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The main aim of this essay is more to open the way for solving methodological problems, point to directions defence economics ought to follow, rather than to find easy answers to all of them. That is the ver y theme of Economy Depar tment of Facult y of Economics and Management, Defence University Brno. It is the base for defence economy, constituted as a science discipline.

Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization to accomplish its objectives by bringing a systematic, disciplined approach, so that we are able to evaluate and improve the effectiveness of risk management, command and control, or other processes. Internal auditing is a tool of Ministry of Defence management that is used for increasing effectiveness both in departmental and public sector administration. The article is supplemented by two schemes of the position of audition authorities within the Slovak MoD.

The return of Russia as a power that begins again to partake in political agenda of present-day world raises the necessity to reflect its inner developments in the background of its recent history. There are six key factors that substantionally influence the position of Russia in the world: large sources of raw materials (pipelines); outstanding military capacities (the world's second nuclear potential); high level of general education; wide scientific and research base; permanent membership in UN Security Council and in the Group of Eight (G-8); deciding influence in the near neighbourhood. The study comes to the conclusion that Russia-in the horizon of 2020-will belong among world's leading actors, together with the US, the EU, China, and Islamic world. Russia will be able to of enforce its foreign and security goals, both in post-Soviet areas and in key regions in Europe, Asia and in the Great Near East. As such, it will probably get into conflict with the US. The priority tasks of the Armed Forces of the Russian Federation will rest on maintaining nuclear parity with the US and building capacities for asymmetrical operations.

The world is full of unsolvable problems. Every key problem has turned now into multinational one; in fact, this can be handled only if it becomes a transnational problem. Security development is multifaceted process tied with the whole globe. The author recapitulates several models or paradigms that influenced a lot our global strategical thinking. The Grand Chessboard: American Primacy and Its Geostrategic Imperatives by Zbigniew Brzezinski; The Choice: The Global Domination or Global Leadership of by the same author; The Clash of Civilizations by Samuel P. Huntington; Avin Toffler's The Third Wave; Kauffman's Fourth Law: Prolegomenon to General Biology (Investigations); Order Out of Chaos by I. Prigogine and I. Stengers. Dr. Volner says that the contemporary humankind has its last chance to push such a solution that might lead us out the world of dangers and threats to start building up a balanced and lasting security, but he warns against waging "small preventive wars", as the only way to safeguard the peace.

The purpose of the paper is to explain some of the connections among military and public spendings and its influence on forming fiscal policy in the 90s. Security doctrines influence national military concepts, level of defence expenditures, and developments of other spheres of public spending. Defence and other items are parts of spending budget, constituting government's fiscal policy, and vice versa; the economy in respective countries influences defence policy. The author treats the question how Czech expansive fiscal policy reached the limits of its growth, how it was reflected in defence policy. The key military reform proved to be inevitable; the reform of armed forces demanded the reform of civil administration. He comes to the conclusion that in our country, government spendings are not a stimulus of economy growth, even not in a short time period, that it is economy growth that determines public spendings, so does the defence budget.

Security situation has been changing all over the world, so has in regional territories. It is necessary for us to create systematically new safety culture with regards to contemporary knowledge and experiences. The Czech Republic contribution to the safety of democratic states must meet their expectations; prospective security studies will have to bring new knowledge and technology which, first of all, will increase the level of general capabilities of the Czech Republic and at the same time to take into consideration the needs of national economy and Czech environment. Capital investments into security research are necessary as a basic input for the safety preparedness level of the CR. For these purposes it is desirable to establish security research that will be able to produce ideas and technologies which will sustain and renew the Czech Republic safety in changing conditions, among others taking note of a Seventh Framework Programme of EU for research,

The practice of a company sending work to outside factories to reduce production costs is called outsourcing. Outsourcing is one of many methods that might help defence department to fulfil a number of various tasks that either can't be accomplished within the armed forces or such work or services can be obtained at low-costs in civil sector. The authors propose several practicable techniques using dynamic outsourcing model to identify prospective services to support given transformation process.

