The necessity and utility of performance audits of investment projects in tangible assets Case Study-Roia Montan

Maricica STOICA Management Ph.D.Faculty of ASE Bucharest, Romania, hagimamioara@yahoo.com Gabriela MODORAN ASE Master School of Management Bucharest, Romania, modoran.gabriela@yahoo.com Melania Alexandra OROS ASE Master School of Management Bucharest, Romania, oros ale!andra@yahoo.co.u" Adelina PETRESCU ASE Master School of Management Bucharest, Romania, adelina.#etr@yahoo.com A STRACT! Given the fact that public !ne" u#t pr!vide c! f!rt$ #afet"$ health$ educati!n$ tran#p!rt infra#tructure and utilitie f!r the c!untr"%# p!pulati!n$ perf!r ance audit i# the !nl" in#tru ent that u#t end!r#e the c!untr"&# health" devel!p ent and a t!!l 'ith 'hich 'e can deter ine #cientificall" the i pact !f p!licie#$ pr!(ra #$ pr!)ect#$ and acti!n# !f #tate in#tituti!n# t! addre## the in due ti e* In thi# #tud"$ the auth!r# pre#ent a #erie# !f le##!n learned fr! the perf!r ance audit rep!rt !n the pr!)ect R!+ia M!ntan,* "#$ %&R'S$ audit perf!r ance$ #u#tainable devel!p ent$ inve#t ent$ pr!)ect (#) C)ASS*+*CAT*&,! %&', ()*, ()+, ,*-, ,+. -. *,TR&'/CT*&, /he utility of #erformance audits of in0estment #ro1ects, lies in the fact that they cannot be tested in ad0ance, ha0e a high degree of uni2ueness and com#le!ity, are resource intensi0e, influencing the e0olution of society in time and s#ace. /hese considerations ha0e re2uired the de0elo#ment of norms, standards, la3s and methodologies a##licable to the #ro1ects since the design #hase to meet the * E 4efficiency, effecti0eness, economy5 in s#ending #ublic money 4Boulescu et al., '66)5. /he #erformance audit can determine the chances of success, if the outcomes or #ur#ose of the #ro1ect 3ill achie0e the e!#ected #erformance and solutions to correct mista"es. Many #ublic in0estments 3ere started and are unfinished, ree0alued at high #rices or ha0e been abandoned in 0arious stages for reasons concerning the #olitical factor, corru#tion, im#airment of funding, lac" of a coherent long7term strategy, lac" of databases, lac" of funding and #oor management 4Stoica, '6)65.. Romania8s 9ourt of Accounts is by la3 the institution that endorses the management of #ublic 3ealth and s#ending 3ith economy, efficiency and effecti0eness the #ublic money, that is to say the institution must conduct #erformance audits 49ourt of Auditors, '66+5. :o3e0er, it is found that to the #erformance audit is not gi0en due im#ortance, being o0erthro3n by the financial audit and concordance audit, neglect #erformance audit of in0estment #ro1ects made in '6)6 to ha0e about -6,666 started and unfinished #ro1ects, among 3hich the most im#ortant are high3ays, ;nits * and - at 9erna0od<, but also issues of cost, time, 2uality and obtaining building #ermits and licenses. =e obser0e that the conce#t of #erformance and mandatory criteria by 3hich #erformance should be 1udged are not defined and clearly stated, leading to a different a##roach and inter#retation according to the indi0idual interests in #ublic s#ending. An #erformance audit also contributes to re0ie3 legislation, regulations, standards. 0. AR1/M#,TS *, +A2&/R &+ A/'*T &+ R&3*A M&,TA,4 5R&(#CT /he real #roblem of this #ro1ect is brea"ing the la3 and the lac" of scientific analysis based on accurate, reliable and u#dated information, lac" of s#eciali>ed studies in the field that 3ere su##osed to under#in the elaboration of #ro1ect documentation. ;ntil no3, officially, there has been made only a feasibility study in '66) by the 9anadian com#any, 3hich sho3ed the follo3ing conclusions$ the e!#loitation is #erformed on four careers, using cyanide, 3ith the

