WITH DEFICIENCES OF VIEW
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The Court of Accounts of the Republic of Moldova, on June 28, examined the Audit Report on the consolidated financial reports of the Ministry of Environment concluded on December 31, 2022.
The Ministry of the Environment is the central specialized body of the public administration, which ensures the development of policies in the fields of environmental protection, climate change, and the sustainable management of natural resources. There are 8 public institutions subordinate to the ministry, such as the Environment Agency, the Environmental Protection Inspectorate, the "Moldsilva" Agency, the "Apele Moldovei" Agency, the State Hydrometeorological Service, etc.
In 2022, the ministry managed resources worth 622.1 million lei and expenses worth 666.1 million lei. Also, during the same period, the Ministry of the Environment managed assets worth a total of 1.7 billion lei.
The audit found the most significant non-compliances and deficiencies that were the basis for expressing the qualified audit opinion. Thus, the Ministry of the Environment:
- did not evaluate and account in the established manner the lands of the forest fund and the lands of the water fund, transferred in the economic management to the state enterprises whose founders are the subordinate institutions. The total undervaluation of the balance of the group of accounts "Shares and other forms of capital participation within the country" constituted a minimum of 3 billion 719.5 million lei and a maximum of 24 billion 724.7 million lei;
- did not comply with the provisions of Law no. 29/2018 and Law no. 246/2017 regarding the accounting of the value of 1089 buildings with a total area of 182.3 thousand m² transferred for economic management to forestry enterprises, of which 171 buildings worth 67.3 million lei attributed to the public domain are irregularly included in the share capital of 20 state forestry enterprises. This led to the overvaluation of the account balance "Procurement of shareholdings" and the undervaluation of the account balance "Investments in related and unrelated parties", the balance of the account group "Shares and other forms of capital participation within the country" not being affected;
- did not evaluate and, respectively, did not record in its accounting records 256 plots of land with a total area of 1643.4 acres. Of the total unassessed and unaccounted land lots, 1637.8 acres are leased, of which 112 land lots with an area of 569.7 acres are registered in the Real Estate Register, and 135 plots of land with an area of 1068.1 acres were leased without delimiting them and registering the patrimonial rights over them. As a result, the balance of the "Lands" account group was undervalued by a minimum of 43.3 million lei and a maximum of 120.3 million lei.
- recognized in the accounting records the value of 2 buildings which, according to the entries in the Real Estate Register, belong to third parties. As a result of these errors, the reported value of the balance of the "Buildings" group of accounts was overestimated by 12.9 million lei;
- did not take into account the provisions of the Order of the Minister of Finance no. 216/2015 and erroneously accounted for "Special constructions" and "Machines and equipment" the volumes of investments made in the objectives belonging to third parties. As a result, the balance of the account group "Capital investments in assets under construction" was undervalued by 177 million lei, and the balances of the "Special constructions" and "Machines and equipment" account groups were overvalued by 146 million lei and 31 million lei, respectively.
The audit highlighted deficiencies that, although they did not influence the audit opinion, resulted in the non-compliance of the activity of registration and administration of the institution's patrimony with the laws and regulations related to the field.
The Court of Accounts noted deficiencies related to the management of patrimony, which boils down to the non-registration of patrimonial rights over 16 immovable assets worth 1.9 million lei, which presents increased integrity risk, loss of control over the state's public property and possible litigation.
In 2022, 64.3 million lei were allocated from the Government's intervention fund, in order to prevent the increase in firewood prices for the population, in the cold period of 2022-2023, 56.6 million lei being transferred to forestry enterprises, of which, until the end of 2022, they capitalized 22.3 million lei, or 39.4%, in the bank accounts, leaving 34.3 million lei unused. According to the information presented by the "Moldsilva" Agency, out of the 34.3 million lei not capitalized, 4.4 million lei were to be returned to the state budget as a result of the overestimation of the financial resources needed.
Also in 2022, for the afforestation and reforestation of the land areas of the forestry fund, 57.3 million lei were allocated, 57.1 million lei were financed, capitalized by state forestry enterprises - 11.9 million lei, at the end of the management year, 45.2 million lei remained unused, which remained in the bank accounts of forestry enterprises.
Finally, it is confirmed that the internal managerial control established within the Ministry of the Environment does not ensure the effective identification and management of all risks related to the financial-accounting process, including those related to the preparation of consolidated financial statements. The fragmented establishment of internal managerial control influenced the truthfulness and completeness of the information reflected in the financial reports.
