I. Budget reliability
Scores by Dimension
Overall Indicator Score
1. Aggregate expenditure outturn
B
Notes:
1.1 Aggregate expenditure outturn
B
Notes:
Aggregate expenditure outturn was between 90.4% and 96% in all three years, the average outturn constituting 93.6%.
2. Expenditure composition outturn
D+
Notes:
2.1 Expenditure composition outturn by function
B
Notes:
Variance was below 10 percent in each of the last three completed fiscal years.
2.2 Expenditure composition outturn by economic type
D
Notes:
Variance was greater than 15 percent in two of the last three completed fiscal years.
2.3 Expenditure from contingency reserves
A
Notes:
The actual expenditure charged to the contingency fund did not exceed 3 percent of the original budget in the last three completed fiscal years.
Notes:
3.1 Aggregate revenue outturn
B
Notes:
Actual revenue was between 94% and 112% of budgeted revenue in 2018 and 2019.
3.2 Revenue composition outturn
B
Notes:
Variance in revenue composition was less than 10% in 2019 and 2020.
II. Transparency of public finances
Scores by Dimension
Overall Indicator Score
4. Budget classification
A
Notes:
4.1 Budget classification
A
Notes:
Budget formulation, execution, and reporting are based on every level of administrative, economic, and functional classification using GFS/COFOG standards. The country classification I salso applied.
Notes:
5.1 Budget documentation
A
Notes:
The 2021 state budget documentation fulfills 11 elements, including every basic element (1–4).
6. Central government operations outside financial reports
C+
Notes:
6.1 Expenditure outside financial reports
C
Notes:
The estimated expenditure outside of government financial reports is greater than 5% of total BCG expenditure and less than 10%.
6.2 Revenue outside financial reports
C
Notes:
The estimated revenue outside of government financial reports is just less than 5% of total BCG revenue and less than 10%.
6.3 Financial reports of extrabudgetary units
B
Notes:
Detailed financial reports of most extrabudgetary units are submitted to government annually within six months of the end of the fiscal year.
7. Transfers to subnational governments
B
Notes:
7.1 System for allocating transfers
A
Notes:
Almost all inter-budgetary transfers were allocated based on established rules, including either formulas or clearly defined criteria (except special capital transfers which amounted 0.8% of the total transfer’s amount in 2020).
7.2 Timeliness of information on transfers
C
Notes:
Local public authorities had less than four weeks to prepare their own budgets after they receive from MoF the information on their transfers / allocations for 2020.
8. Performance information for service delivery
B+
Notes:
8.1 Performance plans for service delivery
A
Notes:
The executive budget documentation provides information on outputs and objectives for programs and subprograms in each of 9 line ministries.
8.2 Performance achieved for service delivery
A
Notes:
The budget execution reports provide information on outputs and objectives realized for programs and subprograms in each of 9 line ministries.
8.3 Resources received by service delivery units
A
Notes:
Each service delivery unit under its founding ministry has a subaccount in the TSA and all information on the level of resources transferred from the founding ministry is available.
8.4 Performance evaluation for service delivery
C
Notes:
There have been two external performance reviews in health and education but an absence of internal performance audit in the past 3 years.
9. Public access to fiscal information
A
Notes:
9.1 Public access to fiscal information
A
Notes:
The government made available to the public 8 (out of 9) elements, including all 5 basic elements, within the specific time frames.
III. Management of assets and liabilities
Scores by Dimension
Overall Indicator Score
10. Fiscal risk reporting
B
Notes:
10.1 Monitoring of public corporations
C
Notes:
While most public corporations publish audited annual financial statements, the evidence is between 6 and 9 months after the end of the financial year. The financial performance of the state enterprises is monitored in various consolidated reports.
10.2 Monitoring of subnational governments
C
Notes:
The financial statements of local authorities are not audited but the financial statements are published and submitted to the MoF which prepares a consolidated fiscal risk report on local authorities.
10.3 Contingent liabilities and other fiscal risks
A
Notes:
The note on budgetary and fiscal risk includes a detailed analysis and commentary on all explicit and implicit fiscal risks.
11. Public investment management
D+
Notes:
11.1 Economic analysis of investment proposals
C
Notes:
The economic analysis of two largest state capital investments projects was conducted based on the guidelines adopted by the Government’s Resolution. The results of economic analysis are not published; and the analysis is not reviewed by an entity other than the sponsoring entity.
11.2 Investment project selection
D
Notes:
The MoF did not follow the established project selection procedure for the 2020 budget. The main public investment projects were included into the 2020 State Budget based on discussions with line ministries.
11.3 Investment project costing
C
Notes:
The annual budget information included each main public investment project’s total capital cost and planned capital expenditures for the next three budget year but did not include projections of the total life-cycle cost of public investment projects, which would include both capital and recurrent.
