WITH DEFICIENCES OF VIEW
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The Court of Accounts of the Republic of Moldova (CoARM), on December 13, examined the Audit Report of the financial statements, concluded on December 31, 2020 and the Audit Report on compliance of the budgetary process and public assets management in 2020 with the administrative-territorial unit (ATU) Nisporeni district (level II budget).
The administrative-territorial unit subject to audit is a legal entity under public law and has, according to the law, a patrimony distinct from that of the state and other administrative-territorial units. The district budget finances 38 institutions, of which 33 are educational institutions. Also, the Nisporeni District Council is the founder of 4 entities.
According to the data of the entity's balance sheet, at the end of 2020, the total value of assets amounted to 276.9 million lei, increasing by 2.3 million lei, compared to the beginning of the same year. For the year 2020, the district budget on the part of revenues was executed in the amount of 177.4 million lei, constituting 98.4% of the volume of the specified allocations, and in the part of expenditures - in the amount of 176.8 million lei, or 95.3%.
The purpose of the financial audit was to provide reasonable assurance that the financial statements of the district budget would not be affected by material misstatement due to fraud or error, and that an opinion would be issued. According to the audit findings, the financial reports of the Nisporeni ATU (level II budget), concluded on 31 December 2020, do not present a correct and accurate picture according to the applicable financial reporting framework, and the contrary opinion is issued.
The opinion was determined by the following effects:
- the value of the “Buildings” account was overestimated with the total amount of 12 million lei, as a result of the wrong accounting of the built block of flats, owned by the private partner, in the amount of 12,64 million lei, of the related land in the amount of 2,5 million lei, as well as the value of a building received on loan and its capital repair works, in a total amount of 1.17 million lei;
- the value of the “Buildings” account was decreased by the value of the construction works of 5 new objects, illegally sent to the ATU level I balance of 1.65 million lei, the value of a building sent into use in 2018 to a public institution, of 1,6 million lei and the value reported non-compliant to the “Special Constructions” account of 1.06 million lei;
- the value of the “Transmission installations” account was undervalued by 7.39 million lei, as a result of the non-reporting of the value of 4.7 million lei related to the Șendreni-Bolțun high pressure gas pipeline, as well as 2.69 million lei reported non-compliance with the account "Capital investments in assets in progress";
- the value of the “Land” account was underestimated by 13.77 million lei due to the non-recognition of the lands with the total surface of 6.19 acres of public property and of a land with the value of 5.97 million lei transmitted in management to a founded public institution, illegally excluded from the accounting records;
- the value of the account "Other receivables of budgetary institutions" was decreased by the total amount of 26.36 million lei, due to the registration of expenses of the financial means transferred as a financial contribution for the implementation of a project in the amount of 6.96 million lei in 2020 and in 2018-2019 in a total amount of 19.4 million lei;
- the value of the account "Shares and other forms of participation in capital within the country" was decreased by the amount of 1.74 million lei, being recorded at the expense the financial means transferred to public medical institutions for the purchase of protective equipment, medical equipment and other materials necessary for the protection of personnel involved in the treatment of patients with COVID-19 virus infection.
In the context of the compliance audit of the budgetary process and the management of the public patrimony at the Nisporeni ATU (level II budget) in 2020, the Court of Accounts established some deviations and irregularities, among the most significant being:
- insufficient substantiation of the budget proposals regarding some estimated revenues led to undervaluation and overvaluation in the amount of 408.3 thousand lei and 875.8 thousand lei, respectively;
- the failure to ensure the proper monitoring and administration of the process of leasing the public domain spaces, caused the non-collection of the calculated revenues of 33 thousand lei;
- the non-application of the measures provided by the normative framework regarding the adjustment of the fee for the training in the music school, lacked the district budget of revenues in the total amount of 207.7 thousand lei;
- the income from the payment for the feeding of the students of V-XII grades was approved irregularly, by the boards of directors of the pedagogues and of the parents, although they were to be approved by the District Council.
- capital repair works in the amount of 805.7 thousand lei were executed in the absence of expert projects;
- failure to ensure the substantiation of the investment of 91.8 million lei for the object “Modernization and reconstruction of the Youth and Sports Center in Nisporeni”, which should provide information on the expected results as a result of the project implementation;
- contractual commitments for capital works in the absence of approved financial sources, of about 11 million lei;
- improper use of financial means for road infrastructure of about 1.6 million lei;
- failure to specify the annual allowances in the works contract amounting to 16.46 million lei, with a term of more than one year;
- non-compliance with the framework of regulatory procedures and transparency in the public procurement process has conditioned irregularities related to: non-elaboration and non-updating of public procurement plans for goods, works and services;
- division of the estimated value of repair works into separate procurement contracts, lack of record keeping and supervision of small value purchases, etc.;
In the context of the identified deficiencies, during the audit the audited entity undertook some actions to remedy the irregularities found: the registration in the accounting records of the value of the illegally excluded building in the amount of 1.6 million lei and the value of the land of 5.96 million lei, etc. The Court of Accounts has made recommendations to the audited entity, which are to be implemented on time.
