WITH DEFICIENCES OF VIEW
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On February 28, the Court of Accounts of the Republic of Moldova examined the Audit Report of the financial reports of the administrative-territorial unit (ATU) Ungheni district concluded on December 31, 2020 and the Compliance Audit Report of the budget process and public assets management.
The Ungheni district budget finances 52 institutions (6 public institutions of the District Council and 46 educational institutions) with a staff of 2695 units.
The total value of the assets managed by ATU Ungheni district on 31.12.2020 amounted to 366.1 million lei. Concerning 2020, the district budget was executed on the part of revenues in the amount of 326.8 million lei or 96.8% of the volume of the specified allocations and on the expenses in the amount of 323.8 million lei or 95.3%.
In the opinion of the audit team, with some exceptions, the financial reports of ATU Ungheni provide, in all significant aspects, a real and accurate picture according to the applicable financial reporting framework.
The qualified opinion on the financial statements was determined by the following effects:
- the value of “Lands” was underestimated by 449.5 million lei due to non-compliant application of the rules for recognition and evaluation of lands of district interest in the public domain of ATU;
- limiting the audit in determining the undervaluation of the account "Special constructions" related to 4 roads with a length of 3.35 km, not recorded in the accounting records;
- the road infrastructure goods resulting from the inventory of roads of district interest in 2017, were not registered and accounted for, including: road plantations, bridges, pavilions and road signs;
- non-compliant decrease in the value of the “Transmission installations” account with the amount of 38.7 million lei, as a result of non-recognition and non-accounting of the technical-municipal infrastructure in the public domain related to the Zagarancea-Cornești aqueduct;
- the inventory and determination of the fair value of 15 gas networks with a total length of over 215 km in the amount of 88.6 million lei was not ensured;
- the textbook fund included in the rental and ownership scheme of the Ministry of Education and Research sent into custody to local bodies, in a non-compliant way was registered by the education department and educational institutions, being allowed the increase of the value of the account "Other fixed assets" by 6.5 million lei;
- The President's Office did not ensure the record of the forms of participation in capital within the country and the composition of the transferred goods of about 164.9 million lei, as well as the non-approval for them of the legal regime, of the inventory and of the possession of an exhaustive list of transmitted goods to the account is about 14.5 million lei.
- increase of expenses and concomitant decrease of receivables by 5.9 million lei related to financial means transferred as a contribution for the implementation of projects;
- was not ensured the duration of the operation of the roads and the recalculation of the wear and tear as a result of the capital expenses incurred of 75.5 million lei.
The compliance audit was to evaluate the compliance of the budgetary process and the management of the public patrimony in relation to the regulatory criteria of a legal nature.
The contracting authorities did not ensure the transparency of low value public procurement by complying with them in a clear and formalized way, and the district president and the Ungheni district council did not issue single regulations for all subordinate entities.
In 2020, 46 educational institutions reported 1508 contracts in the amount of 34.2 million lei or 77% of the total made through low value purchases. Only 9 out of 46 educational institutions confirmed that they had formed working groups in public procurement.
According to the information of the Public Procurement Agency, for the years 2019-2020 we find that only 15 out of 46 educational institutions and the Office of the President of 6 entities of the Ungheni District Council presented the report for low value procurement.
The purchase of 2 buses by the working group of the Education Directorate was carried out in violation of the legislation, due to lack of transparency and non-performance of effective preventive procedures, conditional on the cancellation of procedures initiated repeatedly, and at a price exceeding the customs value (1,07 million lei) with 0.7 million lei.
Allocations for gasification works were made in the absence of legal criteria and without ensuring transparency in procurement and efficient use of budgetary financial means. Through the decisions of the Ungheni District Council, allocations were approved to the first level LPA in the total amount of 5.1 million lei for gasification works, which were contracted directly from an LLC, without respecting the transparency of the acquisitions.
The approval of the decisions is carried out without legal, economic, technical expertise and without the participation of the Construction Section within the District Council, and the presentation of work estimates is made unofficially by the employee of Ungheni-Gaz LLC, where the founder of the respective LLC also operates and participates in the reception of works.
The audit states that the beneficiary municipalities do not even have formed procurement working groups. The prices for gasification works are significantly increased, the cost for the same work/material differs from one town hall to another, which results in a major risk of legality and efficiency of using public money.
Regarding the data from the Financial Reports on the vacant positions, it is revealed that they are not true and described narratively in the Annual Reports, lacking the public placement of the information and the submission of the proposals for filling the vacancies by competition. The cumulating of functions means the performance, in addition to the attributions of the basic function, of the attributions of a vacant or temporarily absent function during the management month. The head of the culture department approved contracts for cumulating of vacancies dating from 2017, the expenses for 2020 amounting to 106.9 thousand lei.
Failure to ensure the regularity of the administration of the public patrimony resulted in the non-compliant registration within the Real Estate Register, of the patrimonial encumbrance rights on constructions amounting to 332.0 million lei and related lands with an area of 85.4 acres, as well as lands related to roads with length of 177 km.
The authorities do not report the results of financial and patrimonial monitoring according to the legal conditions. Respectively, a total record and evaluation of the investments made within the public-private partnership for the delivery of the thermal agent estimated at a minimum of 8.0 million lei was not ensured. In the absence of the necessary justifications, expenses from the austere budget of the educational institutions of 260.0 thousand lei were irregularly incurred.
The District Council did not delegate to the Apa-Ungheni Municipal Enterprise the management of the public water supply service, through a management contract. The inventory and analytical detailing of the goods of the technical-municipal infrastructure under administration in a total value of 79.5 million lei was not performed. The lack of monitoring of the activity of the district operator Apă-Ungheni Municipal Enterprise and of the consumer records, conditioned the non-collection of revenues of 1.4 million lei, the unjustified accumulation of receivables for services delivered in 2020 of over 0.5 million lei.
Finally, the Court of Accounts reveals deficiencies in the management of budgetary funds and local public patrimony of ATU Ungheni district, caused by the non-implementation of the internal management control system and the responsibility of decision makers, being formulated on the audit observations the necessary recommendations.
