audit reports on compliance in budget and public assets under management
local public entities
of Gagauzia for the years 2014-2015
in the Official Gazette
Article No. 25
Court in the presence of Members of Parliament of the Republic of Moldova, Mr. Cornelius Dudnic, Governor (Bashkan) of Gagauzia, Ms. Irina Vlah, first vice-president of the Executive Committee of Gagauzia, Mr Vadim Ceban, head of the Directorate General for Finance (Gagauzia ), Tatiana Donchev, head of the State Tax Inspectorate (Gagauzia), Natalia Comarov, Head of the Department management of public property under the public property Agency under the Ministry of Economy, Mr. Mihai Doruc, chief cadastral office Comrat, Mr Vladimir Marcovschi, Head of Directorate General for health and social insurance (Gagauzia), Mr. Alexei Zlatovcean, acting Head of the General Department of agroindustrial complex (Gagauzia), Mr Alexander Chendighelean, chairmen of districts: Comrat, Mr Vladimir Garcev, Ceadîr-Lunga, Mr. Valentin Cara , deputy district Vulcăneşti Mr. Ion Rotaru, and mayors: mun. Comrat, Mr Sergei Anastasov, or. Ceadîr-Lunga, Mr Anatoly Topal, or. Vulcăneşti, Victor Petrioglu, guided by art. 2 (1) and Article 4 para. (1) a) of Law No 261-XVI Court of 05.12.20081, examined the audit report conformity of the budget year in local authorities in Gagauzia the years 2014-2015, as well as asset management compliance audit report public within public entities in Gagauzia the years 2014-2015.
_______________________________________ 1 Law No 261-XVI Court of 05.12.2008 (hereinafter - the Law No 261-XVI from 05.12.2008).
Audit missions were carried out under article 28, article 30 and article 31 of Law No 261-XVI from 05.12.2008 and in accordance with the program of audit work of the Court of Accounts for the year 20162. In overall, the audits focused on issues related to compliance by local government authorities (hereinafter - AAPL) the legality and regularity of the budgetary process and the economical and prudent management of public assets. _______________________________________
2 Decision No. 46 of 12.14.2015 Court of Auditors' audit work on the approval of the Court of Auditors for 2016 ".
The audits were conducted according to the standards applied by the Court internaţionale3, audit evidence was obtained by examining reports on budget execution, financial statements of the audited entities, accounting records; verification of source documents; indicators and analyze meaningful data; direct observation and by analyzing the reasons people in positions of responsibility in entities audited. Similarly, decisions and provisions were examined Executive Committee and governor of Gagauzia acts deliberative and executive organs of administrative-territorial units (further - ATU) levels _______________________________________ I.
Court Decision No 3 .60 of 11.12.2013 "on the application of international auditing standards of the Supreme audit Institutions level 3 - ISSAI 100, ISSAI 200, ISSAI 300, ISSAI 400 in the audits of the Court of Auditors'; Court Decision No. 7 of 03.10.2014 "On the application Audit Guidelines (ISSAI 1000-9999) under the Public Audit".
Examined the results of the audit and heard reports presented, as well as explanations of the persons officials present at the public hearing, the Court
Public audit assessments elucidates successful in managing public funds, but at the same time, raises some irregularities caused by the irrational use of resources allocated. Thus, deviations and irregularities admitted by local government of Gagauzia in the budget processes of 2014 and 2015 certifying that they have taken clear objectives for strengthening the financial base of local budgets, especially on the account (re) assessment of taxable implicitly sources of own revenues not meeting projections fullness fiscal rigor and confidence, and not ensuring the sustainability of ATU budgets of all levels. However, the management of budgetary expenditure and public property does not meet the criteria of prudence and economy. Management of public not help to strengthen the finances of local, fixed assets and assets managed by entities founded not generate adequate revenues.
