Court of Accounts
Republic of Moldova
The Court of Accounts of the Republic of Moldova examined at the meeting on February 27, the Report on the audit of the financial reports of Cruzesti District, concluded on 31.12.2017 and the Report on the audit of the financial reports of Durlesti District, concluded on 31.12.2017.
Report on the audit of the financial reports of Durlesti, concluded on 31.12.2017
Durlesti district is an administrative-territorial unit of the first level in the municipality of Chisinau with an area of 3087 ha and about 17600 inhabitants. The Court of Accounts audited the financial statements of Durlesti for the year ended December 31, 2017. Following the accumulation of audit evidence, a contrary opinion was issued, determined by the effect of the distortions related to: the balance sheet at December 31, 2017 - in the amount of 710.1 million lei; the actual expenditures amounting to 1.9 million lei and the revenues in the amount of 2.6 million lei.
At the same time, the audit determined that, within the town hall Durlesti did not set up the financial management and control system, which was confirmed by: the non-identification and non-description of the operational processes descriptions; not defining and not describing control procedures and actions; lack of risk assessment and monitoring activities, etc., which has influenced the veracity and completeness of the information reflected in the audited financial reports.
The value of fixed assets was denatured by the amount of 266.1 million lei, determined by the incorrect classification and registration of fixed assets; not increasing the amount of fixed assets by the amount of the capital repair costs, classified incorrectly as current expenses; the increase in the value of machinery and equipment as a result of the double recording of transactions; failure to recognize and underestimate the value of road and pavement infrastructure.
Significant distortion of the financial report was also determined by the non-recognition and non-evaluation of land with an area of 687.82 ha, estimated by the audit team amounting to about 444.1 million lei.
The town hall of Durlesti reported, as subsidies, the expenditures for the cleaning services of the main streets in Durlesti city, executed in 2017, amounting to 938 thousand lei by the "Regia Autosalubritate Durlesti". According to the legal provisions, the sanitation and greening of the locality is a public service of communal household, to be transmitted in direct management or delegation of management, based on a contract. The town hall does not have a direct delegation contract or a service contract with the IM „RAD”. Thus, it is not clear what services to be provided by the IM "RAD".
The lack of information on the value of the tax base on real estate tax and other irregularities found by the audit, permit the loss of revenue in the local budget from property taxes.
During the audit mission by Durlesti City Hall the following irregularities were remedied:
Report on the audit of the financial reports of Cruzesti, concluded on 31.12.2017
The purpose of the audit mission was to obtain reasonable assurance that the Cruzesti financial reports related to the budgetary process and public property management are prepared and presented in accordance with the applicable financial reporting framework, with the issuance of an audit opinion.
As a result of the accumulation of audit evidence, the Court of Accounts issued the contrary opinion, which was determined by the effect of the significant distortions related to: fixed assets, decreased by 8.20 million lei; of wear and tear, diminished by the amount of 4.29 million lei; lands, underestimated by the amount of 39.5 million lei; receivables, diminished by the amount of 0,05 million lei; debts, diminished by the amount of 0.26 million lei; of the actual expenditures, increased by the amount of 0.27 million lei and the actual revenues, diminished by the amount of 0.13 million lei.
Thus, balances on some items in Cruzesti's balance sheet do not present truthful and faithful information, being caused by:
The audit mentions that, during the audit mission, the Cruzesti City Hall took some actions to remedy the deficiencies found. So:
We would like to mention that the audit evidence obtained shows that the audited financial statements of the audited city halls, concluded on 31.12.2017, do not provide a true and fair view of the patrimonial and financial situation and are sufficient to express the contrary opinion.
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