WITH DEFICIENCES OF VIEW
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The Court of Accounts of the Republic of Moldova (CoARM) was invited to present on June 7, within the Public Finance Control Committee and the Economy, Budget and Finance Committee, the results of the financial audit report on the Government Report on the execution of the state budget for 2022.
Tatiana Șevciuc, Member of the CoARM reported on the most relevant findings of the audit that were the basis for formulating the general conclusions, as well as the submitted recommendations.
The audit highlighted the significant issue related to the completeness of the reporting data on the sub-account "Shares and other forms of equity participation within the country". It should be noted that, by the State Budget Law, allocations were approved for the increase of the share capital of the State Enterprise "Moldova Railway" in the amount of up to 392.9 million lei, of LLC "Arena Nationala" up to 69.6 million lei and of the JSC "Energocom" up to 6 billion lei.
Annually the Court of Accounts issues modified opinions on the consolidated financial reports of the ministries, these being mainly conditioned by the aspects related to the reporting of the balance sheet accounts. Thus, for the year 2022, according to the preliminary data, the errors found in the audits that are ongoing at the ministries, boil down to the undervaluation of groups of balance sheet accounts by about 710.2 million lei and the overvaluation by about 616.2 million lei.
With reference to the revenues of the state budget, the following audit observations were mentioned, for the year 2022, revenues in the amount of 59.3 billion lei were approved, being executed in the amount of 59.2 billion lei. The most significant contribution to the total revenue comes from VAT receipts - 48.9%, income tax - 17.9%, excise duties - 13.5%, customs duties and other import taxes - 3.2%, etc.
A problem highlighted from year to year by the audit is the non-regulation and non-application of the unique balance reporting mechanism to the "Import/export duties paid in advance" account. Thus, the data reported by the Ministry of Finance forms a divergence in the amount of 7.8 million lei compared to the revenues reported by the Customs Service.
According to the data reported by the Ministry of Finance, as of 31.12.2022, the arrears in the payment of taxpayers' obligations towards the state budget amounted to 2.4 billion lei, including basic payments, late increases and fines, with the exception of tax obligations taken into special account. Of the total arrears, those administered by the State Fiscal Service amount to approximately 1.7 billion lei, by the Customs Service 0.6 billion lei, and by the Public Property Agency 0.9 million lei. Compared to previous years, there is a significant increase in arrears of 22.7%.
Another significant problem is the lack of an operational framework and an effective control regarding the monitoring of the implementation of projects financed from external sources. The level of capitalization of external resources by budgetary institutions in 2022 constituted only 38.3%, or 3.1 billion lei of the total amount of 8 billion lei. In this context, the Court of Accounts formulated a recommendation, it being necessary to strengthen the institutional capacities related to the processes of development, management and reporting of investment projects by the central public authorities in order to increase the level of absorption and capitalization of external resources, respecting the terms of disbursement and achieving results in the implementation of projects.
A problem identified by the present audit, as well as by the previous audits of the Court of Accounts, concerns the financing from the state budget of self-managed public institutions of state enterprises and joint-stock companies, which do not fully respect the budgetary principles and budgetary rules fiscal. For these categories of institutions, in 2022 allocations for subsidies in the amount of 4.6 billion lei were approved, 4.2 billion lei being executed.
The audit certified the maintenance of the growth trend in the total expenditure of transfers from the state budget to the budgets of another level, constituting in 2022 a share of about 57.6% of the total expenditure executed.
In this context, the Court of Accounts revealed that the Government's Report on the execution of the state budget, for the budget exercise ended on December 31, 2021, provides, under all significant aspects, a correct and faithful picture regarding the execution of the budget, in accordance with the applicable financial reporting framework.
The Chairperson of the PFCC, Tatiana Cunetchi, emphasized that she appreciates the activity of the Court of Accounts and mentioned that the subject addressed, such as the execution of the state budget, is a very important one.
