The SAO SR performed audits focused on the management of public funds and the disposal of property in the municipalities of Frička and Hrabská and in the municipality of Lúka and the municipal water management company Šáchor.
The audits in the municipalities of Frička and Hrabská confirmed that small municipalities often have a problem in ensuring compliance with legislation concerning their administration and complex rules in the field of budgeting and accounting, despite the fact that many municipalities provide some such services through joint offices. In this context, the SAO SR supports the opening of a broader discussion on the further direction of municipal reform, the division of competencies, the consolidation of the settlement structure and fiscal decentralization.
The auditors also pointed to a number of shortcomings indicating serious breaches in the areas of accounting, asset management and non-compliance with budgetary rules, in particular breaches of financial discipline. In connection with the persistent problems in the field of accounting and budgeting, the SAO SR recommended to the Ministry of Finance of the Slovak Republic, as the coordinator of Act 357/2015 Coll. on Financial Control and Audit, to amend the legislation on financial control. The SAO SR recommended to the Ministry of the Interior of the Slovak Republic to consider a new systemic approach to the creation of the seats of joint municipal offices and the creation of a central body responsible for the management of necessary modernization changes in public administration. With regard to the reaffirmed ineffectiveness of the internal control mechanisms, the SAO SR also proposed to take systemic measures to strengthen the internal control system. The identified serious deficiencies related to the suspicion of fulfilling the elements of the factual nature of the criminal offense of breach of duty in the administration of foreign property were referred to the organs active in criminal proceedings.
As part of the audit in the municipality of Lúka and in the municipal water management company Šáchor, the SAO SR found serious deficiencies in the area of ??the internal control system, which, for example, enabled the statutory body to conclude contracts without performing the financial control. The municipality also concluded contracts without the relevant local council approval. Not all legal means were used to protect the property. The auditors also found a violation of the law on budgetary rules - violation of financial discipline and the Public Procurement Act. The identified serious deficiencies related to the suspicion of fulfilling the elements of the factual nature of the criminal offense breaching the duty in the administration of foreign property were referred to the organs active in criminal proceedings. The SAO SR recommended to Ministry of the Interior, as the Act 369/1990 Coll. on Municipality Establishments coordinator, to incorporate into law the obligation of the outgoing mayor to submit complete documentation on the management and property of the municipality to the incoming mayor (in connection to the problems related to the submission of accounting records and documentation for auditing),
Deficiencies in the municipal water management company Šáchor concerned, for example, the non-disclosure of certain contracts and mandatory information on invoices and orders, public procurement, errors in the inventory as well as in the application of tax relief which did not apply to it, which caused an income tax cut to almost half.
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