WITH DEFICIENCES OF VIEW
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The Court of Accounts of the Republic of Moldova (CoARM), on June 29, examined the Audit Report of the consolidated financial reports of the Ministry of Internal Affairs (MIA) concluded on December 31, 2022.
The CoARM’s auditors checked the aspects related to the management of public assets, remuneration for work, capital repairs of buildings, public procurement, etc.
During the meeting, the main observations were presented, which were the basis for issuing the qualified audit opinion:
- due to the non-valuation and non-recognition of some fixed assets, some institutions subordinate to the MIA admitted the undervaluation of non-financial assets in the "Buildings" and "Lands" account groups with the amount of 204.9 million lei;
- two institutions subordinate to the MIA have admitted the irregular classification of fixed means, namely radio communication networks, fact that conditioned the undervaluation of the balance of the group of accounts "Transmission installations" from the consolidated financial report with the amount of 251.8 million lei and the overvaluation of the balance of the group of accounts "Machines and equipment" with 231.9 million lei, of the group of accounts "Special constructions" with 17.7 million lei, of the group of accounts "Tools and tools, production and household inventory" with 1.1 million lei, and of the group of accounts "Stocks of circulating materials" with 1.1 million lei;
- an institution subordinated to the MIA spent financial means for the expansion and modernization of the "Traffic Control" automated road traffic surveillance system (ARTSS) in the amount of 44.6 million lei, having no planned allocations for 2021-2022;
- for the reconstruction of the swimming pool of the central sports club "Dinamo", 37.3 million lei were transferred to 2 entities in advance, but the construction works during 2017-2021 were not submitted to the contracting authority. In 2022, the object was put into operation, but due to the irregular accounting of the expenses related to the construction of the swimming pool, the "Special constructions" account was undervalued by the amount of 12.3 million lei. At the same time, the primary documents certifying the performance of the works for the swimming pool in the amount of 1.3 million lei are missing, the cost of the investment being irregularly overestimated by the nominal amount;
- twelve institutions subordinate to the MIA registered on 31.12.2022 a stock of circulating materials or clothing, footwear, fuel, household materials and spare parts in the amount of 473.1 million lei, the stock registering an increase of 90.7 million lei or 23.7% compared to the previous period;
- two institutions did not legally write off, during the reporting period, the circulating materials in the amount of 7.4 million lei, actually used in December 2022 and settled in January 2023, a fact that led to a decrease in expenses and an increase in stocks by the nominal amount;
- due to the increase in prices in 2022, two institutions within the MIA formed a reserve of 393 tons of fuel stored in plastic containers in the amount of 8.8 million lei for a period of 4-5 months, a fact that had a direct impact on the increase in the value of material stocks and led to the immobilization of public financial means for a period of 4 months.
The audit evidence reveals that, in 2022, the executed revenues totaled 4,607.7 million lei or at the level of 97.6%. The specified indicators were not achieved by 12 institutions with the amount of 115.5 million lei, the reason being the non-disbursement of external grants in the amount of 65.9 million lei, the non-utilization of budget allocations in the amount of 41.2 million lei and the non-collection of revenues from the sale of goods and services with payment in the amount of 10.5 million lei.
Seven institutions subordinated to the MIA did not collect income from the lease of public property and from the provision of paid services, forming claims in the amount of 9.6 million lei, including 2 million lei are claims with an expired payment term.
In 2022, the personnel expenses of the ministry's employees amounted to 3061.5 million lei, increasing by 732.6 million lei or by 31.5% compared to the previous period. The audit identified approximately 6,191 employees of the Ministry of Interior with annual leave arrears, who at the end of 2022 irregularly accumulated 436.9 thousand unused leave days, which imposes legal obligations towards the staff of approximately 181.8 million lei, which are an increase of 46.4 million lei compared to 2021.
Although some measures have been taken by the MIA, the registration of the public patrimony managed by the ministry at the cadastral bodies remains an unresolved issue. At the end of the management period, some institutions subordinate to the MIA did not register 303 buildings (97.8 thousand m2) and 41 lands (15.9 acres) with the cadastral authorities. One of the reasons for the non-registration of property rights over some buildings invoked by the cadastral bodies is the lack of final acceptance documents for the works on buildings built until the 1990s.
The audit also found that 62 buildings and special constructions with a value of 21.2 million lei, which are part of the public patrimony under the administration and economic management of some institutions subordinate to the MIA, are not being used and are in the process of advanced deterioration.
On 31.12.2022, institutions subordinate to the MIA were managing 30 ongoing projects financed from external sources. Due to the non-receipt of external grants for construction works, the procrastination of procurement procedures, as well as the reduced capacities to absorb public funds, some institutions did not execute the budget allocations in the amount of 66.3 million lei intended for "Capital investments in assets under execution". Although the grant disbursements did not take place, the project employees benefited from the increase for participation in projects financed from external sources.
