The Court of Accounts of the Republic of Moldova on July 29, examined during an online meeting the audit report on the consolidated financial reports of the Ministry of Education, Culture and Research concluded on December 31, 2021, the audit report on the consolidated financial reports of the Ministry of Education and Research ended on 31 December 2021 and the audit report on the consolidated financial reports of the Ministry of Culture concluded on December 31, 2021.
As a result of the restructuring of the specialized central public administration, the Ministry of Education, Culture and Research was reorganized into the Ministry of Education and Research and the Ministry of Culture.
According to the balance sheet data, on January 1, 2021, the Ministry of Education, Culture and Research and its subordinated entities managed assets worth 4.7 billion lei and in eight months of 2021 managed a budget worth over 1.7 billion lei.
In four months of 2021, the Ministry of Education and Research and its subordinated entities managed a budget of 0.8 billion lei, the execution level being 83 percent. The value of the managed assets on December 31 constituted 4.6 billion lei.
In the same period, the Ministry of Culture and its subordinated entities managed a budget of 0.18 billion lei, the level of execution being 94 percent, the value of assets managed was 0.35 billion lei.
In the opinion of the audit team, the financial reports of the Ministry of Education, Culture and Research, the Ministry of Education and Research and the Ministry of Culture do not present a true and fair view according to the applicable financial reporting framework. The adverse audit opinions were determined by the deficiencies found at the level of all financial reports:
- Ministry of Education, Culture and Research: the accounting balance was affected by 87.4 million lei, revenues – by 0.36 million lei and expenses – by 87.9 million lei;
- Ministry of Education and Research: the accounting balance was affected by approx. 5154.4 million lei, revenues – by 0.19 million lei and expenses – by 50.2 million lei;
- Ministry of Culture: the accounting balance was affected by approx. 1289.5 million lei, expenses – by 5.9 million lei.
The most significant deficiencies referred to:
- the opening balances of the financial reports of the Ministry of Education, Culture and Research contain misstatements that significantly affect the financial reports of the audited period. As a result of the fact that the ministry did not correct historical errors in the amount of 4.8 billion lei, at the level of asset and liability balances, they were significantly distorted;
- the persons responsible for governance within the Ministry of Education and Research, as well as within the Ministry of Culture, did not comply with the requirements of the Ministry of Finance on aspects related to reorganization, namely, the restructuring committee has not been established in the near term, the inventory of the heritage and the transfer of assets and liabilities has not been carried out until November 30, 2021, a fact that disrupted the reorganization process and significantly affected the consolidated financial reports of both ministries;
- without having rights and obligations, the Ministry of Education and Research accounted for assets and liabilities with a balance sheet value of 485.2 million lei, which are managed by the Ministry of Culture, but which were not transmitted according to the acceptance-handover documents;
- due to the non-compliant application of the rules for the recognition and evaluation of public lands, the value of the "Lands" account was undervalued at the Ministry of Education and Research by 361.5 million lei, and at the Ministry of Culture by 147.1 million lei;
- the value of the "Buildings" account was reduced at the Ministry of Education and Research in an aggregated total of 115.3 million lei, determined by:
- the decrease by 35.4 million lei, as a result of the non-adjustment of the cadastral value of 19 buildings;
- non-capitalization by "Aristotel" High School of investments of 78.2 million lei;
- failure to register in the accounting records 7 buildings worth 10.2 million lei and 2 constructions estimated at 1.4 million lei; etc.
- 18 scientific research institutions subordinated to the Ministry of Education, Culture and Research and the Ministry of Education and Research did not take sufficient actions to record as intangible assets the expenses incurred for scientific research. On 31.12.2021, only 45.6 million lei were capitalized, or 29.6% of the total expenses of 154 million lei, incurred for research and innovation projects. Thus, the research institutions did not ensure the accounting in 2021 as intangible assets in progress of the expenses incurred for scientific research, in the amount of 108.4 million lei;
- at the Ministry of Education and Research, the value of the "Capital investments in progress" account was increased due to the double record of the investments made in 7 objects with 14.5 million lei, also recorded in the accounting records of LPA, and in 3 objects of 15, 5 million lei sold by LPA; non-capitalization of the investments of 78.2 million lei made at the "Aristotel" High School; non-execution of invoiced construction works of 5.84 million lei;
- within the Ministry of Culture, the value of cultural heritage assets was reduced by 181.6 million lei, due to the failure to take measures for the accounting of monumental buildings;
- the allocation of subsidies to support the activity of theater-concert organizations, by the Ministry of Education, Culture and Research in the amount of 104.2 million lei and by the Ministry of Culture in the amount of 87.9 million lei, was carried out without respecting the normative provisions and limits established against the total expenses, which conditioned the bearing of expenses over 16.5 million lei.
For good governance, the ministry has the obligation to implement the normative acts in the specific fields of activity and to monitor, adjust the public policies in the field of competence. Starting from 2019, the normative framework that regulates the size of the tariffs for services provided against payment of study fees, being in force approved in 2005 and 2015, has not been adjusted, which limits the institutions to self-management in the individual approval of the tariffs for studies based on contract.
The Ministry of Education, Culture and Research did not calculate and approve the average cost for the training of a specialist, as a result, the executed expenses of the study process related to budget allocations were irregularly reported, a situation also found in the audit reports of previous years, which determines the overestimation of the expenses related to the services for the realization of the "State Orders" plan by about 336.7 million lei. Also, the ministry and the institutions of higher education have not approved procedures to ensure the implementation of the mechanism of restitution to the state budget of the expenses incurred for the training of students who refused the mandatory employment in the field of work and of those expelled from studies. The expenses borne by the state for the training of 2,175 de-matriculated students, for one year of studies (without scholarship), amount to approximately 44.8 million lei.
In the chapter on labor remuneration, deficiencies were found in the normative framework, in some cases with an impact on financial reports. Through the erroneous application of the normative provisions, non-compliant salary rights were granted, over the regulated limits in the amount of 492.4 thousand lei at the Ministry of Education, Culture and Research, 768.6 thousand lei at the Ministry of Education and Research and 191 thousand lei at the Ministry of Culture, which were attributed to supplements, performance bonus, one-off awards and grade increases for policy-making work, etc.
Finally, the Court of Accounts noted that, during the audit, the institutions under the Ministry of Education and Research made financial-accounting corrections of 1.3 million lei, they (re)registered assets of 3.5 million lei and revenues of 34.4 thousand lei. The Ministry of Culture made accounting corrections of 43.9 thousand lei and capitalized assets of 12 million lei.