Expenses for materials and services at selected ministries: auditors revealed disproportions in prices and errors in public procurements
PRESS RELEASE on Audit No. 15/34 – 29. 8. 2016
The Supreme Audit Office (SAO) audited purchases of equipment and services that were procured by the Ministry of Defence, the Ministry of Labour and Social Affairs, and the Ministry of Agriculture within the period 2013–2014. Auditors scrutinized expenses for office stationery, language training, consultancy services, surveillance, and cleaning services amounting to CZK 245 million in total. Errors were found at all three audited ministries in the bookkeeping as well as in awarded public contracts.
At the Ministry of Defence, auditors revealed errors in office stationery purchases during the audited period, which were awarded as small-scale contracts in spite of the fact that the total expenses exceeded CZK 79 million, which was above the threshold defined by the law. Thus, the Ministry could not have selected a cheaper supplier on the basis of more bids. Such proceedings are in breach of the budgetary discipline. When scrutinizing office stationery purchases, auditors revealed significant differences in costs of printing paper packages (500 pcs), which varied from CZK 67 to CZK 86 at audited ministries.
Auditors also revealed significant differences in prices of language training at the audited ministries. The cost of one English lesson varied from CZK 299 to CZK 450 during the audited period. For example, one English lesson at the Ministry of Labour and Social Affairs cost 1.5 times the price at the Ministry of Defence. The Ministry of Agriculture spent CZK 2.5 million for language training in 2013, however, the training took place in 2014. One supplier even received CZK 1.4 million in an advance payment, which was in violation of the budgetary discipline.
At the audited ministries, auditors scrutinized expenses for consultancy and legal services and revealed that the Ministry of Agriculture paid CZK 4.7 million for an expert’s presence in 12 public administration audits, in spite of the fact that there is a specialized department with 20 employees who can perform such audit operations.
At the audited ministries, unit prices for cleaning services were also various. The price for cleaning of an area of 100 square metres varied from CZK 226 (at the Ministry of Defence) to CZK 1,370 (at the Ministry of Labour and Social Affairs – VAT not included). Moreover, the Ministry of Labour and Social Affairs paid for cleaning services in one building CZK 3,500 more a month than stipulated in the contract. According to the invoices, the Ministry had been paying such prices since 2009 and the total price difference made CZK 101,000, which also violated the budgetary discipline.
As for the expenses for surveillance during the audited period, auditors revealed that the Ministry of Labour and Social Affairs failed to verify whether its own stuff would carry out the surveillance at one building on more advantageous terms. The Ministry started to deal with this issue as late as in 2015 and the resulting analysis stated that the Ministry’s own employees carried out the surveillance for CZK 190 per an hour, which was 91.5 % more than the average price of this service according to the Czech Statistical Office’s data. In 2015, the Ministry awarded a public contract to an external supplier for CZK 86 (VAT not included).
Supreme Audit Office