The SAO audited 2012 final accounts of the Ministry of Education
Press Release – September 2, 2013
The Supreme Audit Office (SAO) performed an audit of the Ministry of Education and its closing accounts, recordkeeping, and financial statements submitted for the year 2012. The audit also aimed at the compliance with legal regulations. The SAO concluded that balance accounts of the Ministry for the year 2012 included bad records in the amount of CZK 90 million, which represent only 4 % of the maximum allowable ratio of bad records1. For example, the annex to the balance accounts did not show all long- and short-term obligations that had emerged from the Ministry´s agreements and in the summary of changes to their capital, the Ministry incorrectly showed the properties obtained as presents.
The reliability of the records included into 2012 balance accounts should be assessed with respect to the significance of errors. It is only possible to assess the reliability if there are no relevant limitations. In case of the Ministry´s 2012 balance accounts, the assessment was made impossible because of the actual state of accounting legal regulations in 2012. As a result, the overall use of the legal regulations cannot be assessed in terms of correctness. As the regulations were ambiguous, the accounting units were forced to use individual accounting methods and implemented the regulations in their own ways in some cases.
The SAO could not assess whether records of the total amount of CZK 49,000 million had correctly been kept; the amount overreaches the maximum allowable ratio of bad records by twenty times. In 2012, there were insufficient regulations applicable for the pre-financing from the state budget in case the funds would be re-paid in full from the EU. The Ministry of Education cannot be criticized for ambiguity and vagueness of the accounting principles defined for this area.
The auditing operation followed six previous auditing operations, which aimed at subsequent annual financial statements of the Ministry of Education. At the Ministry, incorrect records have been decreasing since 2011. On the other hand, there has been a continuously rising amount in the Ministry´s financial statements, which the SAO cannot assess in terms of correctness because of ill-defined regulations. The Ministry´s closing account and financial statements did not contain fundamental errors.
For further details about auditing operation No. 12/30 (in Czech only), see the following link: http://www.nku.cz/assets/media/informace-12-30.pdf (477 kB).
Supreme Audit Office
1] The maximum allowable ratio of bad evidence that the 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 Ministry of Education for the given accounting year. That was CZK 2,400 million in 2012.