With reference to the good governance of public procurement with an impact on the management of public funds, the audit found the following:
- as a result of the organization by the Material Reserves Agency of the procedure for the purchase of fuel oil through the negotiation method without the prior publication of a notice of participation, the contract for the purchase of 14.5 thousand tons of fuel oil in the amount of 300.1 million lei was concluded. The agency did not regularly consult the market in order to prepare the purchase of fuel oil, as well as correctly estimate the value of the purchase announced in the award documentation. As a result, the public auction was canceled due to the non-participation of economic operators in the auction;
- when organizing a new procedure for the purchase of fuel oil, through the negotiation method without prior publication of a tender notice, the criteria set out in the award documentation were not properly applied when determining the winning bid, a fact that led to the acceptance of a fuel oil offer more expensive by 58.4 million lei, as the difference between the price announced in the award documentation and the accepted offer. At the same time, the requested amount of 16.5 thousand tons of fuel oil was reduced by 2 thousand tons. In the opinion of the audit, additional expenses from the state budget were admitted;
- also, the Material Reserves Agency initiated the public auction for the purchase of 41.7 thousand tons of food wheat with the estimated value of the purchase amounting to 217.7 million lei or 5.2 thousand lei for one ton, which was canceled due to the non-participation of economic operators in the auction. Although, Law no. 131/2015 obliges the contracting authority to ensure publicity, transparency, competition and efficiency of procurement procedures, subsequently, the agency decided to organize a new procedure for the purchase of food wheat with the same estimated value of 217.7 million lei, but through the negotiation method without prior publication of a notice of participation;
- when determining the winning offer, the Material Reserves Agency did not apply the award criteria and evaluation factors from the award documentation in accordance with the regulations, a fact that led to the acceptance of the offer of an economic operator for the purchase of the same amount of food wheat, but with a higher value of 11.3 million lei. In the opinion of the audit, additional expenses were admitted from the state budget in the nominal amount;
- The Information Technologies Service (ITS), during 2021-2022, purchased equipment and works for the expansion and modernization of the "Traffic Control" system in the amount of 44.6 million lei, without having approved capital investment allocations through the annual budget laws. Due to the postponement of the terms of installation works for the installation of infrastructure elements for 12 locations, at the end of 2022 at the ITS, machinery in the amount of 4.7 million lei, paid for with public money, intended for the expansion of the "Traffic Control" SASCR, remained in stock, which was left for safekeeping by the economic operator, and the claim of 4.7 million lei was not accounted for according to the regulations. At the same time, on 31.12.2022, 1.1 million lei remained unused for unexecuted works;
- due to the incorrect estimation by the General Police Inspectorate (GPI) of the value of the purchase announced in the award documentation, the equipment for the DNA laboratory of the Technical-Forensic and Expertise Center, according to the audit, was purchased at an exaggerated price of 14.5 million lei, the commercial addition to the 6 items of equipment in total amounted to 7.5 million lei, although the duty-free price was 7 million lei, which includes VAT, customs duty, customs procedures, transport costs and other items of value. In the opinion of the audit, additional expenses from the state budget were admitted;
- The GPI did not legally plan the amount of services required for the entire 2022 budget year, but drew up 4 service purchase contracts with the Forensic Center worth 23.8 million lei, without legally drawing up the technical specification for the contract indicating the quantities of services and the type of expertise that were to be procured. As a result, on 31.12.2022, the GPI irregularly formed debts towards the Forensic Medicine Center for services rendered and unpaid in the amount of 4.9 million lei, which were not reflected in the accounting records at the GPI;
- the audit identified within the GPI 3 contracts for the purchase of construction works in the amount of 7 million lei, which were concluded without the urban planning certificate and the building permit, as well as 2 contracts for the purchase of works in the amount of 6.1 million lei when the building permit was issued after the start of construction works;
- The General Inspectorate for Emergency Situations, as a result of the public tender, concluded the contract in the amount of 1.1 million euros for the purchase of 8 vehicles intended for emergency medical assistance in SMURD missions. Although the vehicles were received, due to the delayed submission of the intermediate financing requests and the withholding of installments, the entity has not paid the cost of the purchased goods for more than 2 years, although the project members were calculated and paid the salary increase. The public auction for the purchase of special vehicles was organized in the absence of external financing of the project, and on 31.12.2021 it irregularly formed debts in the amount of 22.9 million lei and respectively of 12.3 million lei at the situation of 31.12.2022, the project being extended until September 2023.
Finally, the Court of Accounts noted that, during the audit, 36 buildings and 5 plots of land worth 204.9 million lei were evaluated and accounted for, the actual income and expenses were corrected with the amount of 83.3 million lei and the balance of depreciation of fixed assets with 9.5 million lei. As a result of the financial audits carried out by the Court of Accounts in recent years, the institutions subordinate to the MIA have assessed and accounted for assets worth 1193 million lei.
