ORDER OF THE GOVERNMENT OF THE REPUBLIC OF MOLDOVA

of February 2, 2018 No. 124

About approval of the Development program of the state internal financial control for 2018-2020 and the Action plan on its implementation

For the purpose of accomplishment of provisions of article 29 of the Law No. 229 of September 23, 2010 on the state internal financial control (The official monitor of the Republic of Moldova, 2010, Art. No. 231-234, 730), with subsequent changes, DECIDES: the Government

1. Approve:

1) the Development program of the state internal financial control for 2018-2020, according to appendix No. 1;

2) the Action plan on implementation of the Development program of the state internal financial control for 2018-2020, according to appendix No. 2.

2. The Ministry of Finance is the body responsible for coordination of implementation of the Development program of the state internal financial control for 2018-2020.

3. To the interested bodies to take necessary measures for accomplishment of the Action plan for implementation of the Development program of the state internal financial control for 2018-2020 and annually, till March 1, to submit to the Ministry of Finance reports on implementation of actions.

4. To the Ministry of Finance annually, till June 1 to submit to the Government the summary annual statement about the state internal financial control, and also, in case of need, offers on modification and amendments in the Action plan on implementation of the Development program of the state internal financial control for 2018-2020.

5. Declare invalid the Order of the Government No. 1041 of December 20, 2013. "About approval of the Development program of the state internal financial control for 2014-2017" (The official monitor of the Republic of Moldova, 2013, Art. No. 304-310, 1147).

Appendix No. 1

to the Order of the Government of the Republic of Moldova of February 2, 2018 No. 124

The development program of the state internal financial control for 2018-2020

I. Determination of problem

1. The government of the Republic of Moldova undertook the obligation to consolidate management of public funds on the basis of the principles of proper management.

2. The principles of proper management consist in transparency and responsibility, profitability, effectiveness and efficiency, legality and justice, ethics and integrity in activities of the public subject which accord with the basic principles of reform of public management.

3. The concept of the state internal financial control, including systems of internal managerial supervision, assumes radical change in culture of management and management of public resources. By means of development of the state internal financial control Government aims at increase in efficiency of public management, reducing bureaucracy, minimization of corruption risks, provision of high-quality services for citizens and business environment.

4. Managers of all levels of public subjects bear responsibility and shall be responsible for the activities not only in the field of policy and operational processes, but also and in the field of internal managerial supervision.

5. The concept of the state internal financial control is intended for increase in managerial responsibility and is focused on 3 elements:

1) internal managerial supervision – the system organized by manager of the public subject and its personnel for the purpose of ensuring proper management, covering set the politician, procedures, internal regulations, processes and actions performed within the public subject for risk management and provision of reasonable guarantees of achievement of tasks and the planned results;

2) internal audit – the independent and objective activities for provision of guarantees and consultation directed to increase in the importance and improvement of activities of the public subject. Internal audit renders assistance to the public subject in accomplishment of its tasks by means of systematic and methodical approach, estimating and increasing process performance of management of risks, control and management

3) the Central management on harmonization - the division of the Ministry of Finance responsible for development and monitoring of policy in the field of the state internal financial control.

6. The previous development program of the state internal financial control was ambitious and did not achieve in full common goal - strengthening of managerial responsibility for optimum control of resources. The carried-out analyses elicit the fact that there is space for improvement of managerial culture at all levels of public administration.

7. Development of the state internal financial control is key to success of reform of public administration which is directed on:

1) increase in responsibility of managers and employees;

2) development of the corresponding state policy;

3) upgrade of public services;

4) effective management of public resources;

5) modern human resources management.

8. In the context of reform of management of public finance the system of the state internal financial control, as its tool, shall increase trust of the population to the state, simplify resource management for goal achievement, provide to interested persons reliable information about capability to manage the budget and, at last, to submit to Parliament reports on overall effectiveness of the public sector.

9. The concept of managerial responsibility, including internal managerial supervision, is not completely functional. There is number of the obstacles interfering the subsequent effective implementation and development of system of the state internal financial control such as:

1) low interest of top managers in practice - they either are not interested in general, or show limited interest in implementation of system of the state internal financial control;

2) the isolated reform - lack of coordination, cooperation and communication between the undertaken reforms. At the moment the Ministry of Finance is considered the single body responsible for implementation of system of the state internal financial control;

3) the limited understanding at the level of top management, and also among employees that internal managerial supervision and internal audit - implementation financial represent management and control is understood as technical reform, but not as management reform, and internal audit is not perceived as integral part of the extensive control system;

4) the limited proposal of specialists in the field of public finance - for organizations which implement financial reforms is difficult to find and hold specialists, such as internal auditors, accountants and economists;

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