Audit at the Ministry of Foreign Affairs found errors in property lettings and high tuition fees with children of embassies’ employees

PRESS RELEASE on Audit No. 15/25 – May 30, 2016

The Supreme Audit Office (SAO) carried out an audit of the Ministry of Foreign Affairs and its management within the period from 2012 to 2014. In total, auditors scrutinized property worth more than CZK 752 million and funds exceeding CZK 349 million and concluded that the Ministry made accounting errors, let premises in central Prague for low prices, and paid extremely high tuition fees for employees’ children, which varied from one State to another in CZK 1 million for one child in one year.

The Ministry of Foreign Affairs proceeded uneconomically when rented out premises in Rytířská Street in central Prague to three different companies. The contractual price was established by agreement and not according to the open-market value. The individual lessees’ rents varied in the period 2012–2015: The first two companies paid from CZK 6,000 to CZK 7,000 per one square meter, while the third company only paid around CZK 4,500 per one square meter. For the whole period, the third lessee paid at least CZK 2.2 million less than the other two lessees who were obliged by their contracts to pay higher rent.

Nearly one half of the Ministry’s expenses consisted of operation costs of embassies. In 2014, there were 115 embassies with some 1,000 employees of the Ministry. Auditors concluded that there was a significant increase in tuition fees that had been paid for employees’ children. In 2015, the Ministry paid CZK 102 million for the children’s tuition, which was 45 % more than in 2012, while the number of school children of the embassies’ employees increased by 27 % in the same period. At selected 21 embassies, auditors revealed different annual education costs, which in half of the cases made more than CZK 300,000. In two cases, the difference nearly amounted to CZK 1 million. According to the relevant legislation, children of the Ministry’s employees should preferably attend public educational institutions.

Auditors also compared the Ministry’s expenses on its international policies within the period 2012–2014 with the same expenses in neighbouring countries. The proportion of expenditures of the Czech Ministry’s international policy reached 5 % of the annual national budget, which is the lowest in comparison to the rate in the neighbouring countries.

Communication Department
Supreme Audit Office

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