WITH DEFICIENCES OF VIEW
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The Court of Accounts of the Republic of Moldova, on July 28, examined in the online session the Audit Report on the consolidated financial reports of the Ministry of Health, Labor and Social Protection concluded on December 31, 2021, the audit report on the consolidated financial reports of the Ministry of Health concluded on 31 December 2021 and the audit report on the consolidated financial statements of the Ministry of Labor and Social Protection concluded on 31 December 2021.
As a result of the restructuring of the specialized central public administration, the Ministry of Health, Labor and Social Protection (MHLSP) was reorganized into the Ministry of Health (MoH) and the Ministry of Labor and Social Protection (MLSP). Thus, the MHLSP transferred the assets managed to the Ministry of Health and the Ministry of Labor and Social Protection, reporting at the end of the management period the balance of the balance sheet elements at the value of 0.
The Court of Accounts audited the consolidated financial reports of the Ministry of Health for the budget year ended 31 December 2021 and issued a qualified audit opinion, which was determined by the following deficiencies:
- the value of the "Lands" account was distorted by 23 million lei less, due to the lack of revaluation of 8 plots of land with an area of 1.60 hectares;
- overestimation of the value of the group of accounts "Shares and other forms of participation within the country" by 99 million lei;
- the increased valuation of 15 buildings determined the erroneous reporting of the value of the "Buildings" account, which was overvalued by 6.7 million lei;
- the erroneous reporting of the value of the group of accounts "Capital investments in assets in progress", reduced by 254 thousand lei the information regarding the cadastral value of the building administered by the Center for Continuing Medical Education of Medical and Pharmaceutical Personnel with secondary education;
- the overestimation of the financial report by 633 thousand lei, to the value of the "Intangible assets" account as a result of the non-cashing of 60 units of intangible assets by 2 entities subordinated to the ministry;
- the reporting in the consolidated financial statements by the National Agency for Public Health (NAPH) of the stocks of circulating materials with expired validity in the amount of 621 thousand lei and the reflection in the accounting records of stocks of circulating materials that do not participate in the production and service provision process in the amount of 234 thousand lei.
The audit determined 2 uncertain situations regarding capital investments. Thus, according to Government’s Decision no. 789 from 2014, with reference to the development of the infrastructure of the "Atletmed" National Sports Medicine Center, aimed at the design and construction of a 9-storey block, of which the 1st and 2nd floors with the area of 1200 m2, with administrative purpose, and the 3-9 floors with residential purpose, as well as the arrangement of a car park. Thus, it was found that until now only demolition works have been carried out on the existing buildings on the territory intended for the construction of the 9-storey block.
This investment project did not achieve its intended goal, which indicates that during the years 2014-2021 the leadership of the ministry, being responsible for monitoring the implementation stages of this project, did not undertake sufficient measures in order to analyze the evolution of the project and the regulatory perfection of all related documents.
These conditions determined the loss of existing buildings at that time, through demolition, in the amount of 554 thousand lei, as well as the risk of losing the land (0.26 hectares) transferred from the public domain to the private domain, while the actual purpose was not reached.
Another uncertain situation indicates that the Ministry of Health until now, although it ordered measures to evaluate the capital investments made in the amount of 81 million lei, for the construction of a block of the Phthisiopneumology Hospital in the village of Vorniceni, Străseni district, the building is not functional. At the same time, the technical evaluations carried out during 2021 concluded that the resistance structure of the building does not correspond to the current technical requirements of the regulations in force, but no concrete measures to strengthen the construction were stipulated. This situation indicates that the investment project did not reach its intended goal, which proves that during the years 2015-2021, the inaction of the ministry's management led to the waste of public funds (81 million lei) allocated for this construction.
