Ministry of Finance violated regulations when managing fixed properties
Press Release – March 1, 2010
From May to November 2009, auditors from the Supreme Audit Office performed an audit that focused on the state properties managed by Ministry of Finance. Auditors found serious violations of State Property Act, Accountancy Act, and budgetary rules. Auditors scrutinized the internal auditing system and concluded that the Ministry only performed the screening and ex-post controls of many activities within this area as a matter of form.
“The Ministry entered 3 tenant contracts for indefinite period and one fixed-term contract (for 28 years), thus violating the Act on State Property that stipulates the maximum tenant limits with immovable properties. Auditors concluded that the Ministry had enabled the tenants to use the properties without legal grounds“, said president of the SAO František Dohnal.
Auditors found inaccuracies in 2008 final accounts of the Ministry and concluded that during the inventory, the Ministry had failed to determine inventory differences of its immovable properties thus the information was not put on the respective accounts. The Ministry failed to identify abundances that amounted to nearly CZK 7 million and shortages worth over CZK 17 million.
“The Ministry’s 2008 accounting was not reliable. The inventory on the date December 31, 2008, was not taken in accordance with Accountancy Act. Instead of ascertaining the actual state of the items, only the properties’ index cards were scanned. The inventory was not documented at the end of 2008 but on October 1, 2008, and the Ministry explained that the inventory only documented properties, which the Ministry had registered into the real estate cadastre“, said Dohnal.
Auditors concluded that the Ministry lacked an overall survey of their lien accounts. The Ministry did not catch up with updating the real estate records in the cadastre before the end of the auditing operation. As a consequence, the Ministry will not be able to enforce the entire state rights in case the individual debtors do not carry out their obligations.
The Ministry also produced budget revenues overreaching CZK 6 million from land sales within the period 2003–2007 and accumulated them on an out-of-budget account. But the Ministry should have transferred the cash into the state budget by 3 days after the receipt of payment. The Ministry violated the budgetary regulations as the funds were not transferred into the state budget until 2008.
The auditing operation was included into the 2009 Audit Plan of the SAO under No. 09/13. Jaromíra Steidlová, Member of the SAO Board, controlled the operation and prepared the audit conclusion as well.
Bc. Radka Burketová
Press Speaker
Supreme Audit Office