EGAP supported with CZK 1,000 million every year in spite of sufficient own resources

PRESS RELEASE on Audit No. 13/18 – April 28, 2014

The Supreme Audit Office (SAO) performed an audit of Export Guarantee and Insurance Corporation (EGAP) and funds provided by the Ministry of Finance in 2011 and 2012 in support for the insurance of export activities of Czech exporters. The audit focused on methods, which Ministry used when assessed the EGAP’s requests for financial support for its operations.

According to the internal documents that auditors obtained during the auditing operation, the EGAP needed support from the State budget in the amount of CZK 770 million in 2012 and CZK 735 million in 2013. But the applications for financial aid, which were sent to the Ministry of Finance, requested a rounded sum of CZK 1,000 million for each year.

However, auditors revealed that at the time when the applications were submitted, insurance funds and reserves of the EGAP overreached the minimum amounts needed for the EGAP’s insuring operations by CZK 2,000 million in 2011 and by CZK 5,000 million in 2012. That means that the EGAP had sufficient funds for ensuring its operations and did not need any financial support from the State budget.

In addition, the EGAP’s applications for the financial support from the State budget omitted or failed to document some facts required by the decree of the Ministry of Finance. The Ministry did not ask for additional completion of the data or documents and decided to provide the funds in the required amounts. As a result, the State budget in 2012 and in 2013 included expenditures, which exceeded the calculations by one third due to the Ministry’s procedures.

During the audit of the EGAP, auditors were limited by the SAO’s auditing powers that are defined by the law and so it was not possible to scrutinize all facts related to the provision of funds from the State budget.

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