dis#lacement of ),666 families, )6 churches, )' cemeteries and the historical center. ?n '66& the authori>ation of the #ro1ect 3as sus#ended because of the non7com#liance certificate authori>ing the #ro1ect #lanning and so the feasibility study in '66) is no longer 0alid. /he feasibility study commissioned by the 9anadian com#any #resented some data on the site 3or", in#uts, influences on the en0ironment and local community, but they are not real, com#lete, they do not gi0e a true #ers#ecti0e and are not scientifically. /hus, the archaeological remains, the #sychological im#act on the local community, en0ironmental rehabilitation, alternati0es of de0elo#ment that does not concern mining 3ere not ta"en into account, therefore Ro@ia Montan< Aold 9or#oration costs 3ere undersi>ed and Romanian state benefits 3ere o0ersi>ed. ?n the considered case the greatest ris"s are the en0ironmental ones arising from an error in the study of dismantling area costs, corres#onding the in0estment, other ris"s are social issues threatening the #ro#er conduct of the local community after the com#letion of the o#erating #eriod of )& years and the 3ithdra3al of the in0estors. Regarding the lac" of funding, the #ro1ect 3as sus#ended and the mine closed in '66. because of the rules im#osed by the ac2uis communautaire that #re0ent mining subsidies, 3hich demonstrates that this business is ban"ru#t, funded by state grants and #romises of the Ro@ia Montan< Aold 9or#oration. Discussions on this issue brought u# until no3 a range of arguments both for the #ro1ect and for its closure, but no official ste# has been made in any of these cases. /here ha0e been a lot of #rotests so far. /here 3ere also a number of documents attac"ed 3hich 3ere obtained by Ro@ia Montan< Aold 9or#oration in court. A series of fragmented studies on 0arious #roblems and issues such as cultural, archaeological by teachers and researchers ha0e been conducted but there is no official document, co0ering all rele0ant as#ects of the #ro1ect, that 3ould formulate rele0ant conclusions and recommendations. For the Romanian state, the cost7benefit ratio is ob0iously unfa0orable. /he benefit of the Romanian state 3ich holds under '6B of the business cannot be com#ared 3ith the costs that 3ill be sub1ected during o#eration of the in0estment, such as en0ironmental monitoring of the 3hole area around the acid 3ater treatment #latform, the social assistance to redundant staff after closing the in0estment, 3aste tan" monitoring, monitoring of underground 3ater table #eriodic critical e!#ertise in the area 4Stoica, '6)65. ?n the audit re#ort that 3e ha0e elaborated, 3e ha0e demonstrated that the #ro1ect is e!tremely com#le!, 3ith #oor analy>ed im#act in time and s#ace 7 only in terms of benefits to the area, totally neglecting the national interest of the area 3hich has the alternati0e de0elo#ment$ industry, light industry, agriculture, tourism and attracting Euro#ean funding to re0i0e mining in the area in accordance 3ith national and E; legislation. /his #ro1ect is, according to the contract, in RomaniaCs disad0antage also by the fact that the de#osit of hundreds of thousands of tons of uranium that 3ould e!ist at Ro@ia Montan<, according to secret clauses of the concession contract 3ould go to Ro@ia Montan< Aold 9or#oration. /hus, e0erything that is going to be found during the e!#loitation of gold 7 li"e uranium, strontium, cycloniu, 3ill go into the #ro#erty of Ro@ia Montan< Aold 9or#oration. /he only benefit to the local community is that )6 years ago Ro@ia Montan< 3as an area "no3n by historians and mentioned only in s#eciali>ed boo"s as a #lace of disco0ery of the roman tablets and mining in old times, no3, than"s to the #ro1ect, the region has become the sub1ect of both nationally and internationally media. As far as Ro@ia Montan< Aold 9or#oration is concerned things ha0e changed in relation to the design #hase because the costs that ha0e been rumoured, ha0e been underestimated from the actual ones, due to the #rice of gold and the uranium de#osit in the area. 0.