Performance Audit Report concerning "the impact of local public finance reform on the financial decentralization of the administrative/territorial units within Chisinau and Râșcani rayon?"



Published: 09.12.2016 in Official Gazette No. 423-429 art no: 37 plenum of the Court of Auditors, in the presence of the Deputy Secretary-General of the Government, Mr. Valentin Guznac, President of Râșcani rayon, Mr. Iurie Nettle, head of the Directorate the budgets of administrative-territorial units of the Ministry of Finance, Mr. Idris Ali, Deputy Head of the Directorate-General for political and fiscal and customs legislation of the Ministry of Finance, Mrs. Rodica Baig, Deputy Head of the Directorate-General for Finance of Chisinau municipal Council Ms. Valentina Văzdăuțan, head of the Finance Directorate of District Council Mrs Râșcani, Mayor Tăbîrță, Akash. Vadul lui Voda, Mr. Iurie Onofriiciuc, examined the performance audit Report "the impact of local public finance reform on the financial decentralization of the administrative/territorial units within Chisinau and Râșcani rayon?".
The Mission of the audit has been carried out in accordance with article 28, article 30 and article 31 of the law on the Court of Auditors No. 261-XVI of 05.12.20081 and in accordance with the audit activity of the Court of Auditors for the year 2016, aimed at determining the impact of the implementation of the new system of training of local budgets on the sustainability of budgets of administrative-territorial units (hereinafter-the UAT), and if this system corresponds to the pre-established intentions of the legal-normative framework relevant financial decentralization.
The audit was conducted in accordance with international standards on auditing (ISSAI 100, ISSAI 300) 2 and with additional manuals. The audit approach was based on the determination of reușitelor and nereușitelor the reform of local government finances, audit mission centred mainly on budgetary process related audit of local public incomes and on their appreciation for suficienței costs.
The audit covered the various aspects of the assessment and identification of institutional weaknesses derived from the aggregation of generators causes and impact, inter-budgetary relations resulting from resizing, but quantifiable. This certifies that the start of the Ministry of Finance of the project itself has not been accompanied by feasibility studies and impact, and lack of adequate monitoring of results below expectations.
Examining the report submitted and hearing the results of the audit, as well as explanations of persons with responsibility functions present in the public tender, the Court of Auditors has noted: preliminary results regarding the implementation of the new model for the formation of local public incomes and inter-budgetary relations recorded at this stage denotes a necuantificarea measurable and sustainable impact in terms of strengthening financial targets envisaged in not being FAILED. As a result, there has been a significant reduction in the share of income, the income of the UAT autonomous fallen being substituted with allowances from the State budget, which has perpetuated the phenomenon of consolidation of financial resources. Revision of general tax sharing and support centralized transfer model (General and special purpose) under no circumstances does not give the reasons for the authorities of local public administration (hereinafter LOCAL GOVERNMENTS) in their edge to extend their tax base. Therefore, the new model of inter-budgetary relations, being extended to all authorities of level I in the absence of tests on explorers, enhances the spirit neasumării by the local public authorities the necessary responsibilities in matters of finance and budget, preferring to not submit the necessary efforts and to limit the guaranteed funds at the expense of the State budget.
In support of those recorded as well as taking note of the recitals of stakeholders within local administrations in Chișinău and Râșcani, the plenum of the Court of Auditors shall retain the attention of the Government and the Ministry of Finance on the relevance of a reabordări background of the problem concerned in this regard, it recommends a far-reaching financial decentralization model at the local scale, including the neîntârziate operation of the necessary adjustments.
Concluding from the exposed, in accordance with article 7 para. (1) (a)), article 15(1) thereof. (2) and paragraphs 1 and 2. (4) article 16 c) and art. 34, para. (3) of law No. 261-XVI of 05.12.2008, Court of Auditors decides: 1. to approve the performance audit Report "the impact of local public finance reform on the financial decentralization of the administrative/territorial units within Chisinau and Râșcani rayon?", annexed to this decision.
2. This decision and the report of the audit shall be submitted to: 2.1. AAPL auditate3, for making an attitude, and it requires the implementation of remedial measures point to shortcomings and obstacles in the audit report;
2.2. The Ministry of finance and is required to: 2.2.1. initiating extensive studies concerning the assessment of the advantages and drawbacks of the project concerning decentralization reform local financial; the involvement of experts relevant to the themes of the research/additional explorations, in order to identify institutional weaknesses and prompt remedy;
2.2.2. starting from the perspective of administrative-territorial reform, the (re-) identification and (re) assessment of economic potential (including sectoral infrastructure), public property, reinventarierea property, respectively, restoring the socio-economic and financial base of the delimitation of national heritage related local and thereby redefining the fiscal-budgetary base of local public authorities, as well as of the relationship between local government and inter-budgetary the Central;
2.3. The State Chancellery is proposed: 2.3.1. together with Central and specialized public authorities and with the direct participation of LOCAL GOVERNMENTS, the review and delineation of clear and strict powers (powers) AAPL on levels of budgets, development/approval of the nomenclature of the powers of LOCAL GOVERNMENTS and their estimate of costs;
2.3.2. together with ministries, the development and implementation of minimum standards of quality in the exercise of its powers decentralised and identification solutions for aligning objectives achieved on the basis of a national decentralization Strategy;

2.3.3. reshaping the interaction between central public authorities concerned (in particular, economic, financial, fiscal, customs, statistics, cadastral plans) and local ones, for the Organization's continued assistance and methodological training, as well as publicity and transparency in State taxpayer relations;
2.4. the Permanent Parliamentary committees for economy, budget and finance; public administration, regional development, environment and climate change, for information, and it calls for the initiation of hearings on Central and local authorities regarding the State of affairs in the implementation of financial decentralization of the administrative-territorial units.
3. About measures taken to execute subpunctelor 2.1-2.2 of the present Judgment will inform the Court of Auditors within a period of 12 months from the date of its publication in the Official Gazette of the Republic of Moldova, informed about the measures taken yearly.
4. This decision shall be published in the Official Gazette of the Republic of Moldova in accordance with article 34 para. (7) of the law on the Court of Auditors No. 261-XVI of 05.12.2008.

The PRESIDENT of the COURT OF AUDITORS Caj KADI