Management of State Property and State Budget Funds in the Office of the Public Defender of Rights
Press release on completion of the auditing operation No. 06/15
The auditing operation was included in the Annual Audit Plan of the Supreme Audit Office (hereinafter referred to as “SAO”) for the year 2006 under No. 06/15. The auditing operation was managed and the audit conclusion drawn up by Mrs. Eliška Kadaňová, the Member of the SAO.
The aim of the audit was to examine how the Office of the Public Defender of Rights managed the state property and budgetary funds allocated in 2001 – 2005.
The audited period covered the years from 2001 to 2005 as well as previous and following periods in certain cases of relevant connections.
The audited body was the Office of the Public Defender of Rights.
The Office of the Public Defender of Rights (hereinafter referred to as “Office”) is an administrator of the separate state budget chapter. Review of the financial and accounting statements submitted as the basis for the State Final Account 2005 found out overall irregularity amounting to CZK 4,439,121.50. The balance sheet’s inaccuracies comprised mainly shortcomings made during commencement of the Office’s activities. The above-mentioned irregularity was considerably affected by the incorrect pricing of the headquarter building, which was obtained by voluntary conveyance in 2000. According to accounting regulations, it should had been recorded in bookkeeping with the acquisition price not only the depreciated price; the difference amounted to CZK 3,459,737.
An internal audit failed to function as an assurance and consulting unit that should help to improve accounting and managerial processes in the organisation. They did not review whether data in financial, accounting and other statements gave true and fair view of the property, resources of its financing and management of that.
The audit of the management of the state property namely found out that in 2001, the Office granted funds amounting to CZK 487,000 to support of non-profit activities, despite the Budgetary Rules Act did not allow such a possibility. According to the Public Defender of Rights’ commentary, the draft budget for 2001 declared under the item “Other non-investment expenditures” that these transfers were expenditures of the so-called dispositional fund, which was determined to the free disposition of the Public Defender of Rights. This operation breached the budgetary discipline in the sense of the Budgetary Rules Act.