Financial Auditing Act yet to be adjusted to legal requirements of the European Union
Press Release – February 16, 2010
From March to November 2009, auditors from the Supreme Audit Office (SAO) audited funds utilized for implementation of the Single Programming Document – Objective 2 (SPD 2). Out of approximately CZK 2.8 milliard, which were allotted for individual projects included into the SPD 2 within the period from 2004 to 2008, auditors focused on funding achieved through the state budget and European Regional Development Fund, which amounted to some CZK 560 million.
Auditors focused on management of the SPD 2 implementation activities within the frame of Ministry for Regional Development, the Czech Centre for Regional Development and the Capital City of Prague. The auditing operation was aimed at decision processes during evaluation and selection phases, the achievement of defined parameters, internal auditing activities, re-collection of wrongfully provided finances, and sanctions for disobeying the projects’ specifications. The auditors also examined whether end beneficiaries followed the legislation and obeyed the pre-set terms with several selected projects.
“During the SPD 2 implementation period, the projects missed some properly defined criteria. If Ministry for Regional Development had defined the assessment criteria for the projects according to the schedule, relevant monitoring criteria could have been set by the recipients”, said president of the SAO František Dohnal.
In three cases altogether, expenses that reached beyond CZK 741 thousand were refunded in contradiction with the Act of Budgetary Regulations. Auditors concluded that this problem was caused because the Centre for Regional Development had insufficiently analyzed the eligibility of expenses.
Ministry for Regional Development delegate the preliminary public administration auditing powers to Capital City of Prague and the Czech Centre for Regional Development. However, Financial Auditing Act does not imply the multi-level managing and auditing processes, which were applied by SPD 2. Financial auditing powers of the funds have not been specified. During a previous audit operation No. 08/22 entitled “Financial means allotted for wastewater treatment” the SAO pointed out that the need to reform the Act was inevitable. It should correspond with the EU legislation as well as the standard practice.
The auditing operation was included into 2009 Audit Plan of the SAO under No. 09/09. Marie Hošková, Member of the SAO Board, controlled the operation and prepared the audit conclusion as well.
Bc. Radka Burketová
Press Speaker
Supreme Audit Office