The SAO audited the closing account of the state budget heading Ministry of Defence for the year 2010
Press Release – July 2, 2012
The auditors scrutinized whether the Ministry of Defence proceeded in compliance with applicable legislation when compiled the closing account of the state budget heading "Ministry of Defence" for the year 2010.
With regard to unclearness and incompleteness of the accounting legislation in 2010, it was not possible to review whether the Ministry’s 2010 financial statements gave a true and fair view of the accounts in accordance with the law.
The accounting regulations for organizational units of the state, which were effective in 2010, did not contain clear, unequivocal, and complete definitions. Implementing regulations came into effect shortly after they had been published. Only four accounting standards for the year 2010 were issued, but the issued standards did not cover the whole subject, which had previously been defined in the standards No. 501–522 (effective till the end of 2009). For that reason, the SAO could not review several accounting areas.
In 2010, the Ministry amended the existing regulations and issued new ones, which contained mostly adjustments related to the new version of accounting principles, in spite the above mentioned time limitation.
In 2010, the Ministry violated the Accounting Act when committed system errors in the following fields:
- stock-taking of assets,
- liabilities towards the staff and social security costs,
- accounting in the off-balance sheet accounts,
- correction entries of receivables from the previous accounting period.
In the Ministry’s 2010 closing account, records of stock-taking of assets and liabilities were not entered into the corresponding accounting period. For example, long-term assets amortizations, JAS 39 Gripen aircrafts leasing fees, and funds provided to the NATO military budget were not accounted for in corresponding accounting periods.
System errors were revealed within the field of accounts of so-called “activated“ long-term tangible assets. The exchanged assets were accounted for incorrectly and after the recording system had been changed, the Ministry accounted for items, which were not subject of its accounting (in spite the assets were unused or were not depreciated, or assets were not produced directly), thus violating the Accounting Act.
The auditing operation was performed from August 2011 to March 2012. The audited period was year 2010; where relevant, the preceding period the period until the completion of the audit were also scrutinized. The audited body was the Ministry of Defence. The auditing operation was included into 2011 Audit Plan of the SAO under No. 11/22. Jan Vedral, Member of the SAO Board, managed the audit and prepared the audit conclusion as well.
Communication Department
Supreme Audit Office