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 all 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. 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 2019 and 2020.
PI-2.2 Expenditure composition outturn by economic type
D
Notes:
Expenditure composition outturn by economic classification was more than 15% in all three years.
PI-2.3 Expenditure from contingency reserves.
A
Notes:
Actual expenditure charged to the Reserve Fund of the Ungheni rayon was on average 0.1% of the original budget.
Notes:
PI-3.1 Agregate revenue outturn
B
Notes:
Actual revenue was between 94% and 112% of budgeted revenue in two of the last three years, 2019 and 2020.
PI-3.2 Revenue composition outturn
D
Notes:
Variance in revenue composition was more than 15% in two of the last three years, 2018 and 2020.
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
B
Notes:
PI-5.1 Budget Documentation
B
Notes:
Annual budget documentation fulfills 5 elements, including the 3 basic elements and 2 additional elements. 3 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 by the spending units.
PI-6.2 Revenue outside financial reports
A
Notes:
All revenues are reported by the spending units.
PI-6.3 Financial reports of extrabudgetary units
NA
Notes:
The Ungheni Rayon EBUs prepare annual financial statements and submit them within three months of the end of the year.
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 programs at entity level.
PI-8.2 Performance achieved for service delivery
A
Notes:
The budget execution reports provide information on outputs and objectives realized for the rayon programs for each entity.
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.
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
B
Notes:
PI-9.1 Public access to fiscal information
B
Notes:
Ungheni rayon discloses 4 basic elements out of 5, and 1 out of 3 additional relevant elements.
9bis Public consultation
C
Notes:
9bis.1 Public consultation in budget preparation
B
Notes:
Public consultation at budget preparation is conducted prior to approval of the budget by the subnational council. Public consultation is facilitated by the availability of accessible reader-friendly and understandable information on the budget proposal (in PowerPoint presentation format).
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 subnational government 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 two of the three state owned enterprises (SOEs) are received within 3 months of the end of the financial year.
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 does have two PPP arrangements, but their liabilities are not significant, and it has no extra-budgetary units under its ambit.
PI-11 Public investment management
NA
Notes:
PI-11.1 Economic analysis of investment proposals
NA
Notes:
This dimension is not applicable, since there were no investment projects funded by own budget sources.
PI-11.2 Investment project selection
NA
Notes:
This dimension is not applicable, since there were no investment projects funded by own budget sources.
PI-11.3 Investment project costing
NA
Notes:
This dimension is not applicable, since there were no investment projects funded by own budget sources.
PI-11.4 Investment project monitoring
NA
Notes:
This dimension is not applicable, since there were no investment projects funded by own budget sources.
PI-12 Public asset management
A
Notes:
PI-12.1 Financial asset monitoring
A
Notes:
The Ungheni 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.Information on the performance of the portfolio of financial assets is published annually.
PI-12.2 Nonfinancial asset monitoring
B
Notes:
The Ungheni rayon maintains a register of its holdings of fixed assets including information on their usage and age, which is published at least annually. The CoA mentioned qualification on valuation.
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:
Domestic debt records are complete, accurate, and updated quarterly. Most information is reconciled quarterly with the creditors.
PI-13.2 Approval of debt and guarantees
A
Notes:
Debt is managed by the rayon finance division in accordance with the provisions of the law no.419/2006. The public debt and state guarantees is endorsed by the Minister of Finance.
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.
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 and expenditures for the budget year are based on information on transfers, revenue and expenditure estimates and key demographic and macroeconomic indicators.
PI-14new.2 Fiscal impact of policy proposals
B
Notes:
The Ungheni rayon prepares estimates of the fiscal impact of all proposed changes in revenue and expenditure policy for the budget year.
PI-14new.3 Medium-term expenditure and revenue estimates
D
Notes:
The rayon budget is 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 rayon budget, it is not possible to compare the previous year’s forward estimate with the actual that occurred in 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:
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. 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. The ceilings were not approved before the circular was issued to the budgetary units.
PI-17.3 Budget submission to the subnational council
C
Notes:
The executive authority of the Ungheni rayon 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
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.
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 Ungheni rayon council. The current procedures include internal organizational arrangements such as committees, technical support, and negotiation procedures. There are arrangements for public consultation.
PI-18.3 Timing of budget approval
A
Notes:
The 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 legal framework foresees the clear rules 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
PI-19 Tax administration
NA
Notes:
PI-19.1 Rights and obligations for tax measures
NA
Notes:
All tax revenues and fees are administered and collected by the central authority- State Tax Service (STS) of Moldova on behalf of Ungheni rayon.
PI-19.2 Property tax register and value assessment
NA
Notes:
Ungheni rayon does not levy any property tax nor property transfer tax (in case of sale or inheritance).
