SNG PILLAR: INTERGOVERNMENTAL FISCAL RELATIONS
Scores by Dimension
Overall Indicator Score
HLG-1 Transfers from Higher Levels of Government
B
Notes:
HLG-1.1 Outturn from higher-levels of government
C
Notes:
Outturn of transfers from the state budget was between 92% and 116% of the estimate in two of three years.
HLG-1.2 Transfers composition outturn
C
Notes:
Transfer composition outturn was less than 15% in two of three years.
HLG-1.3 Timeliness of transfers from higher-levels of government
A
Notes:
The timetable for transfers from the state budget to SNG budget is prescribed in Ministry of Finance Order (MFO) no.3/2017 which was respected in all the last three years.
HLG-1.4 Predictability of transfers
A
Notes:
The budget circular issued by MoF to SNGs contains information on transfers for the fiscal year and the two following years with detailed explanations of any changes incurred and respective calculations.
HLG-2 Fiscal rules of monitoring of fiscal position
A
Notes:
HLG-2.1 Fiscal rules for subnational governments
A
Notes:
The fiscal rules are clearly laid down in the law on local public finances.
HLG-2.2 Debt rules for subnational governments
A
Notes:
The rules on ceilings for SNG debt are provided in the law. The MoF monitors the subnational debt both at approval and at execution.
HLG-2.3 Monitoring of subnational governments
A
Notes:
All SNGs provide their annual financial statements to MoF. Annual NPB Execution Report produced by MoF includes consolidated report on execution of local budgets.
I. BUDGET RELIABILITY
Scores by Dimension
Overall Indicator Score
PI-1 Aggregate expenditure out-turn
D
Notes:
PI-1.1 Aggregate expenditure out-turn
D
Notes:
The aggregate expenditure outturn was greater than 115% in two of three years.
PI-2 Expenditure composition outturn
D+
Notes:
PI-2.1 Expenditure composition outturn by function
D
Notes:
The variance in expenditure composition by functional classification was significantly more than 15% in all three years.
PI-2.2 Expenditure composition outturn by economic type
D
Notes:
The variance in expenditure composition by functional classification was significantly more than 15% in all three years.
PI-2.3 Expenditure from contingency reserves.
A
Notes:
No expenditures incurred from contingency reserves in all three years.
Notes:
PI-3.1 Agregate revenue outturn
D
Notes:
The actual revenues exceeded 116% of the budgeted revenue in all three years.
PI-3.2 Revenue composition outturn
D
Notes:
The variance in revenue composition exceeded 15% in all three years.
II. TRANSPARENCY OF PUBLIC FINANCES
Scores by Dimension
Overall Indicator Score
PI-4 Budget Classification
A
Notes:
PI-4.1 Budget Classification
A
Notes:
Budget formulation, execution and reporting are based on consistent and detailed administrative, program and economic classifications.
PI-5 Budget Documentation
C
Notes:
PI-5.1 Budget Documentation
C
Notes:
Annual budget documentation fulfills 4 elements, including 3 basic elements and 1 additional element. Other 2 elements are not applicable at the subnational level.
PI-6 Subnational government operations outside financial reports
A
Notes:
PI-6.1 Expenditure outside financial reports
A
Notes:
There are no extrabudgetary units in the municipality.
PI-6.2 Revenue outside financial reports
A
Notes:
There are no extrabudgetary units in the municipality.
PI-6.3 Financial reports of extrabudgetary units
NA
Notes:
As there are no extrabudgetary units in the municipality, there are no relevant financial reports.
PI-7 Transfers to subnational governments
NA
Notes:
PI-7.1 System for allocating transfers
NA
Notes:
Ungheni municipality does not have lower-level subnational governments. Dimension is not applicable.
PI-7.2 Timeliness of information on transfers
NA
Notes:
Ungheni municipality does not have lower-level subnational governments. Dimension is not applicable.
PI-8 Performance information for service delivery
B+
Notes:
PI-8.1 Performance plans for service delivery
A
Notes:
The draft budget documentation provides information on outputs and objectives for the municipality programs which is published.
PI-8.2 Performance achieved for service delivery
A
Notes:
The budget execution reports provide information on outputs and objectives realized for the municipality programs. The performance reports are published.
PI-8.3 Resources received by service delivery units
A
Notes:
Amounts allocated to individual service delivery units are recorded at the level of the unit in the accounting software system and are disclosed in the annual budget documentation.
