The audit report on the consolidated financial statements and audit report
management of public funds by the Ministry of Defence and some subordinate entities in budget year 2014-2015
in the Official Gazette
Article No. 24
Court, in the presence of Deputy Minister of Defence Mr. Alexander Cimbriciuc, Head of economic and financial Ministry of Defense Vitalie Mr. cooks, chief military camp 142 Battalion call Mr Andrian Balan, commander-rector of the Military Academy of the Armed Forces, Alexandru cel Bun "Mr. Iurie Bruma, Facilities Department Director Sergiu Voinu, anti-aircraft missile regiment commander Mr. Ion Branişte, former administrator SE "Marculesti International Airport" Mr. Sergiu Ciobanu deputy head of the Directorate finances justice, public order, defense and security in the Ministry of Finance Ms Margareta Andries and other officials, guided by art. 2 (1) and art. 4 (1) a) of Law No 261-XVI Court of 05.12.20081, examined the consolidated financial statements audit report of Ministry of Defence and entities subordinated budget year 2014-2015 (Annex No. 1) and compliance audit report of management of public funds by the Ministry of Defence and some subordinate entities in the budget year 2014-2015 (Annex 2). ________________________________________
1Legea Court No 261-XVI of 05.12.2008 (as amended and supplemented).
Audit missions were conducted under article 28 and article 31 of Law Court and pursuant to the Programme of audit work the Court of Auditors for the year 20152, aimed at fairness certification preparation and presentation in all material respects consolidated financial statements reported by the ministry as of 31.12.2014 and 31.12.2015 situation, showing the audit opinion and compliance management of public funds in the budget year 2014-2015 formulation of the audit conclusion on compliance. _________________________________________
2Hotărîrea Court No. 57 of 12.08.2014 "On approval of the Programme of audit work of the Court of Auditors for 2015" (as amended and supplemented).
The audits were conducted in accordance with auditing standards and good practices. To support the findings, conclusions and making recommendations, the audit was conducted at the Ministry of Defence, collecting samples from some subordinate entities and state enterprises founded by the ministry.
Examined the results of audits and heard reports presented, as well as explanations of the persons officials present at the public hearing, the Court
For the years 2014 and 2015, the Ministry of Defence have been allocated budgetary funds amounting to 619.6 million lei, respectively 682.8 million.
Although generally the system of financial management and internal control of the Ministry of Defence and is functionally subordinate entities were found several circumstances / issues / deficiencies, evidencing the need to strengthen and improve it significantly.
Thus, given the legal powers and responsibilities involved in the management, monitoring and reporting of financial statements and the property, the audit revealed that the wording of the audit opinion with reservations on them is conditional on the following: untimely assessment and failure in Accounting respectively, to submit the financial statements the value of land and property; inaccurate accounting records; accounts of budgetary execution of payments and actual expenditure was not always held in strict compliance with the budget classification structure and methodology approved; information technology related accounting functionality is not regulated nor uniform approached; The inventory process did not include the full heritage of auditees usually not subject to inventory in some tangible progress, budgetary claims and suppliers etc.
Mentioned shortcomings were caused by lack of internal regulations on presentation of financial statements; not including, filling in accounting policy and failure to update regulatory rules in November; lack of internal control procedures on reporting interdepartmental spending; doubling the actual expenses for centralized procurement and free transmission of the Ministry of Defence under the scheme; irregular conduct inventory; failure possible levers to lower debt provided for by law established.
The reports referred influenced the drafting subordinate institutions and the consolidated report of the Defence Ministry, may condition relative to misstate the financial statements 31.12.2014 - 8.34 million lei, and 31.12.2015 - 4.7 mln, which fall within the materiality threshold of 4%, representing respectively - 0.48% and 0.22% in March. Property cases reported were distorted, as at 31.12.2014, with 5.06 mln, falling in materiality, constituting 0.43% in April, and as of 31.12.2015 - with 66.06 million .lei that exceeds the fixed ceiling, constituting 5.20% 5. However, the financial situation has been affected by 31.12.2014 in the accounts do not reflect the state's share in the share capital of state enterprises founded by the Ministry of Defence totaling 385.7 mln, exceeding the threshold of significance, being 21.9% of total assets in the consolidated balance sheet of the ministry. The audit opinion on the issue of non-compliances have influenced both quantifiable and significant as the context, such as failing to record land and some buildings etc. ________________________________________
32 014 (8.43 mil / 1761.0 mln = 0.48%), 2015 (4.7 mil / 2180.4 mln = 0.22%).
42 014 (5.06 mil / 1165.6 mln = 0.43%).
52015 (66.06 mil / 1270.5 mln 5.20%).
Meets these processes in execution of funds and reporting the property, is revealed: the need for documentation, organization and development of financial management and control; Mismatch internal documents related institutional regulatory framework; planning special means irrelevant, generating a major gap between the amounts planned and executed, and increase exaggerated hips, in particular, special means centralized fund; Improper management of the procurement process; several nonconformities in management of public and bookkeeping etc.
