The State guarantees are accompanied only by partial problems
Press release to audit No. 17/34 - 5. 11. 2018
The Supreme Audit Office focused on the way how the state guarantees were administered by the Ministry of Finance from 2013 to 2016. Auditors examined how the resort worked with guarantees, registered them or dealt with receivables linked to these guarantees. They also focused on how information about the commitments for which the Czech Republic guarantees is published. The audit revealed only partial deficiencies.
The Ministry of Finance, for example, was paying amounts to the bank for guaranteed loans in Czech crowns, even though these loans were denominated in euros; such a procedure was not left without consequences. As the Ministry did not initiate a change in the contract and the amounts were not being reimbursed in euros, which the resort had at its disposal, and the transfer of the currency was left up to the bank, at least CZK 1,8 million was paid unnecessarily. This resulted from a sample of three reviewed loans.
The Ministry of Finance also did not, for instance, provide a guarantee for a loan of CZK 280 million in the state closing account, nor did it record it in its accounts, although it should have acted in this way. However, the Ministry of Finance reimbursed the guaranteed loan in 2017.
The audit also showed that the information on the status and development of the liabilities of state contributory organisations, for which the state guarantees, are a compulsory part neither of the state closing account nor the closing accounts of individual headings of the state budget. These commitments increased by more than 40 % between 2014 and 2016 to CZK 34 billion, amounting to CZK 45 billion at the end of 2017. In view of this significant amount of funds, the SAO recommends establishing the obligation to report the amount of liabilities of state contributory organisations for which the state guarantees.
At the end of 2016, the Ministry of Finance was registering guarantees worth almost CZK 440 billion. Between 2013 and 2016, over CZK 13 billion was paid in relation to these guarantees. In 2017, the guarantees balance significantly decreased by CZK 190 billion, mainly due to the decrease in the amount of the guarantee granted to the Czech National Bank when selling the Investment and Post Bank.
The guarantees oblige the state to pay in certain situations the financial obligation of a particular debtor for which it has decided to guarantee. These are the so-called standard guarantees, most often for the Czech Railways and the Railway Infrastructure Administration, as well as non-standard guarantees, such as those already mentioned in connection with the sale of the Investment and Post Bank, or the guarantee of the state linked to insurance and export financing.
Supreme Audit Office