-. A/'*T M#T6&'S A,' T#C6,*7/#S /S#' *, 5R&(#CT /he di0ersity and com#le!ity of the issues to be in0estigated in order to identify the cause7effect connections generating #erformance and to de0elo# most com#etent solutions to its gro3th in 0arious areas, ha0e led to the de0elo#ment of methods and techni2ues 3hich allo3 an accurate assessment of the #erformance of #ro1ects in the domain of in0estment in tangible assets. For the audit of the #ro1ect of Ro ia Montan< 3e conducted scientific and inde#endent assessments on the #ro1ect to assess the use of national resources 4minerals, archaeological sites, landsca#e, anthro#ological resources, ecosystems5 and ho3 this #ro1ect #romotes, #rotects and defends the national 0alues. ?n formulating the audit re#ort, 3e considered the follo3ing sources$ field 0isits, im#act assessment, feasibility study, research and o#inions of s#ecialist institutions and non7go0ernmental organi>ations in the country and abroad media. =e used techni2ues and methods such as re0ie3ing documents, 2uestionnaires, direct obser0ations, ris" analysis, assessment through the #erformance criteria and the *E. Follo3ing the scheme$ Phase ? Audit #lanning$ create database, identification of #ro1ect logic, identifying areas that the #ro1ect re2uires and issues to be analy>ed, establishment of general criteria D the #erformance standards by 3hich the #ro1ect 3ill be analy>ed, establishment of s#ecific criteria #ro1ect by 3hich the #ro1ect 3ill be 1udged

'

Phase ?? Audit e!ecution$ #erformance assessment through general criteria 7standards of #erformance, #erformance e0aluation in terms of s#ecific #erformance criteria, e0aluation of #erformance through the *e, formulate conclusions and recommendations Phase ??? Establishment of audit re#ort$ establishment of audit re#ort 4Stoica, '6)65. 0.0. 5#R+&RMA,C# &+ A/'*T R#S/)TS 0.0.-. Audit through the general criteria /he general criteria, mandatory, 3hich 3e ha0e ta"en into account in #erformance e0aluation are$ the national interest, national 0ocation, s"ill, com#etence, social 1ustice, moral integrity, com#liance, 2uality, safety and security. 4Stoica.M.'6)65 Eational interest$ is defined as C the #ermanent interest of Romania to be on a tra1ectory of economic7financial7social7 cultural in its e0olution out of 3hich all the Romanian citi>ens, both #resent generations as 3ell as future generations, res#ecting #re0ious generations can gain.C 4M. Stoica '6)65 Romania holds only )F.*B o3nershi# sta"e in Eurogold 4currently Ro@ia Montan< Aold 9or#oration5. Roia Montan< gold mine is the most durable of this scale in Euro#e, co0ering o0er ',666 years of history, 3ith #re7Roman galleries, Roman, medie0al and modern, a s#ecial historical industrial area, an old center 3ith o0er -6 houses declared national heritage and a archaeological remains of indis#utable 0alue, thus destroying this area 3ould ha0e 0ery serious negati0e conse2uences on the national interest. Roia Montan< is rich in ores and s#ecialists say that the de#osits contain$ G667 -666 tonnes of gold, sil0er more than ',*66 tons, *66 tons of uranium and o0er )6 rare metal. /his rare metal is more e!#ensi0e than gold and is used in military and s#ace industry. Recently, e!#erts from (!ford, em#loyees are the com#any Roia Montan< Aold 9or#oration 4RMA95, e0aluated at Ro ia Montan< de#osits e!ceeding )66 billion euros. ?n reality, the 0alue of these de#osits is much higher. /his enormous 3ealth of the Romanian #eo#le has been granted to someone else. Because Roia Montan< as declared by %a3 + H '666 is a monument of e!ce#tional 0alue, rescue e!ca0ations must not continue 3ithout the Romanian go0ernment to claim national interest in this in0estment 4S<lcudeanu, '6)65. /he go0erment cannot interfere because the #ro1ect is #ri0ately o3ned and re#resents a #ri0ate interest in no 3ay a national interest. Eational Iocation$ is defined asC s#ecial s"ills for a #articular art or science, #redis#osition, inclination, calling for a s#ecific area of acti0ity for a certain #rofession, for a #articular 3ay of life etc. 4DEJ FG5 Ro ia Montan< is "no3n for mining acti0ities for more than '666 years, accom#anied by a long history of human settlements and industry, being recogni>ed for that reason, as an area 3ith a great cultural heritage. Roia Montan<8s historical bac"round is un2uestionably su#erior in the national interest as#ect than the Kmining heritageL, therefore the region must be discharged of the Kmining heritageK instead of the historical one and future oriented to3ards Ro ia Montan< Eational Par", to the modern organi>ed international tourism, held since restoration