WITH DEFICIENCES OF VIEW
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The management of the JSC “Termoelectrica” is mainly focused on the current activity, which consequently denotes the non-solution of some historical deficiencies that affect the proper administration of the owned patrimony.
Such a conclusion was reached by the Court of Accounts of the Republic of Moldova (CoARM), after the examination, on November 30, of the Compliance Audit Report of public patrimony management by the JSC "Termoelectrica" in 2020.
Taking into account the importance and complexity of the thermal energy system, but also the significant number of beneficiaries of the services provided by the JSC “Termoelectrica”, the Court of Accounts initiated the audit in order to evaluate the compliance of the public patrimony management by the audited Company, and as a result, to present the relevant information to the involved and interested parties.
The JSC "Termoelectrica" is a public interest entity that was created for the purpose of carrying out entrepreneurial activity with profit, by ensuring the efficient operation of centralized heat supply systems, electricity production, promotion and use of cogeneration technologies, distribution and supply of thermal energy and delivery of electricity. At the moment, the JSC "Termoelectrica" is the main producer and supplier of thermal and electrical energy in Chisinau and its suburbs.
The company prepares financial statements according to international financial reporting standards, being constituted by the parent entity – the JSC "Termoelectrica" and the daughter entity – the LLC "InfoBon", this being created in 2017.
In 2020, the JSC "Termoelectrica" reported revenues amounting to 2308641.22 thousand lei and expenses in the amount of 2317112.57 thousand lei, thus registering a loss of (4798.12 thousand lei). Given that the company produces and sells heat and electricity, the revenues obtained from their sale represent 94% of the total financial resources accumulated in the year under management. The cost of sales represents 86% of the total expenses, and the value of the raw material used in 2020 constituted 65% of the total cost of production or about 56% of the total registered expenses. Other significant components of expenses are staff remuneration (15%) and depreciation/amortization expenses of fixed assets held (13%). It should be noted that the National Energy Regulatory Agency annually coordinates the composition of expenditures related to licensed activities, and the natural gas supplier, in terms of sequestration of accounts due to debts, monitors the payments made by it.
The audit assessing the compliance of the management of public assets by the JSC "Termoelectrica" in 2020, concluded that all activities included in the audit area do not fully comply with the requirements of the regulatory framework in force, as well as existing internal regulations.
The formation of the general conclusion was based on the following audit findings:
- The non-compliant reflection of the long-term debts amounting to 2036332.32 thousand lei towards the natural gas supplier, which does not present the real patrimonial-financial position and creates uncertainties regarding the understanding of the current liquidity rate of the Company. Likewise, there is a divergence of 574223.31 thousand lei between the debt registered by the JSC "Termoelectrica" and the one recognized by the Natural Gas Supplier
- Non-compliance with the legal provisions related to the management of tangible assets with an initial value of 543858.54 thousand lei, which does not properly reflect the real value of the assets held and used by the Company
- Non-adjustment of the value for obsolete and slow-moving stocks, amounting to approximately 107,851.02 thousand lei, which does not contribute to the truthful and compliant presentation of the information related to the managed patrimony
- Lack of shares regarding the assets under execution with the value of 85147.53 thousand lei, which denotes an inefficient management of the financial resources previously allocated for some objectives that have not been achieved so far
- Admission of errors in the presentation of the consolidated financial statements and the management report by decreasing revenues and expenses by 10184.8 thousand lei, which does not provide real information on financial performance by types of activities
- Failure to develop fair criteria for remuneration of the staff of the JSC "Termoelectrica", which affects the transparency of the allocation and use of financial resources in this regard.
The LLC "InfoBon", responsible for the distribution of heat consumption for the apartments and the generation of payment orders for the final consumers with the collection of those payments to be transferred to the founder, in 2020 recorded a net profit of 6941.58 thousand lei which is decreasing compared to 2019 by 9786.13 thousand lei. A decrease is also found in the total accumulated revenues, which in 2019 amounted to 24781.25 thousand lei and in 2020 - 15 896.51 thousand lei. At the same time, it is noted that the entity's expenses increased by 2206.07 thousand lei compared to the previous year, amounting to 7939.8 thousand lei in the year under management.
The income of the subsidiary entity obtained from interest is the most significant component of the entity's income, far exceeding the income from the provision of services. Thus, in 2019, interest income accounted for 77% of total income, and in 2020 - 61%.
In 2020, the JSC "Termoelectrica" took over 24 goods from the JSC "Termocom" in bankruptcy proceedings, of which 18 were subsequently sold at auctions with shouts and discounts. It is attested that, 9 goods were sold with 50 percent of the exposure price, in all cases involving only 2 economic operators. Although, in general, the Company has carried out the process of marketing unused assets in a regular manner, there are gaps in the related regulatory framework that may compromise the efficiency and transparency of the process. Thus, given that the current regulations, in the case of the participation of two or more potential buyers, allow to reduce the price by up to 50 percent, the risk of formal participation is denoted, by prior agreement, only for the possibility of obtaining said discount.
In view of the above findings, there is a non-compliant approach to the process of managing debt, property, developing assets, as well as obsolete and unused stocks, which is contrary to the principles of good governance, and the non-application and non-establishment of policies, procedures and rules affects the remuneration process of staff, thus generating other risks in relation to regularity. At the same time, the deficiencies registered in the activity of the LLC "InfoBon" certifies that the mechanism for transferring consumer payments only at the request of the founder denotes the direction by him of the cash flow.
Finally, the Court of Accounts reveals the urgent need to take managerial decisions in order to elucidate the exposed situations, to strengthen the internal control system to ensure the efficient management of compliance risks.
