SAO audited funds utilized for the compensation of market intervention costs and export subsidies within the common market organisation
Press Release – November 3, 2010
From January to July 2010, auditors from the Supreme Audit Office (SAO) were performing audit operation No. 10/01, which focussed focussing on EU and State budget funds allotted for compensation of the costs of market intervention and export subsidies within the common market organisation.
Within the audited period 2007–2009, over CZK 1.8 milliard were utilized on the compensation for market intervention costs, the food aid programme for the most deprive, and export subsidies. The auditors scrutinized more than 27 % of the funds and also audited the intervention revenues in the amount of CZK 219 million.
“The conclusion states that the funds were utilized in compliance with the set conditions and the funding system of selected common market organisation measures was functional; despite this, however, auditors revealed that some of the audited bodies had breached legal regulations“, said president of the SAO František Dohnal.
In several cases the Ministry of Agriculture did not proceed in line with the Act on Financial Control because it failed to perform systematic assessments of the state of affairs with regard to implementation of the measures adopted based on the findings of foreign audit missions, and did not adopt measures in respect of certain significant internal audit findings. In the annual reports on internal financial audits, the Ministry omitted relevant facts related to the assessment of adequacy and effectiveness of the financial auditing system. The SAO had warned of the same shortcomings in audit conclusions of the previous auditing operations No. 07/11 and 09/12).
The State Agricultural Intervention Fund failed to refuse sub-standard deliveries of dried skimmed milk that did not meet the EC regulation requirements. It failed to require that warehouse keepers always provided it with monthly stock reports within the set deadline in accordance with this regulation, and failed to impose sanctions for breach of that obligation.
The food aid programme for the most deprived is not regulated in the Czech Republic in a way enabling broad utilisation of this aid. In 2007, the allocated amount of 144 453 EUR was not utilized at all. In 2008, only EUR 36 thousand out of the allocated amount of EUR 155 443 were utilized. In the same time, the intervention supplies were not put to use at all. The Czech Republic did not participate in the food aid programme in 2009“, said Dohnal.
The auditing operation was included into 2010 Audit Plan of the SAO. Jiří Kalivoda, Member of the SAO Board, controlled the operation and prepared the audit conclusion as well.
Mgr. Bc. Radka Burketová
Press Speaker
Supreme Audit Office