Was 2012 Ministry of Transport accounting move intended to burnish image of government parties?

13-10-2014

The Ministry of Transport carried out a strange accounting move at the end of 2012 that reduced the budget deficit the following year, the Czech Republic’s Supreme Audit Office says in freshly released report.

Ministry of Transport, photo: Filip JandourekMinistry of Transport, photo: Filip Jandourek According to the SAO, CZK 5 billion “flew about” between the Operational Programme Transport and the State Transport Infrastructure Fund at the request of the Ministry of Finance. It said the move had been carried out in order make the deficit figures look better ahead of what was to be a pre-election year.

The transfer took place on one of the last days of 2012, when money was moved from the account of the Operational Programme Transport to that of the State Transport Infrastructure Fund. The following February it was returned in full, SAO spokesperson Olga Málková told reporters on Monday.

2013 was to be a pre-election year. However, with the collapse of the centre-right government of Petr Nečas in June of that year early elections were actually held in October 2013.

When the suspicious transfer took place Miroslav Kalousek of TOP 09 was minister of finance and Zbyněk Stanjura of the Civic Democrats, which headed the coalition, had just become top man at the Ministry of Transport.

Defending the move on Monday, Mr. Kalousek told the news website iDnes.cz that it wasn’t correct to describe it as completely unusual. Several such transfers were carried out in the Czech Republic 20 years ago, he said.

The former minister of finance says the State Transport Infrastructure Fund believed towards the end of 2012 that it would need more disposal funds to cover some contracts.

However, says Mr. Kalousek, there were delays in relation to the submission of invoices and other problems and the fund did not use the money. It therefore returned it to the Ministry of Transport, he said, adding that he did not remember the details of the transaction.

The suggestion that the transfer was deliberately carried out to reduce the budget deficit and make the government look better in a pre-election year is denied by Mr. Kalousek. He says the move simultaneously negatively impacted the 2012 budget, by the same amount.

In addition, he says, in both 2012 and 2013 the budget deficit was significantly greater than planned. It was just an accounting operation; nobody embezzled anything and nobody stole anything, the TOP 09 politician added. Mr. Stanjura also says that nothing untoward took place.

For its part, the SAO – a constitutional agency tasked with supervising the management of state property and the state budget – says the transfer by no means represented normal business. The whole process, including the filing of the request and financial controls, lasted only two days, said Málková.

The SAO said that normally the State Transport Infrastructure Fund transferred unneeded funds back to the Operational Programme Transport in December. In 2012 the exact opposite happened.

13-10-2014