In the framework of a compliance audit, the State Audit Office of Hungary (SAO) has examined whether the Supervisory Board of the Hungarian Air Ambulance Non-Profit Ltd. operated regularly and performed properly its duties in 2022. The work of the Supervisory Board is of paramount importance, as it monitors the activities of the company in order to safeguard the interests of the owner. Through the information and signals provided by the Supervisory Board, the Rapid Response and Special Police Services of the National Police exercising ownership rights is informed of operational, financial management and any other significant issues affecting the company and, if necessary, has the opportunity to intervene in a timely manner. The audit found that the Supervisory Board of the Hungarian Air Ambulance Non-profit Ltd. has, on the whole, functioned regularly and performed its duties properly.
In the course of the audit of MVM Energy Private Limited Company and MVM OVIT National Power Line Company Ltd., the SAO assessed the appropriateness of the bonus system applied to the top manager of the subsidiary of a majority state-owned company and the incentive effects of the system. A well-designed and properly operated performance reward system encourages the top manager to perform its duties effectively and efficiently. It can also increase its loyalty and commitment to the employer and the owner. The SAO’s audit found that MVM Zrt. had set relevant bonus targets related to the operation and performance of MVM OVIT Zrt. in accordance with the provisions of the Remuneration Regulation and had documented the assessment of their achievement. MVM OVIT Zrt. has regularly fulfilled its obligations prescribed by MVM Zrt. in relation to the performance-related remuneration of the top executive.
The SAO also audited/examined, on the basis of selected samples, the justification and expediency of decisions taken for the use of expert and consultancy services, the regularity of the consultancy contracts concluded, the performance of the services and the regularity and justification of the payments for 2022 in nine companies in majority state ownership. The audit’s experience shows that well prepared, documented and regulated decision making contributes to strengthening the transparency of procurement processes and the protection of the owners’ interests, as well as to reducing the risks of the company, including integrity risks. A sufficiently detailed and clear definition of the scope of the services to be provided against a contractual fee, a thoroughly elaborated design of the terms of payment of the fee to ensure consistency with performance and the setting out in writing of these terms are essential to safeguard the interests of a publicly owned company. Furthermore, the SAO has found that the principle of good governance requires that payments are made only on the basis of documented performance that can be clearly established in an ex post control.
The audit found that, with one exception, the selected consultancy contracts and ad hoc assignments were concluded in accordance with the rules. However, the audit also revealed that the organisations audited did not typically place sufficient emphasis on the decision preparation process and the documentation of the relevant factors of the decision, despite the requirements of their internal regulations. The audit also revealed weaknesses in the documentation of deliverables.