ORGANIZATION AND STRUCTURE OF COMMUNAL ENTERPRISES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000600060020-3
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 3
• Document Creation Date: December 22, 2016
• Document Release Date: August 31, 2011
• Sequence Number: 20
• Publication Date: May 13, 1954
• Content Type: REPORT

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CLASSIFICATION /WNrID tTI L _
CENTRAL INTELLIGENCE AGENCY
INFORMATION REPORT
COUNTRY Czechoslovakia
SUBJECT Grgani.kation and Structure of Communal Enterprises
DATE
ACQUIRE
REPORT
CD NO.
DATE DISTR. /3 Vey 1954
NG. OF PAGES
NO. OF ENCLS.
(LISTED BELOW)
SUPPLEMENT TO
REPORT NO.
1. "Communal ante prises vera formed in 1940 !y a dienrse of the Ministry of the
Interior. The growth c+f eommsunol enterprises was so greatrbecause of the li-
quidation of private propertar ownership, that eontrol of nonmunal enterprises
was transferred to district end regional leveleAdn 1919_ A special section
called the Central Inspectorate was established ty the Ministry of the Inte-
rior to supervise cmmaunal enterprises. Any ehangea to be made had to be pass-
ed by the Central Inspectorate.
2. The Central Ins ?etorsts acts as liaison between the enterprises and other ni-
rirtr ea. s headed the Deputy Minister of the Interior, and is composed
of a group of $experts', all men with a university education. The Inspectorate
La divided into many sections, according to the kind of production involved.
3. "The Regional National Committee is directly subordinate to the Ministry of the
Inter r, and supervises communal enterprises in political matters. (It follows
the Communist party line closely, so political adherence to the ?arty is the
qualifying factor for membership on the a ienittee.) The Regions,", W-+i-al Len-
mittee assigns production Contingents.
4. The R
-mional Insnactosu;.s anewera to the Regional Committee and the Regiol.-
al 5ecre ry o the a)Zaunist Partcp.
5, 'The District National Committees the direct management of communal entt.or"es
is 011.iy the EcononiC Section or the Local Committee, whi.h is, ir_ turn.
nominated by the District National Caw?ittse. The majority of the enterprise "
managers are loyal Communist.. The manager is responsible for all occurrences
in his enterprise, despite the fact that there are experts within the enterprises
he is not responsible for tax matters, which fall under, the District Tax Section
of the District National Committee.
6. "security Sections the officer of this section is a former State Secret Police
CLASSIFICATION /
oire BUTM
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agent., and member of the Party Se retariat. He is usually a hated man, be-
cause his duties 5ncj.ude countering sabotage acts, publishing penal, sanctions,
and maintaininH discipline. a is in touch with the Security :eatiou, both
from his office aria has tame, The uadren officer is under the Communist ::cc-
retary, He screens all employees; no one may be hired or fired withaui his
permission. He is the judge in any situation involving an employee, includ-
ing promotion. He is also responsible for enterprise education.
7. "The "'ersonrel De srtment of an enterprise carries out orders of the Cadre:
Officer. _ ham cs doctors' certificates, national insurance matters, and
is responsible for bookkeeping (wages and payr.lls); it, drafts written agree-
ments. (Wages and sala_i.es are subject to approval of the Cadres Officer).
8. "The Economic Section of an enterprise is responsible for all financial matters.
It is con ac with the bookkeeping office, and is always headed by a tried
Communist.
S. "The :tookkee in Section Ube, ^ l.ai,e -Ll. i tt machincc, for r.a'I.Lig purveys and sum-
'carier. : uniform accounting method is used throughout Czechoslovakian enter-
prises by special d6aree of the Ministry of the Interior. This method divides
each enterprise into sections,, for accounting purposes. Ths divisions include.
0: investment; It small inventory; 22t customers and supplier',; 3: expenses, etc.;
9, amortisation. The function of this office is not a simple one. It operates
under bank supervision. Concerned with production, it works with the Calcula-
tion Department and the it-ee Department of the Ministry of Industry, (without
whose concurrence no prices can be established)- its of 1952, the books for 19L9
had still not been closed; and the reimbursement of private owners was not com-
plete, so calculations were not realistic at that time.
