Promote the development of appropriate administrative capacity to prevent and fight affectively against fraud and other irregularities affecting national and international funds, including the establishment of well-functioning cooperation structure involving all relevant national entities;
With the purpose of prevention of state impairment and undertaking of efficient and tangible measures for its recovery the Court of Accounts (CA) cooperates, on the basis of cooperation agreements with the Centre for Economic Crimes and Corruption Fight (CECCF), the General Prosecutor’s Office, Ministry of Interior and the Service for Information and Security and delivers the respective materials to the Centre for Economic Crimes and Corruption Fight.
Under the Decision of the Court of Accounts no. 15 from 23rd of March 2007 the Action Plan for the implementation of the National Strategy for combating corruption for year 2007 wad approved. In the reporting period three meetings of the Permanent Consultative Council for preliminary examination of the materials delivered by the verifications of the Court of Accounts took place, in the composition of which are the representatives of the Centre for Economic Crimes and Corruption Fight (CECCF). As a result of the preliminary examination by the Consultative Council of the materials delivered by the verifications, the Court of Accounts decided to transmit the materials from three verifications to the Centre. The materials of the verification on the correctness of arrest of property and financial means on the benefit of the state as a result of the enforcement of court decisions were sent.
CA
CECCF
Ensure effective cooperation with the relevant EU Institutions and bodies in the case of on-the-spot checks and inspections related to the management and control of EU funds.
With the purpose of preparation of speakers and organisation of the training courses in the field of internal control and audit, a list of seminars were organised with the participation of the employees of the central apparatus and the territorial structures of the Financial Control and Review Service, with a list of 74 peopled being trained.
Within the seminars organised by the Academy of Public Administration within the President of the Republic of Moldova, the Financial Control and Review Service presented a initiation course in financial management, internal control and audit in the public sector, where 98 employees of the central public administration attended the event, including: chiefs of directories and sections of the specialised central bodies of the public administration, the employees of the Court of Accounts, consultants on issues secretariat issues within the central public administration bodies. Training courses were organised with the subject of internal control and audit in the public sector within the Centre for Continuing Education of the Financial and Banking College “A. Diordiţa” where 38 people attended the event. During 26-30th of March 2007 the Academy of Public Administration within the President of the Republic of Moldova, along with the Financial Control and Review Service have organised a training seminar with the subject of “Improvement of the mechanisms of internal control and internal audit within the public authorities”, where 17 employees of the Service and 19 specialists in the field attended the event, employees from the Court of Accounts, Ministry of Finance, Ministry of Interior, General Prosecutor’s Office, General Directory Finance of the Municipal Council Chisinau, National Social Insurance House, National Company of Health Insurance, National Centre for Preventive Healthcare, the Centre for Economic Crimes and Corruption Fight, Security and Information and Service.
MF
Improve public finance management and transparency, through upgrading of the existing Treasury Accounts System, appropriate audit of budget revenue and expenditures, in line with the suggestions of the World Bank’s Public economic management review. Extension of the Treasury system by including in the state budget the social insurance budget, compulsory medial insurance funds, special resources, extra-budgetary funds. Creation and implementation of an integrated informational system for public finance management.
With the purpose of purchasing the Informational System for Financial Management (ISFM) for public finances, a tender was announced on the 2nd of March 2007 to acquire the above-mentioned system.
With the purpose of attainment of instalment, parameter-setting and testing of the new ISFM, planned for the respective reporting period, a period of until the 1st of June 2007 was set for perspective offers. Currently, the Committee analyses the received offers.
According to the set calendar, the draft structure of the Accounting Plan of accounting management of the public sector was generated and presented for examination to the working group.
Subsequently, a comparison table between the draft budgetary classification and the draft single budgetary plan for the public sector was generated.
MF
Public Internal Financial Control
Development of a strategy and policy paper for the public internal financial control system (managerial accountability and internal audit).
In accordance with the Governmental Decision no. 489 from 03.05.2007 on the approval of the modifications and add-ons applied to the Governmental Decision no. 667 from 27.05.2005, the Central Directory for Harmonisation of the internal control and internal audit system was created. In June 2007 the draft Development of the Internal Financial Public Control Strategy was generated and sent for comments to the Ministry of Finance.
MF
Establish legislative framework for public internal financial control.
