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The Republic of Moldova

The Republic of Moldova. Ministry of Finance State Treasury. Management , accounting and reporting of externally financed projects. Regulatory framework. International agreements Decision by Parliament on ratification of international agreements

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The Republic of Moldova

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  1. The Republic of Moldova Ministry of Finance State Treasury

  2. Management , accounting and reporting of externally financed projects

  3. Regulatory framework • International agreements • Decision by Parliament on ratification of international agreements • Public Debt Law, Law on Government Guarantees and Law on Government On-Lending • Budget System & Budget Process Law • State Budget Law; Decisions by Local Authorities approving annual local budgets (for a given year) • Regulation on institutional framework and mechanism for coordinating assistance by international donor organizations and donor countries to the Republic of Moldova (Government Decree)

  4. Externally financed projects and the budget process • Budget planning 100% • Execution: - through Treasury System53.1% - through the Banking System 46.9% • Reporting 100%

  5. Budget Planning Components of state and local budgets: • Core component • Special means • Special funds • Externally financed projects

  6. Share of externally funded projects in the budget (revenues)

  7. The share of externally funded projects in the budget (expenditure)

  8. Budget Planning State Budget Law for 2012 Article 21. – The Ministry of Finance is in the right to: а) - upon application of key budget ministries - change the approved state budget allocations: • For projects funded out proceeds of foreign grants and credit, • as well as to use the remaining balances of monetary resources sitting in project accounts at the beginning of a year -

  9. Implementation of externally financed projects

  10. Rules of providing treasury system services to externally financed projects • Separate Bank and Treasury accounts for each donor in foreign & local currencies • Interest on balances - in bank accounts – that are recorded to local budgets • Expenditure for servicing bank account that are paid by state/ local budgets • Procurements made as per available contracts • Contracts registered with a local treasury • Prioritized servicing of projects

  11. Providing treasury system services to externally financed projects Treasury Commercial bank Project implementation units of externally financed projects Enterprises

  12. Current Budget classification & Chart of Accounts

  13. Register of foreign donors

  14. Treasury account for the proceeds of foreign grants to be used for externally financed projects Has 4 parts – 15 characters/ digits XXXXXXX XXXXXXXX  Part I – 4 digits – code of balance account from the Chart of Accounts ; Part II – 5 digits –chapter/ paragraph of Budget Classification; Part III – 4 digits – code of a public institution , beneficiary, that has received proceeds of foreign grants; Part IV – 2 digits –budget classification code (functional, organizational); foreign donor’s code. Example: 4681 41202 3649 01 Where, 4681 – “Foreign grants, other receipts & transfers of state budget for operations of externally financed projects” 412.02 – “Grants for externally financed projects” 3649 – “Consolidated unit for implementing the International Fund for Agricultural Development programs” 01- 11.05 “Activities & services in agriculture, forestry, fishery & water industry, not attributed to other groups ”, 750 “Project of providing financial services and developing agribusiness in rural areas”, 57“International Fund for Agricultural Development “

  15. Treasury account for proceeds of foreign loans to be used for implementing of externally financed projects Has 4 parts – 15 characters/ digits XXXXXXX XXXXXXXX Part I – 4 digits –code of balance account from the Chart of Accounts; Part II – 5 digits – main group code/ functional classification group of budget expenditure ; Part III – 4 digits - code of public institution, beneficiary of resources of foreign credit ; Part IV – 2 digit – budget classification code (functional, organizational); foreign donor’s code; Example: 8582 02803 3649 01 Where, 8582 – “Foreign loans of state budget from international financing institutions for operations of externally financed projects” 28.03 - “Loans by foreign financing institutions” 3649 – “Consolidated unit for implementing the International Fund for Agricultural Development programs” 01- 11.05 “Activities & services in agriculture, forestry, fishery & water industry, not ascribed to other groups ”, 750 “Project of providing financial services and developing agribusiness in rural areas”, 57“International Fund for Agricultural Development”

  16. Treasury expenditure account for proceeds of grants and foreign loans used for implementing of externally financed projects Has 4 parts – 15 characters/ digits XXXXXXX XXXXXXXX Part I – 4 digits – code of balance account from the Chart of Accounts; Part II – 5 digits – main group code/ functional classification group of budget expenditure ; Part III – 4 digits - code of public institution, beneficiary of resources of foreign credit ; Part IV – 2 digit – budget classification code (functional, organizational); foreign donor’s code. Пример : 2281 29102 3649 01 где, 2281“State budget expenditure out of proceeds of foreign grants, foreign loans, etc. receipts for implementing operations of externally financed projects” 291.02 – “Share of foreign grants” 3649 – “Consolidated unit for implementing the International Fund for Agricultural Development programs” 01- 11.05 “Activities & services in agriculture, forestry, fishery & water industry, not ascribed to other groups ”, 750 “Project of providing financial services and developing agribusiness in rural areas”, 57“International Fund for Agricultural Development”

  17. New Budget Classification and new Chart of Accounts

  18. Reporting Ministry of Finance • Monthly • Quarterly & annual Line Ministries Project Implementation Units Ministry of Finance Line Ministries Project Implementation Units

  19. Reporting On a daily basis, statements from the serviced bank Externally financed Projects serviced by Treasury system Reports are entered manually into information System of Ministry of finance Externally financed Projects serviced by Banking system

  20. Challenges • Projects are dispersed across the Treasury & banking systems • Reporting • Accounting • Technical capacity • Staff

  21. Solutions • Integrated management of externally financed projects serviced by Treasury system • Implementation of an Integrated Public Finance Management Information System (IPFMIS) • Uniform rules and methodology • Training

  22. Thank You for Your attention! www.mf.gov.md 22

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