The state administration forgave three quarters of penalties and fines for violations of budgetary regulations
Press Release – December 2, 2013
The Supreme Audit Office (SAO) performed an audit of the General Financial Directorate and penalties and fines imposed for violations of budgetary regulations during the audited period from 2011 to the end of the first quarter of 2013.
During the audited period, financial authorities claimed penalties and fines in the total amount of CZK 13,500 million, out of which CZK 9,800 million (73 %) were forgiven in the end. The costs of administration of fines and penalties amounted to CZK 562 million within the years 2011 and 2012. This was the second auditing operation performed by the SAO, which focused on penalties and fines for violations of budgetary regulations. The previous auditing operation was performed in 2010 and concluded that the Ministry of Finance, which was competent to forgive the claimed penalties and fines, did so in 90 % of the cases. The administration of penalties and fines was extremely costly.
In spite of the obvious improvement to the situation, the auditors warn that the Ministry of Finance failed to solve many problems, which had been known since the previous auditing operation. The whole system of penalties and fines for violation of budgetary rules requires a lot of administrative procedures. Penalties for minor violations are disproportionally high. The authorities are burdened by assessment of fines as well as the pardoning processes. The SAO does not consider the system as effective.
The system is also burdened with repeating and coinciding controls. It usually takes five months between applying for the pardoning and obtaining the final decision. During the period, the applicants are unsure whether they will have to pay back the funds and pay the penalties in addition.
In spite recommendations suggested by the SAO and the Audit Committee of the Chamber of Deputies of the Parliament, the Ministry of Finance has not produced a more accurate definition of "especially noteworthy regards", which the Ministry quotes when deciding to forgive the penalties and fines.
For further details about auditing operation No. 13/15 (in Czech only), see the following link: http://www.nku.cz/assets/media/informace-13-15.pdf (241 kB).
Communication Department
Supreme Audit Office