The article deals with the teaching of management at the University of Defence. Its authors are long-standing university teachers, possessing also experiences from command and staff appointments. In recent years, the emphasis in military schools has shifted more to subjects indirectly related to civilian courses of study, e.g. the theory of management. At the Defence University Brno it covers a wide range of other subjects: economy, informatics, operational investigation, etc.; other subjects are in fact only "supporting": applied mathematics, sociology, psychology, humane resource control and law. Military management, theory of military operations, staff service, and that belong to the group of applied fundamentals. At present, "military management" at the Defence University has only a limited scope of teaching units. It is read both at bachelor and master levels of studies, inevitably many themes are duplicated. So, among others, the authors recommend to shift the core of military management teaching to higher levels of studies, at master levels.

All NATO nations and their armies are looking for effective exploiting social sources for defence and security. It is clear now that effective spending of public expenses asks for changed infrastructures of forces and their activities. It is necessary to form teams of experts who will cooperate with leading defence officials while setting the most suitable variants of further advance.

The authors depict the development of outsourcing methods in US armed forces, its origins, and sources. Collected data are accompanied by experiences from British and German armies. The American Office of Management and Budget (OMB) issued in 1966 Circular No A-76 (lately several times revisited) to define procedures how to set rules which commercial activities are to be done within the frame of armed forces or in private sector. Backed by a number of literatures, magazines and newspapers (Air Force Journal of Logistics, Air Force Magazine, Armed Forces Journal, Defense Nationale, Washington Technology, Wehrtechnik, etc.) authors analyse several outsourcing processes. They present both positive and negative results, including open or hidden problems of A-76 policy (e.g. business process outsourcing). For the Army of the CR they recommend to overcome above mentioned problems by creating the corrective authority, similar to the British PPPU (PublicPrivate Partnership Unit).

On 13-17 March, 2006, the Directorate of Centre of Simulation and Trainer Technologies Brno ran experimental computer-aided exercise dealing with combat activities of a Battalion Task Force (BTF) in urban area. It was outlined as a double-sided opponent procedural exercise, with the use of computer potential, in attendance of staff and personnel from Special Force Command, Support and Training Force Command, Training Base Vyškov, Military Academy Vyškov, designated unit commanders from Special Force, namely 72 Mech Bt. This experimental exercise proved right some factors that are prepared in accordance with NATO operational concept USECT (Understand, Shape, Engage, Consolidate, Transition). In the first place, the experiment demonstrated the practicability of manoeuvre attack by BTF on fully prepared opponent's defences and subsequently occupying his positions and locations, even though at the cost of relatively higher losses of combat vehicles. The article is accompanied by the Table of Exercise Summary.

He was born in the early part of the last century, in 1919. After the German occupation, he fled the country and in 1939 he joined French Foreign Legion. He fought in Southern France and after the defeat of France he flew to England, where he was requalified for Spitfires. He took part in two operational runs, so he belonged among the most engaged and dedicated Czech pilots. In 1945 he was awarded DFC. Returning to his native country, he became a flying instructor and in 1946 Capt. Liškutin was assigned Aide, 7th Air Regiment, Brno. After 1948 (when communists came to power), he was dismissed from the Czech Air Force, and again escaped abroad. In Britain he joined the Royal Air Force. He retired in 1962 to find a position in a civilian airline company. He accepted the offer to become a pilot instructor in the Republic of Zambia (Central Africa). He wrote two books that were also published in the Czech Republic. Apart from the above mentioned DFC, he was awarded 5 Czechoslovak War Crosses 1939, Medal for Bravery, Merit Medal and many others.

Czech MoD has to be economical with resources provided from the state budget. The article deals with the distribution and structure of state budget in relation to MoD itemized summary of expected income and expenditures. The authoress discusses several patterns used in this field, e.g. costminimization analysis, or assessing the total amount of money allocated for a specific purpose during a specified period. She also points to several unintended mistakes done by MoD officials.

For many years we have been talking about simulators/trainers. The first phase of this process ended in 1998 by publishing "The Concept of Introducing Simulation and Trainer Technology". This year, in 2005, two simulation centres, in Brno and Vyškov, are opened. We elaborated new programmes for the preparation of mechanised and armour units. In these days the Instruction Book is printed and very soon it will be distributed into respective units and institutions of ACR. The author is a strong supporter of exploiting simulators. He knows from his own experiences that the quality of training is much better and soldier's skills grow in high speed. To understand this question better, the author enumerates several time-schedules for simulator training and recommends few time-tested procedures and methods of exercises. He believes that once you try to use simulators, you will see how advantageous this method is. The simulators can be used not only for practicing combat situations, but also for operations other than war. But this theme will be treated next time.

