EXCLUSIVE The management system of the NRRP is non-functional, especially with regard to anti-fraud and corruption prevention measures – SOURCES

The system for managing the National Recovery and Resilience Program (NRRP)  is not working or is partially working and substantial improvements are needed, is the conclusion of checks carried out by the Audit Authority at ministries involved in NRRP projects, according to exclusive information obtained by G4Media from these ministries, which received the first report earlier this month.

This system audit report is required before the first payment claim is submitted to the European Commission, and a negative opinion would result in postponing the submission of the payment claim until the problems found are corrected, sources consulted by G4Media added.

The Audit Authority is an institution of the Romanian Court of Accounts.

„As a result of the verifications carried out during the audit mission from 02.03 to 01.04.2022, no reasonable assurance has been obtained that the management and control system put in place for the NRRP is functional and effective so as to provide assurance that the funds have been managed in compliance with all applicable rules, in particular those concerning the avoidance of conflict of interest, the fight against fraud, the avoidance of corruption and of double funding under the mechanism and other Union programs, in accordance with the principle of sound financial management.

Based on the assessment of the key requirements set out in Annexes 1 to the Grant Component Financing Agreement and the Loan Agreement signed by Romania with the European Commission, it was concluded that the management and control system „does not work or works only partially. Substantial improvements are needed”, a classification corresponding to category 3.„, says a document obtained by G4Media, which was received by the ministries with responsibilities under the NRRP from the Audit Authority of the Romanian Court of Accounts.

In the document received from the ministries, the Audit Authority analyses one by one the situation of the procedures and systems necessary for the implementation of the NRRP projects and funds, and outlines the conclusions, the assessment being on a scale of 1 to 3 (1 – functional, 3 – not or partially functional).

For example:

The Ministry of Investments and European Projects (MEIP):

• Failure to respect the principle of separation of functions between the MIPE – National Coordinator and the MIPE – Reform Coordinator, in that there is no separate interdepartmental structure or unit at MIPE level to fulfil the role of reform/investment coordinator;
• Lack of an anti-fraud policy covering the four elements of the anti-fraud cycle – prevention, detection, correction and follow-up;
• Lack of documentation and information to substantiate the verifications related to the fulfilment of milestones/targets, carried out by MIPE, based on the provisions of Article 5 of GEO 124/2021;
• Not all financing agreements with reform and investment coordinators have been signed;
• There are inconsistencies between the number of posts allocated according to the MIPE’s function statement/organizational chart and the number of allocated posts foreseen in the NRRP; (and others)
• Failure to adequately fulfil the obligation to provide methodological coordination for the reform/investment coordinators to meet the milestones and targets of the NRRP through the failure of the MIPE to provide, in the vast majority of cases, model procedures, model implementation agreements/financing contracts (or binding provisions to be included in the financing contracts), information and training sessions on the use of the system for monitoring and reporting on the achievement of milestones, model working documents, etc;

The Ministry of Research, Innovation and Digitalization:

• An operational procedure on fraud risk assessment, an analysis of identified fraud risks has not been developed;
• An anti-fraud policy covering the four elements of the anti-fraud cycle – prevention, detection, correction and prosecution – has not been operationalized;
• An operational procedure on conflict of interest has not been developed;
• No operational procedure on the avoidance of double funding has been developed
• Reporting and correction mechanisms on serious deficiencies (cases of fraud, corruption and conflict of interest) have not been established; (and others)

Ministry of Finance:

• An operational procedure for whistle blowing has not been developed.
• Adequate rules have not been developed to protect staff against internal sanctions if they disclose certain internal malfunctions.
• There are no procedural provisions for monitoring the occurrence of fraud indicators in key activities carried out.
• Adequate measures have not been established to verify the achievement of milestones and targets;
• Adequate measures have not been established for the prevention, detection, detection and sanctioning of irregularities by the authorities in charge of the implementation of the NRRP components (and others).

What the Ministry of European Investment and Projects, the institution coordinating the NRRP, has to say

G4Media has requested a view from the Ministry of European Investment and Projects on the overall findings of the System Audit Report.

Briefly, the response received states that the audit mission was started on the 2nd of March 2022, the stages are still ongoing and MIPE is the auditee. The Ministry also states that „The acts drawn up and/or issued by the structures of the Court of Accounts have public character only after the completion of the procedures for their recovery provided for in the indicated Regulation. In view of the above information, as well as the fact that the documents issued during the audit mission by the Audit Authority of the Court of Accounts of Romania are the property of this institution, and the publication or improper use of their content is prohibited, MIPE cannot answer the raised questions”.

Asked by G4Media to specify whether the request for payment of the first tranche of NRRP funds to the European Commission will be delayed until the problems have been solved and to estimate when this request will be sent, the Ministry replies: „The transmission of the first request for payment of the National Recovery and Resilience Plan is one of the priorities of the Ministry.”

In practice, the deadline for sending the first payment request to the European Commission in May, as announced by former Investment Minister Dan Vîlceanu, is no longer confirmed.

Preparations for the system audit required before the first payment claim began as early as January, according to a note on the progress of the NRRP measures published by the Romanian Government:

„Regarding the preparations for the audit of the NRRP management and control system by the Audit Authority, the MIPE has sent the institutions coordinating reforms and investments the request for the necessary documents so that the system audit process can be carried out. This audit report is essential for the preparation and submission of the first payment claim according to the schedule announced to the European Commission (Q2 2022)” – these were the plans in January.