PI-8.4 Performance evaluation for service delivery
C
Notes:
There have been two external performance reviews in health and education nationally in the past 3 years that is relevant for the municipality. There were no external reviews specific to the SNG.
PI-9 Public access to fiscal information
D
Notes:
PI-9.1 Public access to fiscal information
D
Notes:
Ungheni municipality discloses 3 basic elements out of 5, and 2 out of 3 additional elements.
9bis Public consultation
C+
Notes:
9bis.1 Public consultation in budget preparation
B
Notes:
For FY2021 budget, the public consultation was held during the budget formulation and preparation stage. Simplified budget information was published on the website in advance. Summary of inputs received as result of public consultation was not published.
9bis.2 Public consultation in the design of service delivery programs
C
Notes:
Participation processes are carried out for most service delivery programs. Reports regarding the opinions, observations and proposals made by citizens, as well as the feedback and conclusions are not published.
9bis.3 Public consultation in investment planning
C
Notes:
During preparation of major investment projects, public consultation is conducted for most major investment projects managed and decided by the subnational government.
III. MANAGEMENT OF ASSETS AND LIABILITIES
Scores by Dimension
Overall Indicator Score
PI-10 Fiscal risk reporting
D
Notes:
PI-10.1 Monitoring of public corporations
D
Notes:
The municipality does not receive annual financial statements from the enterprises it owns. Those statements are not regularly audited.
PI-10.2 Monitoring of subnational governments
NA
Notes:
The municipality does not have any subnational governments that reports to it.
PI-10.3 Contingent liabilities and other fiscal risks
NA
Notes:
The municipality does not have any public-private partnership arrangements and has no extra-budgetary units under its ambit.
PI-11 Public investment management
D+
Notes:
PI-11.1 Economic analysis of investment proposals
C
Notes:
There are no guidelines for economic analysis of own investment projects preparation. The construction specialist of Ungheni municipality assessed the needs for the major investment project before its inclusion in the medium-term Strategy for Economic Development, that ensure the objectivity of analysis.
PI-11.2 Investment project selection
C
Notes:
There are no established selection criteria for own investment projects. However, the major investment project is among the priority investment projects contained in the medium-term Strategy for Economic Development.
PI-11.3 Investment project costing
C
Notes:
Projections of the total capital cost of the major investment project, together with a year-by-year breakdown, are included in the budget documents but not estimates of the recurrent costs for the next three years or projections of the total life-cycle cost.
PI-11.4 Investment project monitoring
D
Notes:
The total cost of the major investment project is monitored by the Financial Department within the routine monitoring of budget execution. Physical progress is monitored separately by a specific unit under the municipality. Annual results are not published.
PI-12 Public asset management
B+
Notes:
PI-12.1 Financial asset monitoring
B
Notes:
The Ungheni municipality maintains records of all financial assets at acquisition cost. The performance information about major financial assets is published annually.
PI-12.2 Nonfinancial asset monitoring
B
Notes:
The Ungheni municipality maintains the register of its fixed assets. The data is provided to the Public Property Agency that publishes a register of the assets held by all subnational governments based on the data submitted annually by them.
PI-12.3 Transparency of asset disposal
A
Notes:
Procedures and rules for the transfer or disposal of financial and nonfinancial assets are established, including information to be submitted to the municipal council for information or approval.
Notes:
PI-13.1 Recording and reporting of debt and guarantees
A
Notes:
Ungheni municipality maintains complete and accurate information on all its borrowings (domestic and foreign debts). At the moment of evaluation there are no guarantees issued to municipal enterprises.
PI-13.2 Approval of debt and guarantees
A
Notes:
The provisions of the law no. 419/2006 states that public debt and state guarantees and policies are to be approved by the Minister of Finance. The municipal council, as a deliberative authority of the local public administration, approves the issue of new debt.
PI-13.3 Debt management strategy
D
Notes:
A medium-term debt management strategy (DMS) covering existing and projected subnational government debt is not developed. The explanatory note to the budget documentation provides data about annual debt program that is publicly available as an annex to the municipal decision on annual budget approval.
IV. POLICY-BASED FISCAL STRATEGY AND BUDGETING
Scores by Dimension
Overall Indicator Score
PI-14new Medium term budget strategy
C
Notes:
PI-14new.1 Underlying forecasts for medium-term budget
B
Notes:
Estimates of revenue are made for the budget year and two following fiscal years, while the expenditure estimates are provided only for the budget year.
