Court of Accounts
Republic of Moldova
On November 5th 2018, the Court of Accounts of the Republic of Moldova (CoA) examined the Report on the audit of the financial statements of the National Integrity Authority (NIA) as on December 31st 2017.
The audit aimed to verify in all material respects whether the financial statements of the NIA as on December 31st 2017 represent a true and fair view in accordance with the applicable financial reporting framework and as a whole do not contain material misstatement due to fraud or errors, as well as to issue an opinion.
The NIA is an entity of vital importance to prevent corruption by controlling wealth and personal interests and respecting the legal status of conflicts of interest, incompatibilities and restrictions. It was created in mid-2016 when the Law No.132 of 17.06.2016 on the National Integrity Authority and the reorganization of the National Integrity Commission entered into force, being the successor of the rights and obligations of the later.
The assets managed by the NIA, in terms of material existence and composition, constituted 3.5 million MDL at the end of 2017. According to the State Budget Law 2017, for the achievement of the basic objectives and the operational activity, the National Integrity Authority approved allowances in the amount of 5.9 million MDL, out of which 5.8 million MDL from the state budget, and 72.7 thousand MDL - collected revenues.
The audit evidence reveals that the accounting policy of the National Integrity Authority is a document taken from the normative framework, not adjusted to the specificity of the institutional activity. As a result, information about fixed assets and their use, as well as information on stocks of current assets in the financial statements at December 31st 2017, was not true.
• for some fixed assets, amounting to 1.4 million MDL, the wear was increased with a total amount of 300.2 thousand MDL;
• for the non-material assets, amounting to 2.2 million MDL, the amortization was reduced with the total amount of 127.9 thousand MDL;
• for some goods, in the total amount of 60.2 thousand MDL, classified irregularly, the wear was not calculated. According to audit estimates, it amounted to approximately 32.8 thousand MDL;
• Incorrect attribution of machinery and equipment to the fixed assets category "Tools, production and household inventory" conditioned their inappropriate registration in a total amount of 37.3 thousand MDL;
• Incorrect application of the rules for the classification of fixed assets has insignificantly affected the fullness and accuracy of the information related to the fixed assets, by reducing the stock of circulating materials by the total amount of 5.8 thousand MDL;
• Also, due to the inappropriate classification of 77 material goods, the information of this category in the financial reports was distorted with 44.0 thousand MDL.
The evidence accumulated by the audit revealed that the superficial inventory approach conditioned the failure to identify and properly register an information system in the amount of 12.6 thousand MDL.
At the same time, the audit reveals that:
• Expenditure on remuneration of employees' work was real, in line with the commitments assumed and presented accurately in the financial statements,
• Expenses on goods and services are characteristic for the activity of the authority and the related transactions and events have been accounted and reported accordingly.
As far as revenues are concerned, they have been fully identified and presented in the financial statements.
Although the gaps identified in the previous audit report have been identified and reported to the NIA management, only in 2018 concrete measures have been taken to strengthen and streamline the procurement process. The NIA therefore developed and approved the Regulation on the work of the Public Procurement Working Group, assigned the responsibilities of the members of the Procurement Working Group, identified needs for goods and services, and elaborated and published the Procurement Plan for 2018.
At the same time, following the evaluation of the actions taken by the NIA, in order to implement the requirements and recommendations previously submitted by the Court of Accounts, the audit reveals their high level of performance.
Taking into account that the gaps identified and mentioned were not significant, as well as the fact that they have been corrected during the audit mission, we conclude that the Financial Reports as a whole provide a fair and accurate picture.
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