Accounting errors worth CZK 2,700 found at the Ministry of Foreign Affairs
PRESS RELEASE on Audit No. 16/17 – March 20, 2017
The Supreme Audit Office (SAO) performed an audit at the Ministry of Foreign Affairs, which aimed at accounting in the year 2015. Auditors verified whether the Ministry’s accounting for the year 2015 was correct, complete, relevant, understandable, and in agreement with the appropriate legislation. Accounting errors worth CZK 2,700 million were found, which mostly resulted from erroneous booking of accounting events at embassies, conditional obligations from foreign transfers, and advance payments. The SAO considers such errors as significant and concluded that the Ministry’s accounting in the year 2015 was incorrect, incomplete and unintelligible.
Embassies' accounting was not conducted continuously but in the form of one-off entries. A total of 302,000 accounting entries, which made up 59 % of all accounting entries of the Ministry of Foreign Affairs in 2015, were brought in two books with two documents each. In addition, these documents failed to meet statutory requirements for accounting documents and it was not clear, which issues they related to.
For the embassies, the Ministry of Foreign Affairs incorrectly set the accounting period, which was from November 2014 to October 2015 instead of the calendar year. For rest of the year 2015, the Ministry only kept records of the expenses.
Auditors also revealed systemic errors in accounts of embassies. For example, the Ministry of Foreign Affairs failed to distinguish between cash and non-cash transfers of money as all cash-related operations were recorded as cashless payments. As a result, the current account performances of the embassies’ bank accounts were not in accordance with the balances given in the statements of accounts.
The Ministry of Foreign Affairs also made errors in records of advance payments of embassies, which amounted to CZK 200 million and were erroneously entered into accounts as obligations towards other subjects, in spite of the fact that the money was only transferred between the Ministry’s own bank accounts.
Mistakes were made particularly in the accounting books of embassies and in the accounting of conditional obligations from foreign transfers and other contracts. In 2015, the Ministry failed to report more than CZK 1,400 million worth of conditional obligations imposed on the Ministry by the government. These obligations included payments of contributions to international organisations, of which the Czech Republic is a member.
Communication Department
Supreme Audit Office