This document provides information about performance audits conducted by the Court of Accounts of Moldova. It discusses the development of the Court's capacity to conduct performance audits with support from international donors. It summarizes several pilot performance audits conducted on topics like the oncology institute, procurement law, and social aid. The document highlights the impact of these audits in identifying issues and leading to improvements like staff replacements, legal amendments, and strengthened internal controls. Examples showed audits helped improve programs on viticulture, waste management, and social aid.

1. The Impact of Performance Auditing in MoldovaPresentation byEcaterina Paknehad, Member, Court of Accounts of the Republic of Moldova

2. About Moldova

3. About the Court of Accounts

4. Development of Court’s Capacity to Conduct Performance Audits and Audits of IT Systems

5. Pilot Performance Audits and Additional Audits

6. Examples of Impact of Performance Audits

7. Questions?2What will we cover ?

8. WHERE IS MOLDOVA ?3

9. Capital city – Chisinau (population 785.1 thsd inhabitants)

10. Official language – MoldovanPolitical system – Parliamentary RepublicIndependence towards USSR: - declared on 27 August 1991 - recognized on 25 December 1991Area – 33.8 thsd. km2

11. Population – 3.9 mln. inhabitants (density -111 inhabitants/km 2)

12. GDP (nominal, for 2009) – 5.403 billions EURO - per capita - 1420 EUROMember of: UN, Latin Union, Council of Europe, OSCE, GUAM, CIS.4 About Moldova

13. The Court of Accounts: – was established in 1994 as a supreme financial control institution , and since 2008 – it is the SAI of the Republic of Moldova, performing external public audit;has 150 staff, established Plenum(7 members, including the president and deputy president, appointed for a term of 5 years by the Parliament) and personnel with audit functions, specialty personnel and technical personnel;

14. is apolitical and has organizational, functional, operational and financial independence;

15. performs regularity, performance and IT audits;

16. submits to Parliament, during the year, audit reports, including annual report.5 About the Court of Accounts

17. Strategic Development of the Court of Accounts: Switching from external control to external public auditThe Court of Accounts, with support of international donors and expertsdeveloped and implemented the Strategic Development Plan for the Court of Accounts for the period April 2006–December 2010

18. Towards October 2008, the Court of Accounts had:3 employees trained in performance audit (IDI INTOSAI, long-term training courses, 2004-2005)About 25 controllers with skills of performing thematic controls in different fields (controls with elements of performance audit, 2004-2006)12 controllers trained for 4 days in performance audit by UK NAO (2006)5 employees had some report preparation and report writing skills, obtained from the UK NAO.7The platform for developing performance audit skills

19. 24 month WB funded Project Implemented by IBTCI: Performance audits and audits of IT systems. Started Oct 2008/ended Oct 2010

20. One week modular performance audit training program

21. Four day report writing/three day report review course

22. Extensive “hands-on” training/assistance —IBTCI consultants worked day-to-day with Court staff

23. Pilot audits (5 Performance/3 audits of IT systems)8Development of Court’s Capacity to Conduct Performance Audits and Audits of IT Systems

24. Oncological InstituteImplementation of New Procurement LawSocial Aid Process (requested by the European Commission)Primary Health Care System (requested by the European Commission)Assistance to Viticulture Industry(audits undertaken late 2008 through March 2010) 5 Pilot Performance Audits

25. 10Titles of the 5 pilot audits and the relevant quantitative indicators are presented as follows:

26. Solid waste disposal (at the proposal of INTOSAI)Implementation of investment projects in vine-making enterprises (Court’s initiative)Implementation of a Cultural Project (Court’s initiative)Procurement of Medical Equipment (requested by the European Commission)Scientific Research (Court’s initiative) 5 Additional Performance Audits

27. 12 Titles of the 5 additional reports and the quantitative relevant indicators are presented as follows:

28. 13 4 IT Audits performed4 IT audits (reviewing the general controls and the application controls)—3 of these were pilot audits; 4 staff trained in IT auditing;Training materials;IT Auditing Manual.

29. 14Title of 4 IT audits and quantitative indicators are presented as follows:

30. 15The Court of Accounts thanks Mrs. Linda Weeks and Mr. James Bonnell, Mr. Michael Bitz for their dedication and effort in development of professional capacities of auditors to conduct performance and IT audits

31. EXAMPLES OF IMPACT OF PERFORMANCE AUDITS16What did we achieve?

32. Critical Health Care Institution—never been audited.Performance audit found serious problems with the Institute’s systems for managing its resources.Audit identified areas where performance could be improved: procurement, management of medications, from determining the needs through distribution and use of medications; better utilizing inpatient department; and obtaining information on the technical status of medical equipment. Oncological Institute

33. 18Nurse attempted to keep track of medications using over 170 ledgers

34. Director and several senior staff were replaced.Moldova Anti-Corruption Commission investigating medication issues identified by audit.Court report is being used as a guide to improve Institute operations.19 Impact of Audit

35. In 2008, Moldova passed a new procurement law intended to significantly improve public procurement process.Performance audit assessed whether the objectives of the law were being met.Implementation of New Procurement Law