Deficiencies identified by the audit engagement is expressed by:
• lack of application institutional development of internal control systems, and weak interaction between the relevant authorities (financial, economic, fiscal, statistical and cadastral) did not allow inventory and (re) assessment of taxable respectively quantified amount of taxes, but the audit assessed and accounted (2014-2015) not less than 71.6 mln, respectively, 60.8 million (VAT - 26.5 mln / 10.7 mln; excises - 14.7 mln / 36.1 mln, taxes on real estate - 6.6 mln / 5.4 mln; tax on territory - 1.7 mln / 1.6 mln; fee for commercial units and / or social services rendering - 1.3 mln / 0.9 mln, income tax entrepreneurship - 15.1 mln / 0.6 mln, revenues from the management of public land and property - 5.7 mil / 5.5 million);
• expense management not meeting the requirements, thus allowing for multiple violations and irregularities that have diminished the effectiveness of budgetary allocations expressed as:
→ planning with deviations from the normative number of children, which led to an increase of transfers POI preschool education from the state budget for 2014 by a total of 8.3 mln, respectively 2015 - by a total of 10.3 mln;
→ disapproval staffing for the period under audit, which resulted in irregular expenditure amounting to 70.39 million lei;
→ include an increased number of units in the staff for 2014, which generated additional expenses for wages (111) in the amount of 9.34 million lei;
→ uncontrolled use of budget funds on wages totaling 1.5614 million lei (including related contributions);
→ Free supply of I-IV grade pupils in primary schools, gymnasiums and lyceums under the rules approved by a total of 0.35 million lei, as well as children in preschool institutions - the total amount of 3.70 million .lei;
→ full inadequate use of public funds for capital expenditures amounting to 8.9 mln;
→ not recording in the accounts of statutory value increase repaired items resulting from capital expenditures totaling 5.67 mln;
→ contractual amendment irregular elements by introducing new elements, plus initial value for 0.14 million lei;
→ neelaborarea plans for procurement of goods, works and services amounted to 14.6 mln;
→ failure to publish the notice of intended procurement of goods, works and services amounting to 31.4 mln;
→ use of funds for purposes not of an exceptional nature in the amount of 2.8 mln;
→ inadequate control and monitoring failure to initiate action on the part of decision makers on the use of the humanitarian aid AAPL ended with: failure to register in the accounts balances in the amount of 43.2 tons of diesel fuel and the amount of food grain 2721.5 tons; failure to reinstate fuel and lots of food wheat allocated to operators on loan, totaling 14.9 mln; not submitting AAPL, capitalization / recording items repaired / constructed, expenses amounting to 2.30 million lei; use humanitarian aid for purposes other than those specified in the documents distribution, totaling 0.12 mln etc .;
• makers nonconforming work within AAPL (level I and level II) to ensure the regularity and legality of public property management, improper management of its management, noncompliance with legislation and the lack of a framework for AAPL regulating the management of public assets ended with:
→ veridical presentation of the Report on public Property Agency under the management of public assets AAPL subtracting the value of fixed assets of 13 entities in management in 2014 and 23 entities 2015, the sum total respectively 90.2 mln and 96.75 mln, and the increase in other entities 21 27 entities in 2014 and 2015 respectively with 159.9 million. 142.55 mln lei and;
→ proper by not registering and not accounting 10 UAT public assets worth 127.12 mln, transmitted management of public healthcare institutions;
→ failure to comply record of public assets worth 230.97 mln transmitted economic management of municipal, and not excluding the record of privatized housing buildings worth 309.92 mln;
→ registration by municipal enterprises of uncovered losses amounting to 65.06 million lei, due to inefficient operational activities;
→ non-registration of primary massive public buildings, sectors of land beside the dwellings and gardens within 3 UAT;
→ failure / failure to complete the demarcation of land public property of ATU in the public and private sectors in all 26 ATU of Gagauzia;
→ registration regulatory failure in the Land Register of rights in immovable property worth 124.9 mln and land with total area of 37 300 ha;
• improper accounting management did not ensure full extent of the principles governing the organization of accounting and record keeping and reporting financial statements under the rules laid down and found the records of irregular financial transactions as a result erroneous statements being reported financial and patrimonial;
• checks on compliance requirements and recommendations outlined in the audit report budgets of administrative-territorial Gagauzia 2011 and the management of public property, approved by Decree No. 24 of 29.05.20124 Court, shows that the management of UTA AAPL Gagauzia was not demanding the necessary fixes. Thus, previous recommendations on the management of state assets were partially implemented, which does not ensure continuity and remedial action to improve financial management. ___________________________________ 4 The
- Decision No. 24 of 29.05.2012 Court.