PI-14new.2 Fiscal impact of policy proposals
C
Notes:
The municipality prepares estimates of the fiscal impact of most proposed changes in revenue and expenditure policy for the budget year.
PI-14new.3 Medium-term expenditure and revenue estimates
D
Notes:
The estimated municipal expenditures are presented to and approved by the council for the forthcoming year only.
PI-14new.4 Consistency of budgets with previous year's estimates
NA
Notes:
As there is not a medium terms perspective to the municipal expenditures, it is not possible to compare the previous year’s forward estimate with the actuals of that year.
PI-14 Macroeconomic and fiscal forecasting
NU
Notes:
NU
PI-14.1 Macroeconomic forecasts
NU
Notes:
NU
PI-14.2 Fiscal forecasts
NU
Notes:
NU
PI-14.3 Macro-fiscal sensitivity analysis
NU
Notes:
NU
Notes:
NU
PI-15.1 Fiscal impact of policy proposals
NU
Notes:
NU
PI-15.2 Fiscal strategy adoption
NU
Notes:
NU
PI-15.3 Reporting on fiscal outcomes
NU
Notes:
NU
PI-16 Medium term perspective in expenditure budgeting
NU
Notes:
NU
PI-16.1 Medium-term expenditure estimates
NU
Notes:
NU
PI-16.2 Medium-term expenditure ceilings
NU
Notes:
NU
PI-16.3 Alignment of strategic plans and medium-term budgets
NU
Notes:
NU
PI-16.4 Consistency of budgets with previous year estimates
NU
Notes:
NU
PI-17 Budget preparation process
C
Notes:
Notes:
The Mayor’s office finance staff prepares the draft budget. All budget institutions respect the budget calendar. A deadline for 2021 budget drafting was around one month (less than 4 weeks). Submissions are made in accordance with the timetable approved for each budget cycle separately.
PI-17.2 Guidance on budget preparation
C
Notes:
The Mayor’s office uses a comprehensive and clear budget circular issued by the MoF and rayon finance division. The budget circular covers total budget expenditure for the full fiscal year and budget rules for next 2 additional years.
PI-17.3 Budget submission to the subnational council
C
Notes:
The executive authority of the municipality has submitted the annual budget proposal to the subnational council at least one month before the start of the fiscal year in two of the last three years.
PI-18 Legislative scrutiny of budgets
C+
Notes:
PI-18.1 Scope of budget scrutiny
B
Notes:
The municipal council review covers fiscal policies and aggregates for the coming year as well as details of expenditure and revenue. The budget proposal includes the medium-term fiscal forecasts (on revenue only) and medium-term priorities are included in the tables to the explanatory note and in the program-based budgets.
PI-18.2 Legislative procedures for budget scrutiny
C
Notes:
The municipal council approves and follows the budget review procedures foreseen in the legal framework; this has been the case in recent years and the fiscal year 2020.
PI-18.3 Timing of budget approval
A
Notes:
The municipal council has approved the annual budget before the start of the year in each of the last three fiscal years.
PI-18.4 Rules for budget adjustments by the executive
A
Notes:
The legal framework foresees the clear rules for in-year budget adjustments. The rules set strict limits on the extent and nature of amendments and are adhered to in all instances.
V. PREDICTABILITY AND CONTROL IN BUDGET EXECUTION
Scores by Dimension
Overall Indicator Score
PI-19 Tax administration
NA
Notes:
PI-19.1 Rights and obligations for tax measures
NA
Notes:
Most municipal tax revenues and fees are administered and collected by the central authority- State Tax Service of Moldova. Although the property tax is collected by the Ungheni municipality and administered largely by STS, it accounts for about 14 percent of total tax revenues of Ungheni municipality (less than 75 percent of the total tax revenues of the SNG). Hence there are no core taxes.
PI-19.2 Property tax register and value assessment
NA
Notes:
Most municipal tax revenues and fees are administered and collected by the central authority- STS. Although the property tax is collected by the Ungheni municipality and administered largely by STS, it accounts for about 14 percent of total tax revenues of Ungheni municipality (less than 75 percent of the total tax revenues of the SNG). Hence there are no core taxes.
PI-19.3 Tax risk management, audit and investigation
NA
Notes:
Most municipal tax revenues and fees are administered and collected by the central authority- STS. Although the property tax is collected by the Ungheni municipality and administered largely by STS, it accounts for about 14 percent of total tax revenues of Ungheni municipality (less than 75 percent of the total tax revenues of the SNG). Hence there are no core taxes.