of the 0illage in the style of his o3n glory years, 3ith stam#s of gold ore crushed and #rocessed, 3ith their au!iliaries. /hrough the international tourism, a future Eational Par" of Roia Montan< might become, in time, a famous Aeo7Archeological site, ethnical in Euro#e, bringing fame and income to our country, another reason for im#osing further reconsideration to ca#itali>e its 0alue. ?rretrie0able loss of these geo7historical testimonies regarding the location and the certification of the genesis of the Romanian #eo#le 3ould be incalculable and unli"ely to su##ress. %et us remember that the gold de#osits in the A#useni Mountains are o#erated for o0er ',666 years and yet the local #o#ulation continues to li0e in #o0erty 4Eil< M R<dulescu, '6))5.. Should it be different no3N 9ertainly not. Authentic national 0ocation, 3ould be #ermanently damaged by the u#rooting of the local community and destruction of cultural, social 0alues, and of 3ell done 3or". S"ill$ is defined asC indi0idual mental attribute 3hich ma"es the good #erformance of a 3or", an action, a##lication, inclination, gift. 4DEJ.FG5 /he team in0ol0ed in the #ro1ect has not demonstrated by the #ro#osed solutions the s"ill in the field concerned as Ro@ia Montan< Aold 9or#oration #ro1ect could mean the loss of countless irre#laceable artifacts uni2ue heritage not only national, but uni0ersal and also the destruction of tourism in the area. Ourisdiction$ is defined as oneCs ability to rule on a thing, under a dee# "no3ledge of the issue in 2uestion, the ability of an authority, of an official etc.. to #erform certain tas"s 4DEJ.FG5. /he criterion of 1urisdiction should be assessed at each institution in0ol0ed in the #ro1ect from the local community, the #ro1ect team, the com#any as ma1ority

shareholder, central and local institutions res#onsible of contracting, a##ro0al, and authori>ing a##ro0als #ro1ect. Practically, no institution has demonstrated com#etence only irres#onsibility along 3ith incom#etence. /he result is that the #ro1ect is not com#atible 3ith Euro#ean la3. /he ?nstitutions also ignored the 0ie3s of ci0il society, launched an agitation among the #o#ulation, ha0e negati0ely affected the image of the authorities and the country 7 ma"ing it an un#leasant #arallel 3ith situations that occurred during the dictatorshi# 4demolition of houses, churches, forced resettlement #o#ulation, etc..5. Social E2uity$ is defined as 1ustice, im#artiality, honesty, "indness 4DEJ.FG5. /he criterion is one of the #rinci#les of sustainable de0elo#ment in the Brundtland Re#ort 4=orld 9ommission for En0ironment and De0elo#ment, ;nited Eations, )FG*5 must be a##lied to the same generation and bet3een generations. Mining must not 1eo#ardi>e the system 7 su##ort of life$ air, 3ater, soil, flora and fauna. Pro1ect in0estment data are com#letely contrary to the re2uirements of the conce#t of de0elo#ment. /he conce#t of sustainability cannot define the irre0ersible changes to the en0ironment and #eo#le in the area after closing the in0estment. =e can not tal" about fairness in circumstances 3here the #ro1ect in0ol0es the de#o#ulation and u#rooting of the area, destruction of agricultural land and forests, that #ro0ide a source of income for local #o#ulation, significant degradation of the natural en0ironment, the enormous costs for future generations 3ith the en0ironment rehabilitation after mine closure. Moral #rinci#le 4intergenerational e2uity5 3hich concludes the descri#tion of the conce#t cannot be fulfilled because '667*66 #eo#le 3ill be 3or"ing on the industrial #latform 4including foreign staff5 for )& to '6 years, after 3hich do>ens or hundreds of human generations 3ill #ay for the negati0e effects of e!ternalities on the en0ironment, generated continuously by the e!7o#eration. Moral ?ntegrity$ is defined as the mental and intellectual ca#acity to be incorru#tible in terms of honesty, to #ro0e in any situation and at any moment moral #robity and ob1ecti0ity 4Stoica, '6)65. Both the local and the central institutions of the state and of course Aold 9or#oration ha0e been accused of corru#tion or attem#ted