Joint report on parallel audit of Procurement of public building and corruption prevention

Report ID: 41

In January 2011, the Supreme Audit Office of the Czech Republic (Czech SAI - NKÚ) and the Bundesrechnungshof of Germany (German SAI - BRH) agreed to conduct parallel audits both of the EU-wide awarding of building contracts and of corruption prevention.

The audit focused on the application of EU procurement law as transposed into national law and corruption prevention of contracts for building construction and road construction and/or transport infrastructure. The audit also covered contract awards below the EU thresholds with a view to corruption prevention.

The working groups of the two SAIs compared the legal frameworks and administrative regulations in the Czech Republic and in Germany and the results of their parallel audits which they conducted specifically in the fields of building construction and road construction.

The two SAIs´ audit findings are summarised in the joint report.

SOURCE: https://www.nku.cz/en/publications-ocuments/other-publications/procurement-of-public-building-and-corruption-prevention---joint-report-on-parallel-audit-nku-and-brh-id6067/

Parallel audit of the use of public funds for motorway construction

Report ID: 65

The European motorway network forms the backbone of the passenger and freight transport in the European Union. As this situation will remain unchanged for the time being, investments in the expansion and maintenance of the European Motorway network are very important. Thus, examining the use of public funds for financing motorway construction projects is a key responsibility of Supreme Audit Institutions.

This report informs about the findings produced by the parallel audit missions regarding the funds spent on building the A 73 motorway (A 73) in Germany (section Thuringia/Bavaria satate border - Lichten - fels) and the D 1 motorway (D 1) in the Slovak Republic (section Vrtizer - Hricovske Podhradie). The audit missions focused on the public procurement procedure and a comparison of building standards and costs relative to the A 73 and the D 1. In the years 2009 to 2011, the audits were performed by the German SAI and the Slovak SAI in their respective country in order to share their findings and make comparisons.

The parallel audits found that by awarding the public works contract concerning the D 1 to a general contractor, competition was restricted placing small and medium sized enterprises at a disadvantage.

The expenses on building the two motorways increased considerably owing to the general increase in construction costs, the hike in value added tax (VAT) and, above all, the inadequate preparatory works performed by the respective national road works administrations. The two administrations did not or not adequately invite tenders for required work and services, with the result that supplementary agreements had to be subsequently concluded. Since the costs stipulated in these agreements were fixed in an environment with reduced or even no competition the contractors were able to enforce higher prices.

Audit of the investment on Maria-Valeria bridge

Report ID: 78

For thousands of years the Danube River has been used by nations as a key route of transport. Researchers
have found that a river crossing point had been developed in the region of today’s Esztergom and Štúrovo
(Párkány) already in the Bronze Age and roads crossing the river have been leading through this area ever since then. The construction of the first permanent iron bridge was started towards the end of the 19th century and the bridge named on Grand Duchess Mária Valéria was officially inaugurated on 25 September 1895. The bridge was blown up in 1919 and restored in 1927. During the Second World War the retreating German army once again blew up the three middle sections of the Bridge.
The desire for the reconstruction of the Bridge emerged during the second half of the 20th century time
and time again, primarily based on the requests of local residents. However, several decades had to pass before the decision was made at the highest decision-making level and the commencement of any substantive negotiations concerning the restoration of the cross-border connection. The development of events accelerated in the second half of the eighties, and in the first half of the nineties the preparation for the reconstruction of the Bridge was launched. The ‘Bridge reconstruction committees’ established by the two countries and the senior officials of the ministries concerned agreed on the initiation of submitting a request for the PHARE support offered by the European Union for this purpose. The Slovak and the Hungarian minister submitted their joint request to the European Commission on 25 September 1995, the 100th year anniversary of the inauguration of the Mária Valéria Bridge, and received a positive answer
already in December of the same year.

