative effects of distributed administration competencies in connection with repayable financial assistance
Press Release – September 18, 2009
From October 2008 to July 2009, auditors from the Supreme Audit Office (SAO) performed an audit that focused on the administration of repayable financial assistance (RFA) by Ministry of Industry and Trade and the Ministry of Agriculture. Auditors also scrutinized proceedings of the revenue authorities that administered the payments from the RFA recipients, which violated the budgetary discipline within the period from 2000 to 2007. Auditors concluded that Ministry of Industry and Trade, Ministry of Agriculture, and Ministry of Finance failed to ensure well timed transfers of retention money and penalty payments through revenue authorities as required by the budgetary rules.
Administrative competences of the claims, which resulted from the RFA that had been provided within the period from 1991 to 1995, were distributed among Ministry of Agriculture, Ministry of Finance, and district financial administration offices. Auditors concluded that complications emerge from such a situation especially when the demands are claimed during insolvency proceedings and the interests reclaimed. By the end of 2007, the interests from claims that had been filed but not recovered amounted to CZK 17.4 million with 16 from the audited financial administration offices. Ministry of Agriculture or any of the audited authorities did not claim for demands worth CZK 10 million in bankrupts that were adjudged within the period from 2000 to 2007.
“The above mentioned ministries failed to report all the cases, in which the RFA recipients made their payments after the due date. Penalty payments worth CZK 2.4 million were imposed on those late payers“, said president of the SAO František Dohnal.
Claims amounting to CZK 3.7 million were not brought to accounting books of the Ministry of Industry and Trade or entered in the files of the audited financial administration offices, in spite the later did proceed in compliance with laws and regulation.
Among the audited bodies were district financial administration offices in Brno I, Brno – venkov, Praha 5, Praha 8, and Praha 9 as well as the regional offices in České Budějovice, Hradec Králové, Kolín, Kutná Hora, Náchod, Písek, Plzeň, Rychnov nad Kněžnou, Třebíč, Ústí nad Orlicí and in Zlín.
The auditing operation was included into the 2008 Audit Plan of the SAO under No. 08/35. Antonín Macháček, Member of the SAO Board, controlled the operation and prepared the audit conclusion as well.
Radka Burketová
Press Speaker
Supreme Audit Office