corru#tion by the re#resentati0es of Romanian authorities, starting from local, county, and ending 3ith those of the e!ecuti0e and Parliament or #eo#le closed to the current #resident of Romania. /here are real o##ortunities for the Romanian state to be eliminated from the KschemeK, further more, e0en o3ing the foreign in0estor once the #ro1ect 3as started 4to be more s#ecific, once all necessary a##ro0als ha0e been obtained5. (beying the %a3$ ?s defined as the character that is legal, according to la3P #rinci#le that any state or #ublic organi>ations and citi>ens are obliged to res#ect in their 3or", the la3 4DEJ, )FFG5. /he 0iolation of the la3 starts 3ith the o#erating license number -&H)FFF, 3hose content and transfer from Min0est to Ro@ia Montan< Aold 9or#oration is illegal, continuing to change o0er time the #erimeter mining license, 3hich is illegal 4R<g<lie M Muscalu, '66*5. :as been 0iolated Article )*+ of the 9onstitution, the #ro1ect intends to e!#loit to the e!haustion of natural resource of national strategic im#ortance 7 gold, the StateCs #artici#ation is only )F.*)B, 3hich 3ill result in a sustainable disaster and not a sustainable de0elo#ment, that destroys archaeological and historical heritage of national and global im#ortance. ?t 0iolates Euro#ean ;nion legislation and namely$ E?A Directi0e G+H**&HEE9 of '& Oune )FG+ 4Directi0e on En0ironmental ?m#actAssessment5 and SEA Directi0e 4Strategic En0ironmental Assessment Directi0e5 4SEA, )F&F5, Directi0e G6H.GHEE9 of )& December )F&F Directi0e on ground3ater #rotection, Euro#ean Parliament resolution to ban by the end of '6)) mining based on cyanide 4E?A, )FG+5. ,uality$ ?t is defined as$ K... all traits and essential as#ects under 3hich a thing is 3hat it is differing from other things ...K in order to achie0e the Kdifference in 0alue ...K bet3een them. 4DEJ FG5. Regarding the #ro1ect, 2uality re#resents a sum of multidisci#linary re2uirements$ engineering, socio7economic, legal, aesthetic, en0ironmental management etc. 3hich is measured by the usefulness and efficiency that the #ro1ect ensures during design, im#lementation, o#eration and after mine closure. ?t 3as found that in the design #hase the basis data 3hich the documents are dra3n u# are not real, im#act study is #re#ared in a #oor and confused manner, a0oiding any res#onsibility for the incident in terms of #ollution borne by the com#any, 2uality standards are not met. /he three basic com#onents 3hich aim at ensuring 2uality in the area$ social 42uality of housing, infrastructure, education5, economic 41obs, income5, en0ironmental 43ater 2uality, landsca#e and nature conser0ation5 are not insured by the #ro1ect. Safety and security, Kconstantly #ro0iding 2uality of life, the climate of #eace, tran2uility and confidence to3ards any ris"s and threats, #olitical, economic, financial, social and en0ironmental stability, for all citi>ens across the country in terms created by the Euro#ean union.CC 4Stoica, '6)65

Roia Montan< Pro1ect does not #ro0ide en0ironmental conditions, social, economic, safety res#ecting national security, because it results in a state of distress, doubt, imbalance, degradation, ris" that affect the e!istence, health, local and regional sustainable de0elo#ment, creates and feeds a #ermanent uncertainty state regarding en0ironmental factors 2uality in time and s#ace 4Dogar, '6)65. 0.0.0. Audit in terms of specific criteria /he s#ecific criteria that 3e ha0e ta"en in e0aluating the #ro1ect are$ community de0elo#ment im#act, im#act on the landsca#e, the im#act on cultural heritage. 9ommunity de0elo#ment im#act$ /he #ro1ect #ro0ides resettlement or relocation of F66 families of o3ners of the Roia Montan< and 9orna, ie about '666 #eo#le 4of -6665. /he most im#ortant social loss is the destruction of local community cohesion. /he fact that some had to go, 3hile others remained, and from those 3ho ha0e to lea0e some resisted the tem#tation of money, others did not, di0ided the 0illage into t3o cam#s. KDi0ide and con2uerK, an ancient method of the Romans 7 ironically 7 it is successfully used to continue the #ro1ect. Solidarity, #eace in the community ha0e disa##eared, #erha#s fore0er. /here is great tension in the 0illage, bet3een #eo#le, se0en years no3. At the end of e!