Tatiana Shevchuk
The ministries of culture and education with traditionally weak knowledge of exact sciences and record keeping are among the accounting outsiders. Although the auditors saw an improvement in the situation here as well. As a result, they changed their opinion on the annual report from “negative” to “conditionally positive”. With the wording “as a result of partial correction of previously identified deficiencies”. Opinions used to be issued with great reservations.
As a matter of fact, in case of a negative opinion or inability of auditors to express an opinion on financial statements of a budgetary body, disciplinary responsibility of its head should be imposed. This is what the law “On Public Finances” says. In other words, after the investigation, he should be sent to resign. And, if to follow the letter of the law, the heads of the mentioned ministries would be replaced annually during the last four years. But the change takes place according to a different algorithm.
The head of the Ministry of Health has no formal chance to resign this year. The Ministry of Health received its first unconditional positive opinion in 2024 after several years of successive qualified opinions, which “is an example of progress made as a result of institutional efforts,” the Audit Chamber praised the agency.
As for the finance ministry, exemplary in its reporting, it too found shortcomings this year in accounting for confiscated property. According to the auditors, the Ministry of Finance was the only one that consistently received an unconditional positive opinion between 2021 and 2023. However, in 2024 it changed to a conditionally positive opinion, which “indicates a deterioration in the quality of reporting.”
The external public audit landscape is, of course, dominated by these – conditionally positive opinions, with many reservations about chronic irregularities in the accounting and management of state assets. Most ministries, including the MFAEI, the Ministry of Interior, the Ministry of Justice, the Ministry of Defense, the Ministry of Labor and Social Protection, the Ministry of Infrastructure and Regional Development, the Ministry of Agriculture and Food, the Ministry of Economic Development and Digitalization, the Ministry of Environment, and the Ministry of Energy, have received consistent qualified opinions in recent years. There was no progress last year either.
Tatiana SHEVCHUK, Chairperson of the Accounts Chamber of RM:
– The financial audit conducted by the JS is not limited to identifying technical deviations, but provides a comprehensive diagnosis of good governance in the public sector. From the quality of accounting records to managerial responsibility, each auditors’ opinion issued contributes to strengthening financial discipline.
The formulated opinions from the 2024 Government Report largely reflect the persistence of systemic problems due to unimplemented recommendations issued by the Court of Auditors in previous years. Especially those related to accounting for state assets, asset valuation, budget classification, and compliance with accrual accounting principles.
Audit missions encouraged state agencies to introduce functional internal management control systems and develop real internal audit mechanisms, replacing formal approaches with reliable risk management methods. Unfortunately, complex diagnostics reveal the same problems of misstatement in financial reporting.
Misstatements in the financial statements of ministries mainly concern:
- Lack of recording and incomplete valuation of assets (land, buildings, public goods);
- Errors in the accounting classification of expenses and revenues;
- Lack of clear accounting of contributions to the authorized capital of subordinate enterprises;
- Incorrect application of the rules of accounting for depreciation and amortization of fixed assets.