The inventories carried out by NAPH of the stocks assigned to the "Medicines and sanitary materials" account established the existence of goods with an expired validity period (March - April 2022), in the amount of 2.6 million lei, including goods received from donations such as: rapid COVID tests - about 10 thousand pieces in the amount of 1.81 million lei, protective masks about 17000 pieces - 671 thousand lei, hand sanitizers - about 2000 thousand pieces - in the amount of 141 thousand lei. The entity's management presented information regarding the resolution of these circumstances by scrapping some goods with an expired shelf life.
The Court of Accounts concluded that the internal managerial control established within the Ministry of Health does not fully ensure the identification and efficient management of all risks related to the financial-accounting process, including those related to the preparation of consolidated financial statements.
With reference to the labor and social protection sectors, areas taken over by the Ministry of Labor and Social Protection, as a result of the MHLSP’s restructuring, the audit issued a qualified audit opinion, being determined by the following deficiencies:
- the undervaluation by 2.2 million lei of the value of the "Intangible Assets" account as a result of the non-cashing of 3 units of intangible assets worth 353 thousand lei and the non-capitalization of the works for the development of two information systems worth 2.6 million lei of the National Employment Agency;
- the erroneous reporting of the "Amortization of intangible assets" account by 1.5 million lei, as a result of overvaluation through the erroneous calculation of depreciation by 2.3 million lei and undervaluation by 816 thousand lei;
- erroneous reporting of the account "Other claims of budgetary authorities/institutions", with 852 thousand lei by the Center for Temporary Placement for Persons with Disabilities (Adults), Brânzeni commune, Edineț municipality, a situation determined by keeping records of income by the cash method and not by the accruals method;
- the erroneous reporting of the value of the "Buildings" account in the amount of 818 thousand lei, by not actually evaluating 10 buildings, and by owning and the value of a privatized apartment block and reported by a public institution.
The audit determined an uncertain situation of the housing block in Alba Iulia street no. 91/3 intended for participants in the liquidation of the consequences of the accident at N.P.S. Chernobyl. The initial value of the public investments established in the contract was 39.4 million lei at the time of signing, but after the execution of the contract through an additional agreement signed on 24.06.2013, it was increased up to 51 million lei, plus additional expenses for design 16.7 million lei. It is noted that contrary to the provisions of the normative acts, the final reception meeting of the housing block in Alba Iulia street no. 91/3, was convened and carried out 16 months (23.07.2020) after the completion of the works, or 44 months (02.03.2024) ahead of the contractual provisions assumed by both parties. Following the physical visualization by the audit team of the mentioned block, water leaks were identified from the technical floor, the plaster on the ceiling and walls being destroyed, and the floor related to the 10th and the 11th technical floor, respectively, was affected the ventilation, sewage and electrical systems.
This situation indicates that this investment project worth 67.7 million lei at the moment (07.01.2022) did not reach its intended goal and the 80 apartments, which were to be distributed and handed over to the participants in the liquidation of the consequences of the accident at N.P.S. Chernobyl is state-owned and decaying.
From the perspective of fraud and corruption risks, the audit determined two situations with the presence of fraud indicators:
- at the end of 2021, an entity subordinated to the Ministry of Labor and Social Protection contracted services for the repair of the archive room in the amount of 44.5 thousand lei. As a result of the analysis, comparison of the contract, the technical specification and the estimate concluded on 01.12.2021, compared to the works allegedly executed on 12.12.2021, the audit found that, contrary to the contractual provisions and conditions, no works were executed in the established room. The management of the entity reasoned that the contracted works were executed in another room, for which there was not and is not available a loan agreement with its owner. These circumstances cast doubt on the veracity of the data presented;
- the audit determined that 21 employees from the sample of 1030 people, who worked in 7 institutions out of the 40 checked, were tabulated and remunerated at work, but in fact were outside the Republic of Moldova. The data was contrasted with the information presented by the General Inspectorate of the Border Police. Respectively, the calculation and payment of labor remuneration, in the amount of about 104 thousand lei, show signs of fraud.
Finally, the Court of Accounts mentioned that during the audit, some attested non-conformities were remedied, and the audit recommendations were accepted and qualified as implementable within the established terms.
