2009 balance accounts of Ministry of Agriculture gave fair and true view of accounting

Press Release – December 8, 2010

From March to September 2010, auditors from the Supreme Audit Office (SAO) were performing auditing operation No. 10/07 that examined the closing accounts submitted by the Ministry of Agriculture for the year 2009 as the supporting documentation to the closing account for the state budget chapter. Auditors scrutinized whether the Ministry had followed the applicable legislation when preparing the closing account.

“In view of comparisons of the total absolute inaccuracy with the pre-set maximum allowable irregularity ration of the records¹⁾ it is clear that the 2009 financial statements of the Ministry of Agriculture gave true and fair view of the accounts of the year 2009, pursuant to the applicable legislation“, said president of the SAO František Dohnal.

Auditors found shortcomings pertaining to the stock-taking of assets and liabilities. In 2009, the Ministry failed to account for assets totalling CZK 320 million on the relevant accounts. Budgetary regulations were violated in the total amount of CZK 436 thousand. The shortcomings were mostly caused by over- or underestimations of the separate statement items. The final account of the Ministry did not include some obligatory data stipulated by the decree on determination of extent, structure, and terms of the state budget chapter balance accounts.

The current provisions regulating the book-keeping of organizational units of the state deal inadequately and ambiguously with the issue of merging ownership interests according to the level of influence exercised on the entity representing the ownership interest, i. e., according to the decisive and material influence and on other ownership interests. The SAO has been repeatedly pointing this out over the last few years, but the state of affairs continues to prevail.

In violation of the law on the state property, the joint stock company Government Testing Laboratory of Agricultural, Food Industry and Forestry Machines got possession of lands worth CZK 55.8 million without the Government’s consent or approval.

The Ministry lacked an internal auditing system, which would tackle the state budget chapter’s accounting, financial reporting, and preparation of the final account of the state budget chapter. Such a provision would help to avoid and take out the shortcomings. As a consequence, the Ministry did not identify and review the shortcomings within the final account and the balance accounts in 2009.

The auditing operation followed the previous audit operation No. 09/08, which aimed at identical subjects and used the same audit methodology while focusing on a different auditing period. “The Government instructed the Minister of Agriculture to ensure implementation of the corrective measures recommended in the previous audit conclusion. Auditors assessed the implementation and effectiveness of these measures and concluded that the most substantial inaccuracies had been provided against but some of them had occurred during the audited period as well“, said president Dohnal.

The auditing operation was included into 2010 Audit Plan of the SAO under No. 10/07. Jaromíra Steidlová, Member of the SAO Board, controlled the operation and prepared the audit conclusion as well.

Mgr. Bc. Radka Burketová
Press Speaker
Supreme Audit Office

1) In line with the INTOSAI recommendations, the maximum allowable ratio of bad evidence that the users of reports can treat as still acceptable was defined as 2 % of the value that best represents the scope of the given accounting unit‘s financial activity.

print the page