WITH DEFICIENCES OF VIEW
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The Court of Accounts found that the actions taken by the responsible institutions did not contribute effectively and efficiently to the implementation of the Chisinau Penitentiary Construction Project, which affected the implementation of government policies in the field of justice, generating risks of incurring additional expenditures from the state budget.
These and other conclusions were presented by the Court of Accounts of the Republic of Moldova today, July 13, in the Public Finance Control Committee (PFCC), in the context of the Audit report on the consolidated financial statements of the Ministry of Justice concluded on December 31, 2021 and the Performance Audit Report of the “Construction of the Chisinau Penitentiary” Project.
The CoARM’s auditors reported that, based on the activities carried out in the audit of the consolidated financial statements of the Ministry of Justice, a qualified audit opinion was issued, which was influenced by several deficiencies, such as:
- the non-application of the general rules of valuation and registration in the case of 35 plots of land with a total area of 82.02 acres by 12 institutions subordinated to the National Administration of Penitentiaries (NAP) conditioned the significant distortion of the balance of the subclass "Non-productive assets". the amount of 105.9 million lei;
- the non-capitalization of the value of capital repair works of buildings and other objects reconstructed/repaired by 9 penitentiary institutions subordinated to NAP, determined the overestimation of the balance of capital investments under execution by 44.5 million lei, the undervaluation of the value of buildings by 45.3 million. lei and of the special constructions by 6.2 million lei;
- the scrapping and the irregular transfer to expenses by the NAP of the stocks of circulating materials conditioned the overestimation of the balance of the subclass “Goods-expenses regarding the use of stocks” by 7.7 million lei.
Regarding the capital investments for the construction of some courthouses, it was mentioned that:
- The Ministry of Justice did not ensure the phased implementation of the actions of the Plan for the construction of new buildings and the renovation of existing buildings, as the project documentation was not elaborated and the construction works of the courthouses were not executed;
- regarding the achievement of the investment objective “Reconstruction of the Penitentiary no. 10-Goian”, it was found that, although at the end of 2019 the construction and reconstruction works amounting to 38.2 million lei were completed, by the end of 2021 the final reception of the works was not carried out regularly, as well as commissioning of the object;
- regarding the construction works for the investment objective “Construction of the Bălți Detention House”, it is noted that, during 2021, services were contracted to update the design documentation related to the second stage of construction, in the amount of 1.3 million lei, the expertise report being presented to the contracting authority by the end of December. The second stage of execution of the works is to be initiated after the completion of the procurement procedure, which was not organized due to disagreements with the local public administration authorities regarding the ownership and delimitation of the construction site for the administrative area, which prevents the receipt of the building permit for the second stage of the works at the mentioned objective.
Also, the results of the performance audit of the Project “Construction of the Chisinau penitentiary.
In 2011, the Government of the Republic of Moldova initiated negotiations with the Development Bank of the Council of Europe (DBCE) in order to finance the Chisinau Penitentiary Construction Project with isolator status, for 1536 detainees with detention status, which will replace Penitentiary no. 13 from Chisinau. As a result of the negotiations, on October 10, 2013, it was signed by the parties and, respectively, ratified by the Parliament, by Law no. 295 from December 12, 2013, the Framework Loan Agreement between the Republic of Moldova and DBCE for the realization of the mentioned project.
The construction project of the Chisinau penitentiary was initiated in order to contribute to the achievement of the Government's objective of improving detention conditions and ensuring new standards in terms of safety, security and discipline, according to international norms and standards. In social terms, the project is intended to contribute to the modernization of the main pre-trial detention institution in the country, introducing a new managerial approach, aimed at improving the treatment of detainees, reforming the organization and management of prisons.
The needs of the project were financed through the following sources: (i) the Framework Loan Agreement, amounting to 39 million euros, which has been increased to 49 million euros; (ii) the contribution agreement, amounting to 1 million euros; and (iii) the contribution of the Government of the Republic of Moldova amounting to 4.5 million euros, which was increased to 6.8 million euros. In the total sources of financing and the estimated costs of 56.8 million euros, the DBCE financing has a share of 88%, or 50 million euros, and the Government contribution - of 12%, or 6.8 million euros.
The management and control system set up within the Ministry of Justice and the Implementation Unit was not fully functional and efficient to ensure the achievement of the project objective and the achievement of the expected result. Although, according to the Framework Loan Agreement between the Republic of Moldova and the Council of Europe Development Bank, the construction of the penitentiary was to be completed on 31 December 2017, and the commissioning of the penitentiary was planned for July 2018, the audit indicates that the construction works have not yet been initiated, the project implementation deadline will expire on December 31, 2022.
The problems and deficiencies found by the external public audit in carrying out the project activities compromised the full implementation of the planned objective, subjecting the low level of disbursement of financial resources from the external sources of financing of the project, which constituted 2% or 1 million euro out of the total value of 50 million euro, as well as the reduced capitalization of the means of 1.7 million euros, or 3% of the total cost of the project of 56.8 million euros. Delays and certified issues led to an additional increase in project cost estimates by 12.3 million euros, bearing from the state budget the expenses in the form of interest in the amount of 27.7 thousand euros for servicing the loan, as well as the increase of the expenses for the salary of the PIU staff by 7 million lei, as a result of the extension of the project term.
Tatiana Cunețchi, President of the Public Finance Control Committee, praised the work of the Court of Accounts on the issues related to the construction of the Chisinau penitentiary and the enormous efforts to strengthen efficiency in accounting for all financial and material resources and transparency in the use of public money. According to Ms. Cunețchi, the audited entities must strengthen their efforts to capitalize on the financial resources of donors and complete the full implementation of the planned objective.
