SNG PILLAR: INTERGOVERNMENTAL FISCAL RELATIONS
Scores by Dimension
Overall Indicator Score
HLG-1 Transfers from Higher Levels of Government
A
Notes:
HLG-1.1 Outturn from higher-levels of government
A
Notes:
Outturn of transfers from the state budget was between 97% and 106% of the estimate in two of the last three years.
HLG-1.2 Transfers composition outturn
B
Notes:
Transfer composition outturn was less than 10% in all 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 of 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. The 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
A
Notes:
PI-1.1 Aggregate expenditure out-turn
A
Notes:
Aggregate expenditure outturn was between 95% and 105% in two of the last three years.
PI-2 Expenditure composition outturn
D+
Notes:
PI-2.1 Expenditure composition outturn by function
B
Notes:
Expenditure composition outturn by function was less than 10% in all three years.
PI-2.2 Expenditure composition outturn by economic type
D
Notes:
Expenditure composition outturn by economic classification was more than 15% in two of three last years.
PI-2.3 Expenditure from contingency reserves.
A
Notes:
Actual expenditure charged to the reserve fund of the Cahul rayon was on average 0.3% of the original budget.
Notes:
PI-3.1 Agregate revenue outturn
D
Notes:
Actual revenue exceeded 116% of budgeted revenue in two of the last three years.
PI-3.2 Revenue composition outturn
D
Notes:
Variance in revenue composition was more than 15% during the last 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 reliable and detailed administrative, economic, functional, and program classifications, using GFS/ COFOG standards that can produce consistent documentation comparable with named standards.
PI-5 Budget Documentation
B
Notes:
PI-5.1 Budget Documentation
B
Notes:
Annual budget documentation fulfills 6 elements, including 4 basic elements and 2 additional elements. 2 other 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:
All expenditures are reported.
PI-6.2 Revenue outside financial reports
A
Notes:
All revenues are reported.
PI-6.3 Financial reports of extrabudgetary units
NA
Notes:
The extrabudgetary units in the rayon receive financing from the central government and submit annual financial statements within three months of the year-end.
PI-7 Transfers to subnational governments
NA
Notes:
PI-7.1 System for allocating transfers
NA
Notes:
There are no SNGs under the rayon as per definition of the PEFA Framework.
PI-7.2 Timeliness of information on transfers
NA
Notes:
There are no SNGs under the rayon as per definition of the PEFA Framework.
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 rayon programs and subprograms at entity level.
PI-8.2 Performance achieved for service delivery
C
Notes:
The budget execution reports provide information on the activities performed under the rayon sub-programs, but more detailed information of the outputs produced and outcomes achieved is not 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. The FMIS allows to issue the report compiling the resources received by each service delivery unit. The reports are compulsory issued monthly, but it could be generated at the requested date.
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 rayon.
PI-9 Public access to fiscal information
D
Notes:
PI-9.1 Public access to fiscal information
D
Notes:
Cahul rayon discloses 3 basic elements out of 5, and 1 out of 3 additional relevant elements. Element 7 is not applicable.
9bis Public consultation
C
Notes:
9bis.1 Public consultation in budget preparation
B
Notes:
The Cahul rayon council conducts public consultations for budget preparation prior to approval of the budget. Public consultation is facilitated by the provision of accessible reader-friendly and understandable information on the budget proposal.
9bis.2 Public consultation in the design of service delivery programs
D
Notes:
Public participation processes are carried out only for some local government programs, strategies, and services.
9bis.3 Public consultation in investment planning
NA
Notes:
There were no investment projects managed and decided by the Cahul rayon council in 2020.
III. MANAGEMENT OF ASSETS AND LIABILITIES
Scores by Dimension
Overall Indicator Score
PI-10 Fiscal risk reporting
C
Notes:
PI-10.1 Monitoring of public corporations
C
Notes:
The financial reports of the three public corporations are received within 3 months of the end of the fiscal year. The annual financial statements have not been audited.
PI-10.2 Monitoring of subnational governments
NA
Notes:
There are no SNGs under the rayon as per definition of the PEFA Framework.
PI-10.3 Contingent liabilities and other fiscal risks
NA
Notes:
The rayon has no public-private partnership agreements and has no extra-budgetary units under its ambit.
PI-11 Public investment management
D
Notes:
PI-11.1 Economic analysis of investment proposals
D
Notes:
Economic analysis was not conducted for major investment projects. Applicants prepare design and estimate documentation without a feasibility study.
PI-11.2 Investment project selection
C
Notes:
Major investment projects are prioritized based on the Socio-Economic Development (SED) Program; selection criteria were not established.
PI-11.3 Investment project costing
D
Notes:
The capital expenditures for the forthcoming budget year and two following years were included in the budget documents for fixed assets as aggregate amount only, without disaggregation by projects.
PI-11.4 Investment project monitoring
D*
Notes:
Monitoring reports present deviations from plans for both, the total cost and physical progress. Quarterly monitoring reports for major investment projects should be submitted to the rayon council but not published. However, there is no evidence the reports were prepared.