Deviations from legality and regularity attested by the administration of resources and public funds AAPL expressed largely low degree of coordination and supervision of the implementation of internal control tools.
Based on the above, under Article 7 para. (1) a), art. 15 (2) and para. (4), Article 16 c) and Article 34 paragraph . (3) of Law No 261-XVI from 05.12.2008, the Court
1. Approving the budget year audit report compliance within local authorities in Gagauzia the years 2014-2015, as well as asset management compliance audit report public within public entities in Gagauzia the years 2014-2015, annexed to this Decision.
2. This Decision and audit reports shall be submitted:
2.1. to implement the recommendations given in the audit report, to determine concrete actions to eliminate the deficiencies found and the setting of deadlines and persons responsible for their achievement:
2.1.1. People's Assembly, the Executive Committee of Gagauzia, the Governor of Gagauzia, heads: Directorate General Economics Directorate General of agroindustrial complex, Directorate General Education, External Relations Directorate General, Directorate-General for Finance, local councils mun. Comrat, or. Ceadîr-Lunga and the town. Vulcăneşti, district chairmen Comrat, Ceadir-Lunga and Vulcanesti mayors mun. Comrat, or. Ceadîr-Lunga and the town. Vulcăneşti (compliance audit report of the budget year in local authorities in Gagauzia the years 2014-2015);
People's Assembly, the Executive Committee of Gagauzia, the Governor of Gagauzia, head of the Directorate General Finance district chairmen Comrat, Ceadir-Lunga and Vulcanesti mayors mun. Comrat, or. Ceadîr-Lunga and the town. Vulcăneşti (asset management compliance audit report public within public entities in Gagauzia the years 2014-2015);
2.2. information and making attitude regarding compliance with audit recommendations given in audit reports, given the presence of similar deficiencies found in the audited UAT:
2.2.1. Heads Directorate General Youth and Sports General Directorate Culture, Directorate General for Health, Directorate General Construction, local councils and mayors of villages / villages: Avdarma, Beşalma, Budzhak, Dezghingea, Chirsova, Chioselia Russian, Congaz, Congazcicul Upper Cotovscoe, Svetlîi, Ferapontievca, Knock-Maidan, Baurci, Beşghioz, Gaidar, Jolt, Cazaclia, Chiriet-Lunga, Copceac Tomai, Carbalia, Cismichioi and Etulia, heads of educational institutions preuniversitar5 - audit report compliance budget year in local authorities in Gagauzia on years 2014-2015; ____________________________________ Theoretical
5 High Schools: "M. Eminescu "(Comrat); "N. Tretiacova "(Comrat); "Mavrodi YES" (Comrat); s.Dezghingea; "M. Tuzlova "(Chirsova); s.Congaz No.1; "M. Ches "(Beşalma); s.Cioc-Maidan; "D. Celenghir "(Avdarma); s.Tomai; s.Beşghioz; "S. Baranovschi "(Copceac); "B. Ianacoglo "(Copceac); s.Cazaclia; 2 (Vulcăneşti); "S. Economova "(Etulia); gymnasiums: "S. Curoglu "(Comrat); No.7 (Comrat); "M. Tanasoglo "(Chirsova); "N. Cebanova "(Congaz); No.3 (Congaz); Upper s.Congazcicul; s.Cotovscoe; s.Gaidar; "P. Cazmali "(Ceadîr-Lunga); s.Bugeac; gymnasiums, nursery "Vovcioc" (Ferapontievca); "Sîrmaci" (Ceadîr-Lunga).
