The SAO audited 2010 closing accounts of the Ministry of Labour and Social Affairs
Press Release – February 16, 2012
The aim of the audit was to scrutinize whether the Ministry of Labour and Social Affairs kept the books and elaborated 2010 closing accounts in compliance with applicable legal regulations.
The audit results indicated system shortcomings in the Ministry’s accounts for the year 2010.
The Ministry failed to implement the changes to accounting principles for organisational units of the state, which followed from legal modifications that came into effect by January 1, 2010, and adopt the changes in internal regulations of the Ministry. In most cases, the Ministry followed the methods and rules, which were effective till the end of 2009.
In 2010, the Ministry failed to take proper accounts in agreement with Subsection 2 of Section 2 of Accounting Act. The shortcomings were found in the following fields: taking accounts of allowance transfers to local budgets and transfers to providers of social services, grant refunds, financial claims and obligation, foreign currency accounts, and calculations of exchange rates
Failures of the book-keeping system involved incorrect and incomplete book-keeping of procurements and disposals of long-term tangible as well as intangible assets.
As with long-term tangible as well as intangible assets, the Ministry failed to keep correct, complete and conclusive book-keeping in terms of Accounting Act, particularly Subsection 3 of Section 8.
In 2010, the Ministry violated the budgetary discipline when failed to remit funds in the total amount of EUR 4,703,132.03 to the state budget, or rather to heading No. 397 – Operations of state financial assets within 10 days of admission, thus violating Subsection 10 of Section 45 of Act No. 218/2000 Sb., on budgetary regulations.
The 2010 accounting principles for organisational units of the state did not define the subject clearly or completely. The legislative implementing Accounting Act was issued shortly before coming into the effect. There were only four accounting standards issued for the year 2010, which only partly re-defined the problems defined in the former standards No. 501–522 (effective till the end of 2009).
The auditing operation was being performed from June to October 2011. The auditors focused on the year 2010 and related data from the previous period. The auditing operation was included into 2011 Audit Plan of the SAO under No. 11/36. Daniel Reisiegel, Member of the SAO Board, managed the operation and prepared the audit conclusion as well.
Communication Department
Supreme Audit Office