WITH DEFICIENCES OF VIEW
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The Court of Accounts of the Republic of Moldova (CoARM) examined on September 2, the Audit Report on the financial reports of the "Education Reform in Moldova" Project concluded on December 31, 2021. The purpose of the audit was to obtain reasonable assurance that, for the fiscal year ended on December 31, 2021, all significant financial transactions were presented at true and fair values with the expression of the audit opinion, based on the interim financial reports.
In the opinion of the Court of Accounts, the interim financial reports of the "Education Reform in Moldova" Project for the year ended on December 31, 2021, in all material respects, provide a fair and true picture according to the applicable financial reporting framework, according to the requirements of the World Bank, being issued an unqualified opinion.
The Project "Education Reform in Moldova" (EPRM) is a project that supports the Government's Reform Program and is financed by the World Bank. The revised development objective of the Project is to improve learning conditions in the targeted schools and to strengthen the beneficiary's education monitoring systems by promoting effective reforms in the education sector. The ones responsible for the implementation of the Project are the Ministry of Education and Research, the implementation team and the Public Institution Social Investment Fund in Moldova, currently the Public Institution the National Office for Regional and Local Development, successor in rights of the Public Institution "Social Investment Fund of Moldova" (SIFM).
EPRM is a loan granted in two stages to the Government of the Republic of Moldova, the total value of which is 50 million USD, implemented by December 31, 2022. As of 31.12.2021, financial means were disbursed at the level of 83.9% or 41.9 million dollars. The total expenses executed amounted to 41.4 million dollars or 82.9%.
In 2021, from the account of external sources, for the implementation of the activities of the Project, expenses in the amount of 6.1 million dollars were executed, for the renovation of 17 district schools and the management of the fund, the procurement of computing equipment and other necessary goods, consulting services, maintenance of the Project management team and other operational expenses. According to the SIFM’s Procurement Plan, the ceiling established for operational expenses is 877.8 thousand dollars, of which 782.3 thousand dollars - for labor remuneration, 772.5 thousand dollars (98.8%) being executed.
The Court of Accounts found some irregularities admitted by SIFM in the management of some expenses, which did not influence the audit opinion. Thus, SIFM did not take into account the provisions of the exposed norms, the salaried staff from the Project account being employed on the basis of individual employment contracts with attributions related to the basic activities. Also, there is a discrepancy between the functions approved in the project’s operational manual and those established in the individual employment contracts.
The justificatory calculations regarding the substantiation of the budget of operational expenses to the Procurement Plan contain the amount of the individual remuneration related to the SIFM’s team, these not being exposed and regulated in other normative documents of the Project. Thus, the uncertainties identified in the previous audit regarding the size of the remuneration paid per function of the consultants and members of the SIFM’s team involved in the implementation of the Project are maintained.
It should be mentioned that the salaries of the employees remunerated from the Project account are established according to Government’s Decisions no. 743/2002 and no. 165/2010. Although employees perform their duties for all SIFM’s activities, monthly, through the Director's Order, the source of funding for each employee was approved. Thus, on average, for 9 employees, the salaries were paid in full from the Project account, which include basic salaries and increases in the amount of about 40%. As a result, in the case of 5 positions, higher salaries than the initially estimated ceilings were granted. In 2021, labor remuneration expenses will be increased by 21.3 thousand US dollars.
The non-compliance with the regulations regarding the purchase of additional repair works that exceed the value of 15% of the initial amount of the contract is certified, in 5 cases, the value of the contract being increased from 15.8% to 28.8%.
In the context of the COVID-19 pandemic and the transition to remote education, the purchase of 10,000 laptops was approved for a total of 2.9 million US dollars. The audit tests identified some irregularities regarding the distribution to the beneficiary institutions, in some cases, the calculation technique was not used for the participation in the remote educational process of the students or for other educational purposes, these being stored at the time of the audit, etc.
In the context of the audit, the Court of Accounts submitted recommendations, the implementation of which will contribute to overcoming the identified deficiencies.
