The Court of Accounts presented, during the PFCC meeting, the financial and patrimonial statements of the SE „Security services” of the MIA

The Court of Accounts of the Republic of Moldova (CoARM) presented today, March 2, within the meeting of the Parliamentary Public Finances Control Committee (PFCC), the Compliance Audit Report of the Management of Public Financial Resources and Public Assets by the State Enterprise "Security services" of the Ministry of Internal Affairs (MIA) in 2019.

The most important aspects of the audit, but also the conclusion of the compliance report were presented by Viorel Chetraru, Vice President of the CoARM and Olga Poiană, Head of the audit team.

According to the financial statements submitted to the National Bureau of Statistics, in 2019, the SE "Security Services" of the Ministry of Internal Affairs recorded revenues amounted to 134,928.35 thousand lei, which represents values ​​increased compared to 2018 by 1416.47 thousand lei. It should be noted that sales revenue was the most important source of revenues (99%), which correlates the type of activity of the entity. At the same time, during the reference period, the entity also incurred expenses amounted to 133,627.96 thousand lei, which also represents values ​​increased compared to the previous year by 1273.57 thousand lei, their most significant share (76%) being recorded in respect of personnel expenses, including social security and medical premiums. This is explained by the fact that the productive force of the entity is represented by the human resources through which the basic activity is carried out.

The audit, assessing the compliance of the management of public financial resources and public patrimony by the SE “Security Services” of MIA in 2019, concluded that all the activities included in the audit area do not fully comply with the requirements of the normative framework in force, as well as the existing internal regulations. The identified deficiencies were caused both by the lack of exhaustive procedures of the internal managerial control, and by the non-compliance of the officials within the entity with the legal provisions.

As a result of the performed audit tests, it is certified that, due to gaps in the current internal control system, the entity has registered some deficiencies regarding the compliance of the management of public financial resources and the public patrimony held, expressed throughout:

the non-registration in the accounting records of 16 lands and 6 buildings over which the entity owns property rights, which distorted the financial statements for the management period by about 2881.55 thousand lei and conditioned the non-calculation of the respective usury for the mentioned buildings;

non-compliance with the legal provisions related to the management of fixed assets amounting to 16,680.72 thousand lei, which adversely affects the real cost of services provided, the cost base of tariffs for provided services and the value of performance indices related to operational activity;

irregular management of expired receivables with a total expiration amount of 8041.7 thousand lei, which provides the entity eligible to directly influence the financial results, given that it records compromised receivables since 2010;

non-compliant reflection in terms of long-term debts of assets received free of charge in the amount of 3206.45 thousand lei, which conditioned the erroneous reporting of information related to long-term debts, the financial result of the management year and, consequently, non-increase of capital own - important indicator for evaluating the activity of the enterprise and for making the necessary decisions in relation to the net assets managed;

awarding prizes in a total amount of 221.91 thousand lei contrary to legal requirements, which significantly reduces the compliant achievement of institutional management.

The audit found that, although the legal framework states that the position of founder of the state-owned enterprise, on behalf of the Government, is exercised by the Public Property Agency, it is revealed that, until now, the Ministry of Internal Affairs continues to fulfill this mission. It should be noted that the Ministry of Internal Affairs has taken initiatives to change the form of organization of the audited entity from a state-owned enterprise to a public institution, which would allow it to continue to serve as a founder.

The Court of Accounts concluded that all the activities covered by the audit area do not fully comply with the requirements of the current regulatory framework as well as the existing internal regulations. Thus, in the light of the above findings, a non-compliant approach is revealed on the process of spending on receivables, as well as obsolete and unused materials, which provides premises for the entity to influence and manage the financial result to artificially maintain the profit rate. At the same time, some processes and activities related to the management of the held assets were not carried out based on the principles of good governance and did not guarantee the integrity and continuous development of assets, and the non-application and non-establishment of internal policies, procedures and rules allowed significant accumulations of receivables and debts, thus generating other risks in relation to the aspect of regularity for obtaining positive economic and financial indicators.

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