In accordance with the Joint Order “on the creation of the joint working group for the coordination of the delivery of Audit Standards” no. 96 from 29.05.2007 of the Court of Audit and no. 57 from 31.05.2007 of the Ministry of Finance, a joint working group was formed, comprising the representatives of the Ministry of Finance, Court of Accounts and Financial Control and Review Service with the purpose of delivery of the National Internal Audit Standards in the public sector.
MF
Gradual harmonization with the internationally agreed standards (International Federation of Accountants (IFAC), Institute for Internal Audit (IIA), International Organisation of Supreme Audit Institutions (INTOSAI)) and methodologies, as well as with EU best practices for the control and audit of public income, expenditure, assets and liabilities.
During the reporting period the following seminars were organised with the various subjects on internal control and audit systems in the public sector.
In January 2007, 74 employees of the central and regional offices of the Financial Control and Review Service participated at the seminars, including:
2nd-3rd of January 2007, 22 people – employees of the central apparatus of the Financial Control and Review Service from Chisinau;
4th-5th of January 2007, 15 people – employees of the Directories of Balti, Edinet, Soroca, the event being organised within the premises of the Financial Control and Review Directory in Balti;
18th-19th of January 2007, 27 people – employees of the Directories of Chisinau, Hincesti, Causeni, Ungheni and Orhei;
1st-2nd of February 2007, within the premises of the Financial Control and Review Directory in Cahul 10 people, including employees of the ATR of Gagauzia.
In February 2007, during the seminars organised by the Academy for Public Administration within the Presidency of the Republic of Moldova, the Financial Control and Review Service present an initiation course on financial management, internal control and internal audit in the public sector, where 98 employees from central public administration bodies participated, including:
22nd of February 2007, chiefs of Directories, sections from central specialised bodies of the public administration – 29 people;
26th of February 2007, employees of the Court of Accounts – 30 people;
28th of February 2007, 39 people participated – consultants on issues of secretariat from the central public administration authorities.
During 12th-13th of March 2007 training courses were organised at the Centre for Continuing Education of the Financial and Banking College „A. Diordiţa”, where 38 people participated. The employees studies issues of internal control and internal audit in the public sector. Besides these, other issues related to the National Strategy for prevention and fighting of corruption were discussed.
During 26th-30th of March 2007 the Academy of Public Administration within the Presidency of the Republic of Moldova, jointly with the Financial Control and Review Service have organised a training seminar with the subject of “Improvement of the mechanisms of internal control and internal audit within the public authorities”, where 17 employees of the Service and 19 specialists in the field attended the event, employees from the Court of Accounts, Ministry of Finance, Ministry of Interior, General Prosecutor’s Office, General Directory Finance of the Municipal Council Chisinau, National Social Insurance House, National Company of Health Insurance, National Centre for Preventive Healthcare, the Centre for Economic Crimes and Corruption Fight, Security and Information and Service. It is worthwhile mentioning that this seminar, to a certain extent, contributed to the harmonisation of the internal control and internal audit activities within the mentioned institutions.
MF
External Audit
1. Ensure the establishment and adequate functioning of an independent Supreme Audit Institution in line with the internationally accepted and EU best practice external audit standards (INTOSAI standards – International Organisation of Supreme Audit
Institutions).
During the perioud, the Court of Accounts continued the implementation of the objectives of the Strategic Development Plan (SDP). The main result of the activity from the reporting period is the legalisation of the relations with donors on the delivery of technical assistance to the Court of Accounts aimed at the implementation of the SDP. On 23rd of April 2007, the Grant Letter was signed between the International Association for Development and the Republic of Moldova, according to which it was agreed that financial means will be transferred in accordance with the conditions prescribed for in the Letter, directed exclusively for the financing of the Technical Assistance Project on strategic development of the Court of Accounts of the Republic of Moldova. On the 21st of May 2007 the Agreement of implementation was signed between the Court of Accounts and the Ministry of Finance. The Ministry of Finance, as the representative of the Government, empowers the Court of Accounts to implement the Project in accordance with the provisions of the Grant Letter. On the 26th of January the Agreement between the Court of Accounts of the Republic of Moldova and the National Audit Office of Sweden was signed, which provides for implementation of a cooperation project oriented to the consolidation of the capacities of the Court of Accounts, as a supreme institution of audit, for the years 2007-2009. Both agreements are in force and provide for delivery of non-reimbursable assistance until the end of 2009. In accordance with the previously agreed arrangements, the sectors of activity of the Strategic Development Plan are completely covered by these agreements, the role of main partner being that of the National Audit Office of Sweden. The main activities that must be accomplished with the support of the NAOS are linked with the following sectors:
- adoption and implementation of the standards, guidelines and manuals on regularity audit;
- inclusion of the attestation auditing;
- delivery of certain subject oriented audit activities in the field of public financial management;
- development of relations with the Parliament and the Government;
- establishment of certain processes of sufficient internal support of the audit activities;
- inclusion of a modern approach to audit;
- development of international relations.
