Errors in the Ministry of Culture’s financial statements exceeded CZK 1,600 million
PRESS RELEASE on Audit No. 15/19 – April 4, 2016
The Supreme Audit Office (SAO) performed an audit at the Ministry of Culture and scrutinized annual accounts for the year 2014. Auditors verified the accuracy, including the completeness, of the data and identified systemic risks related to the compilation of financial statements. Errors in the Ministry’s annual financial statements for the year 2014 exceeded CZK 1,600 million.
The most prominent example of errors in annual financial statements of the Ministry of Culture was the account for the received refund of co-financed transfers in the amount of CZK 1,100 million. In the report on changes in equity, the Ministry also wrongly reported about CZK 227 million that related to a decrease in the liability after financial compensations to churches. Auditors also checked that the Ministry’s accounting included financial obligations towards churches in the amount of CZK 57,000 million as laid down by the law.
The SAO could not give an opinion on the reliability of the annual financial statements of the Ministry of Culture because of the ambiguous accounting legislation, which in particular relate to pre-financing of the transfers that are co-funded from the EU funds as these constituted a considerable part of the Ministry’s annual accounts. The issue was tackled by amendments to the accounting legislation, which became effective since 2015.
Auditors also revealed that the Ministry of Culture wrongly accounted for subsidies that had been granted to its allowance organizations for acquisitions of assets. Out of the audited sample CZK 132 million, errors amounted to CZK 68 million. The Ministry also made poor distinctions between short-term and long-term advance payments of transfers and made errors in the depreciation of fixed assets. Compared to the whole extent of irregularities, the SAO concluded that the Ministry had failed to keep correct and complete accounts.
The SAO did not find any serious errors in the Ministry of Culture’s annual accounts for the year 2014.
In case the Ministry of Culture does not implement corrective measurements, the errors will reflect into following accounting period and consequently influence the consolidated financial statements for the Czech Republic.
Communication Department
Supreme Audit Office