WITH DEFICIENCES OF VIEW
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On July 23, the Court of Accounts of the Republic of Moldova (CoARM) examined the audit report on the consolidated financial statements of the Ministry of Culture as of December 31, 2023.
The Ministry of Culture is the central specialized authority of the central public administration, ensuring the implementation of government policy in the fields of culture, national heritage, tourism, and mass media.
In 2023, the Ministry of Culture managed resources amounting to 625.5 million MDL and expenses totaling 651.8 million MDL. Additionally, the Ministry administered assets worth 2.7 billion MDL.
The meeting addressed the most significant nonconformities and deficiencies found in the draft audit report, which led to the expression of a contrary audit opinion:
- Buildings that are part of monasteries considered national heritage monuments protected by the state were not evaluated and recorded. The value increase of two monastic complexes from reconstruction and restoration works in previous years was not recognized. For the "Căpriana" Monastic Complex, this amounted to 87.8 million MDL, and for the "Curchi" Monastic Complex, 92.5 million MDL. This led to the undervaluation of the "Cultural Heritage Assets" and "Other Income and Financing" account groups by at least 180.3 million MDL.
- 20 cultural monuments were recorded as buildings, and six assets were recorded as other fixed assets, which should have been reflected as cultural heritage assets. This resulted in the undervaluation of the "Cultural Heritage Assets" account group by 103.06 million MDL and the overvaluation of the "Buildings" and "Other Fixed Assets" account groups by 102.3 million MDL and 0.76 million MDL, respectively.
- The comprehensive evaluation and accounting of cultural assets managed by subordinate entities is complex. As of December 31, 2023, only 8,296 out of 899,601 inventoried cultural assets (0.92%) were evaluated at 997.0 million MDL. The audit was limited in obtaining sufficient and appropriate evidence to estimate the value of the remaining 891,305 cultural assets.
- The Ministry did not fully account for the value of assets transferred to self-financing public institutions. While the Ministry recorded 633.1 million MDL under "Shares and Other Forms of Participation in Capital," public institutions managed buildings, land, special constructions, and constructions in progress worth 993.2 million MDL.
In the audit activities were identified another 8 lands with a total area of 3.77 ha of 11.8 million. lei and 7 buildings with a total area of 1705.6 m2 worth 5.9 million lei, not accounted for by public institutions for self-management, the value of goods being estimated at 1010.9 million lei;
- The lands on which the monasteries are situated were not evaluated and recorded. The "Căpriana" Monastic Complex is on a 3.4485 ha plot, and the "Curchi" Monastic Complex is on a 55.2118 ha plot, with a total normative price of 137.9 million MDL.
- The Ministry lacks information on the value of over 60,000 films, including primary image and sound materials, financed by the state budget or state institutions before 2011 which, according to the normative framework, is to be preserved by the National Center of Cinematography, but, de facto, the national patrimony of public property in the field of cinema is deposited in several state institutions: National Agency of Archives, institution subordinated to the Ministry of Justice, as well as to the S.A. „Moldova Film” and S.A. „Moldcinema” founder of which is the Public Property Agency and the national public media service provider Company „Teleradio – Moldova”;
- With reference to the documentary sources of the written national culture, according to the provisions of the normative framework, their legal deposit is created by the National Chamber of the Book, which is constituted as a result of the storage in it, immediately after the appearance of new publishers, of 5 copies sent free of charge by the printer, from the account of the publisher, which are then distributed to 4 libraries. It should be noted that, although the edited books are transmitted to the National Chamber of the Book as the holder of the legal Depositary, this, contrary to the provisions of the normative framework, does not evaluate them and does not account for them, the distribution to the beneficiary libraries of the edited copies being made free of charge, without indicating their value, the last ones, as beneficiary, assessing them and reflecting them in its bookkeeping at the estimated prices. As a result, specimens that remain with the Legal Depository, are not evaluated and inventoried. Thus, from 2520 copies of books entered in 2023 in the possession of the Legal Depositary of the National Chamber of the Book, only 564 (22.38%) have been evaluated and accounted for at the value of 69.5 thousand lei. For the other 1956 evaluated specimens, the estimated value constituting at least 0.15 million lei, respectively, undervalued group of accounts „Other fixed assets” and group of accounts „Other income and financing”.
At the same time, to be mentioned that, in total, 64439 copies edited in the years 1993 – 2023 are not evaluated and accounted, the value of which will be a significant one.
The audit noted the lack of comprehensive provisions and criteria on the financing of theater and concert organizations. Thus, although the normative framework provides that the way of establishing and paying subsidies from the state budget is approved by the Government, it has not been approved so far, over several years, the financing of theater and concert organizations, being carried out in the absence of pre-established criteria. In these conditions, the theater and concert organizations in 2023 benefited from financing in the amount of 281.6 million lei, which is 43.2% of the total expenditure of the ministry budget.
Although, in 2023, a draft of the Regulation on financing public institutions in the theater and concert field subordinated to the Ministry of Culture was developed, which provided as subsidy destinations: staff expenses from 80% to 100%, including social security contributions 100%, as well as infrastructure rehabilitation through capital and current repairs, it received a negative opinion from the Ministry of Finance. Thus, measures are to be taken to develop a new Regulation, taking into account the proposals of the Ministry of Finance.
The audit found that the internal managerial control established within the Ministry of Culture did not ensure the efficient identification and management of all risks related to the financial-accounting process, including those related to the preparation of consolidated financial statements. The fragmented establishment of internal managerial control influenced the veracity and completeness of the information reflected in the financial reports.
During the audit carried out in the previous year, 19 recommendations were submitted to help remedy the non-conformities found, but only 3 recommendations were implemented, 8 recommendations partially implemented, and 8 recommendations have not been implemented, the level of implementation of the CoARM Decision of the previous year being 36.8%. In this respect, partially implemented and unimplemented recommendations were reiterated in the current audit.
The Court of Accounts also noted that the Ministry addressed some of the identified nonconformities during the audit, but these corrective actions did not affect the consolidated financial statements as of December 31, 2023.
