Auditing operation No. 03/28
Management with State Budget funds provided by the Grant Agency of the Czech Republic to legal and physical persons for the support of the research and the development
The auditing operation was included in the Annual Audit Plan of the Supreme Audit Office (hereinafter referred to as „SAO“) for the year 2003 under No. 03/28. The auditing operation was managed and audit conclusion drawn up by Ms. Eliška Kadaňová, the Member of the SAO.
The aim of the audit was to examine whether funds deployed in support of the research and the development (hereinafter referred to as „R&D“) were disbursed and used for the declared purpose, properly and economically.
The audited period covered the years 2000 to 2003, as well as previous periods in case of relevant connections. In case of selected beneficiaries the whole period from the submission of grant application to final report on the grant project implementation, including accounting for the allocated funds, was audited.
The audited bodies were the Grant Agency of the Czech Republic – Czech Science Foundation (hereinafter referred to as „GA“) and 27 beneficiaries, out of which 24 legal entities and 3 natural persons.
In the audited period, i.e. years 2000 to 2003, state support for the R&D totaled CZK 50,2 milliard. Under the Act on State Budget around CZK 12 milliard were allocated for that purpose annually, with the amount slightly increasing each year.
The R&D is in the competence of the Ministry of Education, Youth and Sport, yet the Government Research and Development Council plays a significant role in the system, although only as the Government’s consulting body.
The system for providing state support to the R&D as a whole is considerably fragmented and difficult to control. In addition to the GA, which as the administrator of the separate State Budget chapter manages only with the State Budget funds earmarked to the R&D, other State Budget chapter administrators also release the State Budget funds for the same purpose, e.g. in 2003 this applied to another 21 State Budget chapter administrators.
The audit of 27 beneficiaries (96 grant projects with disbursed amounts totaling CZK 210.815 thousand) and of the GA shows that the set-up of the system is good, nevertheless, it requires consistent control by all the involved parties. It is administratively complex and does not offer the necessary incentives for the grant winner and researcher. The beneficiaries themselves see the GA system as the most advanced and responsive, compared to other providers.
Compliance with aid drawing terms is complicated by the fact that even for projects lasting several years the Aid Drawing Rules change each year. Effective and economic use of grant funds is further hindered by the fact that during project implementation grant winners cannot carry unused funds forward into the next year. Despite the measures adopted by the GA there were delays in disbursement of the awarded funds to grant winners.
Principal deficiencies found with the grant winners consisted in the use of funds for purposes that were not directly related to the implementation of the corresponding project, overestimation of requirements and implementation of changes without applying for the GA approval or without justifying them. There were also cases where, contrary to the Rules, the grant winners did not keep records of the grant funds management separately from other funds. The GA failed to consistently downsize the overestimated requirements and often accepted changes implemented without its approval or changes that were not duly justified. To improve the functioning of the system set-up by the GA it is necessary to strive for more consistency in compliance with the valid terms, transparency of the system and its controllability. Each entity involved in the grant proceedings should be responsible for its positions, evaluations and decisions. This condition is highly important, also with respect to the limited size of the Czech scientific community.