11.4 Investment project monitoring
D
Notes:
There were no systematic monitoring of public investment projects total costs and physical progress conducted in 2020.
12. Public asset management
B+
Notes:
12.1 Financial asset monitoring
B
Notes:
There is a record of all categories of financial holdings at nominal value using international accounting standards. The published annual financial statement includes a statement on financial assets.Yet, per CoA findings there are errors in the valuation of the assets.
12.2 Nonfinancial asset monitoring
B
Notes:
The government maintains a register of its holdings of fixed assets. Information is published annually. Yet, there are concerns that the value of these assets is underestimated.
12.3 Transparency of asset disposal
A
Notes:
The procedures for disposal of financial and non-financial assets are established in law and information is submitted to Parliament and contained in the annual financial report.
Notes:
13.1 Recording and reporting of debt and guarantees
A
Notes:
Domestic and foreign debt and guaranteed debt records are complete, accurate, updated, and reconciled monthly.
13.2 Approval of debt and guarantees
A
Notes:
Primary legislation grants authorization to borrow, issue new debt and loan guarantees on behalf of the central government to a single responsible debt management entity.
13.3 Debt management strategy
A
Notes:
A current medium-term debt management program (strategy) covers existing and projected government debt with a horizon of three years period and is publicly reported.
IV. Policy-based fiscal strategy and budgeting
Scores by Dimension
Overall Indicator Score
14. Macroeconomic and fiscal forecasting
B+
Notes:
14.1 Macroeconomic forecasts
A
Notes:
The indicators and assumptions underlying the macro-economic forecasts are included in the budget documentation submitted to the Legislature.
Notes:
The budget documents provide estimates of total revenues with a breakdown by individual revenue types and expenditure for the budget year and the following two years.
14.3 Macrofiscal sensitivity analysis
C
Notes:
There is a central baseline projection underlying the MTBF which is supplemented by an assessment of the impact of a slower growth which, however, does not contain the level of detail underlying the baseline.
Notes:
15.1 Fiscal impact of policy proposals
D
Notes:
All the policy proposals on individual revenue types are articulated in the MTBF and any changes are outlined. With respect to expenditure the policy changes for wages and salaries are outlined as are the policies for the individual sectors.
15.2 Fiscal strategy adoption
A
Notes:
Due to COVID-19 the fiscal goal of a budget deficit of 2.5% of GDP has had to be set aside. Nevertheless, this is still the medium-term target as the MTBF (2021-2023) comments that the “negative budget balance is estimated to be reduced from 8.0% of GDP in 2020 to 3.0% in 2023.
15.3 Reporting on fiscal outcomes
A
Notes:
The MTBF sets out the economic impact on revenues and expenditure and the fiscal balance during the year and the deviation from the original budget as well as policies for address shortfalls.
16. Medium-term perspective in expenditure budgeting
B+
Notes:
16.1 Medium-term expenditure estimates
A
Notes:
The annual budget expenditure estimates are prepared for 3 years (next year and the two following fiscal years) and are disaggregated by high level administration (organizational classification), functional and program classifications, and economic classification.
16.2 Medium-term expenditure ceilings
D
Notes:
Aggregate and ministry-level expenditure ceilings for the budget year and the two following fiscal years were not approved by government before issuing the state budget circular.
16.3 Alignment of strategic plans and medium-term budgets
A
Notes:
Medium-term strategic plans are prepared and costed for most (all) ministries. All expenditure policy proposals in the approved medium-term budget estimates align with the strategic plans.
16.4 Consistency of budgets with previous year’s estimates
A
Notes:
The budget documents provide an explanation of all changes to expenditure estimates between the last medium-term budget and the current medium-term budget at the ministry level.
17. Budget preparation process
C+
Notes:
Notes:
A clear annual budget calendar exists, but some delays are noted for the last budget cycle. The calendar for 2021 project budget allowed ministries and other budgetary units only three weeks from receipt of the budget circular to prepare their proposals.
17.2 Guidance on budget preparation
B
Notes:
A comprehensive and clear budget circular is issued to budgetary units, covering total budget expenditure for the full fiscal year.
17.3 Budget submission to the legislature
C
Notes:
The executive has submitted the annual budget proposal to the legislature in November (more than one month before the start of the fiscal year) in all last three years.
18. Legislative scrutiny of budgets
B+
Notes:
18.1 Scope of budget scrutiny
A
Notes:
The legislature’s review covers fiscal policies, medium-term fiscal forecasts, and medium-term priorities as well as details of expenditure and revenue.
18.2 Legislative procedures for budget scrutiny
B
Notes:
The legislature’s procedures to review budget proposals are approved by the legislature in advance of budget hearings and are adhered to.