The joint preparations were launched on the basis of the prospective support of the European Union. In 1999
the Agreement between the governments of the Republic of Hungary and the Slovak Republic was signed concerning the reconstruction of the Danube Bridge across the border between the two cities – Esztergom and Štúrovo – along with the construction of the related facilities. The financial support for the Slovak Republic for the reconstruction of the Bridge was approved in the Financing Memorandum signed between the European Commission and the Slovak Republic on 2 November 1999. The Financing Memorandum on the PHARE subsidy to be provided for the reconstruction of the Bridge was signed by the representatives of the European Union and the Republic of Hungary on 22 December 1999.
Construction was launched on 18 October 2000 and on 11 October 2001 the Bridge was officially opened amid much ceremony and festivity. It would not have been possible to reconstruct the Bridge within a foreseeable period of time without EU assistance.
By strengthening the good neighbourly relations and friendly co-operation between the two countries the reconstruction of the Bridge over the Danube also contributes to the strengthening of the stability of Europe. The joint investment project has contributed to the process of the integration of both countries into the European Union and has opened new possibilities in cross-border co-operation and in the economic and social relationships between the two countries.
In addition to the agreement on co-operation in construction, agreement was also made on the parallel
audit of the work as well. In the territory of the Republic of Hungary the audit was performed by the State Audit Office of the Republic of Hungary, in the territory of the Slovak Republic it was carried out by the
Supreme Audit Office of the Slovak Republic, based on a mutually co-ordinated and agreed audit plan. The auditor groups of the parties held regular meetings during the audit period and shared their experiences. The audit covered the state and local level legal entities, which were involved in the reconstruction of the Bridge. The objective of the audit was to assess whether the entities concerned had completed the tasks and met the requirements laid out in the inter-governmental Agreement in the course of the reconstruction of the Mária Valéria Bridge and construction of the related facilities.
Furthermore, the audit was aimed to assess compliance in the course of the utilisation of PHARE support with the rules prescribed by the EU concerning the implementation of PHARE programmes. The Report will
be forwarded to the European Court of Auditors, other competent bodies of the European Union, the National
Council of the Slovak Republic and the Parliament of the Republic of Hungary, along with a joint cover letter
signed by the presidents of the state audit institutions of the two countries.

SOURCE: https://www.nku.gov.sk/documents/10272/1542112/2002+-+Bridge+Maria+-+Valerie.pdf

Auditing Investments of TEN-T Priority Project 6

Report ID: 83

In 2008,  the Contact Committee of the Heads of the Supreme Audit Institutions (SAIs) of the European Union endorsed the execution of a co-ordinated performance audit activity – of a cross-border nature, involving several Member States – related to the utilisation of European Union funds allocated for the realization of investment projects focusing on the Trans-European Transport Network (TEN-T).The estimated value of the entire TEN-T Priority Project 6 is 60.8 billion Euros and is the largest of the thirty TEN-T Priority Projects according to its value.

The Supreme Audit Institutions of Slovenia, Hungary and Italy participated in the cooperative audit.

The audit objective was to evaluate:

1. whether the respective transport policies in the countries of participating SAIs are in line with the principles of the community transport policy and whether they define a demand for the modernisation of railway transport in relation to TEN-T Priority Project 6 and corridor 5;
2. whether the development of railway lines financed by European Union funds – taking into account the principles of the respective national and community transport policy – is effectively and efficiently implemented on the line of the TEN-T priority project 6 and Trans-European transport corridor 5;
3. whether the system set up for preparation and realisation of the selected projects effectively ensures the implementation of the railway network and related infrastructure developments concerning corridor 5 in the participating countries;
4. whether the selected project has achieved/ will achieve its objectives defined in the community and national strategies.

The audit focused on two already completed and two still running railway section investments that are/were financed by European Union funds. Within the framework of the audit, each SAI audited its own railway section. The selection of the railway section, or within this railway section, the selection of a project or projects laid with the respective SAIs.

To ensure a coherent approach, all SAIs followed the approved audit plan as close as possible, particularly with regard to the following main question: did the preparation process and the realisation of the TEN-T project selected to be audited efficiently serve the time-proportional implementation of the European Union’s and national transport policy, as well as the utilisation of available resources? The audit focused on the period 2000 –2010.

Source: https://www.asz.hu/storage/files/files/Angol_portal/coordinated_audit_reports/report_on_auditing_investments_of_ten_t_priority_project_6.pdf?download=true

PARALLEL AUDIT OF ROAD BORDER CHECK POINTS ON THE POLISH UKRANIAN BORDER

Report ID: 149

On July 2004, the SAIs of Poland and Ukraine signed a cooperation plan for years 2004-2005 that included the course of performed audits and the advancement of a parallel audit carried out on the Polish-Ukrainian border.

On the Polish – Ukranian border (around 530 km) there are six road border check points in Dorchusk (Yagodyn on the Ukranian side), Zosin ( Ustylug), Hrebenne (Rava-Rus”ka), Korczowa (Krakovets), Medyka (Shegin) and Kroscienko (Smi¨nytsya).

The SAIs of Poland and Ukraine carried out a parallel audit of road border check points on the Polish-Ukranian border on the basis of the audit programme developed by the Polish party. The Ukranian party adjusted the scope of the audit to the legal regulations and financial and organizational conditions of Ukraine.

The main objective of the audit was to assess the preparation of road border check points for appropriate border control. The audit covered the years 2000 – 2004( 1sta quarter). The two bodies conducted the audit with regard to the activities of competent institutions of the two countries in order to prepare road border check points for appropriate customs clearance.

Source: https://rp.gov.ua/upload-files/IntCooperation/IntAudits/31-07-2005%2009-00-00/Polish_Ukrainian_border.pdf