The SAO audited funds earmarked for the care of the national cultural treasure in the state ownership
Press Release – February 2, 2012
The auditing operation aimed at Programme for the care of the national culture treasure in the state ownership.
The Government approved the Programme in 2006. Funds amounting to CZK 10,323 million were earmarked for the Programme, which should be completed in 2014. Auditors concluded that the Programme had not been prepared well as substantial changes to subject, financial, and schedule terms had occurred during the realisation phase. The most radical modification of the Programme was removing the construction of a new library building at Letna, which resulted in a conceptual change as the National Library had to adjust the Clementinum complex and enlarge the depository in Hostivar.
The Programme’s realisation fell behind the schedule and the Government had to prolong it to 2017. Among the reasons of the delay are insufficiencies in the public procurement documentation of the National Museum reconstruction and cancellation of the entry procedure of the Hostivar depository enlargement.
The financial requirements of the Programme were estimated at CZK 10,323 million. After scrutinizing some projects (1st phase of Clementinum revitalization, the enlargement of the depository in Hostivar) it was revealed that the requirements had been overvalued as the contenders’ offers had been much cheaper. In spite the fact that the Programme abandoned plans to construct the new library (the estimated costs in the amount of CZK 1,892.4 million) and the National Museum building plans got reduced (the costs were reduced by CZK 500 million), the Ministry of Culture has not updated the total financial requirements of the Programme yet.
As a result of the Programme’s realization delays and overvalued requirements of investors, the Ministry of Culture annually increased financial requirements even though it was not necessary. By the end of 2010, the actually spent funds reached only CZK 1,025.8 million, i. e. some 10 % of the total required amount. The unutilized funds were transferred into the claims from unused expenditures.
The Ministry of Culture failed to perform the function of the Programme’s administrator. During the preparation phase of the National Museum main building reconstruction, the Ministry did not carry out controls or make the investor accept results of the feasibility analysis, which had been provided by external experts. The analysis was produced in 2008 and warned of high expenses and risks involved with the construction of basement premises that could endanger the structural stability of the building. As late as in 2011, when the project documentation had already been drafted, the Ministry abandoned the plans of underground constructions, which were found risky and financially demanding. Yet, these changes to the project documentation mean additional cost requirements.
To conduct investment and planning activities, both National Library and National Museum have investment departments within their organisational structures. Nevertheless, these activities were also procured from hired external companies on the basis of mandatory agreements, which the Ministry of Culture had approved. National Library terminated the agreement and consequently had to pay compensations in the amount of CZK 3.09 million to the mandatory.
National Museum entered a mandatory agreement worth CZK 47 million, which included organizing activities related to public procurements, consultations with the contractor, and monitoring of the construction – but these activities increased expenses considerably. Without any economical assessment of the prospect cooperation, a project manager has been hired. For example, CZK 2.66 million were paid for building permit documentation drafts concerning the former Federal Assembly building and the price included the project manager’s fee amounting to CZK 1.39 million for “providing the documentation”. The Ministry of Culture accepted such unfavourable steps.
The auditing operation was performed from February to October 2011. The audited period extended from 2007 to 2010; where relevant, the data from the previous period and the period until the audit operation’s completion were also scrutinized. The audited bodies were Ministry of Culture, National Museum, and National Library of the Czech Republic. The auditing operation was included into 2011 Audit Plan of the SAO under No. 11/05. Pavel Hrnčíř, Member of the SAO Board, managed the operation and prepared the audit conclusion as well.
Communication Department
Supreme Audit Office