In the final process of elaboration Is the draft law on organizationa and function of the Court of Accounts. In order to ensure the convergence of the draft law with the European legislation, including efficient implementation of all duties of the CA in the process of European Integration a working group was created.
In cooperation with SNAO, was initated the procedure of promotion of the new Law on Court of Accounts in the Partliament. In this sense being planed to arrange meetings with the officials from Parliamentary comisions to inform them about the new concept of the law.
For the delivery of technical assistance the World Bank administers the Fiduciary Fond formed of the DFID and the Government of Netherlands. The World Bank project covers the following sectors:
Delivery of technical assistance and equipment for the design of new systems of business management, inclusion of functions of internal audit, purchase and installation of IT equipment and capacity building on the usage of these systems.
Capacity building of the personnel of the Court of Accounts to deliver high performance auditing.
Development and improvement of the abilities and practices of the Court of Accounts employees to promote a higher responsibility, exchange of experience and carrier planning, and delivery of technical assistance on strategic management of Court of Accounts managers to ensure a better administration of the entity.
Strengthening of consolidation capacity of the personnel and members of the Parliamentary Committee on Budget from Moldova on issues of review of analytical information on conditions of public financial management and accounting, and raising awareness on problems of public financial management.
During the reporting period, jointly with the National Audit Office of Great Britain, the strategies on informational technologies and human resources have been delivered and approved – components of the Strategic Development Plan.
With the purpose of fulfilment of the SDP objectives, within the Court of Accounts:
- a working group was created, which jointly with an expert from the National Audit Office of Sweden, continues the work on the delivery of a new law on the Court of Accounts;
- in IT sector:
- the group responsible for the delivery and implementation of the Informational System Development Strategy of the Court of Accounts was created;
- a total inventory of the equipment and informational resources of the Court of Accounts was accomplished;
- the Strategy was finalised and sent to the Ministry of Informational Development and to the Ministry of Finance for comments;
- the action plan was adopted and deadlines were set for the creation of the internal plan on the implementation of the Informational System Development Strategy;
- the training programme for year 2007 was delivered, whilst some of the employees already followed IT training courses;
- on-line connection through the intergovernmental line with the Ministry of Informational Development was accomplished; presently works are undertaken to make the connection available with the Ministry of Finance.;
- the procedure of adherence of the Court of Accounts to the working group IT EUROSAI has been initiated.
- through the Decision of the Court no. 13 from 17th of March 2007 the “Methodology of evaluation of the internal control system in the public sector” was adopted
- two verifications were undertaken, using high performance auditing elements:
Fiscal administration of the State Fiscal Service (2005-2006);
Fiscal administration of the Customs Service (2005-2006);
- 3 verifications were made with the application of internal control systems checks.
With the purpose of implementation of an efficient internal communication policy, the following actions have been undertaken:
- continuing dissemination of the information about the on-going projects with NAOS and World Bank: relevant materials (the communiqués of the experts, meetings’ minutes, workshops’ reports) are placed in the working folders “Materials offered within the development cooperation” where all employees of the Court of Accounts have free access;
- the 2nd Informative Bulletin of the Court of Accounts was published in June 2007;
- presently the webpage of the Court of Accounts is under reconstruction;
- through the Decision of the Court of Accounts no. 8 from 22nd of February 2007 the Human Resources Development and Management Strategy was adopted, which also includes provisions on the improvement of internal communication through:
- extensive use of the electronic means (intranet, internet) during the process of internal communication;
Improvement of the systems of meetings and the working plans of the respective meetings (regularity, frequency, contents);
Improvement of the system of evaluation of the quality of work, by means of organising training seminars for personnel with a certain level of qualifications.