PI-19.3 Tax risk management, audit and investigation
NA
Notes:
All tax revenues and fees are administered and collected by the central authority- STS of Moldova on behalf of Ungheni rayon.
PI-19.4 Tax arrears monitoring
NA
Notes:
All tax revenues and fees are administered and collected by the central authority- STS of Moldova on behalf of Ungheni rayon.
PI-20 Accounting for revenue
A
Notes:
PI-20.1 Information on revenue collections
A
Notes:
The State Treasury provides to both the STS and the finance division of Ungheni rayon information on collected revenues on 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 (both tax and non-tax revenue, broken down by revenue classification codes).
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:
All tax revenues and fees are administered and collected by the central authority- STS of Moldova – on behalf of Ungheni rayon.
PI-21 Predictability of in-year resource allocation
A
Notes:
PI-21.1 Consolidation of cash balances
A
Notes:
The Government of 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
A
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 and adjusted based on when revenues are received on a monthly basis (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
A
Notes:
There have been two in-year adjustments requiring the approval of the rayon council.
PI-22 Expenditure arrears
A
Notes:
PI-22.1 Stock of expenditure arrears
A
Notes:
Arrears are insignificant as a percentage of expenditure.
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 payroll is and personnel records are integrated in the accounting program and are supported by full documentation for all changes made to personnel records each month. It is checked against the previous month’s payroll data.
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 Ungheni rayon has been conducted by CoA for FY2020 and by Financial Inspection agency for the last four completed fiscal years.
Notes:
PI-24.1 Procurement monitoring
B
Notes:
Procurement databases and records are maintained by individual spending units of the Ungheni rayon. The information is complete and accurate for the most procurement methods as evidenced by the CoA audit report.
PI-24.2 Procurement methods
A
Notes:
In 2020, out of all procurement procedures within the thresholds defined by the public procurement law, 98.75% of the total value of contracts was awarded through competitive methods (open tenders, request for Quotations).
PI-24.3 Public access to procurement information
C
Notes:
3 out of 6 key procurement information requirements are made available to the public.
PI-24.4 Procurement complaints management
A
Notes:
The procurement complaint system meets every one of the listed criteria. The procurement complaint body is a national entity.
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:
There is high level of compliance with rules and procedures.
Notes:
PI-26.1 Coverage of internal audit
D
Notes:
The rayon expenditures coverage by the IAU is less than 10%.
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 system. 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. A quality assurance process is not used within the internal audit unit (IAU) and by the nature the compliance audits are only audits conducted during the year.
PI-26.3 Implementation of internal audits and reporting
A
Notes:
Annual audit plans exist, and they are monitored by the Division on Policies in Public Internal Financial Control (Central Harmonization Unit or PIFC Unit) at the MoF.
PI-26.4 Response to internal audits
C
Notes:
Management implemented less than 75% of internal audit recommendations made over fiscal years 2018-2020.
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:
Centre regional treasury unit under the State Treasury/MoF reconciles on daily basis all balances held by Ungheni 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 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, with minor exceptions.
PI-27.4 Financial data integrity processes
A
Notes:
Access and changes to records is restricted and recorded, and results in an audit trail.
PI-28 In-year budget reports
B+
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
A
Notes:
Reports are prepared monthly and issued in average within 2 weeks from the end of reporting period.
PI-28.3 Accuracy of in-year budget reports
B
Notes:
There are no issues with quality. The monthly reports provide information on expenditures at the payment 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 cash flow statement.
PI-29.2 Submission of reports for external audit
D
Notes:
By the law the SNGs are not required to send their annual reports to external auditor.
PI-29.3 Accounting standards
D
Notes:
The financial statements are prepared following to accounting standards consistent with the country’s legal framework.
VII. EXTERNAL SCRUTINY AND AUDIT
Scores by Dimension
Overall Indicator Score
Notes:
Notes:
Financial reports of Ungheni rayon have been audited at least once during the last three completed fiscal years. The audit has highlighted relevant material issues and systemic and control risks.
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 from receipt of the financial reports by the public audit institution in charge of subnational governments for the last three completed fiscal years.
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.
PI-30.4 Independence of the public audit institution in charge of subnational governments
C
Notes:
The CoA 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.
PI-31 Legislative scrutiny of audit reports
C
Notes:
PI-31.1 Timing of audit report scrutiny
B
Notes:
The scrutiny of audit report on financial audit has been carried out by the subnational council within 6 months from the receipt of the report.
PI-31.2 Hearings on audit findings
D
Notes:
The hearings by the rayon council were conducted for the audit report but the auditors did not attend them.
PI-31.3 Recommendations on audit by subnational council
C
Notes:
The rayon council issued the recommendations on the audit report to the executive. No follow up took place since the hearings.
PI-31.4 Transparency of legislative scrutiny of audit reports
C
Notes:
The hearings were not public but the decision and accompanying documents are made public.