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Audit report within MECR, discussed during the PFCC meeting

  • 13.10.2021
  • 381

The Court of Accounts of the Republic of Moldova (CoARM) presented on October 13, within the Public Finance Control Committee (PFCC) of the Parliament of the Republic of Moldova, the Audit Report on the consolidated financial reports of the Ministry of Education, Culture and Research (MECR) concluded on 31 December 2020.

A brief presentation of the Audit Report was made by Eduard Moroșan, Member of the CoARM, as well as by those responsible for the audit: Sergiu Știrbu, and Nadejda Ioniță.

The audit of the consolidated financial reports of the Ministry of Education, Culture and Research was performed at the central apparatus of the MECR, 88 budgetary institutions and about 113 self-managed institutions subordinated to it.

The audit found that the Consolidated Financial Statements of the MECR for 2020 do not present a fair and accurate picture, and a contrary opinion was issued. This opinion was determined by the deficiencies found within the financial reports, which affected the balance sheet by at least 4.98 billion lei and the budget execution report - by 0.25 billion lei.

The most significant and persistent deficiencies that influenced the audit opinion were:

  • increasing the value of the shares and other forms of capital participation within the country by 113.16 million lei, especially due to non-compliance with the conformity of the capital participation quotas of economic agents taken over by PPA (100.94 million lei);
  • decrease in the value of shares and other forms of capital participation within the country by 3.84 billion lei, mainly due to the non-reflection within the MECR accounting records of publicly owned buildings and lands in the public domain, according to the information presented, for the use of entities self-management founded by MECR (3764.48 million lei);
  • the decrease of the land value by 484.73 million lei, due to the non-registration of 449.69 acres of land and their underestimation;
  • decrease of the value of the buildings by 112.74 million lei, of which as a result of the non-solution, from 2012, of the problem regarding the transmission from the balance sheet of the MAS to the balance of the Theoretical High School “Aristotle” of the investments made of 69.86 million lei the value of 29 buildings managed by 12 institutions subordinated to MECR at the cadastral value of 42.5 million lei;
  • decrease in the value of assets of cultural heritage by at least 181.59 million lei, due to non-accounting of: buildings-monuments with a value of at least 180.3 million lei (Monastic Complex "Căpriana" - 87.8 million lei, Monastic Complex "Curchi ”- 92.5 million lei (2 out of 634 monuments/cult buildings owned by the state)) etc .;
  • decrease in the value of intangible assets by at least 177.21 million lei, of which due to the non-registration as intangible assets of the allocations used for conducting scientific research by research institutions subordinated to MECR (113.72 million lei) and the funds transferred by MECR according to the contracts signed with the self-managed institutions (16.21 million lei), etc .;
  • the decrease of the value of “Other fixed assets” by at least 148.8 million lei, as a result of the non-registration as property of MECR of the textbook fund which according to the Regulation approved by the Government constitutes property of MECR (145.89 million lei), etc.;
  • the increase of the value “Capital investments in assets under execution” by 44.18 million lei a, as a result of the double record of investments made in 7 objects (14.51 million lei) registered in the accounting records of LPA, and at 3 objects, sold by LPA (15.47 million lei);
  • non-capitalization of investments made at the Theoretical High School "Aristotle" (8.35 million lei);
  • non-execution of invoiced construction works (5.84 million lei);
  • the increase of the expenses related to the educational services (state order) by 76.73 million lei, as a result of the irregular reporting by the higher education institutions of the financial means allocated and not valued by them until 31.12.2020 (21.73 million lei ), as well as the irregular increase of the budgetary allocations related to the cost of the study programs within the technical vocational education (54.99 million lei);
  • increase of expenses related to services by 26.17 million lei, as a result of non-registration of material goods obtained/printed (9.81 million lei) and non-registration as intangible assets of funds transferred by MECR according to contracts signed with self-management institutions (16.21 million lei), etc.

As in previous years, the audit shows that MECR does not have information on how to use the results of scientific research in the future. Moreover, MECR and 18 subordinated scientific research institutions completely ignored the previous recommendations of the CoARM regarding the registration as intangible assets of the expenses incurred for scientific research, which in 2019 amounted to 259.61 million lei.

The educational services for the realization of the training plan for the higher education staff (in the amount of 582.6 million lei) were contracted by MECR contrary to the provisions of art. 315 of the Civil Code, not being determined exactly the object of the contract. In this respect, the data on the number of equivalent students per study cycles financed from the state budget in accordance with the admission plan provided by the state order are missing. Funding for higher education institutions is not correlated with the number of students. While the financing volume is increasing (2018 - 595.2 million lei, 2019 - 674.9 million lei, 2020 - 678.23 million lei), the number of students financed from the state budget is decreasing with 896 students (5.3%) compared to previous years (2018 - 17740 students, 2019 - 16855 students, 2020 - 15959 students). The average training expenses of a student with budget financing by cycles differ from those from own income, the average cost of a student (for cycle I) from the budget allocations registers values ​​from 34.6 thousand lei to 102.3 thousand lei , while the expenses from own revenues are from 2.6 thousand lei to 15.5 thousand lei.

The Court of Accounts found that the distortion of the financial statements and the lack of information on the assets under management were due to the lack of monitoring of the activity of subordinated entities, non-compliance with the applicable financial reporting framework, and non-implementation of recommendations. Thus, out of 19 recommendations submitted by the CoARM, only 6 recommendations were partially implemented.

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