Audit activity: examination of the consolidated financial reports of the Ministry of Justice

On May 27, the Court of Accounts of the Republic of Moldova examined the Audit Report on the consolidated financial reports of the Ministry of Justice concluded on December 31, 2023.

In order to achieve the objectives and carry out the operational activities, the Ministry of Justice was approved allowances amounting to 1080.5 million lei, which during the year were specified in the amount of 1074.6 million lei, or by 5.9 million lei less. The execution of the budget towards the specified plan was achieved at a level of 96.8%.

In the opinion of the Court of Accounts, except for the possible effects of some aspects, the financial reports, in all material respects, give a true and fair view in accordance with the applicable financial reporting framework. Thus, the audit evidence, which was the basis for issuing the audit opinion with reservations, revealed:

• Non assessment due to the lack of a normative framework that would stipulate the criteria for their evaluation and the corresponding reporting by the National Archives Agency of the 83.4 thousand files of the State Archival Fund, property of the Republic of Moldova, cataloged as "Documentary Monuments" with special historical, scientific and cultural value.
• Registration in the register of the accounting records of the Ministry of Justice and the National Administration of Penitentiaries of 33 buildings with a total area of 5998.8 m2, only in quantitative terms, of which 7 buildings with an area of 566.6 m2 owned by the Central Apparatus of the Ministry of Justice and 26 buildings with an area of 5432.2 m2 managed by the National Administration of Penitentiaries. Although the mentioned assets do not have a cadastral value, their value is classified as substantial, according to the audit team's estimates, amounting to 17.2 million lei
• The National Archives Agency irregularly paid a contractor the value of the repair works in the amount of 2.6 million lei, in the absence of the report of receipt of the executed works
• Following of the transmission by the National Administration of Penitentiaries and the registration in the record of the accounting records of Penitentiary no. 3-Leova of the assets previously deposited in the share capital of SE "Complex no. 1-Leova" in the absence of the decision on diminishing the value of the social capital, the value of assets of 2.5 million lei were reflected twice in the accounting records, as fixed assets and as receivables
• The National Administration of Penitentiaries irregularly carried out the disposal and the transfer to expenses of clothing and footwear in the amount of 4.3 million lei on the date of their release from the warehouse and not at the time of their decomissioning as a result of damage or expiration of the term of exploitation.

With reference to capital investments, the auditors mentioned that, in 2023, there is a low level of execution of capital investments by the institutions subordinated to the Ministry of Justice, the audit noting some delays, problems and deficiencies in the construction and reconstruction processes of some objectives, which incur additional costs for their completion. Thus, although by the State Budget Law for the year 2023, for capital investments, the Ministry of Justice was granted allowances in the amount of 79.3 million lei, later after the amendment of the Annual Budget Law, the specified allowances constituted 37.4 million. lei, of which 36.9 million lei allocated for the construction and reconstruction of prisons. The executed expenses amounted 30.9 million lei, compared to the stated amount, which is 82.6%.

Regarding the capital investments for the construction of some courthouses, the situations found by the audit were caused by the lack of qualified personnel in the field of construction, with skills in organizing and managing capital investment capitalization process, within the Court Administration Agency.

Considering capital investments within the penitentiary system, it is mentioned that in order to align with international norms and standards, the Government of the Republic of Moldova has assumed the specific objective of improving detention conditions in the penitentiary system. Although, since 2013, the construction activities of two penitentiaries have been initiated, for which capital investments in the amount of 140.4 million lei have been capitalized so far, the situation regarding the completion of constructions and their commissioning remains uncertain. After the completion of the first stage of the construction of the "Detention House" with a capacity of 650 places in the municipality of Balti, the second stage was not initiated, the works being suspended, due to some problems regarding the ownership of the land necessary for the complex construction of the penitentiary, which makes it impossible to obtain the construction permit.

The second penitentiary in the municipality of Chisinau is at the stage of drawing up and adjusting the project documentation and estimate, the construction works shall be purchased and carried out.

The audit also reveals that the institutions subordinated to the Ministry of Justice did not fully ensure, through the internal managerial control system, the management and monitoring of capital investments. The attested situations affect the implementation on time of some government policies in the field of justice, which are related to the improvement of detention conditions and ensuring the courts with appropriate offices and working conditions.

A defective situation was found during the capital repair works of the headquarters of the National Archives Agency, the cost of the works constituting a total of 8.7 million lei. Although the works were carried out in the period 2021-2023, the responsible factors within the Agency did not ensure the reception at the end of the capital repair works and the final reception of the works, thereby violating the normative framework in the construction field.

The National Archives Agency paid 2.6 million lei to the contractor selected for the execution of the works, in the absence of the minutes of receipt of the executed works, which were presented to the audit team only in May 2024, or over a period longer than 18 months.

The audit notes that the economic operator did not fully honor its contractual clauses regarding the works contracted and paid for by the Agency. Thus, in order to complete the repair of the facade, works were contracted from another economic agent, respectively, additional budget expenditures in the amount of 240 thousand lei were made.

To remedy the identified deficiencies, the Court of Accounts submitted 16 recommendations, to be implemented by the Ministry of Justice and subordinated entities.

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