Court of Accounts - the state's guardian for a good management of public funds



december 14, 2017 • views 2425


"If you do not know the error, you cannot remove it"

(Murphy's Law)



The Court of Accounts of the Republic of Moldova (CoA) in its capacity as a Supreme Audit Institution (SAI) plays an important role in promoting the awareness of public accountability in the management and use of public financial resources and public assets, the audit authority being empowered under the law framework exclusively with the external public control function.

The external audit by the CoA is not an aim itself but represents a way of asserting democracy and good governance, the reason of which the institution cannot operate in an isolated environment, separate from the processes of alignment with universally recognized standards and practices of the external public financial control and management.

As such, the institution is to become a change promotor and a "locomotive" of utmost importance in society.

The current composition of the CoA, invested with a parliamentary mandate in July 2016, has plenary assumed the responsibility for ensuring continuity in the modernization of the SAI, improving the quality of management and audit activities in the spirit of good practices and commitments of the Republic of Moldova in relation with international bodies and development partners.

The gradual transition from "control" to "audit", conceived and materialized in the period after 2007-2008, is the most significant reform in the CoA with the contribution, support and advising of development partners.

With all the uncertainties and challenges, over the time, the Court, step by step, has complied and exploited audit practices and standards, making measurable progress in this respect.

Thus, the daily and yearly concern is to contribute to consolidating and modernizing good governance, transparency and accountability in the public sector, maximizing efforts and executing the task of identifying the causes and impact of non-compliances that generate waste of public money and property.

We expect the Supreme Audit Institution, through its model of organization and functioning to:

• persevere in professional and integrity aspects;

• become an example for other local public institutions;

• be recognized as an independent and integral, responsible and transparent institution throughout its activity, including in providing stakeholders with the results of its activity.

In this context, the new draft law on the organization and functioning of the CoA, approved in the first reading by the Parliament, expressly pursues this desideratum.

Independence, integrity, confidentiality, objectivity, competence and professional conduct - are values that express our mission, vision and will in the institutional modernization work.

The CoA, in virtue of the attributions and mandate conferred by the Constitution and the framework law, as well as from the perspective of the commitments assumed by the supreme authorities of the state in the relation with the international and European bodies, plenary and constantly takes into account the institutional, corporative and financial management for its reorientation towards good governance and administration of public funds.

According to the provisions of the CoA’s Law, each member is obliged to coordinate a sector in the field of external public audit activity. Personally, I have the duties of coordinating and supervising the activity of the units, which audit public finances, particularly, the state budget - the administration of public revenues and expenditures.

It is worth mentioning in this regard that when the economic management of the entities financed from the state budget is audited, the public assets, the level of administration of which remains low, is also audited. In particular, it is audited whether all public assets are recorded in the balance sheet, recorded in the cadastral organs and managed correctly, administrated properly and efficiently so as to generate added value, not alienated, damaged, demolished, etc.

For us, it is very important to assess the capacities of the relevant public institutions, which are responsible for the evaluation, formation and administration of the state budget revenues, respectively their use through the fiscal-budgetary redistribution mechanisms, in particular - the Ministry of Finance, which is responsible for elaboration and execution of the state budget.

In this sense, coordination through guidance and monitoring of audit missions is quite important, including by disposing quality review procedures, as appropriate, at "cold" and at "hot".

Since its beginnings of edification and development (1994), but especially in the last decade, the Court of Accounts has been restructured and reformed – due to the support generously provided by development partners.

The First Strategic Development Plan for 2006-2010, designed in 2005 with the support of the World Bank and implemented with the assistance of the National Audit Offices of Sweden, Great Britain and of the Audit Scotland, contributed to:

• institutional consolidation;

• ensuring professionalism;

• personnel development and ensuring a measurable impact derived from the institution's activity.

With the same cadence, the Strategic Development Plan for 2011-2015, with the generic "... better audit, to promote greater accountability and better management of public funds", was implemented thus, focusing on quality, professionalism and impact.

The Strategic Development Plan for 2016-2020 certainly confirms our adherence to the spirit of continuity and coherence in streamlining external public audit, focusing on three main pillars:

• contributing to strengthening good governance;

• ensuring institutional sustainability;

• developing and maintaining corporate quality of audit.

Obviously, we expect the institution to have:

- legal and methodological framework for a SAI activity, which will incorporate the recent changes in the evolution of international thinking on public finances and the external public audit activity;

- auditors able to conduct financial, compliance, and performance audits in line with international standards and to share their experience with auditors in other SAIs;

- maximum automation of internal activity processes and of audits;

- well developed external and internal communication systems capable of delivering messages to stakeholders and general public, etc.

A novel aspect represent the Court's audit on external funds management, these representing significant amounts, mostly for structural and institutional reforms and infrastructure projects.

On the basis of the audit findings, the Court essentially contributes to identifying the causes of irregularities, quantifies the impact and formulates solutions to remedy the deficiencies and shortcomings, thus providing support to the audited entities and making more responsible the relevant factors.

In addition to the above, the Court ensures good cooperation with the EU Delegation mission in order to fulfill the undertaken commitments regarding smooth and comprehensive implementation of the provisions stipulated in the Financing Agreement between the Government of the Republic of Moldova and the European Commission on the Program “Support to Public Finance Policy Reforms in Moldova”.

Mentioning the good relations of the Court of Accounts with the European Union, the World Bank, the Swedish National Audit Office and other external development partners, the institution remains committed to transposing good practices and standards, being further preoccupied to the irreversible implementation of the processes related to the development of external public audit and institutional modernization.

Undoubtedly, there is still room for better performance, that is why the achievements are constantly reviewed, but especially the shortcomings occurred during the activity in the implementation of the basic functions and prerogatives that are conferred to us. We are concerned on the fact that some actions do not have the finality or the expected impact.

Therefore, we are aware of the need for more punctual, more complex and, of course, more critical approaches to achieve quantifiable impact per unit, per action and per institution, targeting better achievements.