Court of Accounts
Republic of Moldova
The Court of Accounts of the Republic of Moldova (CoA) examined at the public hearing on December 21st 2018, the Report on the Audit of the Financial Statements of the Public Institution, Project Implementation and Coordination Unit, "Projects Management Team on sustainable management of persistent organic pollutants" as on December 31st 2017.
The purpose of the audit mission was to provide reasonable assurance that the PMT (Project Management Team) financial statements, as on December 31st 2017, are free from material misstatement due to fraud or error, provide a real and faithful picture of the information presented, and the transactions were performed in accordance with the regulations in force, in order to issue the audit opinion.
In accordance with Government Decision No. 888 of 23.10.2014, there was established the Public Institution Project Implementation and Coordination Unit, "Projects Management Team on sustainable management of persistent organic pollutants", affiliated to the Ministry of Environment, through the reorganization of PMT in the field of sustainable management of persistent organic pollutants in PMT of persistent organic pollutants’ sustainable management.
The Project Management Team as Implementing Unit and Project Coordination, administers 3 projects funded by external donors:
1.The project "Management of disasters and climatic risks in Moldova" amounting to 8.3 million Special Drawing Rights or the equivalent of about 12.0 million USD, the sources being fully disbursed. The project includes three basic components, which were carried out by branch ministries (implementing agencies) as follows:
2. The project "Adaptation to Climate Change and Forestry in Moldova" (worth 0.35 million USD, disbursed - 0.26 million USD). Project activities included a series of studies on the country's situation and needs for adaptation to adverse climatic events, including agriculture, forestry, the environment in general, exceptional situations, as well as economic, environmental and social impacts, and the outcome of these studies underpinned the Project Documentation "Adapting to Climate Change".
3.The project "Strengthening the institutional framework in the water supply and sanitation sector of the Republic of Moldova" (4.9 million SEK), with a disbursement of 0.46 million SEK.
The overall aim of the project is to improve the health status of the population of the Republic of Moldova by preventing diseases caused by drinking water status and, as a result, responsible people to lead and administrate drinking water supply and sewerage sector more efficiently and the sectoral institutions to improve performance in delivering services in a sustainable, efficient and equitable manner.
The Mission of the Unit consisted in supporting the activities of the Ministry of Environment and other specialized central bodies in the promotion and implementation of national policies, strategies and programs in implementing the requirements of relevant international conventions and aligning the Republic of Moldova with international standards in the areas of environmental protection, disaster risk management and climate, the management and disposal of hazardous chemicals and hazardous wastes, the prevention of environmental pollution and the protection of the health of the population from the impact of these substances.
In 2017 PMT administered and coordinated financial means for donor-funded projects totalling 9.1 million MDL, of which "Current grants received from international organizations" amounting to 3.1 million. MDL, "Special transfers between institutions within the state budget" amounting to 4.4 million MDL, and funds from external loans amounting to 1.6 million MDL.
At the same time, PMT managed assets worth 4.7 million MDL, registering a decrease of 0.5 million MDL as compared to the beginning of the management period, which is about 9.7%. The most significant elements of assets are held by fixed assets - 1.8 million MDL (ie: machinery and equipment - 0.4 million MDL, means of transport - 1.2 million MDL, tools, production inventory and households - 0.1 million MDL and other fixed assets - 0.05 million MDL).
The PMT was to organize and keep accountancy based on the engagement principle, which is based on the cashing equity method, which has led to the identification of deficiencies that have led to distortions in the financial statements prepared by the PMT as on December 31st 2017.
Thus, the Project Management Team:
• have not ensured the reporting of domestic receivables totalling 2.2 mil MDL, being affected, by diminishing, the correct and full presentation of the balances of the accounts "Debts from outside the budgetary system";
• have not accounted for debts to service providers and goods, consisting in the retention of the goodwill guarantee (10%) of the payments for the volume of services rendered and the goods delivered in full, thus leading to the unrealistic presentation of the information in the financial reports, domestic payments were reduced with 1.5 million MDL;
• have not properly classify expenditures in the amount of 2.2 million MDL related to the contracts concluded with individuals.
Also, the Implementation Unit did not account and did not adequately report the expenditures related to the fiscal invoices issued for December 2017, causing a decrease in expenditures and debts with 4,2 thousand MDL.
It has also been found that the procurement process carried out by the entity had been carried out with some deficiencies and irregularities, conditioned by the reduced control of the beneficiaries of the implemented projects, expressed through:
- inadequate planning of the need for goods and services by the State Hydro Meteorological Service as the beneficiary of the "Climate and Climate Risk Management in Moldova" Project, which led to the inadequate use of resources from the credit granted to the Republic of Moldova for the purchase of 3 mini- automated weather stations (862.4 thousand MDL), which were stored and not put into operation for several years.
- failure to comply with the requirements of the national legislation in the field of construction quality, the projects developed for the construction objectives, not being the subject to verification in the field of "Drafting the valuations" until the initiation of the procurement procedure, which has generated ungrounded costs for the construction of the immovable property for the construction of meteorological stations , the allocated resources being used inefficiently and uneconomically, the allocation being made in the absence of surface norms and technical parameters necessary for these constructions.
At the same time, it has been found that the Ministry of Agriculture and Food Industry (MAFI), being a beneficiary of the project, delegated the responsibilities for implementing a project component to the "National Agency for Rural Development (ACSA)", without controlling the implementation, accounting and continuity of actions resulting from the implementation of the project component. As a result, from 2013, the transmission the Information System "Early Warning and Communication Platform", worth 2,2 million MDL (equivalent to 184.03 thousand USD) has not been received - and was not reflected in the accounting records of the beneficiary.
According to the evidence additionally presented by the ACSA, the information on unfavourable agrometeorological forecasts was collected, processed and transmitted to the beneficiaries and subscribers at least 3 times per week, depending on the number of weather alerts, the data being automatically taken over by the PACT system for several seconds from the State Hydro Meteorological Service based on the collaboration contract. At the same time, we mention that the data placed on ACSA's website in ACSA / weather forecasts / agrometeorological forecasts have not been updated since October 2012.
We note that the audit evidence obtained provides a true and fair view of the financial statements of the Public Institution, Project Implementation and Coordination Unit, "Projects Management Team on sustainable management of persistent organic pollutants" as on December 31st 2017, with some exceptions described above, and are sufficient to express the qualified opinion.
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