Through the Decision of the Court of Accounts no. 20 from 6th of April 2007 on “the approval of the structure of the Report on the methods of management of public financial resources in the budgetary year 2006” the structure of the annual report was approved, taking into account the recommendations of the NAOS:
Summary of the report (synopsis of the report: aim, objectives, conclusions and recommendations) will be placed at the beginning of the report;
The modification of the structure of chapters: first conclusions and recommendations will be identified. These will provide the clear essence of the problem, at which level is it and which are the proposals of remedy;
As part of the chapters on state budget expenditures and state patrimony management by public authorities some conclusions and recommendation will be formulated on the evaluation of the internal control system within the delivered verifications „+ ”, with the comparison of the actual system of internal control within the entities and that established in the Concept of Internal Public Financial Control (CIPFC), developed by the European Commission, COSO framework for Internal Checks and the regulations of the Concept of internal control and internal audit system in the public sector, approved by the Governmental Decision no. 1143 from 04.10.2006. After the identification of differences, there will be some recommendations made on their overcoming. This will contribute to boosting up the implementation of the internal control system as an important element to the public finance management improvement and would offer useful information to the Parliament.
With the purpose of implementing internal control system evaluation procedures in the activity of the Court of Accounts, with the support of foreign experts, 2 workshops have been organised. On the basis of the conclusions and recommendations of experts, as well as on the basis of INTOSAI standards, with the support of the Court of Accounts inspectors, the Directory of metrology, analysis and control has developed “the Methodology of public sector internal control system evaluation” and “the Model of evaluation activities results reporting of the internal control system”.
In accordance with the decision of the Court of Accounts nr. 20 from 6th of april 2007, regarding the ”Adoption of the structure of the report on the ways of managing of the public financial resources in the 2006 buget performance”, being taken into account the recomandations of the swedwn experts, was aproved a new sreucture of the anual report. A special attention was paid to the compartments on performance of the budget spendings and management of the state patrimony by the public authorities. Identifing and removing the problems, there will be made recomantations regarding the ways and methods of overcoming the difficulties. Throught these is intended to improve the sistem of the internl control as an important element in the process of management of the public finances.
CA
Enterprise policy
(43)
Develop a dialogue on enterprise policy aiming at the improvement of the administrative and regulatory environment for companies, at promoting industrial co-operation and tackling the impact of industrial restructuring, and develop the Moldovan legislative and administrative framework for SME promotion - in line with articles 52, 69 and 70 of the PCA
Develop a legislative framework and appropriate infrastructure for SMEs, as provided for in Article 70(2) of the PCA
Strategy of support of the development of Small and Medium Enterprises (SME) for years 2006-2008 was elaborated. It estabilishes the supporting mechanisms, promotion and extension opportunities for SME enterprises.
In conformity with the provisions of this strategy there was elaborated Law for supporting SME, which defines institutional framework for development of SME and eliminates lacunas vis-à-vis the access of foreign investments to the local enterprises.
Organization for the development of SME sector was established, being responsible for the implementation of policy promotion of SME.
The methodology on the monitoring and evaluation of the Strategy of support of the development of small and medium-sized enterprises for the years 2006-2008 was elaborated.
Also, the support of the World Bank project “Competitiveness enhancement” in the facilitation of the access of MSTC services by enterprises needs to be mentioned. This component will help the promotion of MSTC services by entrepreneurs, especially by SMEs, through the usage of Co-financing Grants Mechanism (FGM). The aim of the FGM is to consolidate the competitiveness of the companies in Moldova, increase of exports and consolidation of their position on the local market through means of improvement of the quality of products and services. The mechanism will offer financial support on co-financing basis to companies that which to use external technical assistance as means to modernise the quality of their products and services through international certification, such as ISO or HACCP.
(additional information p.22)
MET
Endorse and implement the European Charter for Small Enterprises and participate in the monitoring cycles from 2004 (includes participation in co-ordination meetings, writing an annual national report and organising an annual bilateral meeting with the European Commission and Moldovan enterprise policy stakeholders).
Republic of Moldova is no longer a member of the European Charter for Small Enterprises.
MET
Preparation of companies for progressive opening of internal market elements to Moldovan participation, focusing on information and training. The opening of one Euro-Info-Correspondence Centre (EICC) is envisaged.
One of the components of the World Bank project “Competitiveness enhancement” has as aim to increase the export potential of the economy of the Republic of Moldova through delivery of co-financing grants (GFM) for enterprises which intend to implement the management system based on internal quality standards such as ISO, which is relatively new element for the internal market of the Republic of Moldova. The aim of GFM is the competitiveness enhancement of the companies from Moldova, export increase and consolidation of the position on the local market through means of improvement of the quality of products and services.
