During the pandemic, the Rehabilitation Center for Children "Sergheevca" and the Rehabilitation Center for the Disabled and Retired "Victoria" registered a considerable decrease in economic indicators. Both institutions are located in the Odessa region of Ukraine and are part of the public patrimony of the Republic of Moldova.
This is one of the findings presented by the team of the Court of Accounts of the Republic of Moldova on December 22, in the Parliamentary Public Finances Control Committee (PFCC), in the context of examining the Audit Report on the consolidated financial reports of the Ministry of Health, Labor and Social Protection (MHLSP) concluded on 31 December 2020.
The CoARM’ team informed the Parliamentary Committee about the most significant findings that were the basis for issuing a qualified audit opinion.
The purpose of the audit was to provide reasonable assurance as to whether the consolidated financial statements of the Ministry of Health, Labor and Social Protection and some subordinate entities as at 31 December 2020 are free from material misstatement and provide a true and fair view and the financial transactions were carried out according to the regulations in force. Thus, the audit evidence was accumulated within the MHLSP and within 41 subordinate institutions.
In the context of the audit engagement, several audit observations were highlighted, such as:
- the MHLSP erroneously reported the value of the group of accounts 371 "Land" which was undervalued by 32.2 million lei, by not complying with the regulatory provisions for land recognition, which was conditioned by the non-assessment of the real value of 22 lands with an area of about 36.0 acres;
- in terms of subsidies, the value of which is significant of 186 million lei, in 2020, there is a lack of regulations on the process of planning, selection, approval, granting and monitoring the use of subsidies, which generated irregularities amounting to 24 million lei.
The audit within some institutions found significant irregularities, as follows:
- the IPH (Institution of Public Health) Institute of Emergency Medicine requested funds in the amount of 14 million lei, for which it did not plan and did not determine their priority need, and did not include in the Annual Procurement Plan, not registering 2 contracts procurement at the Public Procurement Agency;
- IPH Oncological Institute used subsidies amounting to 2 million lei, requested and received from the founder, in violation of the rules on drafting projects according to legal provisions, related to the repair works initiated, signing additional agreements to increase the amount of 264.1 thousand lei, in the absence of arguments from the technical manager.
Concerning the evidence and reporting of receivables and debts by the institutions subordinated to the ministry or established some errors, such as:
- underestimation of receivables by 3 institutions in the consolidated financial statements, in the amount of 210 thousand lei;
- erroneous registration and reporting of claims by the Temporary Placement Center Speranța in Vodă lui Vodă city in the respective amount of 192 thousand lei;
- erroneous reporting of debts of 1 million lei by 3 institutions.
These situations were caused by non-compliance or misinterpretation of the applicable financial reporting regulations, as well as insufficient control by the management and financial service of public institutions, which affects the quality and veracity of the reported data.
In 2020, a period marked by the pandemic situation generated by the COVID-19 infection, the activity of some public institutions was stopped, in particular, the rehabilitation and placement centers, which conditioned:
- lack of collection of significant revenues in the amount of 514 million lei;
- lack of granting and collection of external loans for projects financed by international financial organizations in the amount of 420 million lei;
- lack of allocation and use of the funds provided in the budget in the amount of 226 million lei.
The Ministry of Health, Labor and Social Protection has assets over the borders of the Republic of Moldova (Ukraine) amounting to 37 million lei with an area of 22 thousand m2, managed by 2 public institutions in Sergheevca, namely: the Center for rehabilitation of disabled and pensioners "Victoria” and the “Sergheevca” Children’s Rehabilitation Center. It should be noted that the patrimonial rights of the Republic of Moldova over the fixed assets related to these institutions have been registered and, respectively, recognized in Ukraine. At the same time, the audit did not have the possibility to move and view these goods, and cannot be exposed to the risk of damage. Thus, in case of damage to property and non-ownership of the related land rights, the Republic of Moldova may lose its rights to fixed assets.
In 2020, compared to 2019, the Centers that manage the public patrimony abroad of the Republic of Moldova registered a considerable decrease of the economic indicators.
Generalizing the identified deficiencies, the Court of Accounts submitted recommendations, aimed at rehabilitating the audited area, some recommendations being implemented during the audit.
Finally, Tatiana Cunețchi, Chairperson of the PFCC, mentioned that based on the CoARM’s Report, the Public Finance Control Committee will issue a report and place it on the Parliament's website for familiarization.