PI-19.4 Tax arrears monitoring
NA
Notes:
Most municipal tax revenues and fees are administered and collected by the central authority- STS. Although the property tax is collected by the Ungheni municipality and administered largely by STS, it accounts for about 14 percent of total tax revenues of Ungheni municipality (less than 75 percent of the total tax revenues of the SNG). Hence there are no core taxes.
PI-20 Accounting for revenue
A
Notes:
PI-20.1 Information on revenue collections
A
Notes:
Data are consolidated daily. The STS and accounting unit of the Ungheni Municipality has access to the State Treasury data on collected revenues on monthly/daily/real-time basis. The information is presented by revenue type broken down based on economic classification.
PI-20.2 Transfer of revenue collections
A
Notes:
All tax revenues and fees are paid directly into the accounts registered in the Treasury – separately for each type of tax revenue. Therefore, all tax and fee revenues are directly transferred to the Treasury within 24 hours.
PI-20.3 Tax accounts reconciliation
NA
Notes:
Most tax revenues and fees are administered and collected by the central authority, STS.
PI-21 Predictability of in-year resource allocation
B+
Notes:
PI-21.1 Consolidation of cash balances
A
Notes:
Moldova operates a TSA within which each budgetary unit, including subnational entities, has its own subaccount. All the accounts are consolidated on a daily basis.
PI-21.2 Cash forecasting and monitoring
B
Notes:
Based on the annual budget, an annual cash flow is prepared. Given that transfers form the greatest part of revenues, and these are received monthly, a monthly plan is prepared. It is adjusted based on when revenues are received on a monthly basis. As own source revenues are collected quarterly the adjustment is made quarterly. Based on this revenue forecast, procurement is planned accordingly.
PI-21.3 Information on commitment ceilings
A
Notes:
The municipality plans its budget execution for the whole year based on its cash flow projections so commitments can be planned accordingly.
PI-21.4 Significance of in-year budget adjustments
C
Notes:
There have been six in-year adjustments requiring the approval of the municipal council.
PI-22 Expenditure arrears
A
Notes:
PI-22.1 Stock of expenditure arrears
A
Notes:
There are no arrears.
PI-22.2 Expenditure arrears monitoring
A
Notes:
Arrears are included as a line item in the budget classification system. Spending units must report on monthly basis data on arrears to the rayon which reports to the MoF.
Notes:
PI-23.1 Integration of payroll and personnel records
A
Notes:
The HR and payroll management is centralized in the Mayor’s office. The payroll and personnel records are integrated in the accounting program and are supported by full documentation for all changes made to personnel records each month.
PI-23.2 Management of payroll changes
A
Notes:
Required changes to the personnel records and payroll are updated monthly, generally in time for the following month’s payments. There were no cases that would require retroactive adjustments.
PI-23.3 Internal control of payroll
A
Notes:
Budgetary institutions have clear and detailed rules and procedures for making changes to the information on staff and payroll, which include the requirement for signatures of authorized persons. Changes made to the payroll provide for a clear audit trail.
Notes:
The payroll audits are not done annually. In 2020 the Court of Account carried out financial audit for FY2019 which covered payroll matters.
Notes:
PI-24.1 Procurement monitoring
A
Notes:
Procurement databases and records are maintained by the Ungheni municipality. The information is complete and accurate for all procurement methods.
PI-24.2 Procurement methods
A
Notes:
In 2020, all contracts were awarded through competitive methods.
PI-24.3 Public access to procurement information
B
Notes:
4 out of 6 key procurement information requirements are made available to the public.
PI-24.4 Procurement complaints management
NA
Notes:
The procurement complaint body is a national entity and as such, this sub-indicator applies only once for a set of assessments. The dimension was assessed as part of Ungheni tier II local authority.
PI-25 Internal controls on nonsalary expenditure
B+
Notes:
PI-25.1 Segregation of duties
C
Notes:
Segregation of duties is prescribed throughout the expenditure process. More precise definition of important responsibilities may be needed.
PI-25.2 Effectiveness of expenditure commitment controls
A
Notes:
Strong controls effectively limit commitments to budgetary allocations and cash availability.
PI-25.3 Compliance with payment rules and procedures
A
Notes:
There is high level of compliance with rules and procedures.
