The CzechTourism agency: wellness trips for CZK 600,000, a farewell party paid with tax payers' money, CZK 250,000 for unnecessary membership fees
PRESS RELEASE on Audit No. 14/31 – May 23, 2016
The Supreme Audit Office carried out an audit at the CzechTourism agency and the Centre for Regional Development of the Czech Republic and scrutinized their management within the period 2012–2014. In total, auditors scrutinized funds in the amount of CZK 326 million and property worth CZK 294 million. In many cases, the CzechTourism agency used funds uneconomically and violated the law. The SAO notified the competent authority of a suspected budgetary discipline violation amounting to CZK 20 million. Auditors found some less serious violations of the law at the Centre for Regional Development as well.
At the CzechTourism agency, auditors found violations of the budgetary principles. For example, the Agency purchased gift vouchers to wellness trips for nearly CZK 600,000 but failed to explain what benefits to tourism were generated from the vouchers and who got them. No explanations were given about its top management’s (including the CEO) memberships in various organizations, which cost over CZK 250,000. In 2014, almost CZK 300,000 was paid for a party, which was described as “annual meeting with business partners”, while it simply was a farewell party to the general manager, which could not possibly influence the tourism or suggest some popular travel destinations in the Czech Republic to tourists from abroad.
At the CzechTourism agency, auditors also found errors in the area of public contracts. In many cases the Agency awarded contracts without tendering for more economical prices. For example, only two companies submitted tenders for a public contract related to organizing four annual competitions entitled “World Day of Ice Wine”, which were worth CZK 16.7 million in total. One of the companies did not meet the competition’s conditions and the Agency failed to request further documents in spite the Public Contract Act allows for it. The tender price of the disqualified company was CZK 5 million lower than the winner’s price. In the period from 2012 to 2014, the Agency procured legal services from a supplier without considering whether they were the most profitable. The supplier was paid CZK 45,000 in monthly payments without any need to document the work carried out.
There was no competition in case of regular purchases of airline tickets by the CzechTourism agency. Every year, the Agency purchased airline tickets worth at least CZK 3 million, but the tickets were ordered gradually. From 2012 to 2014, airline tickets were purchased for the total price of CZK 10.5 million. In another case, the order related to distribution of display items and advertising materials was divided into small-scale supply contracts, which were awarded directly without any tendering procedure. All those contracts were worth CZK 3.8 million in total and were connected, so the Agency was obliged to organize a tendering procedure.
Already before the end of auditing operation, the SAO filled a criminal complaint concerning a breach of duties related to management of entrusted assets and providing advantages for tenderers. According to the law, the SAO had to wait before publishing the audit results until allowed to do so by the law enforcement authorities.
Supreme Audit Office