18.3 Timing of budget approval
A
Notes:
The legislature has approved the annual budget before the start of the year in each of the last three fiscal years: 2018 state budget law on 15 December 2017, 2019 state budget law on 30 November 2018, and 2020 state budget law on 19 December 2019.
18.4 Rules for budget adjustment by the executive
A
Notes:
Clear rules exist for in-year budget adjustments by the executive. 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
19. Revenue administration
B
Notes:
19.1 Rights and obligations for revenue measures
A
Notes:
The STS and CS, which together administer and collect 98.8 percent of the central government revenues, use multiple channels to provide payers with easy access to comprehensive and up-to-date information on the main revenue obligation areas, including redress processes and procedures.
19.2 Revenue risk management
C
Notes:
CS and STS assess and prioritize compliance risks for all categories of revenues, however the approaches used are partially systematic and structured.
19.3 Revenue audit and investigation
C
Notes:
CS and STS undertake fraud and audit investigation using a compliance improvement plan, and complete around 74.490 percent of planned controls and investigations.
19.4 Revenue arrears monitoring
B
Notes:
The total stock of revenue arrears at the end of FY2020 was MDL 1,089,087.7 thousand, which accounted for 1.877 percent of the central government revenue.
20. Accounting for revenue
A
Notes:
20.1 Information on revenue collections
A
Notes:
The State Treasury obtains real time basis information on revenues collected by the STS and CS. The information is broken down by revenue type, collection period, and consolidated into a report which is publicly available.
20.2 Transfer of revenue collections
A
Notes:
All taxes, social security and mandatory health insurance contributions, and customs payments are paid into the accounts of the State Treasury according to economic classification and Register of IBAN codes and the transfer is immediate.
20.3 Revenue accounts reconciliation
A
Notes:
Both STS and CS overall undertake complete reconciliation of assessment, collection, arrears and transfers to the State Treasury at least quarterly within four weeks of the end of quarter.
21. Predictability of in-year resource allocation
B+
Notes:
21.1 Consolidation of cash balances
A
Notes:
The government operates a Treasury Single Account within which each budgetary unit has its own subaccount. All the accounts are consolidated on a daily basis.
21.2 Cash forecasting and monitoring
A
Notes:
After the annual budget has been approved each budgetary unit has to submit its forecasts for spending needs and revenues.
21.3 Information on commitment ceilings
A
Notes:
Based on their individual spending forecasts within their annual budget, budgetary units are able to plan their budget for the whole year according to their time period required for expenditure to deliver the services that are to be provided.
21.4 Significance of in-year budget adjustments
C
Notes:
While the adjustments are transparent and predictable, the amounts in 2020 are significant in terms of revenue and expenditure due to the impact of the COVID pandemic.
Notes:
22.1 Stock of expenditure arrears
A
Notes:
Arrears are low and insignificant: in 2018 MDL 2.7 million, 2019 - MDL 0.9 million and 2020 - MDL 0.9 million. These are less than 0.1% of expenditure.
22.2 Expenditure arrears monitoring
A
Notes:
Information on composition on arrears is generated monthly and for the full year in the MoF budget execution reports.
Notes:
23.1 Integration of payroll and personnel records
A
Notes:
MoF ensures budget control, data consistency, and monthly reconciliation of the number of the positions and number of staff (units) for the budgetary sector.
23.2 Management of payroll changes
A
Notes:
Changes to payroll are fully regulated and administrated correctly.
23.3 Internal control of payroll
A
Notes:
Authority is restricted to access and change records and payroll and results in an audit trail. The payroll payments are subject to and are a part of internal audit. The monthly reporting ensures full integrity of data.
Notes:
The payroll audit is mandatory to be included as part of all external audits performed by Court of Accounts and Financial Inspection Agency.
Notes:
24.1 Procurement monitoring
D
Notes:
Data on public procurement can be extracted from the PPA website and from MTender which is the country e-procurement system.
24.2 Procurement methods
A
Notes:
In 2020, out of all procurement procedures within the thresholds defined by the PPL, 95.59% of the total value of contracts were awarded through competitive methods (open tenders, Request for Quotations).
24.3 Public access to procurement information
D
Notes:
Procurement data on the entire volume of public procurement is only partly available to the public. While there is transparency with respect to procedures conducted through MTender, there is limited, or if at all, information on small value procurement which constitutes a large part of public procurement.
24.4 Procurement complaints management
A
Notes:
ANSC exercises its competences by respecting the principles of independence, transparency, and impartiality.
25. Internal controls on nonsalary expenditure
A
Notes:
25.1 Segregation of duties
A
Notes:
Appropriate segregation of duties is prescribed through the entire expenditure process. Responsibilities are clearly laid down.
