Transcript Presentation of Czech SAO - National Report on EU

SUPREME AUDIT OFFICE
CZECH REPUBLIC
Audititing of State Aids and Subsidies
Discussion Group 1
VI. EUROSAI Training Event Better Auditing of Public Aids and Subsidies
6.-8. November 2006, Prague
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Audits of funds spent on cleaning-up flood
damages
• Audit of the management of supports was
carried out at Ministry of Transport, Transport
Infrastructure State Fund, Ministry of
Agriculture, Ministry of the Environment and
selected beneficiaries.
• three typical response:
– Acceptance of finding audits; Adoption of
remedial measures; Rejection of finding
audits
Audit of state budget finances spent on
the provision of investment incentives and
investment aid
• The audited entities were the Ministry of
Finance and Ministry of Labour and Social
Affairs. The audited beneficiaries were
commercial enterprises.
• Monitoring of impacts showed that the
audited ministries do not respect in all cases
audit conclusions.
Tax subsidies
• Attitude to the fiscal policy in Germany
• Regulatory Impact Assessment for Tax
Subsidies
• VI EUROSAI Congress
– EUROSAI Project – coordinated audit of
tax subsidies
The Audit of Subsidies by the Court of
Audit Spain
• Comprehensive summary about state policy
of subsidies
• Study case: „Audit of subsidies granted for
the development of Plans related to training
actions to improve the professional capacity
of workers“
• Main results
Importance of activity
State Aids and Subsidies
1. Ministries need to be encouraged to
improve and strengthen their own internal
control
 Example from the Czech SAO in relation to
Flood Damages
VI. EUROSAI Training Event Better Auditing of Public Aids and Subsidies
6.-8. November 2006, Prague
6
Inportance of activity
State Aids and Subsidies
2. Legislative Frameworks are Incomplete
 Examples include gaps in the legislation,
imperfections
 Lack of definitions
 Lack of compliance with laws, regulatios,
directions
VI. EUROSAI Training Event Better Auditing of Public Aids and Subsidies
6.-8. November 2006, Prague
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Importance of activity
State Aids and Subsidies
3. Unclear Objectives for Subsidy Programs
 Examples in relation to Investment Incentives –
contract annexes allowed additional funds to be
spent but no changes to the goals or targets.
Therefore, expenditure will bring no futher benefits
for the State
VI. EUROSAI Training Event Better Auditing of Public Aids and Subsidies
6.-8. November 2006, Prague
8
Importance of activity
State Aids and Subsidies
4. Hidden subsidies – or Silent Subsidies
 The Kiel University Institute for world economic
affairs estimates that if all subsidies, of which tax
subsidies are a large part, were abolished,
German federal revenue would increase by 32%
 These are not subject to the same scrutiny as
other expenditures
 These need to be scrutinised by both Parliament
and by Auditors
VI. EUROSAI Training Event Better Auditing of Public Aids and Subsidies
6.-8. November 2006, Prague
9
Importance of activity State Aids
and Subsidies
5. Issues for Auditors to consider
Follow up
Can be very useful in ensuring changes happen
Cooperation with other audit institutions and auditors
We all have had similar experiences
Joint audits, collaborative audits, sharing experience
Attribution
Not easy to prove the subsidy was responsible for all
changes
VI. EUROSAI Training Event Better Auditing of Public Aids and Subsidies
6.-8. November 2006, Prague
10
Thank you for your attention
Hana Hykšová