The Supreme Audit Office (NKÚ) investigation, which stretched from May to September of this year, also concluded Ombudsman Otakar Motejl's office couldn't account for more than 4 million Kč ($190,000) in cash, though investigators said the money hadn't been lost and shoddy accounting practices were to blame.

The NKÚ ordered the office to return the money it donated back to state coffers. The Finance Ministry is investigating the matter and weighing whether to fine Motejl.

He could face a fine of up to 500,000 Kč ($23,720), according to the NKÚ.

A law forbids the Ombudsman's Office from using money in its budget for charitable donations.

"This means the office violated budgetary rules," said Radka Burketová, an NKÚ spokeswoman. "The NKÚ considers this use of funding to be the most serious transgression discovered by inspectors."

Burketová added inspectors found other errors that together cast serious "doubts on how trustworthy the Ombudsman's Office accounting is."

The Ombudsman's Office, based in Brno, has existed since 2000, and Motejl, whose six-year term comes to an end this month, has been the country's only public advocate.

He ranks in the top-three trusted public officials in opinion polls.

He admitted misappropriations in a Dec. 5 press release, saying that in 2001 he set up an "all-purpose disposal fund" into which he diverted 500,000 Kč of state money.

"It is a tradition that dates to the First Republic era that some senior state officials have such a fund at their disposal," he said. "They are allowed to use the money for publicly beneficial activities.

"However, according to budgetary rules, the Ombudsman's Office had no right to such a disposal fund and it was therefore incorrect for my office to include it in the 2001 budget," he added. "I was not aware of this when I was first appointed ombudsman."

He said a "major part" of the money went to purchasing painting tools for children in special-needs schools with which they created pictures that now hang on walls throughout the Ombudsman's Office.

"These pictures are basically the only decorations we have at the office," he said.

Money went elsewhere, too. Motejl said he made donations to reconstruct an asylum house in Brno damaged by fire and to purchase hygiene equipment and Christmas packages for the homeless.

Officials have not suggested a conflict of interest, even as the Ombudsman's Office is supposed to objectively mediate between the public and the government on issues. The office has weighed in on the treatment of patients in asylums and special-needs children, for example.

Motejl denied any conflict.

"I am convinced that the way the money was used was in no contradiction with morals or citizens' expectations that public institutions should act in an honest way," he said. "I have taken personal steps in my office in connection with the NKÚ audit."

He would not detail those steps.

Investigators and Motejl would not release the names of the specific charities that received money.