30. "The Warehouse Bookkeeping Section has the complicated job of recording all move-
mante o mere an ee; pa ig, upping and freight costs vary from one ware-
house to another, and, thus, comt!ibute to the variance in ultimate value of
merchandise.
3.1. "The iJ ee Bookkeeping Section keeps payroll records, and withholds taxes and
insurance Payments. a one insurance costs 2L% of wages; of this, the employ-
er paye 1.3.9%, and the employee 10.1%. The premium covers sickness, old age and
pensions).
32. "The investment Bookkeeping Section surveys enterprise investments, and suggests
depreciation gates fort balance sheet, subject to the bank's approval.
13. "The Planning Sec+was established in 1949. It fixes production plane and
?.iotithly'quo s.. Thee as:,igament of. raw materials to an enterprise depends upon
the quotas estaldished. (There were some grotesque cases of quota fixing in
the beginning; one of them :nvolved the manager of funeral services, who was
given an unrealistic quota, and could not fulfill it without committing murders.)
1.4, "The gal De artment, like all legal departments and courts in the country, makes
a joke out o us ce. It sees that those who are not considered to be loyal to
the Party are persecuted. Officers in this department advise employees on matri-
monial matters, They draft agz'xemants with former owners ( the formulation of
which depends upon the relationship of the former owner to the Communist i~arty),
and with national administrators, etc.
15. ,The Tax Section is responsible for tax surveys, and is subordinate to the tax
section of the District `:ztionai Committee.
It. "The Invoice Station conducts surveys on all invoices iscued by the enterprise.
Enterprise Invoices must be issued within three days after ahipaent'of merchan-
dise, or completion of wee*. For each def's delay after three days, the custo-
mer is allowed to deduct 0.1%. On the other hand, the supplier is entitled to
.ask venal sanction for an invoice whiel has not been paid within fourteen days
of receipt. All orders placed pass through this seetic .
CGlArImN?IAL
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The Turchasing Section places all orders Gor r. 4w niaterimJ., and equipxnsnt?
17. "The Building Naintenannce?Ssctiou is divided into departrnentu which cor-
respon en rprise v s ohs. Its budgets are consistently exceeded,
even by 101%,, because of low productivity due to poor worker morale,.
1.8. "The Metals Securing 3eotion procures mejals for all enterprises dealing in
met.alsj for r ncet cue and nickel plating shops, locksmith shops, etc.
It deals primarily in repairs. Material for new products is delivered through
?Kovomat9, 'Technamat', 'Elektrar, etc., L sic,. (The most important enter-
prise involving the ?se of metals to the electromotor industry and the generator
prodhoing industry.)
15. The Wood 3ection handle, all cabinet making, carpentry, and furniture shops, and
espec ie echnomat, enterprise. The worker morale in this. section is as
poor as the morale in the building maintenance section.
?G. "The Hotel Section is divided into groups for the service of Czechoslovakian
hotels, and i~ e service of other enterprises. The section services hotels in
three catogoriess >1 and B group hotels are under national adainiatrationj C
group hotels are communal enterprises. The Hotel Section maintains restaurants,
cafes and bars. The Hotel Section uses the free market for goods, so eubstsntial
profits are made by the communal enterprises?
%l. "The tublic Utility Section controls various enterprises, such as barber shops,
shoe repx r shops, to or shops, upholstery shops, book stores, etc. Its main
s rviee is selling to consumers L sic,. This section controls the clesaing
set?vice in city funeral homes, otitdoor advertising, and some crafts enterprises.
ir, "Transnortatio Sections Except for the Czechoslovakian State Railways and
Buses, this section had a monopoly on aLl transportation. The ?,oving Pans Sec-
tion was transferred to the State Railways in 1951. (The District National Com-
milt.ee felt that trucks should be operated by the Czechoslovakian State Pailways
when fully loaded). In general, the trucks are in poor condition. They are
old vehicles, of German origin, and the non-availability of spare parts renders
about KO;, of them out, of oneration,
23, The bark`-Y)'-,e of communal enterprises are the city water supply system, and
gardens naintenan.e , The principle behind the establ'shnent of the communal
? enterprise system was the liquidation of private ownership and free enterprise.
The suc';esrs of the communal enterprises program depends on the extent and-
effi-ciency of utp.te support,`
-- end -.
L OWARY SUBJECT C: XZEA CODES
787.1 27M
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