ORDER OF THE GOVERNMENT OF THE REPUBLIC OF MOLDOVA

of December 20, 2013 No. 1041

About approval of the Development program of the state internal financial control for 2014 - 2017

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

1. Approve the Development program of the state internal financial control for 2014 - 2017 it (is applied).

2. Determine that the Ministry of Finance is the main organization responsible for coordination of implementation of the Development program of the state internal financial control, and monitoring of implementation of the concept of the state internal financial control is performed by Council of the state internal financial control under the Ministry of Finance. Also the Ministry of Finance will represent to the Government annually, till June 1, the summary report on the state internal financial control.

3. Recognize invalid:

The order of the Government No. 597 of July 2, 2010. "About approval of the Development program of the state internal financial control" (The official monitor of the Republic of Moldova, 2010, Art. No. 117-118, 677);

Item 39 of appendix No. 1 to the Order of the Government No. 868 of November 19, 2012. "About change, amendment and recognition voided some orders of the Government" (The official monitor of the Republic of Moldova, 2012, Art. No. 242-244, 938).

Approved by the Order of the Government of the Republic of Moldova of December 20, 2013 No. 1041

The development program of the state internal financial control for 2014 - 2017

I. Introduction

1. According to provisions of the Law on the state internal financial control No. 229 of September 23, 2010 bodies of the central and local public authority, public organizations, and also the autonomous bodies / organizations disposing of means of the national public budget shall be guided by the modern management system public finances based on the concept of the state internal financial control.

2. General task of the state internal financial control is promotion of higher degree of managerial responsibility in use of public funds of the Republic of Moldova in the way:

1) developments of system of financial management and control using the technician on management of risks;

2) developments of internal audit function which informs managers of public subjects on system effectiveness of financial management and control and promotes its improvement;

3) developments of function of the centralized harmonization responsible for development of the regulatory base in the field of the state internal financial control, textbooks, managements and instructions for their application; the organizations and ensuring training in the field of the state internal financial control; provisions to managers of methodical support on implementation and development of activities of internal audit and system of financial management and control; monitoring of changes and the systematic reporting under the achieved results in the field of the state internal financial control.

3. The purpose of this document is submission of the reviewed version of the development program of the state internal financial control, and also the action plan on its development. This document includes:

1) conceptual model of the state internal financial control;

2) general summary of components of the state internal financial control;

3) comments about the achievements noted today in the course of implementation of the state internal financial control;

4) main necessary changes and directions of development of the state internal financial control;

5) directions of development of Financial inspection;

6) the action plan which will be implemented in the next four years.

II. Conceptual model of the state internal financial control

4. The system of the state internal financial control is directed to the organization and implementation of the corresponding transparent methods for ensuring use of public funds according to the purposes established by the Government and Parliament. Besides, the modern control circle of management is the effective tool for prevention of fraud and corruption. In public sector monitoring and external assessment are carried out by Parliament and Audit Chamber (the supreme body of audit). The government bears responsibility to Parliament for management, implementation, control, assessment, monitoring and updating of the policy and provides functioning of the systems accompanying the budget, systems of accounting, internal control and inspection for fight against fraud and corruption.

5. Traditional models of the state control are based on centralized system of the control ex-ante and inspection of ex-post (according to requirements of the third parties) doubtful transactions, abuses of regulations of financial accounting and punishment of persons for the made mistakes. In comparison with modern systems of the state control, the traditional system is based on legality and does not include such criteria as profitability, effectiveness and efficiency in relation to management and control of use of public funds.

Correctness of financial accounting and financial and economic activities is permanent obligation of public subjects, and internal control includes separate procedures for check of ex-post.

6. The state internal financial control includes set of standards and the advanced practice for the purpose of reforming of traditional system of the state control. The most important elements of system of the state internal financial control provide responsibility of management (system of financial management and control) and the decentralized internal audit. The corresponding system does not include such tasks of inspection as investigation and punishment of separate cases of fraud and violations, has preventive character and is directed to prevention of violations, fraud and corruption. Responsibility for internal control over financial and economic processes is not transferred to bodies of external control (for example, Financial inspection) by request of general or thematic checks, and assigned, first of all, to the head of the public subject.

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