PI-12 Public asset management
A
Notes:
PI-12.1 Financial asset monitoring
A
Notes:
The Cahul rayon maintains a record of its holdings in all categories of financial assets, which are recognized at fair or market value, in line with international accounting standards.
PI-12.2 Nonfinancial asset monitoring
A
Notes:
The Cahul rayon maintains a register of its holdings of fixed assets including information on their usage and age, which is published at least annually.
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 rayon council for information or approval.
Notes:
PI-13.1 Recording and reporting of debt and guarantees
B
Notes:
The general finance division of the Cahul rayon council keeps domestic debt records complete, accurate, and updates them quarterly. Most information is reconciled quarterly with the creditors.
PI-13.2 Approval of debt and guarantees
A
Notes:
The rayon general finance division based on the provisions of the law no.419/2006 manages the rayon debt. The public debt and state guarantees are endorsed by the Minister of Finance. The rayon 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 covering existing and projected subnational government debt is not developed. The explanatory note to the budget documentation provides data about annual debt program which is publicly available.
IV. POLICY-BASED FISCAL STRATEGY AND BUDGETING
Scores by Dimension
Overall Indicator Score
PI-14new Medium term budget strategy
B
Notes:
PI-14new.1 Underlying forecasts for medium-term budget
A
Notes:
Estimates of revenue and expenditure for the budget year and two following fiscal years are based on a subnational fiscal strategy called Cahul Rayon Socio-Economic Development Plan 2017-2020.30
PI-14new.2 Fiscal impact of policy proposals
B
Notes:
Cahul rayon prepares estimates of the fiscal impact of all proposed changes in revenue and expenditure policy for the budget year which are submitted to the subnational council.
PI-14new.3 Medium-term expenditure and revenue estimates
A
Notes:
The rayon budget is presented to and approved by the council for the forthcoming year with estimates for the following two years.
PI-14new.4 Consistency of budgets with previous year's estimates
D
Notes:
The changes to expenditure estimates between the last medium-term budget and the current medium-term budget are not explained.
PI-14 Macroeconomic and fiscal forecasting
NA
Notes:
NU
PI-14.1 Macroeconomic forecasts
NA
Notes:
NU
PI-14.2 Fiscal forecasts
NA
Notes:
NU
PI-14.3 Macro-fiscal sensitivity analysis
NA
Notes:
NU
Notes:
NU
PI-15.1 Fiscal impact of policy proposals
NA
Notes:
NU
PI-15.2 Fiscal strategy adoption
NA
Notes:
NU
PI-15.3 Reporting on fiscal outcomes
NA
Notes:
NU
PI-16 Medium term perspective in expenditure budgeting
NA
Notes:
NU
PI-16.1 Medium-term expenditure estimates
NA
Notes:
NU
PI-16.2 Medium-term expenditure ceilings
NA
Notes:
NU
PI-16.3 Alignment of strategic plans and medium-term budgets
NA
Notes:
NU
PI-16.4 Consistency of budgets with previous year estimates
NA
Notes:
NU
PI-17 Budget preparation process
C+
Notes:
Notes:
A clear budget instruction and calendar is issued for all public sector authorities and spending units, along with multiple budget request forms to be fulfilled. A deadline for 2021 budget drafting was less than one month (3 working weeks). Submissions are made in accordance with the timetable approved for each budget cycle separately.
PI-17.2 Guidance on budget preparation
C
Notes:
A comprehensive and clear budget circular is issued to budgetary authorities and spending units, covering total budget expenditure for the full fiscal year. The budget reflects sectors ceilings per each subnational unit. Yet, the ceilings are not approved by the government before issuing the budget circular.
PI-17.3 Budget submission to the subnational council
D
Notes:
For all three years under the assessment (2018-2020), the executive authority of the Cahul rayon has submitted the annual budget proposal to the rayon council (legislature) less than a month before the start of the fiscal year.
PI-18 Legislative scrutiny of budgets
B+
Notes:
PI-18.1 Scope of budget scrutiny
B
Notes:
The rayon council review covers fiscal policies and aggregates for the coming year as well as details of expenditure and revenue. The medium-term fiscal forecasts and medium-term priorities are not included in the tables to the explanatory note. However, the review does not cover the extent to which the original estimates of past policies have been fulfilled.
PI-18.2 Legislative procedures for budget scrutiny
B
Notes:
The procedures to review budget proposals are covered by the national legislation and are adhered to. There are no separate procedures adopted for the Cahul rayon council.
PI-18.3 Timing of budget approval
A
Notes:
The Cahul rayon 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 annual budget documentation provides clear rules for in-year budget adjustments by the subnational authorities and spending units. 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:
Almost all tax revenues and fees are administered and collected by the central authority- State Tax Service on behalf of Cahul Rayon.
PI-19.2 Property tax register and value assessment
NA
Notes:
Cahul Rayon does not levy any property tax or property transfer tax (in case of sale or inheritance).
PI-19.3 Tax risk management, audit and investigation
NA
Notes:
Almost all tax revenues and fees are administered and collected by the central authority - STS on behalf of Cahul Rayon.
PI-19.4 Tax arrears monitoring
NA
Notes:
Almost all tax revenues and fees are administered and collected by the central authority - STS on behalf of Cahul Rayon.
