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VI. EUROSAI Training Event Better Auditing of Public Aids and Subsidies

VI. EUROSAI Training Event Better Auditing of Public Aids and Subsidies. Auditing of State Aids and Subsidies Czech Experiences and Views Václav Peřich, Supreme Audit Office. The Czech SAO Mandate (a). Section 3 of the Supreme Audit Office Act No. 166/1993 Coll. (1) The Office shall audit:

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VI. EUROSAI Training Event Better Auditing of Public Aids and Subsidies

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  1. VI. EUROSAI Training EventBetter Auditing of Public Aids and Subsidies Auditing of State Aids and Subsidies Czech Experiences and Views Václav Peřich, Supreme Audit Office VI. EUROSAI Training Event: Better Auditing of Public Aids and Subsidies

  2. The Czech SAO Mandate (a) Section 3 of the Supreme Audit Office Act No. 166/1993 Coll. (1) The Office shall audit: (a) the management of state property and financial resources collected under the law for the benefit of legal persons, with the exception of resources collected by municipalities or regions under their independent jurisdiction, (b) the state final account of the Czech Republic, (c) the implementation of the State Budget of the Czech Republic, (d) the management of financial resources provided to the Czech Republic from abroad and offinancial resources for which the State has assumed guarantees, VI. EUROSAI Training Event: Better Auditing of Public Aids and Subsidies

  3. The Czech SAO Mandate (b) Section 4 of Act No. 166/1993 Coll. (1)When carrying out audits, the Office shallexamine whether the audited operationsconform to legal regulations,shall review whether they are substantively and formally correct,and shall judge whether they are effective and economical. VI. EUROSAI Training Event: Better Auditing of Public Aids and Subsidies

  4. State Aids in Europe • States and territories • 43 traditional states (3 also in Asia) • 10 semi-independent territories • 3 Caucasian states • Trade blocs • European Union 25 states, articles 87-89 of the Treaty • European Free Trade Association 4 states, similar • European Economic Area (EU+EFTA-Switzerland) • Commonwealth of Independent States 12, full-fledged free trade zone (WTO criteria) • Central European Free Trade Agreement 9 (3+U+K) - VI. EUROSAI Training Event: Better Auditing of Public Aids and Subsidies

  5. State Aids in Czechia Figures indicate % of GDP VI. EUROSAI Training Event: Better Auditing of Public Aids and Subsidies

  6. State policy of employment VI. EUROSAI Training Event: Better Auditing of Public Aids and Subsidies

  7. Central Subsidies Register (CEDR) • 1998 • Non-investment subsidies • Search by name, subject, budgetary chapter, beneficiary etc. VI. EUROSAI Training Event: Better Auditing of Public Aids and Subsidies

  8. Auditing Operation Main subject Volume of funds Audited Irregularities 03/30 Investment Incentives 4 790 4 505 > 100 04/34 2 135 > 700 03/35 Employment of People with Disabilities fuzzy total 125 05/17 1 900 1 534 04/31 Accompanying Social Programme of Transformation 950 557 > 11 Examples of Audit Results Figures in million CZK VI. EUROSAI Training Event: Better Auditing of Public Aids and Subsidies

  9. Subsidies and loans for firms VI. EUROSAI Training Event: Better Auditing of Public Aids and Subsidies

  10. Auditing Operation Main subject Volume of funds Audited Irregularities 03/24 Support of SME 2 749 the lot 05/04 Research and Development (MIT) 4 024 724 05/05 Support of Environmentally Friendly Farming fuzzy total 831 too large disproportion between M×L 05/07 Monuments‘ flood damages repair fuzzy total 515 > 135 05/08 fuzzy total 2 387 Examples of Audit Results Figures in million CZK Support of Energy Savings and Recoverable Production VI. EUROSAI Training Event: Better Auditing of Public Aids and Subsidies

  11. Investment subsidies VI. EUROSAI Training Event: Better Auditing of Public Aids and Subsidies

  12. ISPROFIN • Information system on participation of the state budget funds in the assets‘ reproduction financing • Chapter • Programme • Institution VI. EUROSAI Training Event: Better Auditing of Public Aids and Subsidies

  13. Auditing Operation Main subject Volume of funds Audited Irregularities 03/26 Building and Operation of Railway Corridors 4 150 4 150 270 prices up to 30% 04/20 Measures for Environment Improvement  1 700 ~ 03/35 Protection against Flood 2 557 2 557 Examples of Audit Results Figures in million CZK 1 700 ~ VI. EUROSAI Training Event: Better Auditing of Public Aids and Subsidies

  14. Disposal of environmental burden Figures in million CZK VI. EUROSAI Training Event: Better Auditing of Public Aids and Subsidies

  15. Example • 05/11 • Disposal of the old Ecological Burdens • >14 000 • 10 531 • Lack of good regulations • Bad co-ordination between ministries involved Figures in million CZK VI. EUROSAI Training Event: Better Auditing of Public Aids and Subsidies

  16. Most Frequent Risks • Inconsistency in legislation (relationships between laws, government regulations, ministerial decrees, rules of practice) • Lack of managerial control - losing the ability to control the expense growth • Neglecting procurement regulations • Failure of expert services • Efficiency and reliability of used technologies - failure of systems (control, operational, information etc.) • Wasting and abuse of resources, fraud, conflicts of interest • Low quality of emergency management (natural disasters, accidents caused by the human factor etc.) VI. EUROSAI Training Event: Better Auditing of Public Aids and Subsidies

  17. Auditor‘s Tool Kit • A proper grasp of assets (balanced approach) • Reasonable shifting between »helicopter–microscope« view • Information & Communication Technology • Interface to Substantial Expertise VI. EUROSAI Training Event: Better Auditing of Public Aids and Subsidies

  18. Quality of auditingprocess • Audit guidelines, standards, planning and programmes • Ongoing operations supervision • Sharing and commenting draft documents • Collective system of approving • Results evaluation VI. EUROSAI Training Event: Better Auditing of Public Aids and Subsidies

  19. Prospective views • Expecting a new grade of standards (95, 98, 04) • Contributing to strengthening of Internal Control • Understanding to the State Aid Reform • Applying scale of tools VI. EUROSAI Training Event: Better Auditing of Public Aids and Subsidies

  20. Thank you for your kind attention! More information is available: www.nku.cz/pages/en/pressrel-2006.htm Personal contact: vaclav.perich@nku.cz VI. EUROSAI Training Event: Better Auditing of Public Aids and Subsidies

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