SAO audited the state budget funds provided to the Securities Traders Guarantee Fund and financial contributions collected from securities brokers
Press Release – March 16, 2011
From May to November 2010, auditors from the Supreme Audit Office (SAO) were performing audit operation No. 10/09 that aimed at state budget funds provided to the Securities Traders Guarantee Fund and activities of Ministry of Finance when providing the returnable financial aid. Auditors also aimed at utilisation of the funds collected from brokers and compliance with the legal regulations within the auditing period 2002–2009.
The Securities Traders Guarantee Fund was created by the Czech law in line with the Directive 97/9EU (ICD) to provide for solutions in cases of securities traders' insolvency and to compensate the registered clients.
Auditors concluded that the Securities Traders Guarantee Fund had violated the budgetary regulations when using CZK 5.9 million from the provided state budget funds to reimburse regular costs instead of settling a case of a bankrupt broker. The Securities Traders Guarantee Fund violated the Public Procurement Act as it accounted for the purchased utilities erroneously. The Fund failed to provide a financial settlement related to the state budget in 2004 a 2005, and failed to ensure an annual scrutiny of its management.
The Ministry of Finance issued decrees on providing the returnable financial aid from the Securities Traders Guarantee Fund, but the decrees did not specify the time schedule or conditions for the utilisation of the funds. The Ministry provided the funds when the payees did not actually need them. As a result, the Fund put the received financial means on deposit accounts and profited from increasing their value in this way.
The set repayment schedules of the financial aid did not correspond with the contributions to the Securities Traders Guarantee Fund. The collected sums exceeded the anticipated contributions in many times. In spite of learning the fact, the Ministry of Finance did not demand increased repayments of the returnable financial aid.
The auditing operation was included into 2010 Audit Plan of the SAO under No. 10/09. Antonín Macháček, Member of the SAO Board, controlled the operation and prepared the audit conclusion as well.
Communication Department
Supreme Audit Office