Czech Supreme Audit Office found no significant shortcomings in the Energy Regulatory Office's management apart from some purchases

The Energy Regulatory Office (ERÚ) bought higher-priced mobile phones, tablets and smartwatches for its management for almost 261.000 crowns, but without proper justification. At its Prague satellite office, the ERÚ had operating expenses 5.5 times higher because it rented commercial premises, compared with its other satellite office in Ostrava, which is housed in state-owned premises. The Supreme Audit Office (NKÚ) reported these findings today following an audit of the Energy Regulatory Office's management. The audit found no significant shortcomings, only less significant shortcomings in the effectiveness of the internal control system. The Czech News Agency (ČTK) is seeking comment from the ERÚ.

The audit covered the years 2019 to 2022. Its aim was to verify whether the office had managed its finances efficiently, economically and in accordance with legal regulations during that period. The ERÚ has a budget of almost 366 million crowns for this year. Its official headquarters are in Jihlava.

The audit office reviewed a sample of 22 purchases worth a total of 38,4 million crowns to assess the ERÚ's procurement procedures. It found that in most cases the ERÚ had acted efficiently, economically and in accordance with legal regulations. However, in three of the 18 purchases examined, auditors found that the ERÚ had bought mobile phones, tablets or smartwatches from a particular brand in a higher price bracket for members of the ERÚ Council and selected employees, without justifying the purchases. “In these cases, the ERÚ did not properly carry out a preliminary management control. The NKÚ recommends amending internal regulations and standardising information and communication technology equipment, including equipment for members of the ERÚ Council,” the audit office said in a press release.

In its audit conclusion, the NKÚ writes that the Energy Regulatory Office generally justified these purchases as replacements for users’ end-user devices and as necessary for working from home. It later justified the purchases by citing cybersecurity requirements. Mobile phones for employees were, however, considerably cheaper than those bought for members of the ERÚ Council. “According to the NKÚ’s assessment, the smartwatches were entirely unnecessary and therefore not an efficient use of funds,” the NKÚ said in its audit conclusion.

The NKÚ found a significant difference when examining the satellite offices in Prague and Ostrava. The Prague office is based in rented commercial premises. Its operating expenses totalled 39 million crowns in 2019–2022, while operating expenses for the Ostrava satellite office, which is housed in state-owned premises, amounted to around seven million crowns. “The difference was mainly due to the fact that the ERÚ did not pay rent for the Ostrava office, while it paid commercial rent for the Prague office. The ERÚ was unable to find suitable state-owned premises in Prague,” the NKÚ said. In its audit conclusion, it stated that the ERÚ had been seeking suitable state-owned premises since 2015. It contacted the government’s office allocation committee and the state property office, but no suitable premises were available.

The regulatory office also paid almost 2,3 million crowns for external media consultancy and PR services from December 2021 to March 2023, despite having its own specialists in public communications. “The ERÚ justified signing the contract by the need to communicate with the public as effectively as possible amid a challenging energy market situation caused by the cessation of operations by some energy suppliers and the energy crisis,” the NKÚ said.