SAO audited development and reconstruction programmes for administrative facilities of Ministry of Defence
Press Release – June 2, 2010
From June 2009 to January 2010, auditors from the Supreme Audit Office (SAO) performed an audit of funds spent on development and reconstruction programmes, which were implemented at administrative facilities of the Ministry of Defence within the period from 2004 to 2008. Auditors focused on the Programme for development and reconstruction of administrative facilities of the Ministry of Defence (“Development Programme”) and the Programme for reconstruction of integrated facilities of the Ministry (“Reconstruction Programme”).
Among the audited bodies were Ministry of Defence, Central Military Hospital in Prague, military hospitals in Brno and Olomouc, and Military Spa and Recreation Facilities. During the auditing operation, auditors scrutinized the utilisation of state budget funds amounting to CZK 3 951.570 million.
“The goals of the Development Programme lack the necessary homogeneity as it included purchases of military technologies too. The programme’s documentation was amended eight times as well as the investor’s primary objectives. Due to increased amounts of the procured military equipments and supplies for military hospitals, the state budget funds, which had been earmarked for the Programme’s implementation, gradually boosted from CZK 1.8 milliard to CZK 3.6 milliard. The initially planned implementation terms could not be met and termination dates were extended for additional four years“, said president of the SAO František Dohnal.
Due to a lack of financial resources, the reconstruction of the Military Spa and Sanatorium in Mariánské Lázně (that had been included into the Programme too) had to be delayed. After the reconstruction started in 2005, in half a year the supplier became insolvent. The allowance organization Military Spa and Recreation Facilities terminated the agreement and following the Ministry’s order contracted another engineer to revise the project documentation. The revised documentation proposed nearly a double of the originally expected costs.
“The Ministry did not look for other ways to accomplish the reconstruction projects and issued statements on the objects’ redundancy. When exposing the inutile objects for sale, the offering price made less then the utilised state budget funds. In despite of utilising nearly CZK 74 million, the reconstruction project was not accomplished. So the investment missed its goals“, said Dohnal.
Ministry of Defence procured a mobile observation and identification system that would target several offensive needs in tropical areas, e. g. convoying and monitoring of persons and vehicles movements. The supplier was contracted to deliver the system by the end of February 2007 for the agreed price CZK 46 million. The supplier subsequently asked the Ministry to change the telemetric data of the ordered supply. In October 2007, the thought user of the system (the Special Operation Group) informed the Military Police Headquarters that the revised module would not meet the necessary technical standards and performance criteria of the foreign deployments. Nevertheless, the agreement was amended on November 27, 2007, and the system was delivered. The final assessment of the investment stated that the goals were reached. But on the contrary, the supply was delivered in the end of April 2009, which was 14 months later than fixed in the agreement, the cost increased by CZK 65.5 million to CZK 111.515 million, yet the demanded standards were not met.
The Ministry was enabled to approve aggregate amounts of state budget funds earmarked for the Reconstruction Program in order to replace allotments within the programme. The total amount of utilized funds did not change in spite some of the investments were cut back and others aborted. The initially set finishing terms got postponed in two years because of the changes in the documentation.
Activities of individual sub-programmes of the Reconstruction Program were not finished before the audit operation’s end (in contradiction with the previously approved schedule) so it was not possible for the auditors to assess the achieved goals of individual sub-programmes.
The auditing operation was included into 2009 Audit Plan of the SAO under No. 09/17. Rudolf Němeček, Member of the SAO Board, controlled the operation and prepared the audit conclusion as well.
Bc. Radka Burketová
Press Speaker
Supreme Audit Office