WITH DEFICIENCES OF VIEW
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The Court of Accounts of the Republic of Moldova examined, on March 24, the Audit Report on the financial reports of the administrative-territorial unit of Comrat, concluded on 31.12.2019 and the Compliance Audit Report on the budgetary process and public patrimony management within the administrative-territorial unit (ATU) Comrat municipality for 2019.
The municipality of Comrat is a I level administrative-territorial unit located on an area of 16396.38 thousand acres and which has a population of about 23.3 thousand inhabitants.
From the local budget are financed 19 institutions with an overall staff of 487.65 units. Also, the local public administration (LPA) of Comrat municipality is the founder of 2 municipal enterprises.
According to the data included in the financial reports of Comrat City Hall on December 31, 2019, the total value of the assets amounted to 1003.5 million lei, the revenues were executed in the amount of 90.2 million lei or 99.4% of the specified budget, and household expenses in the amount of 95.5 million lei or 91.9% of the volume of the specified allowances.
In the opinion of the audit team, given the significant misstatements found and reflected in the Audit Report, the financial statements prepared on 31.12.2019 do not present a correct and accurate picture of the balance sheet, according to the applicable financial reporting framework, being issued a contrary opinion. The situation created was determined by:
1. Increasing the value of account 371 "Land" with the amount of 6.9 million lei, following the doubling of the land records and non-settlement (transition to expenses) of the lands with the surface of 165.55 acres with the amount of 6.7 million lei , sold in 2016-2019 and incorrect accounting of some buildings with the amount of 142.4 thousand lei. Comrat City Hall did not provide an analytical record of the account 371 "Land", being kept only a synthetic record of land;
2. Decrease of the account 312 „Special constructions” with the amount of 46.4 million lei, determined by the non-capitalization of the road repair services with the amount of 44.8 million lei and of the construction materials used with the amount of 1.6 million lei;
3. Increasing the value of account 415 "Other forms of capital participation within the country" with the amount of 129.2 million lei, determined by the ignorance and non-accounting of the technical-municipal infrastructure of water supply and sewerage systems and goods transferred to management, by decreasing the value of the following accounts such as “Transmission installations” (by 68.4 million lei), “Special constructions” (by 45.7 million lei), “Buildings” (by 1.7 million lei);
4. Lack of sufficient and truthful information to quantify the effect of significant distortions related to 142 streets and 174 wells not registered as special constructions with an impact on the value of wear and actual costs;
5. The increase of the expenses related to the subsidies granted to the municipal enterprises, public and private third entities in the amount of 6.7 million lei, with the simultaneous decrease of the value of account 313 “Transmission installations” with the amount of 5.1 million lei, of account 312 "Special constructions" with the amount of 1.0 million lei, of account 282 "Other capital expenditures" by 482.0 thousand lei and of account 415 "Shares and other forms of capital participation within the country" by 130.0 thousand lei, and so on.
In the context of the compliance audit, a series of deviations and irregularities admitted in the budgetary process and in the management of the public patrimony were established, conditioned, to a large extent, by the non-establishment of the internal managerial control within the City Hall, but also by the lack of implementation of the recommendations of the Court of Accounts, issued throughout the Decision no.50 from 23.07.2018. Of the 9 recommendations and 1 requirement issued, only 2 were implemented, 1 requirement and 3 recommendations were partially implemented and 4 recommendations were not implemented at all.
The management of the incurred expenses did not ensure the compliance with the legal norms, thus being admitted some irregularities and deviations from the regulatory framework expressed throughout:
• performing capital repair works in the absence of available financial means;
• the use of diminished financial norms for feeding children from preschool education institutions amounted to 217.9 thousand lei, although they have been allocated;
• the responsible persons of the Comrat City Hall did not respect the principles of correct completion of the menu, did not evaluate the diet and nutritional status of children, according to the provisions of the regulatory framework. Consequently, this has led to the non-compliance with the daily food requirement for a child set by the regulatory framework, with the daily quantity for some products per child being reduced and for other products increased.
The lack of a framework for regulating the management of local public patrimony, as well as a faulty management system, do not ensure the regularity of public patrimony administration, which results in:
• failure to ensure the compliant registration, in the Real Estate Register, of the patrimonial rights over 9 constructions with the value of about 2.0 million lei and of the lands of local public property of 3191.7 acres or 77.6% of the total surface of the ATU;
• the land cadastre of the ATU, according to the situation on December 31, 2019, does not provide users with complete information, because it includes outdated and untrue data;
• the failure to contract and collect the lease payment of the public property lands related to the privatized objectives with the total surface of about 35.4 a resconditioned the loss of revenues of about 1.8 million lei.
The audit reveals that, during the assessed period, although the Comrat LPA has taken some measures to ensure a proper management of the budget process and local public assets, there are still areas that do not meet the requirements and, implicitly, the spirit of regularity and good governments. Thus, the audit shows deviations and irregularities, such as: non-elaboration and non-implementation of internal control procedures that would hold the parties involved in the budgetary process accountable; the legislative vacuum in terms of identifying, assessing and monitoring the economic potential related to the formation of the conclusive tax base; non-compliance with the procurement procedures for goods, works and services; irregular use of public funds to capitalize on investments and capital repairs; failure to ensure full registration of the property right; and so on.
In this context, the Court of Accounts made recommendations aimed at addressing the shortcomings and non-compliances, as well as reducing the risks set out in the Audit Reports.