Notes:
PI-26.1 Coverage of internal audit
D
Notes:
There is no internal audit unit at the municipality level.
PI-26.2 Nature of audits and standards applied
NA
Notes:
There is no internal audit unit at the municipality level.
PI-26.3 Implementation of internal audits and reporting
NA
Notes:
There is no internal audit unit at the municipality level.
PI-26.4 Response to internal audits
NA
Notes:
There is no internal audit unit at the municipality level.
VI. ACCOUNTING AND REPORTING
Scores by Dimension
Overall Indicator Score
PI-27 Financial data integrity
A
Notes:
PI-27.1 Bank account reconciliation
A
Notes:
The centre regional treasury unit under MoF reconciles on daily basis all balances held by Ungheni municipality with the TSA sub-accounts and other bank accounts in the NBM.
PI-27.2 Suspense accounts
NA
Notes:
There is no suspense account.
PI-27.3 Advance accounts
A
Notes:
Reconciliation of advances takes place at least monthly, within a month from the end of period and at the year end there was no balance on the account.
PI-27.4 Financial data integrity processes
A
Notes:
Access and changes to records is restricted and recorded, and results in an audit trail. Financial data integrity is done by the Treasury, which reviews financial information from budgetary units and Centre of Information Technology in Finance under MoF monitors unauthorized systems access. The CoA as part of their audits verify financial data integrity.
PI-28 In-year budget reports
C+
Notes:
PI-28.1 Coverage and comparability of reports
A
Notes:
Coverage and classification of data in the budget execution reports allows direct comparison to the original budget. Information includes all budget estimates and expenditures from transfers.
PI-28.2 Timing of in-year budget reports
C
Notes:
Budget execution reports are prepared quarterly (excluding first quarter) and issued within 8 weeks from the end of each quarter.
PI-28.3 Accuracy of in-year budget reports
C
Notes:
There were issues with reports identified by the Court of Accounts.
PI-29 Annual financial reports
D+
Notes:
PI-29.1 Completeness of annual financial reports
A
Notes:
The report on municipality budget execution is prepared annually and is comparable with the approved budget. It contains information on revenue, expenditure, financial assets, financial liabilities, and long-term obligations. It includes cash flow statement.
PI-29.2 Submission of reports for external audit
D
Notes:
By law the SNGs are not required to send their annual reports to the external auditor. Since the SNG’s financial statements prepared for 2019 were audited by the CoA, the Ungheni municipality presented its statements in October 2020, which exceeded nine months of the end of the fiscal year.
PI-29.3 Accounting standards
D
Notes:
The financial statements are prepared following accounting standards consistent with the country’s legal framework. However, the standards used in preparing annual financial reports are not disclosed.
VII. EXTERNAL SCRUTINY AND AUDIT
Scores by Dimension
Overall Indicator Score
Notes:
Notes:
Financial and compliance audits for Ungheni municipality have been conducted once during the last three completed fiscal years and covered FY2019.
PI-30.2 Submission of audit reports to the subnational council
B
Notes:
The audit report was submitted to the subnational council within six months of receipt of the financial reports by the public audit institution in charge of subnational governments.
PI-30.3 External audit follow-up
A
Notes:
Audit recommendations are included in the CoA decision on approval of the audit reports that are published. The Ungheni municipality provided the written response to the CoA on how the audit findings and recommendations are being addressed.
PI-30.4 Independence of the public audit institution in charge of subnational governments
NA
Notes:
The CoA is a national entity. This dimension is NA as the assessment of the Ungheni Mayor’s Office is part of the set of assessments. This dimension was assessed under Ungheni tier II local public authority (rayon).
PI-31 Legislative scrutiny of audit reports
B
Notes:
PI-31.1 Timing of audit report scrutiny
B
Notes:
Scrutiny of audit reports on financial and compliance audits was carried out by the municipal council within six months after the reports were issued.
PI-31.2 Hearings on audit findings
C
Notes:
The hearing of the audit findings of FY2019 audit reports with adverse opinion was carried out by the Ungheni municipal council. The representative of the CoA did not attend it.
PI-31.3 Recommendations on audit by subnational council
C
Notes:
The Ungheni municipal council appointed responsible officer for the implementation of the audit recommendations and approved an action plan. There were no subsequent hearings which would follow up on how they have been implemented.
PI-31.4 Transparency of legislative scrutiny of audit reports
A
Notes:
The hearings of the audit reports were public, and the council decision on the audit action plan was published on the website.