LAW OF THE REPUBLIC OF MOLDOVA

of September 23, 2010 No. 229

About the state internal financial control

The parliament adopts this organic law.

Chapter I. General provisions

Article 1. Subject of regulation and purpose of the law

(1) This law establishes rules and the basic principles of the organization of the state internal financial control.

(2) the Purpose of the law is strengthening of managerial responsibility for optimum control of resources according to tasks of the public subject on the basis of the principles of proper management by means of implementation of system of internal managerial supervision and activities of internal audit in the public sector.

Article 2. Scope of application

Provisions of the law extend to the budget bodies / organizations, independent/autonomous budget bodies, public bodies / organizations on self-government, the state/municipal companies, commercial societies with completely or mainly the public capital, and also on the independent subjects / bodies responsible for regulation of one of economic and/or social spheres, except for National Bank of Moldova.

Article 3. Basic concepts

For the purpose of this law the following concepts are determined:

control actions - politicians and the procedures established for risk management and achievement of tasks of the public subject;

internal audit - the independent and objective activities for provision of guarantees and consultation directed to increase in value and improvement of activities of the public subject. Internal audit assists the public subject in achievement of its tasks by means of systematic and methodical approach, estimating and increasing process performance of management of risks, control and management;

internal audit by means of association - the activities of internal audit performed on the basis of the agreement on association signed between two or more public subjects which cooperate for ensuring activities of internal audit;

internal audit on contractual basis - activities of internal audit which is booked by the legal entity or physical person with competences in internal audit (supplier) involved by the public subject (beneficiary), performed according to provisions of this law;

proper management - method of management by means of which achievement of tasks on the basis of respect for the principles of transparency and responsibility, profitability, efficiency and effectiveness, legality and justice, ethics and integrity is provided;

the card of internal audit - the domestic situation of division of internal audit determining the appointment, powers, responsibility and scope of activities of internal audit establishing the provision of internal audit within the public subject resolving access to the relevant documents, property and faces for proper performance of the mission of internal audit;

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 deyatelnost performed within the public subject for risk management and provision of reasonable guarantees of achievement of tasks and the planned results;

the state internal financial control - single general system which is formed by internal managerial supervision, internal audit and their centralized harmonization created in the public sector for the purpose of assistance to management of public subjects according to the principles of proper management;

profitability - minimization of cost of the estimated results of activities of resources which are marked out for achievement with preserving the corresponding quality of these results;

efficiency - ratio of the received results and resources used for their achievement;

effectiveness - extent of realization of the tasks planned on each activities and ratio of planned and actual results of the related activity;

the public subject - the budget body / budgetary institution, independent/autonomous budget body, public body / public organization on self-government, the state/municipal company, commercial society with completely or mainly the public capital, and also the subject responsible for regulation of one of economic and/or social spheres;

unfair action - the illegal action which is characterized by deception, concealment or confidence abuse, commited by person or the public subject for the purpose of receipt of money, property/values or services, evasion from payment, extraction of personal or business benefit;

essential misstatement - the violation of the regulatory base and the relevant domestic situations of the public subject consisting in inadvertent action or omission which negatively influences or can influence activities of the public subject;

manager of the public subject - the head of the highest hierarchical level of the public subject;

the operations manager - the head, excepting the manager of the public subject, responsible for management of organizational structure at all hierarchical levels of the public subject;

the concept "financial management and control" is excluded;

management is risk - the systematic process of identification, registration, assessment, control, monitoring and the reporting on risks organized and performed for reasonable guarantee of achievement of tasks of the public subject;

the control circle - the relation and actions of manager of the public subject, operations managers and personnel concerning value of internal managerial supervision within the public subject, the atmosphere, discipline and conditions necessary for achievement of tasks of the public subject;

mission of internal audit - the activities for provision of guarantees and consultation approved by the order having terms of carrying out and accurately certain amount and which are coming to the end with issue of the report of audit;

managerial responsibility - understanding by the manager of the public subject and operations managers and acceptance on itself responsibility for actions, decisions and the pursued policy, including for achievement of the maximum results by means of resource optimization, on the basis of the principles of proper management, and also obligation to report about achieved tasks and results;

risk - probable event which can exert negative impact on achievement of tasks of the public subject;

division of internal audit - functionally independent organizational division of the public subject equipped with function of implementation of internal audit;

the audited division - the organizational division or the public subject responsible for the system and/or process subjected to assessment by division of internal audit.

Article 4. Principles of proper management

(1) the Principles of proper management consist in transparency and responsibility, profitability, efficiency and effectiveness, legality and justice, ethics and integrity in activities of the public subject.

(2) Managerial responsibility for ensuring the principles of proper management is conferred on the manager of the public subject.

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