PI-20 Accounting for revenue
A
Notes:
PI-20.1 Information on revenue collections
A
Notes:
The Treasury provides to both the STS and the general finance division of Cahul rayon information on collected revenues on a monthly/daily/real-time basis.The information on total revenue collections is broken down by type of revenue and the finance division prepares a consolidated report covering all own source of revenues.
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:
Almost all tax revenues and fees are administered and collected by the central authority- STS- on behalf of Cahul Rayon.
PI-21 Predictability of in-year resource allocation
B+
Notes:
PI-21.1 Consolidation of cash balances
A
Notes:
Moldova operates a Treasury Single Account within which each budgetary unit, including subnational entities, has its own subaccount.
PI-21.2 Cash forecasting and monitoring
A
Notes:
Based on the annual budget, an annual cash flow is prepared. Given that transfers form the greatest part of the rayon revenues, and these are received monthly, a monthly plan is prepared and adjusted based on when revenues are received (including own source revenues).
PI-21.3 Information on commitment ceilings
A
Notes:
The rayon 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:
In-year adjustments requiring the approval of the Rayon council are made to spend the balance from the previous year. Adjustments are made three to six times annually.
PI-22 Expenditure arrears
A
Notes:
PI-22.1 Stock of expenditure arrears
A
Notes:
There are no expenditures arrears for the Cahul rayon.
PI-22.2 Expenditure arrears monitoring
A
Notes:
There is a robust system for identifying and recording the arrears.
Notes:
PI-23.1 Integration of payroll and personnel records
A
Notes:
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. Retroactive adjustments are rare.
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.
Notes:
A payroll audit covering all SNG entities of Cahul rayon has been conducted by the Financial Inspection agency for the last four completed fiscal years.
Notes:
PI-24.1 Procurement monitoring
D*
Notes:
The information shared by the Cahul rayon council does not present the whole picture of the procurement situation for all the relevant divisions of the rayon council which procure centralized or individually.
PI-24.2 Procurement methods
D*
Notes:
In 2020, out of all procurement procedures within the thresholds defined by the public procurement law, 90.23% of the total value of contracts was awarded through competitive methods (open tenders, request for quotations).
PI-24.3 Public access to procurement information
D
Notes:
2 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 body is a national entity and as such, this dimension is applicable only once in a set of assessments.
PI-25 Internal controls on nonsalary expenditure
A
Notes:
PI-25.1 Segregation of duties
B
Notes:
Appropriate segregation of duties is prescribed through the entire expenditure process. Responsibilities are clearly laid down for most key steps.
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:
High level of compliance with rules and procedures.
Notes:
PI-26.1 Coverage of internal audit
D*
Notes:
The internal audit is not fully operational. Limited information about annual internal audit activity in the last years is available.
PI-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 systems. A quality assurance process is not adequate.
PI-26.3 Implementation of internal audits and reporting
D*
Notes:
An annual audit plan does not exist for FY2020. There is no evidence of the programmed audits completed.
PI-26.4 Response to internal audits
D*
Notes:
There is no evidence that the management of the rayon provided responses to the internal audit recommendation in the last three years.
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:
Cahul regional treasury unit under State Treasury / MoF reconciles daily all balances held by Cahul rayon 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 monthly, within a month from the end of period. The balance of receivables at the end of 2020 was 1.8%.
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.
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:
Reports are prepared quarterly (except for the first quarter) and issued on average within 8 weeks of the end of the reporting periods.
PI-28.3 Accuracy of in-year budget reports
A
Notes:
There are no issues with quality. The quarterly reports provide information at the payment and commitment stage.
PI-29 Annual financial reports
D+
Notes:
PI-29.1 Completeness of annual financial reports
A
Notes:
The report on rayon 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 a 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. The CoA performed no audits for the last three years.
PI-29.3 Accounting standards
D
Notes:
The financial statements are prepared in line with 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:
No audit was conducted for Cahul rayon in the last three completed fiscal years.
PI-30.2 Submission of audit reports to the subnational council
D
Notes:
No audit was conducted for Cahul rayon in the last three completed fiscal years.
PI-30.3 External audit follow-up
D
Notes:
No audit was conducted for Cahul rayon in the last three completed fiscal years.
PI-30.4 Independence of the public audit institution in charge of subnational governments
NA
Notes:
The CoA is a national authority. This dimension is assessed only once in a set of assessments. It was covered by the Ungheni Rayon PEFA assessment.
PI-31 Legislative scrutiny of audit reports
D
Notes:
PI-31.1 Timing of audit report scrutiny
D
Notes:
No audit was conducted for Cahul rayon in the last three completed fiscal years.
PI-31.2 Hearings on audit findings
D
Notes:
No audit was conducted for Cahul rayon in the last three completed fiscal years.
PI-31.3 Recommendations on audit by subnational council
D
Notes:
No audit was conducted for Cahul rayon in the last three completed fiscal years.
PI-31.4 Transparency of legislative scrutiny of audit reports
D
Notes:
No audit was conducted for Cahul rayon in the last three completed fiscal years.