2.2.2. local councils and mayors of villages / villages: Avdarma; Beşalma; Bugeac; Dezghingea; Chirsova; Russian Chioselia; Congaz; Upper Congazcicul; Cotovscoe; Svetlîi; Ferapontievca; Knock-Maidan; Baurci; Beşghioz; Gaidar; Jolt; Cazaclia; Chiriet-Lunga; Copceac; Tomai; Carbalia; Cismichioi; Etulia, heads of institutions of secondary education and extraşcolar6, heads of cultural institutions: the State Historical-Ethnographic Museum Comrat; Comrat Museum; S Museum. Beşalma; National Theatre "D.Tanasoglu" Teacher Training Center for Youth in Gagauzia - asset management compliance audit report public within public entities in Gagauzia for the years 2014-2015; _____________________________________
6 Theoretical High School "M. Eminescu "(Comrat); "N. Tretiacova "(Comrat); "Mavrodi YES" (Comrat); s.Dezghingea; "M. Tuzlova "(Chirsova); s.Congaz No.1; "M. Ches "(Beşalma); s.Cioc-Maidan; "D. Celenghir "(Avdarma); s.Tomai; s.Beşghioz; "S. Baranovschi "(Copceac); "B. Ianacoglo "(Copceac); s.Cazaclia; 2 (Vulcăneşti); "S. Economova "(Etulia); boarding sports (Comrat); Moldovan-Turkish "S. Demirel "(Congaz); "D. Caraciobanu "(Comrat); "G. Vieru "(Cioselia Russian); "A. Doljenco "(Vulcăneşti); "D. Tanasoglo "(Chiriet-Lunga); "M. Gluboglo "(Ceadîr -Lunga); gymnasiums: "S. Curoglu "(Comrat); No.7 (Comrat); "P. Cazmali "(Ceadîr-Lunga); extracurricular institutions: Sport School No.1 in Ceadîr-Lunga; Vulcăneşti sports school; School of Music in Comrat.
2.3. Gagauzia territorial office of the State Chancellery for information and required AAPL ensuring administrative control of activity of Gagauzia in compliance with legal norms in order to avoid instances of violations and deficiencies identified in the audit report;
2.4. State Tax Inspectorate for information and recommended:
- order the practical application of information management in assessing the taxable matter of taxes / local taxes;
- Ex according skills, the (non) compliance by taxpayers registered localities Gagauzia tax regime under the terms of the Tax Code expressly in force;
2.5. State Tax Inspectorate on Gagauzia for information and seek confrontation indices of institutional information system data UTA municipalities of the relevance and completeness of taxable and enhancing voluntary compliance;
2.6. Ministry of Finance, Information and attitude making activity and tax authorities in Gagauzia related to the evaluation and monitoring of the tax base related training and mobilization of the whole budget revenues;
2.7. Ministry of Economy, for information and making appropriate attitude assurance reporting by AAPL information on public assets managed, and its corresponding record in the Register of public property; for documentation purposes of initiating the process of adjustment of the regulatory environment regarding the relevance of establishing corporate governance additional key indicators of economic management within municipal enterprises, based on criteria of cost-benefit, efficiency and profitability;
2.8. Moldovan government for information and examination of possible impediments in the administration of public property, conflicts generated by certain rules; the degree of compliance of the relevant public authorities and local authorities regarding compliance with legal and regulatory framework in record / cadastre / integrity of public assets managed;
2.9. Moldovan parliament and parliamentary committees: economy, budget and finance; public administration, regional development, environment and climate change, information and, where appropriate, the hearing Gagauzia authorities on their compliance for the national legal framework of state taxes.
March. It notes that during the performance of audits, AAPL audited have taken some steps to remedy the lack of conformity: a draft Law on Investment in Gagauzia, which is submitted for approval to the People's Assembly; They were conformed to the legal and regulatory accounting entries regarding the management of municipal property transferred (242.35 million) and public health institutions (127.12 million); were recorded in the accounts objects in progress (6.39 million); were established payments related objectives owned land privatized / private enterprises and objectives.
4. Given the claim in the audit reports attached to this Decision previous missions of external audit recommendations, it is excluded from the monitoring regime Decision No. 24 of 29.05.2012 Court.
May. About the measures taken for the execution of subsections 2.1, 2.3-2.5 of this Decision, will inform the Court of Auditors every six months, within 18 months of its publication in the Official Gazette of the Republic of Moldova.
June. This Decision shall be published in the Official Gazette of the Republic of Moldova in accordance with article 34 par. (7) of Law No 261-XVI from 05.12.2008.