The annual accounts of the Czech Development Agency contained errors amounting to more than CZK 62 million

Press release on audit No 21/25 – 13 June 2022

The Supreme Audit Office (SAO) examined whether the Czech Development Agency (CDA) had correctly kept its accounts and prepared the 2020 annual accounts. The audit also focused on the accuracy of the data submitted by the Czech Republic for evaluation of the implementation of the State budget. The auditors found irregularities in CDA’s accounts worth CZK 62.5 million, as well as in the data for evaluating the implementation of the State budget which amounted to CZK 40.7 million.

Material misstatements in the accounts arose from CDA’s failure to account for certain costs and revenues from transfers in 2020. In particular, these were costs worth CZK 6.4 million in transfers granted, although the beneficiary had used up all the funds in the course of 2020. The CDA also failed to account for revenue from transfers received amounting to CZK 3 million, even though there is proof that in the course of the year 2020 it had used up the funds received.

In the 2020 annual accounts, material misstatements were also found in the notes section. The auditors quantified them at CZK 51.7 million. They arose as the CDA incorrectly reported contingent liabilities from subsidies for 2021 as contingent liabilities from other contracts.

The SAO therefore assessed the information in some accounts in the profit and loss account, the balance sheet and the notes section as unreliable. However, according to the auditors, all the other information in the annual accounts gives a true and fair view of the subject of the accounting.

The auditors also found significant misstatements in the data for the evaluation of the implementation of the 2020 State budget. This mainly involved the reporting of expenditure on humanitarian foreign aid. The CDA incorrectly reported this kind of expenditure as expenditure on foreign development aid.

Based on the audit results, the SAO drew attention to the nonconceptual definition of the term “transfer” in the accounting rules for selected accounting entities. In practice, as a result of the current definition, accounting can be carried out in a number of different ways, therefore the information related to a certain transaction may vary. The SAO therefore recommends adapting the definition of this term.

Communication Department
Supreme Audit Office

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