ERO's financial management shows no material shortcomings. Weaknesses found in internal control system
PRESS RELEASE ON AUDIT NO 24/15 – 7 July 2025
In an audit of the Energy Regulatory Office's (ERO) management of selected state assets and funds totalling CZK 114 million, the Supreme Audit Office (SAO) did not find any material shortcomings. However, minor deficiencies were identified in the effectiveness of the internal control system. For example, the ERO purchased mobile phones, tablets, and smartwatches of a higher-priced brand for its leadership, totalling nearly CZK 261,000, without properly justifying the necessity of such purchases. The SAO audit also pointed out that the ERO’s Prague branch office, due to its commercial rent payments, had 5.5 times higher operating expenses than those of the Ostrava branch office, which is located in state-owned premises. The audit covered especially the years 2019 to 2022.
The SAO reviewed a sample of 22 purchases with a total value of CZK 38.4 million to assess the ERO’s procurement procedures in 2019–2022. In most cases, the ERO acted effectively, economically, and in compliance with legal regulations. However, in three of the 18 reviewed so-called other purchases, auditors found that the ERO acquired higher-priced brand mobile phones, tablets, or smartwatches for its management – board members and selected employees – without sufficient justification. In these instances, the ERO failed to carry out proper ex-ante managerial inspection. The SAO recommends revising internal regulations and standardizing IT and communication equipment, including what is provided to the ERO Board members.
When examining operating expenses of the Prague and Ostrava branch offices, the SAO identified a significant discrepancy. Operating costs for the Prague office, located in rented commercial premises, reached CZK 39 million from 2019 to 2022, whereas the Ostrava office, located in state-owned premises, incurred less than CZK 7 million in expenses. The main reason for this difference was that the ERO did not pay rent for the Ostrava office, while it paid commercial rent for the Prague office. The ERO was unable to find suitable state-owned premises in Prague. The SAO recommends that the ERO continues seeking options to reduce these costs by relocating the Prague office to a state-owned building or to more affordable premises.
Although the ERO employed its own public relations specialists, it spent nearly CZK 2.3 million on external media and PR consulting services between December 2021 and March 2023. The ERO justified the signing of this contract by stating the need for the most effective possible public communication amid the complex situation in the energy market, caused by the energy crisis and shutdown of some energy suppliers. Additionally, the office paid another supplier CZK 7.4 million from 2018 to 2023 for expert assistance, citing long-term understaffing.
Communication Department
Supreme Audit Office