WITH DEFICIENCES OF VIEW
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On July 12, the team of the Court of Accounts of the Republic of Moldova (CoARM) participated in the official presentation of the results of the Report on the evaluation of public expenditure performance and financial accountability, including the evaluation of public financial management.
The report was prepared by the World Bank’s team within the financing provided by the European Union and in partnership with the Ministry of Finance, as coordinator from the Republic of Moldova and UN Women.
Assessing Public Expenditure and Financial Accountability (PEFA) is an objective way of assessing strengths and weaknesses and measuring progress within a country's public finance management system. The main purpose of the evaluation is to provide the Government of the Republic of Moldova with an objective and up-to-date diagnosis of the performance of public financial management at the national level, based on the latest internationally recognized methodology.
The evaluation included seven pillars of public finance management performance: budget credibility, transparency of public finances, management of assets and liabilities, budgetary strategy and policy-based budgeting, predictability and control in budget execution, accounting and reporting, and external control and audit. Each indicator was evaluated according to the score ranging in size from A to D.
The last pillar, external control and audit, analyzes whether public finances are independently reviewed and if there is a follow-up by the Executive of the implementation of the recommendations offered by the Court of Accounts. Thus, the Court of Accounts was subject to the evaluation through the prism of 4 indicators: coverage and auditing standards, submission of audit reports to the Legislature, follow-up of the external public audit and independence of the supreme audit institution. According to the PEFA report, the Court of Accounts received a maximum score on the first three indicators, accumulating 3 "A" and 1 "C" concerning the independence indicator. The experts mentioned that the Organic Law 260/2017 provides for the organizational, functional, operational and financial independence of the CoARM, but in practice there is a limitation of financial independence by the Executive, by approving the budget of the Court of Accounts within the budget cycle, managed by the Ministry of Finance.
We mention that the PEFA evaluation mission in the Republic of Moldova was launched on July 13, 2021. The evaluation covered the years 2018-2020 and included a new methodology, recognized at national level, which involves the inclusion in this evaluation of several local public authorities of level I and II. The evaluation was also conducted from the perspective of the gender dimension.
Oxana Druță, the World Bank's representative in Moldova, highly appreciated the efficiency of the external public audit by applying international audit standards, preparing the audit reports in time and following up the implementation of the recommendations by the CoARM.
Any type of evaluation is meant to bring added value and a positive change, mentioned Andrei Munteanu, Member of the CoARM. Also, Mr. Munteanu reported that the Court of Accounts performs a qualitative analysis of the impact of the recommendations offered by the supreme audit institution, and the results demonstrate a positive dynamic, in this sense, and contribute to the consolidation of the efforts in the light of the activities carried out by the external public audit.
We mention that PEFA is a tool for assessing the status in order to improve the management of public finances. To date, the Republic of Moldova has conducted five PEFA evaluations: in 2006, 2008, 2011, 2015 and 2021. The current assessment is of major importance, including in terms of obtaining by the Republic of Moldova the status of candidate country for accession to the European Union. The results of the evaluation are to be taken into account in the process of elaborating the next Strategy of public finance management of the Republic of Moldova and fulfilling the conditions for providing macro-financial assistance from the EU.
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