WITH DEFICIENCES OF VIEW
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The Court of Accounts of the Republic of Moldova (CoARM) examined on September 19, the audit report on the consolidated financial reports of the administrative-territorial unit (ATU) of the municipality of Chisinau concluded on December 31, 2020 (ATU/level II budget) and the compliance audit report of the budget process and the management of public assets in 2018-2020 at the ATU of the municipality of Chisinau (ATU/level II budget).
The city of Chisinau is the administrative, economic, scientific, educational and cultural center of the country. Located in the central area of the republic, this municipality is a region of autonomous development, due to its exceptional characteristics, a fact that causes increased interest from the society, as well as from the central authorities.
The assets managed by the ATU Chisinau municipality as of 31.12.2020 amounted to 18.69 billion lei, and the actual expenses for 2020 amounted to 4.34 billion lei.
The Court of Accounts issued the contrary audit opinion, which was determined by the deficiencies found at the level of all financial reports, the accounting balance being affected by approx. 6.08 billion lei, revenues - by 27.6 million lei and expenses - by 133 .3 million lei.
The problems identified within the ATU Chisinau municipality are due to the non-exhaustive delimitation of the powers and responsibilities of the subdivisions taking into account the specifics of their activity, the lack of monitoring of the activity of subordinate entities (74 budgetary institutions and 94 self-management institutions), the lack of communication between subordinate institutions, non-compliance with the legal framework applicable regulations, as well as the non-implementation of the recommendations of the Court of Accounts.
Generalizing the conclusions formulated in the audit process, the Court of Accounts found a series of non-compliances:
- The local public administration (LPA) of the municipality of Chisinau does not have exhaustive and truthful information regarding the indicators that are the basis for calculating the revenues from local taxes established on the territory of the ATU Chisinau, which conditions their inadequate planning. The specialized departments of the municipality of Chisinau do not ensure a compliant record of the tax base for some local taxes, which determined, in 2020, for only 3 local taxes, the underestimation of revenues by about 11.01 million lei;
- The Chisinau Municipal Council (CMC) did not distribute, during 2018-2020, transfers with special destination (TSD) for road infrastructure by spending chapters, a fact that contradicts the provisions of the normative acts. Also, TSD were used for the infrastructure of public roads of local interest (162.81 million lei), and in 2018 funds in the amount of 1 million lei were used to repair the road of a locality that is not part of the municipality of Chisinau;
- Despite the fact that financial means are allocated from the state budget for the repair of the communication infrastructure, the LPA of the municipality of Chisinau, in the period 2018-2020, did not fully utilize the allocated means in the total amount of 29.21 million lei. In the period 2018-2020, the LPA of the municipality of Chisinau used, contrary to the destination, TSD for the road infrastructure in the total amount of 31.78 million lei, which was directed to the payment of the reconstruction works of the technical-building infrastructure (electrical networks, telephone networks , aqueduct and sewage networks);
- LPA fragments the responsibilities aimed at one and the same investment object by involving several subordinate institutions or does not involve the institution responsible for this field. An eloquent example is the objective Reconstruction of the alley on Mircea cel Bătrîn boulevard. The works regarding the elaboration of the project, the topographical plan, the development of the track for cyclists, the installation of cables and electrical equipment, etc. were put in charge of the Ciocana sector Price, 4.65 million lei being used. At the same time, works were contracted from ME EXDRUPO in the amount of about 7.12 million lei and from ME LUMTEH - about 2.03 million lei. This situation also led to non-compliance with the normal sequence of the works that were to be executed;
- As a result of the delay in the implementation of the project of energy efficiency and thermal insulation of public buildings in the municipality of Chisinau, within the term stipulated in the contract, the City Hall of the municipality of Chisinau incurred ineffective expenses in the total amount of 5.7 million lei, the equivalent of the commissions paid for non-payment the amount of loans contracted from the EIB and the BERD;
- The LPA did not ensure the revision of the organization chart of the City Hall apparatus and subordinate entities for the optimization of functions, the exclusion of overlapping and duplication of competences and for the assessment of the actual volume of work. More than that, the headcounts on 31.12.2020 recorded 149 units more compared to the same period of 2018 (in particular, the headcounts were increased at Sector Prices). It is also noted that the necessary personnel are not assigned to the position (at the end of 2016 - 202 vacant units; 2020 - 357 units;
- The ATU and the budgetary institutions do not ensure the declaration of all purchases made. Thus, out of 1.3 billion lei of purchases made, according to the financial report, purchases of 755.8 million lei were declared, of which with a value of less than 10 thousand lei - in the amount of 201.3 million lei. Therefore, the non-declaration of procurements in the amount of 544.7 million lei is noted.
- The sector prices contracted and paid for the installation services of the video surveillance system in public places in the municipality of Chisinau (squares, parks, pedestrian underpasses, ponds, etc.) without these actions being approved and coordinated with the CMC, as well as and in the absence of an agreement with the Police Inspectorate.
The decision-makers within the CMC and the Chisinau City Hall drew undue attention to the findings and recommendations of the Court of Accounts, reflected in the previous audit reports, regarding the management of the municipal patrimony, the issuance of permissive documents, etc. This fact leads to the loss of public property, estimated between 2018 and 2020 for at least 5.3 million euros or 107.8 million lei. The ATU Chisinau was deprived of approximately 45.1 million lei following the transaction related to the lease of the land located on 5 Carrierei street, with a total area of 1.07 acres, which was used as a deposit in a civil society contract regarding the construction of residential blocks, for which the lessor received ownership of real estate with a total area of 4.96 thousand m.p.
For the design and construction of housing blocks on the land with the area of 0.77 ha on bd. Mircea cel Bătrân, during 2017-2018, permissive construction documents were issued by the SCM based on the decision of the CMC of 23.12.2014 to lease the land for a period of three years, although in the Real Estate Register there is no mention of the registration of the SCM's right of use over this land. The lease contract concluded with SCM on 29.11.2016 was for a term of 1 year, but on 16.01.2018 SCM concluded a civil society contract with a real estate developer, whereby he contributes the land in question, and the economic agent - with financial means necessary for the design, construction of a residential housing complex, and commissioning of the building (40% of the housing will be distributed to SCM at a price of 360 euros m2).
The LPA from the municipality of Chisinau does not ensure the drawing up of municipal land use contracts related to private property. A similar situation can be seen in the land related to the garages, summer terraces, vulcanizations and street vendors with a total area of 7.94 acres.
The lack of communication, coordination and verification between the subdivisions of the Chisinau City Hall and the General Directorates of the CMC of the data related to one and the same transaction conditioned the double accounting of the value of the land with an area of 0.231 acres in the amount of 6.71 million lei and the increase unfounded of the value of the income from the assets entered with the free title, with the amount of 46.19 million lei.
