WITH DEFICIENCES OF VIEW
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The Court of Accounts of the Republic of Moldova, on May 23, examined the Audit Report on the consolidated financial statements of the Ministry of Foreign Affairs and European Integration (MFAEI) concluded on December 31, 2021.
The purpose of the external public audit was to provide reasonable assurance that the MFAEI's consolidated financial statements as of December 31, 2021, as a whole do not contain material misstatement due to fraud or error, and the issuance of an opinion.
In order to achieve the objectives and carry out the planned activities, MFAEI was approved allocations in the amount of 479.3 million lei, subsequently specified in the amount of 472.1 million lei, or 7.2 million lei less. The execution compared to the specified plan was done at the level of 90.5%.
The audit evidence shows that in financial terms, the non-functionality of some control activities generated deficiencies and irregularities in the reporting of revenues in the amount of 1.8 million lei, in valuation and registration in the accounting records of some fixed assets and non-productive assets under management, when calculating the wear of fixed assets - 52.6 thousand lei, upon the recognition, classification and registration of non-financial assets in the amount of 57.1 thousand lei, which distorted the consolidated financial statements of the MFAEI in the total amount of 1.9 million lei.
As of December 31, 2021, the total fixed assets amounted to 312.2 million lei. The distorted presentation of the patrimonial elements related to the real estate was caused by the registration in the accounting of a real estate and of the afferent land with the surface of 0.17 acres, which were acquired in 2005, being classified as a single inventory object, and namely as buildings. The cost of the land included in the single price, which according to the cadastral documents is 247.6 thousand lei, and the amount of the building’s wear, recalculated as a result of making corrections to separate the value of the land, is 105.2 thousand lei.
At the same time, it is revealed that the land assessed cadastral at 3.1 million lei with an area of 0.49 acres, leased under conditions of reciprocity for a term of 49 years for the construction of an Embassy headquarters, was not accounted for.
In the budget year 2021, according to the act of transfer of land to the Public Property Agency, MFAEI transmitted and excluded from the accounting records 2 lands with a total area of 0.64 acres, with a total value of 17.7 million lei.
It is revealed that the Public Property Agency did not legalize the possession or use of the public property land of the state related to the constructions by not concluding with the MFAEI the lease or loan agreement. The management rights of the Public Property Agency over the respective lands were not registered in the Real Estate Register either. The use rights on these lands until now continue to be registered after the ministry. In the context of these uncertainties, it is found that the ministry, from the moment of issuing the invoice, recorded expenses for the provision of care and landscaping services in the amount of 50.6 thousand lei, de facto, not having them.
The external public audit found some gaps and deficiencies in the monitoring, recording and reporting of revenues collected by the Consular Affairs Directorate within the MFAEI, which presents only statistical information on the number and type of consular services provided during the year. Thus, MFAEI does not have real data on the collection of this type of income in the Single Treasury Account of the Ministry of Finance. The audit evidence shows divergences between the data recorded in the registers of consular services provided by the Consular Affairs Department, about 1360 thousand lei, the data of the report generated from the system of the Government Electronic Payment Service (MPay), in the amount of 1840.3 thousand leiand the data of the Report on the execution of the budget according to the economic classification to the situation of 31.12.2021 of the Ministry of Finance, which amounts to 1790.6 thousand lei. These deviations or inconsistencies are conditioned by the lack of cooperation of the institutions concerned in order to monitor, record and report the revenues of the state budget. The audit also identified issues related to the implementation of refunds of consular fees paid or incorrectly transferred to the state budget considering that the normative and legal framework does not exhaustively regulate the responsibilities nor the authority to which these attributions belong, such as the State Tax Service, the Ministry of Finance or the Ministry of Foreign Affairs and European Integration.
In 2021, within the MFAEI there was a low level of execution of capital investments - 62.4%, or in the amount of 2.5 million lei, compared to the specified allocations and, respectively, of 21.7 percent compared to those initially approved under the annual budget law. Thus, in order to finalize the project documentation for the redesign of the embassy building, for which the project documentation amounting to 781.3 thousand lei was previously elaborated, additional allocations in the amount of 496.4 thousand lei were executed.
At the same time, within a consulate, within the limits of the approved allocations, were carried out capital repairs of some special buildings and constructions worth 2 million lei, which are still in the process of reconstruction.
Following the verification of the information presented by 21 diplomatic missions and consular offices, the audit found that, on 31.12.2021, about 700 days of annual leave were not used by the employees of these diplomatic institutions. Thus, the ministry incurred additional expenses in the amount of about 1.2 million lei for the payment of allowances to full members. It should be mentioned that, during the year 2021, payments related to the compensation for the unused leave in the previous years in the amount of 789.3 thousand lei were paid, this fact having a significant impact in the use of the budgetary resources allocated for the year 2021.
Finally, the Court of Accounts concluded that the audit evidence obtained was sufficient and adequate to provide a basis for expressing a qualified opinion on the consolidated financial statements of the Ministry of Foreign Affairs and European Integration concluded on 31.12.2021.
