Audit revealed critical errors in the digitization of building administration

Prague - The first working version of the audit revealed several significant errors in the project part of the digitization of building management. Due to violations of the rules governing public procurement, the audit states that it will not be possible to reimburse the total amount from the National Recovery Plan (NPO). This was reported today by the server Seznam Zprávy, which has access to the working version of the audit. Officials and builders have been having problems with the digital systems of building management since their launch in July 2024. In the autumn, former Minister for Regional Development Ivan Bartoš (Pirates) was recalled due to insufficiently functioning digitization, which ultimately led to his party's exit from the government coalition.

According to the audit prepared by the law firms Portos and MT Legal, the Ministry of Regional Development (MMR) should have started selecting companies earlier. It was clear that the work on digitization would not be completed on time. Due to the failure to meet certain milestones, there is also the possibility of sanctions from the European Commission, according to auditors. Its amount cannot be easily determined, but the upper limit could be up to 13.7 billion crowns, according to auditors.

"At this moment, this is a working version of the audit. The draft audit report is currently going through the standard internal commenting process. The report will be completed next week, when the ministry will present its conclusions and subsequent steps to the public. We cannot comment further on the audit report at this time,” said MMR spokeswoman Karolína Nová to the server.

The report also notes, for instance, that there was no analytical team at the Ministry of Regional Development (MMR) to study the new system. Additionally, some key positions necessary for the creation of such a complex system were unfilled, and the ministry did not provide any justification for this absence. The department of digitization and information systems at MMR, led by Petr Klán, was responsible for the new form of building management. The current Minister for Regional Development, Petr Kulhánek (for STAN), identified Klán as a weak point in the development upon taking office, and Klán subsequently left the ministry.

According to the audit, the ministry also did not adhere to the most advantageous and legal options for proceeding with the procurement. After deciding under Bartoš's leadership to provide a new version of the system, MMR found itself in conflict with the Office for the Protection of Economic Competition (ÚOHS). The office prohibited the fulfillment of a contract for part of the system from the company InQool. However, MMR subsequently decided to award the contract to the same company again, through a so-called negotiation procedure without publication. The ÚOHS also canceled this decision. In this regard, the audit sided with the decisions of the antimonopoly office and acknowledged that the process of awarding the second contract was initiated unlawfully.

According to auditors, the constantly changing building law was also a problem. It changed, as did the decrees, which were set to take effect only in July 2024, i.e., at a time when the systems were already supposed to be operational. The creators of the working version of the audit were also unable to assess the involvement of technical supervision of the digitization of building management by MMR. They did not receive any materials from the ministry regarding its activities.

Following Bartoš's dismissal, the government subsequently decided not to continue with the further development of the system and announced a new contract for it. A complete and tested new system for the digitization of building management is expected to be completed by 2028. Until then, there will be a transitional period in which building authorities will be able to use the original local systems and the new digital building management systems simultaneously.