The State Audit Office of Hungary has completed the audit of the management of the foundations established by the National Bank of Hungary for the years 2016. The SAO concluded that the financial management of the audited six foundations was overall in compliance with the relevant regulations and their financial management was transparent. In the course of the audit of PADMA, PAGEO and Pénziránytű Alapítvány (Money Compass Foundation), the SAO discovered some deficiencies, on the basis of which the chairs of the advisory boards have to prepare an action plan.
The State Audit Office of Hungary assesses the financial management of foundations and public foundations in the framework of auditing the use of budgetary resources. Pursuant to its statutory mandate, the SAO is entitled to audit foundations and public foundations that have received subsidies or funds granted free of charge for specific purposes from the government budget.
The SAO audited the management of six foundations – Pénziránytű - Alapítvány a Tudatos Pénzügyekért (Money Compass Foundation for Conscious Finances, Pallas Athena Domus Animae Foundation (PADA), Pallas Athena Domus Concordiae Foundation (PADOC), Pallas Athena Domus Mentis Foundation (PADMA), Pallas Athena Domus Scientiae Foundation (PADS) and Pallas Athena Geopolitical Foundation (PAGEO) – for 2016.
The audited foundations did not receive any subsidies from the government budget nor did they receive any other support or grant in 2016. The amendment of Act CXXXIX of 2013 on the National Bank of Hungary that came into force on 6 May 2016 authorises the SAO to audit the foundations of the National Bank of Hungary. The SAO conducted the audit in accordance with the legislation in force in the audited period, audit methodologies based on international standards and the internal professional rules on auditing.
In the course of the audits, the State Audit Office of Hungary assessed whether the foundations observed the relevant legislation in the course of their financial management and the audits covered the assessment of the regularity of the controls, monitoring and registration systems serving the operation of the foundations.
The National Bank of Hungary established the audited Pallas Athena Foundations in 2013-2014, in line with its Social Responsibility Strategy framework. By merging into the Pallas Athena Domus Scientiae Foundation, the Pallas Athena Domus Concordiae Foundation ceased to exist with effect from 21 September 2017. Its legal successor became the Pallas Athena Domus Educationis Foundation. By merging into the Pallas Athena Domus Scientiae Foundation, the Pallas Athena Domus Concordiae Foundation ceased to exist with effect from 21 September 2017. Its legal successor became the Pallas Athena Domus Educationis Foundation. The Money Compass Foundation, which had non-profit legal status in the audited period, was established by the National Bank of Hungary, the Hungarian Banking Association and the Student Loan Centre Ltd. in 2008.
The SAO concluded that the audited foundations established the organisational framework of their financial management in accordance with the legislation, and their internal financial management policies complied with the relevant legal provisions. Their involvement in business organizations was legal. The investment and renovation costs were recognised properly by the Pallas Athena foundations, and with the exception of PADMA, the accounting of costs and expenditures was in compliance with the provisions of the Act on Accounting. In the case of the Money Compass Foundation, the accounting of investment/renovation expenditures as well as the accounting of costs and expenses did not comply with the provisions of the Act on Accounting.
The registration of the targeted funds for foundations was lawful in the case of all the six foundations in 2016. The foundations fulfilled their reporting obligation in accordance with the regulations, and reports were substantiated by inventories. In the case of PAGEO, the income statement contained errors of significant amount owing to the irregular accounting of a donation received in 2016. The supervisory boards of the foundations performed their control tasks related to the acceptance of the reports appropriately.
Based on the identified deficiencies, the SAO formulated a proposal for the chairs of the advisory boards of PADMA, PAGEO and Money Compass Foundations, according to which they are obliged to draw up an action plan within 30 days.
Department of Communication and Public Relations