WITH DEFICIENCES OF VIEW
Youtube
Facebook
print
.jpeg)
On June 19, the Court of Accounts of the Republic of Moldova (CoARM) reviewed the audit report on the consolidated financial statements of the Ministry of Infrastructure and Regional Development (MIRD) as of December 31, 2023.
At the end of 2023, the assets managed by the MIRD and its subordinate entities amounted to 3.8 billion MDL. Revenues were 4.4 billion MDL, external loans were 3.8 billion MDL, and expenses totaled 4.7 billion MDL, funded by the state budget.
The main audit observations were presented during the session. The qualified audit opinion with was based on the following findings:
- Delays in transferring certain assets by the MIRD and the failure to transfer capital repair works of fixed assets on the balance sheet of another budgetary institution resulted in the overvaluation of building-related information by 586.6 million MDL and transmission installations by 212.7 million MDL. Specific cases include:
- Non-transfer of the Parliament building and related equipment resulted in the overvaluation of MIRD-reported buildings by 581.5 million MDL and transmission installations by 37 million MDL.
- The National Office for Regional and Local Development did not fully transfer investments totaling 4.5 million MDL to beneficiary communities.
- Non-transfer of the Tocuz-Căinari-Mereni main gas pipeline led to the overvaluation of transmission installations reported in the consolidated balance sheet by 175.1 million MDL and the secure telecommunications system by 37 million MDL.
- The National Inspectorate for Technical Supervision did not revalue six properties with a total area of 405.8 square meters, recorded in accounting at an initial value of 188.4 thousand MDL, which were fully depreciated but still in use, resulting in the maintenance of these assets at a zero balance value.
- The MIRD did not record state-owned assets managed economically by self-managed public institutions, resulting in the underreporting of investments by approximately 46.5 million MDL in the consolidated balance sheet.
The external public audit also noted that national roads and state-owned land areas worth 22.9 billion MDL are only recorded in the accounting records of the State Roads Administration, not in the MIRD or Public Property Agency's accounts. As a result, public road values are not reflected in the Government's state budget execution report.
Additionally, railway infrastructure and associated land worth approximately 4.1 billion MDL are not recorded in the MIRD or Public Property Agency's accounts due to incomplete inventory and delineation by the State Railway Enterprise.
The Court of Accounts also observed that funds amounting to 60 million MDL were reallocated from the Roads Program to the Railway Transport Development Program by the Committee for Exceptional Situations, but were invested in government securities rather than used for railway embankment rehabilitation as intended.
The Court of Accounts also reported on the main observations of the audit, which, while not having an impact on the audit opinion, are important information, because failure to resolve them may condition increased risks of distortion and negative impact in subsequent reporting periods:
- Misclassification of budget allocations for regional development agencies and the National Office for Regional and Local Development resulted in the underreporting of current grants to self-managed public institutions by 38.7 million MDL.
- Inconsistent accounting for construction standards and norms led to these assets being reported in both balance sheet and off-balance sheet accounts, totaling 47.5 million MDL.
- The Civil Aviation Authority did not initiate the transfer of state-owned land to the Public Property Agency, resulting in an overvaluation of reported land by 17.6 million MDL.
- The MIRD did not transfer the value of investments in 62,500 ordinary shares of KAMAZ JSC in the Republic of Tatarstan, Russian Federation, leading to an overvaluation of shares and other overseas capital participations by 1.4 million MDL in the consolidated balance sheet.
In conclusion, the Court of Accounts issued 11 recommendations to the MIRD and its subordinate institutions to address the issues identified in the audit report and better control residual risks of misstatement or non-compliance in future periods.
