The SAO audited funds earmarked for acquisition and restoration of rail track vehicles
Press Release – May 31, 2011
The aim of the auditing operation was to scrutinize the state budget funds provided to Czech Railways for acquisition and renovation of rail track vehicles within the period 2003–2010. Funds worth CZK 1.5 milliard were drawn from two investment programmes and EUR 165 million were provided from state-guaranteed loans (which makes about CZK 4.1 milliard with the exchange rate CZK 25/EUR). The auditors also scrutinized financial resources in the amount of CZK 11.8 milliard obtained in 2008 from the sale of assets to the Railway Infrastructure Administration – these finances were designated for the renovation of rail track vehicles.
The audit conclusion called attention to the fact that in programmes aimed at acquisition and renovation of rolling stock, the Ministry of Transport set up a non-transparent system of targets, indicators and parameters, making it impossible to assess the programmes.
Audit results proved that the Ministry of Transport did not carry out an assessment of the effectiveness of the resources expended on implementing the programmes and, in the case of completed programmes, did not perform a proper assessment of the fulfilment of set targets, indicators and parameters. Their fulfilment, however, could not be effectively and demonstrably achieved, especially with regard to the anticipated financing sources for the programmes. Czech Railways obtained finances in the amount of CZK 11.8 milliard from the sale of assets – these finances were designated for the renovation of rolling stock. Czech Railways, however, used only CZK 8 milliard for this purpose, with the remaining CZK 3.8 milliard being used to settle other payables, including salaries and wages. Within the period from 2003 to 2007, state-guaranteed loans were provided to Czech Railways.
In this connection, the Supreme Audit Office recommends that the bodies of Czech Railways (in which the state has its representatives) monitor the financial situation at Czech Railways with the aim of assuring themselves that Czech Railways has the ability to duly pay off the state-guaranteed loans in the period 2013–2017.
The audit was performed from November 2010 to April 2011. The audited period extended from 2003 to 2011; where relevant, the preceding period and the period until the completion of the auditing operation were also scrutinized. Among the audited bodies were the Ministry of Transport and Czech Railways. The auditing operation was included into 2010 Audit Plan of the SAO under No. 10/24. Jiří Adámek, Member of the SAO Board, managed the operation and prepared the audit conclusion as well.
Communication Department
Supreme Audit Office