WITH DEFICIENCES OF VIEW
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The Court of Accounts of the Republic of Moldova, on June 28, examined during the online meeting the Audit Report on the consolidated financial reports of the Ministry of Agriculture, Regional Development and Environment (MARDE) concluded on December 31, 2021 and the Audit Report on the consolidated financial statements of the Ministry of Agriculture and Food Industry (MAFI) concluded on December 31, 2021.
The Ministry of Agriculture, Regional Development and Environment, until the restructuring of the specialized central public administration, was the central public authority, which in 2021 ensured the implementation of government policy in various fields.
The Ministry of Agriculture, Regional Development and Environment has sent the managed patrimony to the Ministry of Agriculture and Food Industry, the Ministry of Environment, as well as to the Ministry of Infrastructure and Regional Development, reporting at the end of the management period the balance of the balance sheet items at 0. At the same time, for the accomplishment of the activities planned in 2021, financial resources for MARDE were specified in a total amount of 1247.03 million lei, being executed 1358.86 million lei, thus being registered an over-execution indicator of 100.8%, fact due to the improper distribution of the allocations to the income part.
In this context, the Court of Accounts issued a qualified opinion on MARDE's financial statements, which in all material respects, with some exceptions, provides a fair and accurate picture, according to the applicable financial reporting framework. The issues that formed the basis of the opinion for MARDE also affected the opinion for MAFI, the successor of rights and obligations.
In 2021, MAFI and its subordinate institutions managed resources amounting to 845.8 million lei, expenses and non-financial assets amounting to 893.6 million lei, the level of income being 81.25%, of expenses and non-financial assets - 83.26%. At the same time, according to the balance sheet data, in 2021, the patrimony administered by MAFI had a total value of 1229.3 billion lei.
The qualified opinion was issued on the basis of the following shortcomings:
- non-exclusion from the accounting records of the shares in the share capital of 2 state-owned enterprises located abroad amounting to 25.7 million lei, as well as the value of the share of a state-owned enterprise, amounting to 20.5 million lei, which was liquidated and deleted from the State Register of Law Units in 2021;
- the irregular transmission, free of charge, to colleges and centers of excellence, which have become self-managed as a result of the 2018 reform, of the share in the amount of 247.5 million lei, consisting of public property;
- the audit was limited in obtaining a reasonable assurance on the fidelity and veracity of the reported value of the composition of the share capital in state-owned enterprises and joint stock companies in the amount of 579.58 million lei.
The audit also noted shortcomings concerning the "Lands" chapter:
- The Ministry did not evaluate and did not account the value of 31 plots of land, with an area of 698.16 acres in the amount of 112.84 million lei;
- irregular registration in the accounting records of the value of 57 plots of land, with a total area of 1669.3 acres, although they belong to third parties;
- the regulatory provisions were not applied, being allowed the accounting of 9 plots of land with an area of 1668.73 acres in the amount of 57.13 million lei, received on loan from the Public Property Agency.
The audit highlighted other shortcomings admitted due to the non-application of the general rules of registration in the accounting records, but which did not affect the financial reports of the Ministry. Thus, the MAFI continued to keep in the accounting records of the demolished real estate of the "Selection" rest base, located in Ukraine.
The Court of Accounts also highlighted other shortcomings that, although they do not have a financial impact and did not influence the audit opinion, imply the non-compliance of the activity of registration and administration of public patrimony with the relevant laws and regulations:
- non-registration of patrimonial rights over 341 real estates in the amount of 49.6 million lei;
- the existence of a significant number of days of annual leave not used by employees (9613 days), which would impose legal obligations on staff, contributing to the emergence of financial commitments in future financial years;
- The Porumbeni Institute of Phytotechnics accumulates revenues from the provision of water supply and wastewater disposal services, not holding the authorization to capture water for special use and without having the tariffs approved accordingly;
- the continued maintenance of the double status assigned to the National Office of Vineyard and Wine, which, according to its own statute, is a public institution of self-management, but has also been assigned the code of budget executor;
- the mechanisms applied by the Public Property Agency for the transfer of the right to manage public property lands to the central public authorities, determines the defective accounting of state assets and the presence of an increased risk of significant distortion of the value of publicly owned land; the audit highlights the need to complete the Chart of Accounts for budgetary institutions with a new account for the assets received under management.
The Court of Accountss considers that the audit evidence obtained and presented in the draft Audit Report is sufficient and appropriate to serve as a basis for the audit opinion, determined by the effect of material misstatement and that except for the effects of some aspects, the consolidated financial statements of MAFI, concluded on 31.12.2021, in all significant aspects, provide a correct and accurate picture according to the applicable financial reporting framework.
