Final accounts of the Ministry of Labour and Social Affairs failed to give true and fair view of the subject of accounting
Press Release – September 16, 2013
The Supreme Audit Office (SAO) performed an audit of the Ministry of Labour and Social Affairs and its final accounts, financial statements, and closing accounts submitted for the year 2012. The audit report states that 2012 final accounts of Ministry of Labour and Social Affairs failed to give true and fair view of the subject of accounting and the Ministry´s financial position as bad evidence amounted to CZK 11,000 million in total1.
The amount of bad evidence was mostly influenced by incorrect account transfers, namely transfers from EU. The Ministry put the transfers on inappropriate accounts, which had not been determined for such items by the legal regulations. Accounting errors also included transfers provided from subsidy programmes, which aimed at support of families and social services, as the Ministry failed to record provided advance payments in the amount of CZK 6,600 million.
The Ministry´s accounts also failed to give complete records. For example, the Ministry omitted amounts receivable from the National Fund in the amount of CZK 1,400 million. In the annex to the final accounts, the Ministry did not record long-term receivables and obligations resulting from concluded agreements.
The Ministry violated the law when failed to use all legal means to set up claims and defend the State´s rights regarding the owned assets. The Ministry failed to look up assets worth CZK 19.3 million, which were not found when the inventory was made in 2010 and 2011. The SAO cannot consider the Ministry´s accounting for the year 2012 conclusive as there was no evidence of inventorying the assets and liabilities in 2012.
For further details about auditing operation No. 12/28 (in Czech only), see the following link: http://www.nku.cz/assets/media/informace-12-28.pdf (486 kB).
Communication Department
Supreme Audit Office
1] To assess the reliability of records, data can be compared with the maximum allowable ratio of bad evidence. The maximum allowable ratio of bad evidence that users of reports can treat as still acceptable was defined as 2 % of the value that best represents the scope of the financial activities of the accounting entity for the given accounting year. At the Ministry of Labour, it was CZK 305 million in 2012, which exceeded the maximum allowable ratio of bad evidence by many times.