WITH DEFICIENCES OF VIEW
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On July 27, the Court of Accounts of the Republic of Moldova (CoARM) examined during the online meeting, the Audit Report on the consolidated financial reports of the Ministry of Education, Culture and Research (MECR) concluded on December 31, 2020.
The purpose of the audit was to verify, in all material respects, that the consolidated financial statements of the MECR present a true and fair view in accordance with the applicable financial reporting framework and, as a whole, do not contain material misstatement.
The patrimony managed by MECR as of 31.12.2020 amounted to 4.74 billion lei or 403.1 million lei more compared to the situation as of 31.12.2019. MECR's actual expenditures for 2020 amounted to 2.61 billion lei, 630 million lei less than the previous year due to the pandemic situation.
Examining the consolidated financial statements of MECR, the Court of Accounts issued the qualified audit opinion, which was determined by the deficiencies found in all financial reports, affecting the balance sheet by about 4.98 billion lei, revenues by 70.1 million. lei and expenses by 288.7 million lei.
The identified problems are due to a faulty internal managerial control. There is no control over the follow-up and implementation of the Court of Accounts' previous recommendations. Throughout the Decision of the CoARM no. 32 from 20.07.2020, 19 recommendations were submitted, most of which have been reiterated since 2018, of which only 6 recommendations were partially implemented. This is due to the reduced institutional capacities, as well as the lack of monitoring of the activity of subordinated entities (88 budgetary institutions and 113 self-managing institutions).
The MECR does not ensure the use of the resources of all directorates within the MECR for the adequate monitoring of the economic and financial activities of the subordinated institutions. As an example, at the Specialized Boarding School for blind and partially sighted children in Bălți, at the time of the verification it had only 15 students, and the number of staff units was 44 units. After graduating from school in the summer of 2021, it will no longer have children to work, the staff being warned about the possible reduction of staff, however MECR did not intervene to review the institution's budget for 2021 there is a risk of unjustified use of funds.
The insufficiency of an internal managerial control also led to the non-assurance by MECR of the delimitation and proper registration of the public property managed by the subordinated institutions. Thus, only 36 out of 88 subordinated institutions and 93 out of 113 entities in which MECR is the founder are found within the G’sD no. 351/2005, which denotes the lack of a true picture of the real situation of state-owned assets transmitted in the administration of institutions within the MECR. Thus:
570 buildings and constructions with a value of 1.2 billion lei, in the accounting records, 37 buildings that are not found in the balance sheet, as well as 21 lands of 59.21 acres with a value of 21.1 million lei are not registered in the Real Estate Register;
4 buildings with a value of 4.7 million lei and 41 plots of land of 52.1 acres with a total value of 106.8 million lei, as well as 16 plots with an area of 9.64 acres, reported by the institutions subordinated to MECR, are registered as the property of the LPA, some of which are also found in the “List of lands publicly owned by the state, public domain, under the administration of the Public Property Agency” according to Government’s Decision 161/2019;
MECR and 8 institutions did not ensure the registration of the right to use over 36 buildings (balance sheet value 109.7 million lei) of 35 lands with an area of 522.95 ha, which are in their use, some of them are registered after the liquidated institutions or which have transferred the founding rights of the institutions to the MECR.
The provisions of the Instruction no. 216/2015, elaborated by the Ministry of Finance and MECR do not provide an analytical record of the patrimony transmitted in the management of the institutions to self-management. As a result, it is impossible to identify the assets amounting to 2.69 billion lei registered in account 415 “Investments in related and unrelated parts”, of which the value of buildings and land is 1.89 billion lei. At the same time, the audit team identified 310 lands (2260.6 acres) with a value of at least 1.82 billion lei, as well as 1109 buildings with an initial value of 5.28 billion lei, or self-managed institutions. by 5.21 billion lei, more than are recorded in the accounting records of the MECR, which may determine the risk of losing the patrimony exclusively owned by the state.
An eloquent example is the management of the patrimony abroad of the Republic of Moldova, where MECR and the subordinated higher education institutions did not ensure an adequate management of it.
The State University of Physical Education and Sports (SUPES), managing the "Pedagog" Training Base in Sergheevca, on 13.03.2014 requested from the Ministry of Education, due to the increased degree of wear, the impossibility of repairing them and its high maintenance costs, the settlement of 17 wooden houses and a pavilion, put into operation in 1977. SUPES received the approval of the ministry, based on which he settled the respective goods in the amount of 462.54 thousand lei. Currently the territory of the base and the settled houses are used by the children's rest base "Ciaika".
