The parliamentary committee examined the irregularities found during the audit within the Ministry of Justice

The importance and relevance of the Court of Accounts' reports is indisputable, and public entities must have a more responsible attitude towards the recommendations made, concluded Tatiana Cunețchi, Chairman of the Public Finance Control Committee (PFCC) in hearing the audit reports at the Ministry of Justice.

The Court of Accounts of the Republic of Moldova (CoARM) presented today, November 24, with the PFCC’s meeting, the Audit Report on the consolidated financial statements of the Ministry of Justice (MoJ), concluded on December 31, 2020 and the Compliance Audit Report on public procurement within the system of the Ministry  Justice during 2019-2020.

The audit on the consolidated financial statements of the MoJ ended with the issuance of a qualified opinion, due to the fact that the errors found in their entirety affected the consolidated financial statements.

Petru Rotaru, Member of the CoARM and the auditors responsible for the audit, presented the most significant observations of the financial and compliance report. The CoARM’s team informed the PFCC about the most significant findings that require the attitude of the Ministry of Justice and its subordinate institutions, namely:

• evaluation and registration of lands under management;
• accounting for the value of capital repair works;
• evaluation of high risk processes, including in the financial-accounting field, in order to provide assurance on the effectiveness of the internal control system;
• recovery of claims for work performed by convicts, including settlement of claims with expired payment term;
• the transfer to the Public Property Agency of the lands under management;
• elucidation of the circumstances regarding the irregular management of the buildings of the “Mecita” Rest Base, with the adoption of the necessary decisions;
• jointly with the Public Property Agency, determining the manner and ensuring the transfer of the share capital of state-owned enterprises founded within the penitentiary system.

Also, the CoARM;s auditors mentioned that the deficiencies and non-conmpliances in the management of financial means and public patrimony by the Ministry of Justice and the subordinated institutions, in 2020 generated significant errors in total amount of 225.5 million lei, respectively the audit opinion being influenced by:

• the undervaluation with the amount of 152.7 million lei of the balance of the subclass “Non-productive assets”. The situation was conditioned by the non-application of the general rules of evaluation and registration in the case of 43 plots of land with a total area of ​​85.6 acres by NAP and some subordinate institutions, as well as by NPI;
• the distortion of the balance sheet value of the fixed assets, determined by the non-inclusion of the value of some works of 37.6 million lei in the cost of the reconstructed/repaired buildings by 12 penitentiary institutions. The situation was conditioned by the non-application of the capitalization rules of the value of the capital repair works.

Regarding the most significant observations from the audit of the compliance of public procurement in the MoJ’s system, the Court of Accounts informed that, during 2019-2020, the contracting authorities from the system of the Ministry of Justice performed public procurements in total amount of 327.2 million lei. In the total expenditures executed for public procurements, the major share is held by NAP - of 257.3 million lei, or 78.6%.

Generalizing the findings and conclusions, the external public audit identified the following deficiencies and non-compliances:

• In the public procurement planning process it is attested that:

• the notices of intent regarding the expected public procurements of 126.4 million lei and some procurement plans of 267.8 million lei within the penitentiary system were not published;
• the planning of public procurement contracts was carried out with some deviations from the provisions of the legal framework, being made unplanned acquisitions of 11.6 million lei.

• In the process of organizing, conducting and monitoring public procurement procedures:

• the shortcomings and non-uniform approaches to estimating food needs in 2019-2020 have led to the formation of large stocks of products at the end of the management year;
• some deficiencies were found in the use of electronic auction in procurement through the procedure of requesting price offers, being concluded contracts amounting to 12.8 million lei;
• there is an increased risk in the management of food stocks in warehouses, in their transport and use in the canteens of penitentiary institutions;
• the Reports on monitoring the execution of contracts amounting to 88.2 million lei were not published by the institutions subordinated to NAP.

• In the process of capitalizing on capital investments:

• no public procurements were made for the construction works of some judges' offices, thus not being capitalized financial resources of 60.0 million lei in 2019 and, respectively, of 28.6 million lei in 2020;
• the delays in contracting and carrying out the construction works of some investment objectives within the penitentiary system conditioned the non-valorization of the financial resources of 156.2 million lei in 2019 and, respectively, of 362.3 million lei in 2020.

In the context of the audit, the Court of Accounts notified the National Anticorruption Center, regarding the examination of the legality of the contractual relations of economic operators in the public procurement of dairy products in the penitentiary system in 2019-2020, including potential situations of concerted participation through persons in interdependent relationships.

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