25.2 Effectiveness of expenditure commitment controls
A
Notes:
Strong controls effectively limit commitments to budgetary allocations and cash availability.
25.3 Compliance with payment rules and procedures
A
Notes:
High level of compliance with rules and procedures.
Notes:
26.1 Coverage of internal audit
C
Notes:
While overall IAUs coverage is 98 per cent of central government institutions with respect to revenue and 95.1 per cent of central government institutions in respect to expenditure, the level of staffing occupancy across central level IAUs is 63% and it implies that the internal audit function is not fully operational.
26.2 Nature of audits and standards applied
C
Notes:
Internal audit activities are less focused on evaluation of the adequacy and effectiveness of managerial internal control system, and largely on high-risk areas. Internal audit activities are guided by the Internal Audit Methodology that complies with the International Professional Practices Framework issued by the Institute of Internal Auditors.
26.3 Implementation of internal audits and reporting
B
Notes:
Annual audit plans exist in 78% of central budgetary units, and they are monitored by the Division on Policies in Public Internal Financial Control (Central Harmonization Unit or PIFC Unit) at the MoF. In fiscal year 2020, planned audits were 188 for central government out of which 172 (91.5%) were completed and their reports distributed to appropriate parties.
26.4 Response to internal audits
A
Notes:
Management provided full response to and implemented 95% of internal audit recommendations made over fiscal years 2018-2020.
VI. Accounting and reporting
Scores by Dimension
Overall Indicator Score
27. Financial data integrity
A
Notes:
27.1 Bank account reconciliation
A
Notes:
Treasury Division under MoF, reconciles on daily basis all CG balances with the TSA sub-accounts and other bank accounts in the National Bank of Moldova.
Notes:
In Moldova, suspense accounts are used to record revenue whose purpose is not identified. The purposes of unidentified amounts are determined daily. Such accounts are cleared in a timely way.
Notes:
Reconciliation of advances takes place at least monthly, within a month from the end of period and only with few balances are brought forward and are cleared in a timely way.
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 Treasury, which reviews financial information from budgetary units and Centre of Information Technology in Finance under MoF monitors unauthorized systems access.
28. In-year budget reports
B+
Notes:
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 central government budget estimates for the budgetary units and expenditures from transfers.
28.2 Timing of in-year budget reports
B
Notes:
Reports are prepared monthly and issued within 4 weeks from the end of reporting period.
28.3 Accuracy of in-year budget reports
B
Notes:
There are no issues with quality. However, the reports provide information on expenditures only at the payment stage.
29. Annual financial reports
D+
Notes:
29.1 Completeness of annual financial reports
A
Notes:
The report on State 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.
29.2 Submission of reports for external audit
B
Notes:
Financial reports for budgetary central government are submitted for external audit within 6 months of the end of the fiscal year.
29.3 Accounting standards
D
Notes:
The financial statements are prepared following to 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:
30.1 Audit coverage and standards
A
Notes:
The financial statements of all central government budgetary units include revenue, expenditure, assets, and liabilities. These are entirely captured in the annual report on State budget execution that are audited using International Standards of Supreme Audit Institutions (ISSAI) for the last three fiscal years.
30.2 Submission of audit reports to the legislature
A
Notes:
The audit reports are submitted to the legislature within forty days from the receipt of the financial reports by the Court of Accounts (CoA).
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. CoA has effective internal mechanism for follow up on the audit recommendations.
30.4 Supreme Audit Institution independence
C
Notes:
The Court of Accounts is independent from the executive with respect to procedures for appointment and removal of the CoA Head, the planning of audit engagements, arrangements for publicizing reports, and execution of the CoA’s budget.
31. Legislative scrutiny of audit reports
C+
Notes:
31.1 Timing of audit report scrutiny
B
Notes:
Scrutiny of the fiscal years 2018 and 2019 reports of the Court of Accounts was completed by Parliament within 6 months of receipt of the reports, with some earlier years within 3 months.
31.2 Hearings on audit findings
C
Notes:
In-depth hearings on key findings of audit reports take place with responsible officers from audited entities in attendance. There were hearings for the report of the Court of Accounts on the annual execution of the State budget for fiscal years 2018-2020 (100% heard).
31.3 Recommendations on audit by the legislature
C
Notes:
During fiscal years 2018-2019, Parliament was not monitoring audit recommendations that it had made or endorsed to ensure they were implemented; they started doing this in 2020.
31.4 Transparency of legislative scrutiny of audit reports
C
Notes:
Hearings are conducted in public except for national security or similar sensitive discussions. Committee reports are provided to the full chamber of Parliament and published on Parliament’s official website.