SAO audited funds and state property under the management of the Czech Trade Inspectorate
Press Release – January 10, 2012
From April to October 2011, auditors from the Supreme Audit Office (SAO) scrutinized funds and state property under the management of the Czech Trade Inspectorate (CTI), including the income from sanctions and fines imposed within the audited period 2008–2010.
In 2008 and 2009, the inventory of long-term assets and claims was not taken in accordance with the Accounting Act. In some cases, the CTI made mistakes the inventory of long-term assets and claims and failed to document the state of long-term tangible assets. Several inventory lists omitted facts, which would make it possible to assess long-term assets unequivocally.
When placing public tenders, the CTI did not create appropriate conditions for economical spending of the state budget funds. Several basic principles for public ordering were violated. The CTI failed to put out the appeals and approached potential bidders who were not able to fulfil the qualification requirements and repeatedly invited the same bidders to submit their offers. In some cases, the CTI invited applicants who had not previously made bids in similar tenders.
During the period 2008–2010, the CTI contracted external providers of legal services to collect receivables in spite of having a similar unit within its organisational structure. In nine cases, the CTI contracted providers of legal services and training courses while having failed to abide by the standards of transparent and fair approach and discrimination stipulated by the Act on public orders.
In 2008, aims and parameters of the project “ICT Operations” were not properly set, and final evaluation did not monitor whether the state budget funds had been efficiently spent. In 2010, monitoring indicators and parameters of the project “Modernization of Vehicles” were set according to previously concluded contracts. Such formally pre-set indicators did not make it possible to assess the effectiveness of the state fund expenditures.
Within the audited period 2008–2010, the owed recorded by the CTI differed from the payments received by customs offices and financial authorities. The cause of this discrepancy was the fact that customs offices had registered claims without attachments or sometimes included the reimbursements into the amount receivable.
Auditors revealed that the CTI had imposed fines but both the CTI and the respective customs offices failed to register the claims for 9–22 months. That is why no enforcing procedures took place. Such a state raises doubts about the functioning of the shared administration system as the conditions for effective application and exercising of state rights have deteriorated. The CTI failed to monitor whether its debtors repaid the liabilities in time and in the proper amounts. In some cases, the CTI failed to collect debts 20 months or even more after the due date.
The auditing operation was included into 2011 Audit Plan of the SAO under No. 11/32. Rudolf Kufa, Member of the SAO, managed the operation and prepared the audit conclusion as well.
Communication Department
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