Even after the Cold War, our world is full of local and international conflicts. There were dozens of wars, fringe clashes between local opposing groups in Africa, Asia and so on. Among them there were four wars of lager size, with more than thousands of deaths in each of them that could be characterized as international wars: Desert Storm 1991, Iraqi Freedom 2003, Allied Strength 1999, and Enduring Freedom 2001. Now we can look at them from a distance ...217 Problems tied with those large-scale wars have several levels: supranational (international) level and military level, being accompanied by paradoxes: international and political paradoxes and military ones. This influenced structures and methods of training and preparation of Australian, Britain and US forces. The lessons were embedded into their military concepts, rules and regulations, e.g. Complex Warfighting (Australia), Future Land Operating Concept (UK), Field Manual: Interim Counterinsurgency Operations (US). New roles of military forces, global and local implications, ought to be embedded also into the structures and concepts of the Army of the Czech Republic, concludes the author.

From economic point of view, the army of every nation spends immense sources from the state budget. To spent sources economically, the officers - managers economists have to be educated in economic science, i.e. they ought to acquire proper economic knowledge, systematically, during his military studies, in army college, or defence university. One of many things the ACR is missing is an economic course explaining army officials above all how to find adequate proportion between costs and incomes, not to make decision only intuitively.

In our forces, similarly like in those of Slovakia, Poland, Hungary, and Lithuania, we assess the scope of damages in numbers showing overall labour needed for repair, necessary for restoration complete combat capacity. Now we put into test another method, by means of the so-called S-M-C-A code (Shoot, Mobility, Communication, Armour); e.g. numbers 0-0-0-0 represent fully combat-ready main battle tank, whereas 0-4-0-4 shows immobile armoured vehicle, with perforated armour. To adapt commanders? decisionmaking process and introduce this method into forces, mechanised units, up the battalion level, we perform exercises on ModSAF trainer (Modular Semi-Automated Forces). This method enables us to plan the application of military repair depots, fully recover combat potential of military vehicles as soon as possible. Nowadays, ModSAF methodology is successfully exploited in the Centre for Simulation Technologies in Brno and Vyškov. The Army of the Czech Republic stands at the very same place as modern forces of Alliance, the US, Great Britain, Germany and others, in the 90?s of the last century.

Under the definition, the present management covers leading the people, implementation of tasks, processes, so that the organization could achieve set prospective targets. Its structure in the ACR is pyramidal and it is divided into vertical and horizontal elements, so is economic management. The purpose of this article is to outline orientation in the education scheme of new professional soldiers - economic experts - to make easier to integrate them into everyday life in units and institutions of the ACR.

China's premier intelligence services are as follows: the Ministry of Public Security (MBS), the Ministry of State Security (MSS), and the Military Intelligence Department (MDI) of the People's Liberation Army/General Staff Department. Last but not least, the central institution of the Chinese intelligence community is the Communist Party of China (CPC) having its own intelligence and security bodies. The operational methods of the China's intelligence services are nothing new to espionage. They run aggressive surveillance and recruitment programs against visiting foreign businessmen, scholars, government officials, and scientists. It is a normal to debrief the returning Chinese delegates to determine whether useful information was acquired by simple observation. However, the MSS and military intelligence services further exploit these opportunities by co-opting a number of these travellers to carry out specific operational activities. Chinese intelligence services can count on state ministries, people's friendship societies, academic institutions, and the militaryindustrial complex to support activities such as agent recruitment and information collection as well as to provide cover jobs to their operatives. Main source: Alain Rodier, Raids, No. 234/2005 (nas).

In fact, we have no universal method for evaluating impacts and protection of nature during military exercises and training. Establishing Environmental Training Group (NATOTraining Group/Army-Sub-Group) revolutionized the ways in which hazards were defined and analyzed to help communities protect themselves against these perils. Newly developed Training Impact Matrix/ Hazard & Impact Index methods enable truly to assess environmental dangers of military materials, vehicles, activities, energy consumption, and their impacts on important localities. Many features of above mentioned methods were introduced by Czech representatives in 2000 at Aachen (Germany). The index of environmental acceptability was further elaborated by Czech experts, among others by the authors of this article. It enables set levels of environmental dangers, their impacts, independently from organic structure of national forces, or individual countries. The article is accompanied by tables, mathematical formulas and patterns of calculation risk categories.