WITH DEFICIENCES OF VIEW
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The Court of Accounts of the Republic of Moldova, today June 27, examined the Audit Report of the consolidated financial reports of the Ministry of Agriculture and Food Industry (MAFI) for the year concluded on December 31, 2022.
The Ministry of Agriculture and Food Industry is the central public authority that in 2022 ensured the implementation of government policy in areas such as the production of plant and animal products, the processing of plant and animal products, wine and alcoholic beverages, veterinary medicine, food safety, rural development programs, etc.
MAFI is the founder of 26 institutions, 14 of which represent public institutions organized on the basis of self-management principles, and 12 being budgetary institutions financed from budgetary allocations and whose patrimony, income and expenses are consolidated in the financial reports of the Ministry of Agriculture and Food Industry.
In 2022, MAFI and its subordinate institutions managed financial resources worth 2 billion 346 million lei, expenses and non-financial assets worth 2 billion 454 million, the level of income realization being 96%, of expenses and non-financial assets - 87%.
At the same time, in 2022, the ministry administered patrimony totaling 870.1 million lei.
The audit highlighted the most significant non-compliances and deficiencies that were the basis for expressing the qualified audit opinion, respectively MAFI:
- did not apply the requirements of Law no. 29/2018 and Law no. 246/2017 regarding the share capital and the composition of the assets deposited therein. The lack of an exhaustive list of the assets transferred to the share capital of state-owned enterprises does not allow providing reasonable assurance regarding the accuracy and veracity of the reported value of 87.07 million lei, which constitutes the share in the share capital of 6 state-owned enterprises;
- did not ensure the application of the normative provisions regarding the identification, evaluation, reevaluation and registration in the accounting records of the public domain assets transferred for economic management to 5 self-management public institutions whose founder is according to Government’s Decision no. 695/2017. Thus, the balance of the "Investments in related and unrelated parties" account was undervalued by at least 28.81 million lei;
- recognized in the accounting records the value of 50 lots of land, with a total area of 751.65 ha, which according to the records in the Real Estate Register, belong to third parties, the value of the balance of the group of accounts "Land" being overvalued by the amount of 37.18 million lions;
- did not accumulate or capitalize in the "Capital investments in assets under execution" account the expenses incurred for carrying out scientific research by subordinate research institutions, including expenses incurred in previous years, the value of the account balance being undervalued by 64.43 million lei.
The audit highlighted the non-registration by the MAFI of the patrimonial rights on 341 buildings, with a total area of 77.43 thousand m2 worth 49.97 million lei.
From the total of 155 plots of land, managed by the Ministry and subordinate institutions, with an area of 7695.72 ha, in total value of 217.85 million lei, MAFI in November - December 2022 drew up and signed the documents of receipt-handover to the Public Property Agency (PPA). As a result, MAFI submitted the documents for only 107 land lots for PPA’s coordination, but until now they have not been signed by the PPA. According to the PPA's explanations, some of the employees who were part of the acceptance-handover committee resigned, and another part refuses to sign the respective acceptance-handover documents.
The auditors also found that within the Ministry, was established the existence of a significant number of unused annual leave days - 9280 days, which would impose legal obligations to the staff, contributing to the emergence of financial commitments in future financial years.
The internal managerial control established within the MAFI partially ensures 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.
It was also mentioned that, although, during the audit carried out in the previous year, 26 recommendations were submitted to contribute to remedying the non-conformities found, an implementation level of 48% was noted, due to the full implementation of 7 recommendations, and of the partial implementation of 9 recommendations. In this context, the partially implemented and non-implemented recommendations were reiterated in the Audit Report.
