WITH DEFICIENCES OF VIEW
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On September 10, the Court of Accounts of the Republic of Moldova (CoARM) examined during an online meeting, the Audit Report of the financial reports of the Project "Education Reform in Moldova" concluded on December 31, 2020.
The purpose of the financial audit was to obtain reasonable assurance that, for the financial year that ended on 31 December 2020, all significant financial transactions were presented at true and trustworthy levels, according to the interim financial reports prepared by the implementing officers of the Project, which are the Ministry of Education and Research, the Project implementation team and the Public Institution Social Investment Fund in Moldova (PI SIFM).
The project "Education Reform in Moldova" is a two-stage loan to the Government of the Republic of Moldova, the total value of which is 50.0 million dollars. The closing date of the Project is December 31, 2022.
As of 31.12.2020, funds were disbursed at the level of 72% or 36.0 million dollars. The total executed expenses amounted to 33.1 million dollars or 66%, the balance formed in the treasury account being of 2.9 million dollars.
In 2020, from the account of external sources for the implementation of the Project activities by the Ministry of Education and Research and the Investment Fund, expenditures amounting to $ 6.7 million were executed, including:
- for the renovation of 17 constituency schools and fund management, executing 5.4 million USD;
- for the purchase of specialized equipment, in this case: computer technology, devices for reproducing messages and other goods necessary to enhance the quality of education, for these purposes being used sources in the amount of 1.2 million USD;
- 0.2 million USD were spent on the maintenance of the Project management team and other operational expenses.
Based on the audit activities carried out, in the opinion of the Court of Accounts, the interim financial reports of the Project "Education Reform in Moldova" for the year ended on December 31, 2020, in all material respects, provide a fair and accurate picture according to the financial reporting framework applicable according to the World Bank’s requirements.
The audit found some irregularities admitted by the Social Investment Fund in Moldova in the management of operational expenses provided for in Component A.2.
Thus, the regulatory framework of the Project contains a set of criteria regarding the training and remuneration of the members of the Investment Fund team, involved in carrying out the activities of the Project. Not respecting all the eligible factors, 12 additional people were trained and remunerated, whose functions and attributions were not provided in the operational manual and the terms of reference for these persons were not elaborated coordinated with the Ministry of Education and Research and the Donor, the ineligible expenses being 52.5 thousand USD.
At the same time, from the sources of the Project, the remuneration for the forced absence from work of the director of the institution in the amount of 5.6 thousand USD was unpaid as a result of his dismissal and subsequent reinstatement based on the court's conclusion. We mention that no remuneration expenses can be paid from the Project account due to disputes between employees and state institutions.
The audit verifications also attest to the avoidance by PI SIFM of performing ex-ante controls at the execution of civil works contracts. Thus, the institution allowed the increase of the initial value of a contract by 20.3% without requesting from the Ministry of Education and Research and the World Bank the prior approval of the contractual amendments, given that they exceed the 15% threshold set by the donor directives.
Regarding the recommendations of the Court of Accounts from the financial audit report from the previous year, it was found that they were made at a level of 70%, which allows the exclusion of the Decision of the Court of Accounts no. 60 from December 4, 2020 from the monitoring regime.