36. While some objectives were being achieved, improvements were still needed.Contracting authorities were not developing procurement plans as required.Procurements were not adequately documented.Significant improvements needed in contract monitoring.Government agency established for overseeing procurement process was not fulfilling mandate.Procurement Audit Findings

37. Court held one day conference to discuss audit findings among key stakeholders.Got key groups/stakeholders talking to one another.Amendments passed to procurement law to improve implementation.Impact of Audit

38. In 2008, Moldova implemented new mechanism for payment of social aid.Audit undertaken to determine if there are problems hindering implementation of the new social aid program.Performance Audit of the Social Aid Process

39. Additional staff needed to effectively implement the process.Internal controls needed to be significantly strengthened throughout the social aid process.Social Aid Process Audit Findings

40. Impact of the Social Aid AuditEU accepted the Court Performance Audit as a condition for additional assistance to this program.Court audit is being used as a guide to improve all aspects of the Social Aid Process, particularly strengthening internal controls.Ministry of Labor and Social Protection has accepted the proposals and recommendations of the Court to improve the social aid delivery mechanism.The Government approved the proposals for modification of the Regulation on determining and payment of social aid. The Parliament accepted a series of amendments to the Law on social aid, which brought clarity in terms of criteria for qualification for social aid, as well as introduced a new social benefit.

41. Government established a long term program (2002-2020) for reestablishing and developing viticulture and winemaking in Moldova.Audit assessed the effectiveness of the program.Reestablishment and Development of Viticulture and Winemaking Audit

42. Identified weaknesses in program implementation, reporting of performance indicators, and management of the program’s financial resources.The Program was developed for the long term but was not adjusted to reflect current economic conditions.Audit Findings – Viticulture and Winemaking

43. Degraded vineyards were partially cut down (Pictures taken by the audit team)

44. Impact of Viticulture/Winemaking AuditMinistry of Agriculture developed a new Program for reestablishment and development of viticulture and winemaking for 2011-2020Court requested tax inspections of economic operators which resulted in 5 mln MDL additional collections.General agricultural census was conducted, including inventory and evaluation of the status of vineyardsThe process of preparing the Viticulture Cadastre was launchedFund to support establishment of vineyards was liquidated. Parliament approved a new subsidizing modality.

45. Domestic solid wastes have a direct influence on environment, and their inadequate management determines pollution of soil, water, air, flora, fauna etc.

46. Waste management is a problem in the Republic of Moldova.

47. The Court of Accounts supported the proposal of the INTOSAI, WGEA Working Group and performed the environment audit, selecting solid waste management.Performance Audit in the field of environment – domestic solid waste management

48. Deficiencies of the domestic solid waste management are significant. The legal framework contains many weaknesses, gaps and imperfections.The number of unauthorized waste storage sites increased significantly.Serious problems found with disposing of medical wastes. Although the national program for waste recovery provides for separate collection of wastes, this does not happen in reality.The majority of local public authorities do not have adequate waste collection, transportation and storage services. The mechanism for allocation of resources from the National Ecological Fund is inefficient.Audit Findings – domestic solid waste management

49. Most public local authorities pay too little attention to the problem of household wastes

50. Some LPA manage to find solutions!!!(A good result achieved within a project of private-public partnership)

51. Ministry of Environment (MoE) highly appreciated the results of the audit, initiating activities to implement the recommendations. The Government established within the MoE a section dealing with development of national policies in the field of waste management.The Government decided to create an Agency of the Environment, which will deal with tracking, monitoring and controlling the wastes flow.MoE developed the National Strategy on waste management expected to be approved during 2011.MoE revised the mechanism of allocating financial resources.Civil society is involved in projects related to training of PLA representatives, producers of wastes and public at large...Impact of the Audit on domestic solid waste management

52. In 2008, Moldova implemented a new mechanism for payment of social aid.Audit was undertaken to determine whether there are problems hindering implementation of the new social aid program.Performance Audit of the Social Aid Process

53. Additional staff needed to effectively implement the process.Internal controls needed to be significantly strengthened throughout the social aid process.Social Aid Process Audit Findings

54. EU accepted the Court Performance Audit as a condition for additional assistance to this program.Court audit is being used as a guide to improve all aspects of the Social Aid Process, particularly strengthening internal controls.Impact of the Social Aid Audit

55. Moldova decided to separate Primary Health Care from hospital care to ensure greater access to health care services. Started process in early 2008.Undertook audit to assess progress made in achieving objectives.Primary Health Care Performance Audit

56. Shortages of doctors and lack of continuous training limited effectiveness.Opportunities to significantly improve access to primary health care services.Many care facilities do not meet standards.Opportunities exist to improve the Ministry’s monitoring.Audit Findings- Primary Health Care

57. Patients enter the facility to visit their family doctor through a hole in the wall of the unfinished building,

58. Minister of Health using audit report as a guide for improving program operations.Minister of Health so impressed with the Court’s audit that he wants the Court to conduct performance audits of hospital care and emergency care systems.Impact of Primary Health Care Audit