The SAO audited the state budget funds spent on indemnities for maladministration or illegal decisions
Press Release – November 4, 2011
The audit scrutinised the funds designated for indemnities paid under Act No. 82/1998 Sb., on liability for damage caused by the execution of public authority by illegal decision or incorrect official procedure, and on amendments to Czech National Council Act No. 358/1992 Sb., on notaries and their activities (the Code of Notarial Practice).
Within the audited period 2007–2010, the Ministry of Justice reimbursed CZK 399,672,576 in total on the grounds of 4,502 indemnity applications. For the auditing operation, the auditors selected 128 applications for indemnities in the total amount of CZK 57,631,447.
Within the period 2007–2010, the Ministry did not act in compliance with the Act on the Property of the Czech Republic when, in a number of cases, it did not process indemnity applications within the six-month deadline for recognising or rejecting claims, nor did it file appeals in time against payments orders where it did not recognise the reason for or amount of the requested indemnity, nor did it attend courts hearings without giving an excuse for its absence.
The Ministry thus baselessly reduced state assets and did not use all legal resources available when exercising and defending the rights of the state. The SAO found that the inflexible organisation of the Ministry and the lack of use of its competencies to file proposals for disciplinary measures also contributed to the very low percentage of enforced regressive payments.
The SAO stated that, in the area of indemnities, the Ministry’s internal control system is not functional.
The auditing operation was performed from January to June 2011. The audited period extended from 2007 to 2010; where relevant, the preceding period and the period until the auditing operation’s completion were also scrutinized. The audited body was the Ministry of Justice. The auditing operation was included into 2011 Audit Plan of the SAO under No. 11/03. Zdeňka Profeldová, Member of the SAO Board, managed the operation and prepared the audit conclusion as well.
Communication Department
Supreme Audit Office