regarding the audit report on the financial statements of the project "Reform of education in Moldova", drawn up to 31.12.2015



Published: 09.09.2016 in Official Gazette No. 293-305 art no: 28 the Court of Auditors, in the presence of the Deputy Minister of education Ms. Elena Cernei, Project Coordinator Mr. Sergiu Harea, consultant in financial management of the project, Ms. Nadejda Bai, the operations officer on the World Bank's education in the Republic of Moldova Mrs. Lucia Ramzan, head of the Directorate in finance education, culture and science of the Ministry of Finance Ms. Svetlana Borțoi , being guided by article 2 para. (1) and article 4 para. (1) (a). the Court of Law) of Auditors No. 261-XVI dated 05.12.20081, examined the audit report on the financial statements of the project "Reform of education in Moldova", drawn up to 31.12.2015.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 1 Law Court of Auditors No. 261-XVI of 05.12.2008 (hereinafter law No 261-XVI of 05.12.2008).

The Mission of the audit has been carried out in accordance with article 28 and article 31 of the law on the Court of Auditors No. 261-XVI of 05.12.2008 and in accordance with the auditing activity of the Court of Auditors for the year 20162, taking into account the terms of reference proposed by the World Bank.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 2 decision of the Court of Auditors No. 46 of 14.12.2015 "about approving the audit activity for the year 2016".

The audit was planned and conducted in accordance with International Audit Standards, applied by the Court of Conturi3 (ISSAI 100, 200 and 1000 ISSAI ISSAI-2999), and with the good practices in the field of financial audit.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 3 Court of Auditors Decision No. 60 of 11.12.2013 "on the application of international standards of Supreme Audit institutions in auditing level 3-ISSAI 100, 200, 300 ISSAI ISSAI, ISSAI 400 audit missions within the Court of Auditors '; The decision of the Court of Auditors No. 7 of 10.03.2014 "With regard to the application of the guidelines on auditing (ISSAI 1000-9999) within the public audit".

Audit objectives and scope of the external audit activity were defined financial reporting systems used in the project. Thus, the reporting of funds used at the expense of State budget support has been carried out in accordance with the framework of the national accounts, and the sources derived directly from the loan account for the purpose of financing the activities of external technical assistance has been provided in accordance with the requirements of the World Bank.
Examining the audit report presented, as well as explanations of persons with responsibility functions present in the public tender, the Court of Auditors has noted: during the period audited, project management has set up a system of financial management and control which was geared to ensure truthful reporting and management of the financial resources of the project "Reform of education in Moldova", financed by the investment credit sources awarded by the International Development Association, the amount of 26.1 Mio. Special drawing rights, equivalent to 40.0 million dollars SUA4. At the same time, the audit shows problematic situations which underlie the formulation of opinions, namely: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 4 the Government of Moldova and the International Development Association have signed the financing agreement (IDA 51960), ratified by law No. 89 of 19.04.2013 "on ratification of agreement on the financing of the Republic of Moldova and the International Development Association regarding the education reform project in Moldova", in order to obtain a loan worth 26.1 Mio. Special drawing rights (SDRs), equivalent to 40.0 million. u.s. dollars.

(i) significant Deficiencies through context, admitted to the establishment of the system of accounts, organized according to Government rules, have generated some errors and irregularities, which have distorted the value of the assets from the budget of the project records and influenced the entries in bilanțiere consolidated balances of the Ministry of education. These irregularities led to the issuance of opinion with reservations concerning the budgetary reporting: • transactions relating to records of design and verification services in the amount of 10965.4 thou lei were accounted for in other accounts than those referred to, namely, the institution's past expenses;
• There have been inadequacies in the process of budget planning in 2015 due to the lack of Foundation with supporting calculations;
• public procurement process for the purchase of design and verification services correspond to legal provisions, with some deviations, such as discrepancies between the provisions of contracts and specifications concerning the inclusion of works; differences observed in two repeated procedures in the assessment of tenders, with the requirements of the specifications, as well as non-compliance with the regulatory framework through the discordance of the term guarantee of good execution as set out in the contract.
(ii) the results of the evaluation of the function of the internal controls of financial transactions related to the project have confirmed that significant financial transactions and balances bilanțiere reflected in the interim financial statements submitted to the World Bank reflects the veracity and completeness of project financial position at 31 December 2015. Accordingly, the audit expressed unqualified opinion regarding interim financial reports.
Based on the above, pursuant to article 7 para. (1) (a). a), article 15(1) thereof. (2) and paragraphs 1 and 2. (4) article 16 c), art. 34, para. (3) of the law on the Court of Auditors No. 261-XVI of 05.12.2008, Court of Auditors decides: 1. to approve the audit report on the financial statements of the project "Reform of education in Moldova", drawn up to 31.12.2015, which is attached to this decision.
2. this Resolution and the attached audit report shall be submitted to: 2.1. The Ministry of education to implement the recommendations set out in the audit report, and shall be required to: 2.2.1. The accounting policy of the Ministry of education issues pertaining to accounts of projects financed from external sources in accordance with the rules of accounting in effect;
2.2.2. Making the record, for each object, the value of the investment project documentation in amount of 10965.4 lei, with its subsequent remission to the beneficiaries.
3. this Resolution and the report of the audit shall be submitted, for 3.1: information and documentation. The country office of the World Bank in Moldova;
3.2. The Ministry of finance;
3.3. The Government of Moldova;
3.4. The Parliamentary Committee on culture, education, research, youth, sport and media.
4. In this Resolution, shall be excluded from the monitoring regime in the previous Decision of the Court of Auditors No. 32 august 5, 2015 "Concerning the audit of the financial statements of the education reform Project in Moldova for the years 2013-2014", being attested to the execution of the recommendations, or, where appropriate, their reiteration in the audit report attached.
5. About measures taken to execute subpunctului 2.1. of this Decision shall inform the Court of Auditors within a period of 12 months from the date of its publication in the Official Gazette of the Republic of Moldova.
6. this Decision shall be published in the Official Gazette of the Republic of Moldova in accordance with article 34 para. (7) of the law on the Court of Auditors.