According to the accounting records of the Technical University of Moldova (TUM), it has on balance the rest base "POLITEH" from Zatoca village, Ukraine, amounting to 76.68 thousand lei. TUM, with the consent of the Ministry of Education, on 03.12.2001 sent the base consisting of: buildings, installations, equipment, and other material goods, leased to a citizen of Ukraine for a period of 15 years, which was not extended after expiration of the lease contract in 2016. It was subsequently found that between the Executive Committee of the town Zatoca and the indicated citizen were signed a land lease contract, being built a hotel complex of 3 blocks and a swimming pool, with the demolition of all the initial constructions. TUM did not go to the courts in Ukraine to recover from the indicated citizen the damage caused by the demolition of the goods, moreover, TUM settled from the records a part of the goods demolished in 2015.
The "Dacia" leisure base (managed by the State University of Moldova), established in 1964, consisting of 53 wooden houses and a canteen on July 17, 2004 was leased to LLC "Odyssey" in Ukraine, a contract that was extended in 2014 for another period of 10 years (according to point 4.2 of the contract), without concluding another contract. The base lease payment is $ 700 annually (point 5.1 of the contract). SUM does not have registered the rights over the real estate of the base in the Register of Real Estate of Ukraine (although the property right of the Republic of Moldova over it was recognized by Ukraine) nor did it conclude a land lease agreement with the local administration of the town Vilkovo, Ukraine. Although, SUM registers substantial financial means on the bank accounts, it did not ensure the modernization of the “Dacia” rest base, as it was in a state of continuous degradation.
The "Bugaz" rest base from reg. Odessa, or. Zatoca, which is a house, donated by SUM on March 4, 1964, and 25 wooden houses, built in 1970 and 1988 and 3 warehouses. The property rights of SUM over the dwelling house were registered in the Real Estate Register of Ukraine on 28.02.2015, and SUM did not conclude a lease of the respective land. Although, the responsible persons within the SUM presented information that it does not currently work, the audit found that the rest base is managed by unidentified persons, harming the financial interests of the SUM. Following the inventory carried out on 12/07/2021 by the SUM’s representatives, at the request of the audit, it was established that at the base of "Bugaz" were demolished some wooden buildings in their place being built other capital buildings. Also, the SUM could not identify the persons who carry out economic activity on the territory of the base.
As in previous years, the audit shows that the MECR does not have information on how to use the results of scientific research. Moreover, MECR and 18 subordinated scientific research institutions completely ignored the previous recommendations of the CoARM regarding the registration as intangible assets of the expenses incurred for scientific research, which in 2019 amounted to 259.61 million lei.
The educational services for the realization of the training plan for the higher education staff (in the amount of 582.6 million lei) were contracted by MECR contrary to the provisions of art. 315 of the Civil Code, not being determined exactly the object of the contract. In this sense, the data on the number of equivalent students per study cycles financed from the state budget in accordance with the admission plan provided by the state order are missing. Funding for higher education institutions is not correlated with the number of students. While the financing volume is increasing (2018 - 595.2 million lei, 2019 - 674.9 million lei, 2020 - 678.23 million lei), the number of students financed from the state budget is decreasing with 896 students (5.3%) compared to previous years (2018 - 17740 students, 2019 - 16855 students, 2020 - 15959 students). The average training expenses of a student with budget financing by cycles differ from those from own income, the average cost of a student (for cycle I) from the budget allocations registers values from 34.6 thousand lei to 102.3 thousand lei , while the expenses from own revenues are from 2.6 thousand lei to 15.5 thousand lei.
MECR has not taken steps to revise the rules for the nutrition of students in technical vocational education institutions, and the planning of expenditures for the free feeding of students is uneven. Thus, if for 6 institutions were planned and allocated funds only for food, then for 41 institutions were additionally planned and allocated financial means for the maintenance of canteens, which led to the overestimation of expenditures in the amount total of 12.13 million lei.
In generalizing the audit findings, the Court of Accounts made recommendations in order to eliminate the shortcomings clarified, aimed at helping to improve the situation created within the audited entity.
