WITH DEFICIENCES OF VIEW
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The Court of Accounts of the Republic of Moldova (CoARM) examined on June 29, the audit report on the financial reports of the "Education Reform in Moldova" Project concluded on February 22, 2023.
The purpose of the financial audit was to obtain reasonable assurance that, upon closing the "Education Reform in Moldova" Project, all significant financial operations were presented at true and faithful values with the expression of the audit opinion on the interim financial reports prepared by those responsible for the implementation of the Project and presented to the World Bank on February 22, 2023.
In order to implement the structural reform in the education sector, in 2013 the Government of the Republic of Moldova and the International Development Association signed the Financing Agreement, in order to obtain a credit worth 26.1 million SDR, equivalent at the time of negotiations to 40 million US dollars.
Later, in 2018, the Additional Financing Agreement was signed, through which the Republic of Moldova benefited from additional financing in the amount of 7.1 million SDRs (equivalent to 10.0 million US dollars), necessary for expanding the activities already initiated in within the project. Thus, the cost of the project constituted 33.2 million SDR or equivalent to 50 million US dollars.
The development objective of the project was to improve learning conditions in the targeted schools and to strengthen the beneficiary's education monitoring systems, by promoting effective reforms in the education sector.
The project was implemented through the Ministry of Education and Research and with the support of the National Office for Regional and Local Development for some specific activities.
Initially, the implementation of the project was planned for a period of 5 years (April 2013 - August 2018), but due to its restructuring and additional financing, it was de facto carried out within 10 years, between April 2013 and December 31, 2022, plus the 4 month grace period.
According to the data reported to the World Bank as of 22.02.2023, from the total amount provided for the implementation of the project of 33.2 million SDR or 50 million US dollars, financial means were disbursed in the total amount of 32.8 million SDR or at the level of 98.8%, of which 25.7 million SDR from the initial loan and 7.04 million SDR from the additional financing loan.
As a result, during the entire period of project implementation, financial means were disbursed in the total amount of 46.2 million US dollars or at the level of 92.4%, of which 36.5 million US dollars – from the initial loan and 9.7 million US dollars – from the additional financing loan.
The World Bank and the Ministry of Education and Research approved a list of 23 educational institutions that were renovated under the project, in 6 schools, the renovation works were carried out by the Ministry of Education and Research and were financed from the state budget, and renovation works in 17 schools were carried out by the National Office for Regional and Local Development with loan financing.
As a result of the audit checks, some non-compliances were found in the management of financial means by the National Office for Regional and Local Development within the project, which were largely remedied at the time. Respectively:
- verification documents were not signed with the economic agents contracted to carry out the works within 17 schools;
- contrary to the provisions of the normative framework, no fiscal invoices were drawn up for the transmission of expenses, investments of local public authorities for increasing the value of the renovated buildings within the project, only investment transmission documents being drawn up;
- for most of the institutions, the investment submission deadline was not respected, with some being submitted more than a year after the final receipt, although, according to the agreements concluded, they were to submit the investment to the balance sheet of the investment beneficiary, within 2 months from the date of final receipt, etc.
According to the provisions of the project's Operational Manual, in the process of carrying out civil works at the renovated schools, the beneficiaries came with their own financial contribution for the execution of additional works in the total amount of 9.6 million lei, other than those covered by the project's sources.
The audit found that the amount of contributions transferred by the local public authorities to the National Office for Regional and Local Development exceeds by 3.1 million lei the total amount from the agreements, of which 5.3 million lei were executed or at the level of 55.5%. Thus, a balance of unused funds in the amount of 4.3 million lei was recorded.
During 2022, as a result of 3 open tender procurement procedures, with the World Bank's approval, 4 contracts were concluded for the purchase of equipment for school laboratories (physics, chemistry, biology) and laptops for distance learning in the total amount of 4.5 million US dollars.
The audit found that, at the end of 2022, 5,500 laptops were purchased in the amount of 42.7 million lei, of which 480 in the amount of 3.7 million lei were redistributed to 160 educational institutions, and 5020 pcs. in the amount of 38.9 million lei are deposited by the Ministry of Education and Research. Thus, at the stage of the execution of the audit, the audit team was informed that the draft Order and the draft Government’s Decision regarding the transfer of the goods were developed.
During the audit, the execution of the recommendations from the previous Court of Accounts’ Decision was also examined, as a result the level of achievement was on average 85.7%, respectively 6 out of the total of 7 recommendations were implemented.
In this context, the Court of Accounts submitted recommendations, the implementation of which will contribute to overcoming the identified deficiencies.
