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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 on the compliance of public procurement within the system of the Ministry of Internal Affairs (MIA) in 2019-2020.
The purpose of the external public audit was to assess the compliance of public procurement within the MIA’s system with the provisions of the applicable regulatory framework and to issue a general audit conclusion.
During 2019-2020, the contracting authorities within the system of the Ministry of Internal Affairs made public procurements in the total amount of 1364.2 million lei, including 124.0 million lei that are communal services, which do not fall under the incidence of Law no. 131/2015 on public procurement.
The external public audit mission collected audit evidence from 12 contracting authorities, which are part of the system, including the Central Apparatus of the MIA.
Generalizing the findings and conclusions formulated in the audit process, which included a succession of audit activities structured according to the stages of public procurement, the audit presents their summary in terms of actual non-compliances, on one hand, and the causes and their impact, on the other hand:
- The internal regulatory framework for the functioning of the public procurement working groups of 10 of the 12 contracting authorities audited has not been modified and strengthened, with the clear establishment and division of tasks and responsibilities between the members of the working group. At the same time, four entities did not describe the operational processes regarding public procurement, as the risk registers were not updated or elaborated.
- The principles of substantiating real needs and those of transparency were not fully respected when planning public procurement.
- Even if they have procurement plans, 10 contracting authorities did not revise the procurement plans at the stage of budget changes, taking into account the increase or decrease of allocations and did not publish them in the established way, the procurement plans being totally distorted by about 170.0 million lei
- Despite the modification of the budgets, 11 contracting authorities did not capitalize the financial means for the procurement of goods, works and services amounted to 221.0 million lei, some of the causes being the allocation at the end of the budget year of financial means mainly for works, as well as reduced capacities of absorption of funds, including those from external sources.
- The analysis of the execution of public procurement by types of procedures shows that in 2020 more than half or 54.5% (432.0 million lei) of the total volume of public procurement took place outside a transparent procurement system.
- When organizing the procurement procedures for cars within the MIA’s system, the compliance of the preparation of the award documentation was not ensured, and due to the lack of endowment norms, the acquisitions of cars were made unevenly per system. Thus, some working groups of the contracting authorities, not respecting the rules for describing the goods, developed restrictive technical specifications with reference to a certain car model, which led to the restriction of competition and the procurement of cars from two affiliated economic operators, with which in recent years 12 contracts for the purchase of cars worth 90.0 million lei have been concluded.
The Ministry of Internal Affairs, not executing the previous recommendations of the Court of Accounts, did not elaborate or approve norms for endowing the subordinated institutions with means of service transport and operative intervention transport, which would be the basis for justifying the budgetary expenditures for the acquisition of off-road cars, with 4x4 traction, which are more expensive, to the detriment of car models with similar technical characteristics, but cheaper, being missed savings as price differences per system in the amount of 9.8 million lei. When purchasing 106 cars worth 38.6 million lei, was established a commercial surcharge of 8.4 million lei, which varied from 12% to 144% at the purchase price, the cause being the increased announcement of the estimated value of the public procurement, the lack of a competition of offers and the purchase of some cars through intermediaries.
For the purchase of devices for measuring speed (radar) worth 4.4 million lei and equipment for measuring blood alcohol in the amount of 1.3 million lei, were developed restrictive technical specifications, a process in which only one bidder participated, being limited the competition between economic operators. Exaggerated commercial additions were applied to alcohol tests in the amount of 1.0 million lei or 329% of the purchase price, being saved savings on the purchase of radars in the amount of 0.6 million lei, radar purchases being made through several intermediaries.
The normative framework that regulates the purchase of equipment for employees within the MIA’s system and which was the basis for preparing the award documentation for organizing public tenders is uneven and imperfect, does not establish by system the name of the fabric and fibrous composition in%. Thus, 20 positions of equipment were purchased in the amount of 11.5 million lei, without label regarding the fibrous composition in % of the fabric, or the fibrous composition of the fabric on the label does not correspond to the criteria in the winning bid and the specifications of the concluded contract being purchased equipment with a high content of synthetic fibers to the detriment of natural fibers.
The stocks of equipment from the warehouses belonging to four contracting authorities amount to 49.4 million lei, increasing compared to the previous year by 13.1 million lei, thus the budgetary means, for an indefinite period, being decommissioned through the formation of stocks unused.
The organization of the procurement procedures for the construction, reconstruction and capital repairs of the buildings within the MIA’s system, in a total amount of 107.9 million lei, was carried out in the absence of projects and general estimates of expenditures, regularly assessed.
The application of the procurement procedure and award of the contract for the purchase of equipment for the construction of the radio network in TETRA standard with the value of 163.5 million lei through the negotiation method without prior publication of a notice of participation, with reference to the "technical reason for creation", contravenes to the Law no. 131 on public procurement, because the contracting authority did not respect the principles of legality, transparency, competition and efficiency.
Due to the application on the customs territory of the Republic of Moldova of illegitimate commercial additions, which, at some positions of equipment intended for the construction of the radio network in TETRA standard, reached the maximum share of 229% compared to the initial import price, were allowed exaggerated final costs of the radio communications network, and 24.4 million lei more were paid from the state budget.
When signing the contracts and the acquisition of goods worth 2.0 million lei, intended to fight the Covid-19 infection, nine contracting authorities within the MIA’s system illegally applied the VAT rate increased by 20%, compared to the VAT rate of 8%, for such goods, in 61 cases being paid from the budget by 0.3 million lei more than needed.
The award documentation and the results of the procurement procedures regarding the evaluation of the tenders drawn up by 7 contracting authorities subordinated to the MIA were challenged at the National Agency for Solving Complaints 72 times, being adopted 38 decisions (52.8%), by which the operators' appeals were admitted and partially admitted. The working groups was obliged to review their decisions and re-evaluate the bids, or to modify the award documentation according to the legal provisions, and through 32 decisions adopted (44.5%) the appeals of economic operators were rejected.
The Court of Accounts notes that the mentioned aspects of the activity of the contracting authorities within the system of the Ministry of Internal Affairs regarding the execution of public procurement procedures need improvements, in order to increase the transparency and efficiency of the use of public financial means. Achieving high performance in public procurement can be ensured by continuously improving the regulatory framework, as well as by supervising and controlling public procurement.
