WITH DEFICIENCES OF VIEW
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The Court of Accounts of the Republic of Moldova (CoARM), on December 8, examined during the online meeting, the Audit Report on the financial reports of Cimișlia district (level II ATU) concluded on December 31, 2020 and the Compliance Audit Report on the budgetary process and the management of the public patrimony in 2020 within the TAU Cimișlia district (level II ATU).
The purpose of the financial audit was to provide reasonable assurance about whether the financial statements are free from material misstatement, which is subject to fraud or error, and to issue an opinion.
In turn, the compliance audit aimed to provide reasonable assurance on the compliance of the formation and use of funds and public assets by ATU Cimișlia district in 2020.
Cimișlia district is an administrative-territorial unit located on an area of 923.7 km² and has a population of about 49.29 thousand inhabitants. From the budget of ATU Cimișlia district (level II) are financed 52 institutions with a staff of 1207 units. Also, the Cimișlia District Council is the founder of 14 public institutions and 4 municipal enterprises.
According to the data of the financial reports of ATU Cimișlia district as of December 31, 2020, the total value of assets amounted to 217.23 million lei. The revenues were executed in the amount of 164.05 million lei or 97.7 percent of the specified budget, and the house expenses - in the amount of 160.26 million lei or 92.7 percent of the volume of the specified allocations.
The audit findings led the Court of Accounts to issue a qualified opinion, highlighting the main shortcomings:
- increase of the value of the “Buildings” account by 7.09 million lei as a result of the non-compliant registration of the buildings in progress and repairs in progress at the buildings owned by ATU level I, as well as a result of the double registration of the asylum building the elderly in the amount of 2.78 million lei;
- overestimation of the account "Special constructions" by 30.48 million lei following the non-transfer of the owners of local (ATU level I) and regional road owners the value of road construction and capital repair works in the amount of 24.87 million lei, incorrect classification of real estate of 3.37 million lei, etc.;
- the increase of the account “Capital investments in assets in progress” with the amount of 2.28 million lei determined by the non-settlement of the objects sent to ATU of level I in the amount of 1.17 million lei and the reflection in the account “Transmission installations” of objects put into operation in the amount of 1.11 million lei;
- the decrease of the value of the account “Other forms of capital participation inside the country” in the amount of 9.59 million lei following the non-reflection as investments of the fixed assets transferred in the management of the founded entities. The audit was limited in assessing the value of 5 buildings (garages/warehouses) with an area of 1.23 thousand m2, registered as the property of the Cimișlia District Council, but not reflected in the accounting records, managed by PMI DH Cimișlia and PMI HC Cimișlia.
As a result of the indicated deficiencies, the financial result of ATU Cimișlia district in the current year was decreased by 0.73 million lei and increased for the previous years by 15.2 million lei.
According to the information presented by the public institutions subordinated to the ATU Cimișlia district in 2020, acquisitions were made in a total amount of about 56.7 million lei, of which low value acquisitions in the amount of 28.7 million lei, or 50.7 % of total purchases.
At the same time, the audit found that the budgetary institutions did not declare expenditures in the amount of over 2 million lei, according to the fact that, according to the reports on the execution of the budget, the reported cash expenditures amounted to about 58.8 million lei. These indicate the lack of a proper record of procurements, their incorrect classification and, respectively, the lack of transparency of public procurement.
The ATU Cimișlia district did not ensure the compliant registration, in the Real Estate Register, of the patrimonial rights over the local public real estate. For example, the ownership right over the lands on which the “Izvoraș” rest camp in Zloți village is located, in which investments of over 15 million lei were made, is registered after the Republic of Moldova. Also is missing the entry in the accounting records of the rights and value of the special constructions located in this camp.
The ATU Cimișlia district did not ensure the proper approval of the statutes of the public educational institutions. Thus, out of 21 entities in their statutes as founder are indicated, within 10 institutions - Cimișlia District Council, and within 9 institutions - the Ministry of Education and Research and within 2 institutions - the Education Directorate.
Finally, the Court of Accounts concluded that although Cimișlia ATU has taken some steps to ensure proper management of the budget process and local public assets, there are still areas that do not correspond to the spirit of regularity and good governance. Thus, the audit shows deviations and irregularities, such as: non-implementation of internal control procedures that would hold the parties involved in the budgetary process accountable; non-compliance with the procedures for the procurement of goods, works and services; irregular use of public funds to capitalize on investments and capital repairs; failure to ensure full registration of the property right, etc. In this context, the Court of Accounts made recommendations to address the shortcomings and to reduce the identified risks.