It is noted that in the context of multiple legal provisions, the Ministry of Defence has drawn up internal regulations which would provide coherent and comprehensive application procedures for the sale of assets for military, how the exclusion of goods statement of assets proposed for sale, approved by Parliament and of how their marketing if they are sent to balance state enterprises founded by the Ministry of Defence or restrict transmission assets for military purposes.
These circumstances determine the circumstances of trading assets for military enforcement of other legal provisions than those approved by Parliament Decision 283-XIV of 02.17.1999, which regulates trading express how military equipment, weaponry and other means their technical Armed forces of the Republic of Moldova. In these circumstances, the marketing of such assets therefore unused by other subjects than the Ministry of Defense, funds received amounted to 2236.0 thousand US dollars (equivalent to about 38.9 million lei) were transferred in full to the account of the state enterprise Ministry of Defence has as founder, who made goods.
Based on work carried out, the audit opinion expressed reservations about the MoD's consolidated financial statements 31.12.2014 and 31.12.2015, and concluded with reservations on compliance management of public funds in the period 2014-2015.
Based on the above, under Article 7 para. (1) a), art. 15 (2) and para. (4) art. 16 c) and art. 34 para. (3) of Law no. 261-XVI from 05.12.2008, the Court
1. The audit report is approved consolidated financial statements of the Ministry of Defence and entities subordinated budget year 2014-2015 (Annex 1) and compliance audit report of management of public funds by the Ministry of Defence and some subordinate entities in the budget year 2014-2015 ( Annex 2).
2. This Decision and audit reports mentioned in point 1 shall be submitted:
2.1. MoD for documentation on the results of audits and undertaking the necessary measures according to their competencies, to implement the recommendations, and ask:
2.1.1. College Ministry to examine the results of audits, ensuring undertake concrete steps for the elimination of irregularities;
2.1.2. to intensify control over compliance with the regulatory framework of the industry and regulations on the organization and operation of state enterprises in order to ensure good governance of public funds;
2.1.3. to examine and resolve issues related to registration, administration and monitoring of state property;
2.1.4. together with the Ministry of Education, to set a deadline for accreditation of Bachelor (first cycle) and to submit proposals establishing a legal term for the conduct of the defense ministry has Graduating specialties double and determine how calculation and composition of the costs of these studies;
2.2. Ministry of Finance, for documentary-making attitude as skills and proposes to examine the opportunity of filling in:
2.2.1. Report on the movement of fixed assets with an indicator inputs and outputs information on fixed assets in the inner system of public institutions and within a central public authorities;
2.2.2. Catalogue of fixed assets and intangible assets, approved by Government Decision no. 21.03 338 of 2003, fixed asset categories that are not in it, following new accounting rules, applied from 1 January 2016 to calculate the wear those goods by submitting proposals in the established manner;
2.3. Moldovan Government for research, and proposes to examine the opportunity revision / amendment of the legal framework related to the specific marketing military hardware that creates the possibility of applying other legal rules than those established by the regulation on the marketing of military equipment, weaponry and other means technical military Armed forces of the Republic of Moldova, approved by Parliament Decision no. 283-XIV of 02.17.1999;
2.4. Moldovan President, the Supreme Commander of the Armed Forces Communication and the Supreme Security Council, as requested nr.03 / 03.08.26 from 26.02.2016;
2.5. Parliamentary Committee on National Security, Defense and Public Order, for information;
2.6. President of the parliamentary faction of the Communist Party of Moldova for information as requested nr.FPC No. 49 of 04.04.2016;
2.7. Prosecutor General's Office for information according to competence, on matters referred to in subparagraphs 3.2. and 3.3. and presented in subsections 4.6. and 4.7. Report presented in Annex 2.
March. It notes that during the audit:
3.1. Ministry of Defence and some subordinated institutions have taken a number of measures for the shortcomings and irregularities exposed in audit and audit reports attached; prior to the closing financial statements for 2015 have been corrected accounting errors worth 13.3 million lei, and in 2016 to the completion of the audit were removed and adjusted accounting irregularities amounting to 65.6 million. lei;
3.2. Facilities Department on 03.22.2016, has issued Military Prosecution for investigation dossiers related documents public auctions held on the acquisition combined with drawing camouflaged fabric for military uniform;
3.3. unused military assets on the marketing cases were examined by the Department investigations and crime in the Armed Forces of the Prosecutor General.
4. Measures taken on the execution of subsections 2.1., 2.2. implementation of this Decision and recommendations of audit reports will inform the Court within 12 months of its publication in the Official Gazette of the Republic of Moldova.
May. By this Decision, is excluded from the monitoring regime Court Decision No. 20 of 11 May 2012 on regularity audit report on the 2011 budget year the Ministry of Defense, military units and subordinate institutions, taking into account the recommendations reiteration executed and / or partially executed audit reports attached.
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 Court of 05.12.2008.
PRESIDENT OF THE COURT OF AUDITORS Serafim Urechean