Court of Accounts
Republic of Moldova
In the meeting on May 29th 2018 the Court of Accounts examined the Financial Audit Report of the Government Report on the Execution of the State Social Insurance Budget (SSIB) in the 2017 budget year.
The purpose of the audit mission was to express an opinion on the Government's report on the execution of the SSIB in the 2017 budget year, to point out if it presents a fair and accurate picture in line with the approved reporting framework.
Audit samples were collected at the National Social Insurance House (NSIH) by analyzing and counterbalancing the data from the information system, including that from NSIH's accounting records. Also, audit evidence was collected at some territorial social insurance houses.
The role of the NSIH consists in administrating the state social insurance budget and implementing programs in accordance with the objectives and the assumed performance indicators. According to the Statute, the NSIH administrates and manages the public social insurance system of the Republic of Moldova and prepares the annual report on the execution of the state social insurance budget, coordinates it with the Ministry of Labor, Social Protection and Family, the Ministry of Finance and presents it to the Government for examination and approval within the set deadlines.
In this context, the National House organizes and keeps track of the SSIB execution, according to the legal framework, and ensures the recording of the operations regarding the performed incomes and expenditures, as well as the debts paid up to December 31st, ensures the records of the transfers from the state budget, by closing the revenue and expenditure accounts.
The findings set out in the Financial Audit Report on the Government Report on the Execution of the State Social Insurance Budget in the completed 2017 budget year reveal the following:
the reform of the pension system was initiated trough transmitting the attributions for the establishment and payment of pensions and indemnities to the pensioners from the force entities (1087.2 million MDL), as well as the valorization of the old-age and disability pensions (111.1 million MDL), including changes in the way pensions are set;
even if the deadlines for assuming the tasks of pensions and social benefits payment for the pensioners from force entities were established, the concerned institutions did not respect them, the process of files and documents transmission not have being completed yet;
when transmitting the pension documents established by the force entities, there was not ensured their fullness, being found the insufficiency of the evidence necessary for checking the correctness of the pensions previously established by them;
with the assumption of the duties of establishment and payment, there was not provided the right to the NSIH to review the benefits in case of finding undue payments;
the valorization of the pensions was made within the set deadlines, being attested some uncertain situations regarding the pensions’ recalculation and record;
NSIH does not have sufficient power to fully refund the transferred amounts after the beneficiaries’ death;
starting with 2018, the NSIH has no longer the responsibility to control the correctness of the establishment, calculation and payment of indemnities for temporary work incapacity. Also, the way to initiate, carry out the controls in the field, as well as to transmit the information on control results is not regulated, to ensure an adequate and justified coverage of these costs.
Partially, the found deficiencies were caused by the establishment of very limited timeframes (3-5 days) for the implementation of policies, for complex processes that required not only the organization of the activities but also the adjustment of the information system of the NSIH.
All above reported were presented in the key aspects of the audit as areas requiring remedies, at the same time, significant distortions not being found.
In the context of the audit findings, recommendations to the relevant ministries on the regulation of the areas according to the delegated tasks were made. The NSIH is to improve its activity and to improve the internal control system by setting up additional control activities and internal regulation.
At the same time, as a result of the previous audit missions, 35 requirements and 55 recommendations were submitted, the implementation deadline of which expired. Analysis of the requirements’ execution and recommendations’ implementation shows that they have been achieved at a level of over 70% and will be removed from monitoring, however, some of them being reiterated under this audit.
The audited entity is to inform the Court of Accounts on the implementation of the recommendations within 5 months of publication in the Official Gazette of the Republic of Moldova. The decision of the Court of Accounts shall be published in the Official Gazette of the Republic of Moldova, in accordance with art. 10 letter. a) and art. 34 paragraph (2) of the Law of the Court of Accounts no. 260 of 07.12.2017.
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