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Audit of Financial Reports of the Central Unit of the Ministry of Foreign Affairs and European Integration

April 03, 2019 views 1041

 

On April 3, the Court of Accounts examined the Audit Report on the Financial Statements of the Central Unit of the Ministry of Foreign Affairs and European Integration, concluded on 31 December 2018.

The purpose of the audit mission was to obtain sufficient and relevant evidence to provide reasonable assurance that in all material respects the financial reports of the Central Unit of the Ministry of Foreign Affairs and European Integration, concluded on 31 December 2018, present a fair and true image in accordance with the applicable financial reporting framework and, as a whole, do not contain significant distortions.

The Ministry of Foreign Affairs and European Integration is the central specialized body of the public administration, which ensures the implementation of governmental policy in the areas of activity entrusted to it.

Under the State Budget Law for 2018, the Ministry of Foreign Affairs and European Integration approved the budget for resources for expenditures and non-financial assets in the amount of 375.3 million MDL for the achievement of the basic objectives. Of these, the financial resources for the central unit amounted to 60.9 million MDL, consisting of general resources - 59.4 million lei and the resources collected - 1.5 million lei. Subsequently, over the year, it received additional financial means amounting to 1.4 million lei, the total amount of resources and expenditures amounting to 62.3 million lei.

As of 31.12.2018, the total fixed assets amounted to 36.3 million lei. The audit evidence reveals that the related information was affected in some cases by the non-compliance with the normative framework on the classification of fixed assets, the calculation of the fixed assets' depreciation and the depreciation of the non-material assets.

The audit also reveals that 2 items (the administrative buildings of the MFAEI and the Consular Directorate), with a useful life of 80 years, are reflected in the balance sheet of the Ministry of Foreign Affairs and European Integration at the "Buildings" sub-account. According to the Fixed Assets and Non-Material Assets Catalog, the useful life is 40 years. The audit has not been presented with evidence that would substantiate the extension of the duration of the buildings, while at the same time it is established the lack of the registered inventory sheets.

Regarding the personnel expenses, the audit shows that they were executed in the amount of 50.0 million lei, of which, the remuneration of labor - 39.5 million lei, contributions and compulsory insurance premiums - 10.5 million lei, these being faithfully presented in the financial statements.

The audit shows that, according to staffing states, the MFAEI had planned 2 units of staff within the Information and Communication Technology Service, for which a person was hired in August 2018. At the same time, 5 IT service contracts were concluded during the year, with total personnel expenses amounting to 281.5 thousand lei. In the opinion of the audit, from the point of view of the efficiency of the utilization of the allocated resources, it is necessary to fill in the vacant position within the Information and Communication Technology Service according to the staffing states.

With reference to internal audit as part of public internal financial control, the audit shows that the effect of high fluctuation on this segment generates the deprivation of the manager of an insurance and advisory instrument designed to add value and to improve the effectiveness of risk management, and governance.

Regarding the audits of the implementation of the recommendations submitted by the Court of Accounts Decision no. 59 of 31.07.2018 on the Report of the Audit of the Consolidated Financial Statements of the Ministry of Foreign Affairs and European Integration on 31 December 2017, which issued 5 recommendations, shows that 4 recommendations were fully executed and 1 partially executed recommendation. The Decision of the Court of Accounts no. 59 of 31.07.2018 was proposed to be excluded from the monitoring regime.

During the audit mission, the Ministry of Foreign Affairs and European Integration took measures to remedy the deficiencies noted in the financial reports for 2018.

Thus, corrections were made in the total amount of 103.1 thousand MDL, namely:

• the calculation of the fixed assets' depreciation and the amortization of the non-material assets in the amount of 21.0 thousand lei;

  • increasing the value of the fixed asset with the design works - in the amount of 21.1 thousand lei;
    • Drawing up and sending the goods delivery vouchers in the amount of 61.0 thousand lei to the institutions of the diplomatic service and respectively excluded from the off-balance sheet accounts.

The findings of the Audit Report served as the basis for expressing unqualified opinion on the financial statements of the MFAEI on 31 December 2018. Thus, the MFAEI Financial Statements on 31 December 2018, in all material respects, provide a true and fair view of patrimonial and in line with the applicable financial reporting framework.