#loitation of the de#osit the area 3ill remain 3ithout 1obs, 3ith a large number of uneme#loyed 4and a se0erely affected en0ironment5, social #roblem ha0ing a sustainable, long7term sol0ing. /he seriousness of unem#loyment in the area 3ill be e!acerbated by the #resence of a #o#ulation 3ho 3ould ha0e settled there in the meantime. /he #ro1ect is located in a #o#ulated area, 3ith historical and cultural im#ortance for Romania. So it cannot be com#ared 3ith similar #ro1ects in the 3orld most of 3hich are located in arid, uninhabited areas. ?m#act on the natural$ cyanide technology is one of the fe3 substances 3ith chemical #ro#erties necessary to e!tract gold in the safe and efficient 3ay, 3hich is 3hy the Euro#ean ;nion banned its use in the Euro#ean s#ace because of its negati0e effects on the en0ironment in time and s#ace that 3ill be #olluted 3ith irre0ersible effects in time and s#ace. ?t is ob0ious the o##osition bet3een the conce#t of sustainable de0elo#ment and en0ironmental im#act caused by gold mining 3ith cyanide technology. ?t is hard to acce#t the #ro0isions of the im#act study submitted by the in0esting firm 3hich states that . t H year hydrocyanic acid is lost during the technological #rocess, and *6 tons #er year are 3asted in the tailing #ondQ =here is it 3astedN ?n the atmos#here, of course. Acti0ities im#act on cultural heritage$ 9ultural heritage can bring more 0isitors in Ro@ia Montan<, #ro0ided that it is 3ell #reser0ed, restored and #ut into 0alue. Ai0en the negati0e im#act on the natural, it can be concluded that the cultural heritage of the area 3ill be affected, so e0en if there 3ill be in0estments in the damaged area the tourists 3ill be rare. 0.0.8. Audit in terms of the 8# 9efficiency: effectiveness: efficiency; ?ne!#ensi0e or economy, is understood as Kto minimi>e costs used for an acti0ity in com#liance 3ith the highest 2ualityK 49ourt of Auditors, '66+5. According to this #rinci#le, the in0estment in Ro@ia Montan< is not characteri>ed by economy, if 3e loo" in terms of time hori>on, in terms of in0ol0ement of other industries in the economic cycle or the costs that the Romanian state ha0e to co0er after the #eriod of e!#loitation is finished. For a country 3here economic de0elo#ment and #ros#erity must characteri>e any in0estment, the issues listed abo0e are im#ortant, in that the #ro1ect does not benefit the State 7 decommissioning costs and ecosystem restoration >one must be borne by the Romanian State and engaged in e2ui#ment and machinery are im#orted, ha0e higher costs and re2uires a s"illed 3or"force. Efficiency is about ma!imi>ing the cause effect relation. From the #ers#ecti0e of this criterion the in0estment is un#rofitable. /he si>e of gold and sil0er reser0es of Ro@ia Montan< cannot be e!#loited in terms of efficiency, the de#osit being ha0ing a lo3 concentration of gold and sil0er. ?n fact, e!#loitable ore reser0e 3as estimated at around ')&.F million tonnes, the de#osit is considered relati0ely #oor and e!#loitable only because of the large amount of gold. Bet3een t3o successi0e u#dates of the feasibility study, ca#ital costs ha0e increased by about R )G6 million. /he #rocess of destruction of cyanide in the tailings and achie0ing the Romanian standard of +6 ##m 3ill lead to increased o#erating costs by R ).'' million #er year. /his 3ill lead to a reduction in the total #rofit of about R '6 million. ?f it re2uires the achie0ement of E; standards cyanide concentration of ) ##m, then it needs additional ca#ital cost of about R )6 million and increased o#erating costs by R '.F+ million #er year. So a reduction in #rofit by about R -G million. /he discount rate used in calculations of the in0estment efficiency of +B is non7com#liant. For such an in0estment 3ith a relati0ely high ris" discount rate of G7)6B is more realistic, co0ering both a0erage loan rate 4-7+B5 and the ris" of ma"ing business. For a rate of GB, reduction of gross #rofit 3ill be around R 'G7*6 million.