In February 2006, as a result of signing the technical contract with the European Commission – Directorate General “Enterprises and Industry”, the Commerce and Industry Chamber of the Republic of Moldova officially obtained the right to manage the Correspondent Euro Info Centre from the Republic of Moldova.
MEC
CCI
In accordance with articles 52 and 69 of the PCA, promote dialogue on industrial policy and associate Moldova to EU initiatives to stimulate competitiveness, including in the tourism sector (e.g. exchange of information, participation in networks and studies, training).
With the purpose of establishment of a continuous dialogue on the industrial policy, negotiations have been initiated on cooperation agreements on industry issues with 12 countries from the European Union and members of the Stability Pact for South-Eastern Europe (Slovenia, Greece, Slovakia, Germany, Croatia, Macedonia, France, Estonia, Lithuania, Latvia, Austria and Belgium). Another 16 similar agreements are scheduled to be concluded during this year with countries from the respective region.
These agreements create a motivating normative framework for cooperation in the following fields: light industries, machine manufacturing, electronics, chemical, furniture, exhibition cooperation, enhances specialised exchange of information.
The experience Member States of the EU in the field of functioning of industrial/innovative parks have been studied and are currently applied, in the process currently being the development of respective draft legislative acts.
With the purpose of creation of a favourable environment for the development of a competitive industry, in harmony with industrial structures of the EU, the Ministry is preoccupied with the development of technical Regulations for certain products, as part of the requirements set in the European Directives.
Presently, in the development process there are 6 technical regulations:
„Electrical equipment of low voltage. Mandatory requirements” (approximation with the requirements of the EU Directive 73/23/CEE);
„Electrical and radio-electronic equipment. Electromagnetic compatibility. Mandatory requirements” (approximation with the requirements of EU Directive 89/336/CEE);
„Packaging and waste from packaging. Mandatory requirements” (approximation with the requirements of the EU Directive 94/62/CE);
„On titles, markings of fibre composites and labelling of textile products” (based on the requirements of the EU Directive 96/73/CEE);
“On the setting of methods of analysis used to determine the fibre composition of textile products” (based on the requirements of the EU Directive 96/73/CEE);
„On safety of toys users” (based on the requirements of the EU Directive 88/378/CEE).
With the purpose of implementation of international and European standards in industrial procedures, a list of these harmonised standards has been developed, on the following sectors: electrical equipment of low voltage, electromagnetic compatibility, compatibility of packaging material, toys and textile products with the purpose of their subsequent transposition as national standards.
The Ministry pays great attention to the increase of competitiveness of enterprise, according to international standards, through the means of continuing upgrade of managerial practices, implementation at industrial enterprises of the quality management systems.
The Sector Programme “Calitate” planned for 2004-2008 is monitored with special emphasis on the development, implementation and certification of quality management systems schedules, according to international standards ISO 9000.
Presently there are implemented and certified quality management systems according to international standards ISO 9000 at 14 enterprises.
At its final stage of development and approval is the Strategy of the Industrialisation of Moldova until 2015, which defines the priority sectors of the industry: machine manufacturing industry, processing industry, light industry, furniture production, electronic industry, chemical industry etc.
Presently, there is work going on with the development and implementation of the quality management systems at other industrialised enterprises, the Progressive Reforms Programme “20 Keys” is under implementation, a fact that contributes to the improvement of performance indicators of enterprises and application of modern management techniques.
With the purpose of international recognition of tests performed in the country, a special attention is paid to the accreditation of laboratories and testing centres on the basis of European standards EN 45000 and EN ISO/CEI 17025.
In cooperation with the Centre for accreditation in the field of conformity evaluation, works have been performed on examination of dossiers and accreditation of testing centres and laboratories specialised in sectors of industry and energy.
With the purpose of investment attraction as means of implementation of project in priority area, there is cooperation with international structures - - ONUDI, PSESE, World Bank, UNDP, IMF, OECBS, EBRD etc. Some projects have been presented by the Ministry to the neighbouring countries representatives during their bilateral meetings.
The local industrial potential has been promoted during the international promotional events: exhibitions such as “Moldova presents”, including specialised ones for textiles, furniture, machinery and equipment; investment forums, visits of businessmen organised in the country and abroad.
