- Hans Weber
- December 1, 2023
Audit Reveals Financial Mismanagement in Czech Government Organizations
The Supreme Audit Office of the Czech Republic (Nejvyšší kontrolní úřad or NKÚ) has conducted an investigation into the financial management practices of various government organizations. The audit report has unveiled a series of problems in the management of twenty-five government organizations under the purview of the ministries of environment, agriculture, industry, and trade. These organizations, collectively receiving more than 8.5 billion Czech koruna for their operations, have been found to engage in the excessive purchase of external services that they were originally tasked with providing themselves. Furthermore, the audit determined that proper cost-effectiveness evaluations were often lacking in these procurement processes.
Among the organizations subjected to scrutiny by the NKÚ were the Czech Environmental Information Agency (CENIA), the Institute of Agricultural Economics and Information (ÚZEI), the Service Administration of the Ministry of Industry and Trade, and the Czech Agency for Standardization (ČAS). The report disclosed that CENIA allocated 44% of its total expenses in 2021 to external purchases, while ČAS allocated a similar proportion, at 45%, for similar services.
In one notable instance, ÚZEI had outlined 12 research tasks to be completed between 2019 and 2021 but managed to fulfill only two. Additionally, the report spotlighted a peculiarity in ČAS’s payment structure, as it remunerated its employees with wages instead of salaries. This resulted in significantly higher monthly earnings for some leading employees in comparison to their counterparts in other government organizations subjected to the audit.
Furthermore, the NKÚ investigation exposed irregularities in the sponsorship program designed to provide access to Czech technical standards (ČSN). In 2021, sponsors, primarily government ministries, contributed over 113 million Czech koruna to the program. However, the actual number of users benefiting from this sponsorship was substantially lower than reported. While ČAS had estimated the user count to be 65,011, the verified figure was a mere 8,512.
The NKÚ report has raised concerns about financial management practices within these government organizations and has underscored the necessity for enhanced oversight. It has called for stricter control and evaluation of procurement processes while emphasizing the importance of prioritizing cost-effectiveness and internal service provision.
The findings of this audit report serve as a compelling reminder of the importance of financial accountability and transparency within government organizations. To ensure that public funds are utilized efficiently and effectively to fulfill their intended purposes, these organizations must enhance their financial management practices, thereby serving the best interests of the Czech Republic and its citizens.
Article by Prague Forum