Effecti0eness indicates ho3 the initial targets ha0e been achie0ed at #ro1ect com#letion. /o determine ho3 effecti0e a #ro1ect is, it is useful that its results be obser0able and measurable 4and ob1ecti0es ha0e been defined in terms of obser0able and measurable5. Effecti0eness is the main criterion for e0aluating a #ro1ect and at the same time an argument for credibility. Ee3 in0estment in Ro@ia Montan< as 3ell as other historical or in0olution 4Baia Mare, for e!am#le5 did not gain and do not ha0e a fa0orable o#inion from the ci0il society or from the not in0ol0ed #olitical #rofessionals. 9ontro0ersy around the in0estment continues at Ro@ia Montan< and made that the #ro1ect train )* years, des#ite strong su##ort from ma"ers of high7le0el #o3er s#here. /he conce#t of sustainability cannot define the irre0ersible changes to the en0ironment and #eo#le in the area after the closure of the in0estment. /a"ing these analysis into account, the #ro1ect does not benefit the Romanian state, and thus 3e can say that it is un#rofitable for it, the only beneficiary of the #rofit is the 9anadian in0estor. 8. C&,C)/S*&,S A,' R#C&MM#,'AT*&,S /he o0erall conclusion that emerges from the audit #ro1ect is that the #ro1ect 3as de0elo#ed 3ithout a scientific foundation based on rigorous based on the follo3ing mandatory elements$ 7 management techni2ues and tools for analy>ing the en0ironmental situation of the areaP 7 field studiesP 7 cost7benefit analysis or economic analysis, social or en0ironmentalP 7 #ro1ect #erformance indicatorsP 7 u#dated, real data and information. /he conse2uence of this unscientific a##roach led to a #roblematical a##roach o this #ro1ect that does not met any of the #erformance criteria. Practically, the #ro1ect should not be im#lemented, the #ro#osed solutions are not efficient, economical and effecti0e. Small benefits for Romania in this case are unsubstantial com#ared to its losses, the cost 4loss5 H benefits ratio being 0ery unfa0ourable to our country. Substantial #otential benefits that might deri0e from an alternati0e #ro1ect, such as one based on agriculture and tourism de0elo#ment are the ones that should really be considered. =eighing the #otential benefits and costs in0ol0ed in mining #ro1ect in Ro@ia Montan< #ro1ect sho3 that, in its #resent form it cannot be classified as 3or" of K#ublic interest in the economic benefit of the countryK and the benefits of #ri0ate interest does not 1ustify the ris"s and lead to the conclusion that the initiati0e should be abandoned before further irre0ersible catastro#hic conse2uences. R#+#R#,C#S Boulescu, M. M AhiS<, M. M Ialerica, M. 4'66)5. Perf!r ance audit- c!llecti!n techni.ue#$ anal"#i# and interpretati!n !f audit evidence, /ribuna Economic<, Bucharest. 9ourt of Auditors 4'66+5, /andb!!0 !f perf!r ance audit$ C!urt !f Acc!unt# , retrie0ed from htt#$HH333.curteadeconturi.roHsitesHccrHR(H9ontrolB'6siB'6AuditHPaginiHManualulB'6AudituluiB'6Performan B9+BA*ei.as#! Dogar, A. 4'6)65. See0in( 1friendl"2 #!luti!n# f!r R!+ia M!ntan,, E0enimentul Tilei, retrie0ed from htt#$HH333.e0>.roHdetaliiHstiriHse7cauta7solutii7#rietenoase7#entru7rosia7montana7GG.G&).html E?A, 4)FG+5, Directi0e G+H**&HEE9 of '& Oune )FG+, Envir!n ental I pact A##e## ent, retrie0ed from htt#$HHec.euro#a.euHen0ironmentHeiaHfull7legal7te!tHG+**&.htm Florea, M. 4)FFF5. Perf!r ance audit$ c!ncept# and per#pective#, Societatea Ade0<rului, Bucharest. Eil<, A. M R<dulescu, 9., 4'6))5. R!+ia M!ntan,$ villa(e 'hich receive# a #ec!nd chance$ A#useni Ee3s#a#er, retrie0ed from http!<<===.>iaruldeapuseni.ro<inde?.php R<g<lie, U. M Muscalu, S. 4'66*5. A#pect# c!ncernin( the ec!n! ic efficience !f the R!+ia M!ntan, pr!)ect , res#onse to the Parliamentary 9ommittee, Bucharest. Slcudeanu: T. 90@-@;. Roia Montan El Dorado in the Carpathians : Anali>a fin: retrieved from http!<<===.masteratpolitic.ro<anali>a-politica<rosia-montana-el-dorado-din-carpati< SEA, 4)F&F5, Directi0e on ground3ater #rotection G6H.GHEE9 of )& December )F&F, Envir!n ental I pact A##e## ent, retrie0ed from htt#$HH333.#rodes7#ro1ect.orgHfileadminHFilesHDeli0erable . ).#df Stoica, M. 4'6)65. Perf!r ance audit, %umina %e!, Bucharest. Stoica, M. 4'6)65. Mana(e ent and c!ncepti!n$ de#i(n$ i ple entati!n !f inve#t ent pr!)ect#, %umina %e!, Bucharest.

&