Tatiana Shevchuk
The audit mission portfolio is being replenished
Between September 15, 2024 and September 15, 2025, 57 missions were conducted: 27 financial audits; 21 compliance audits; 1 performance audit and 8 control missions. The number of audits has been increasing year by year – last year there were 40, the year before that 33. But the audit missions did not limit themselves to the technical presentation of the results of the audits, naming the main problems of institutional accountability, but also told what was behind it.
Not only central but also local authorities, health care institutions, joint-stock companies, state and municipal enterprises fall under the control of the supervisory body. To mitigate the effects of external crises and build resilience, the Government has devoted significant resources to energy, food and transportation security and to support vulnerable populations. The effectiveness of these areas, implemented with the help of external assistance, was given special attention by the Court of Accounts.
The commitments undertaken by the country forced last year to expand the fiscal framework to support all components of the national public budget and to amend the law on the state budget with two amendments. As a result of the exemptions undertaken in the context of exceptionality, the execution of the 2024 budget ended with a deficit of 12.6 billion lei (3.9 per cent of the GDP), and the Court of Accounts took into account the financial and economic realities in carrying out its missions.
Tatiana Shevciuc, President of the Court of Accounts of the Republic of Moldova: “The Court of Accounts fulfills its constitutional function as an instrument of parliamentary control of decision-making in the field of state finances. Our reports and recommendations represent a reliable basis for strengthening public policies and governance mechanisms. The mission of the Court of Accounts is to support public institutions in the efficient and conscientious use of budgetary resources and management of public assets. Thus, the Chamber of Accounts directly contributes to increasing citizens’ trust in the state and its decisions”.
Money is better utilized
The anti-crisis budget required anti-crisis execution. Among the achievements in this regard, the Accounting Chamber notes more financial discipline in the government’s utilization of foreign aid. During the last budget study, all three government reports received an unconditional positive opinion (“without reservations”).
In 2024, the national public budget revenues were executed at the level of 100.4% of the annual budget, which represents a surplus of 399.2 million lei against the planned level. Thus, compared to 2023, the revenues increased by 7.9%, or by 8,039.3 million lei, mainly due to the increase in revenues from taxes on goods and services, income tax, as well as compulsory insurance contributions.
The national public budget expenditures were executed at the level of 96.6% of the annual allocations. Compared to 2023, they increased by 4.3 p.p., which corresponds to an absolute increase of 5,091.5 million lei. The expenditure realization rate was 1.5 p.p. higher than in the previous year, indicating a moderate improvement in the budget’s absorptive capacity. However, the improvement could not offset the systemic problems of public finances.
From the JP report: Capital expenditure in 2024 was executed at 87.2%, down 1.5 p.p. from 2023. Of this, capital expenditures were executed at 56.1%, indicating continued difficulties in the implementation of development projects, especially in terms of planning, contracting and execution of investment works.
The state does not know its own price
Undervaluation of the state’s assets is one of such systemic problems. It is caused by the absence or errors in accounting for the real value of assets or by “unrecorded” assets, confusion in transferring them from balance sheet to balance sheet, and sometimes by a deliberate unwillingness to recognize assets.
The problem of undervaluation of assets, shares and other forms of capital participation within the country, reported by the central public authorities, has become chronic, generating mismanagement and violation of the law.
From the JS report: We believe it is important to emphasize the existence of systemic problems that, although they did not affect the auditor’s opinion, persist permanently and require special attention from the responsible authorities.
Speaking in terms of numbers, we can outline the scale of depreciation of the state’s own assets. In fact, the value of roads and land plots in the amount of about 61.9 billion lei, the value of forest lands in the amount of about 4.7 billion lei, railway infrastructure and the lands occupied by it in the amount of about 4.1 billion lei have been taken out of circulation.
Also, the value of public property related to high-voltage installations, amounting to 933.7 million lei, the value of goods transferred to the management of state institutions with financial autonomy, amounting to at least 575.1 million lei, etc., was not taken into account.
Regulatory vacuum of “shortages”
The Court of Accounts draws attention to the need to complete the normative framework, particularly with regard to the lack of a mechanism for systematization and capitalization of research results. Research funding methodologies do not regulate the national systematization of scientific results, the identification of the actual beneficiary or the monitoring of technological transfer.
At the same time, the regulatory framework does not provide clear ways to account for and capitalize research results as intangible assets. In 2024, MDL 407.2 million was allocated for research, of which 97.7% was implemented. Most of the funds went to the Ministry of Education and Research (343.5 million lei), the Ministry of Culture (33.9 million lei) and the National Agency for Research and Development (22.3 million lei). But in the absence of a nomenclature that would uniformly classify research results, there is still a risk that they will not be recognized as state assets, the auditors said. The completeness of the budget investments is violated.
The same uncertainties are associated with the reporting of the SME Credit Guarantee Fund (CGF). The budgetary financial resources related to the FGC (401.9 million lei) were not included in the consolidated balance sheet of the Ministry of Education and Science and, consequently, in the Government’s report on budget execution. The amounts allocated in 2024 for the capitalization of the FGC (5 million lei) were erroneously indicated as “current grants”, although they were not used. The Court of Accounts notes that part of the Fund’s financial resources (286.5 million lei) was invested in SS. It is nonsense to use budgetary resources to cover the deficit of the same budget.
Other Terra incognita
The Court of Accounts draws attention to the chronic delay in the process of elaboration and approval of the state budget, although the Law on State Finances and Fiscal Responsibility directly regulates the budget calendar and general budgetary procedures. And the procedure for financing, execution and reporting on subsidies and grants remains ambiguous due to the lack of a clear definition of these concepts.
In the current conditions of financing of state agencies, the lack of interrelation with the general budget rules annually leads to immobilization of financial resources for an indefinite period of time, and the principle of transparency suffers.
From the SP report: Legislation does not regulate the procedure for public institutions to return balances of funds that are allocated to them from the budget from subsidies and grants provided by partners. As a result, unused balances of funds during the year are to be used in the following year, although in a deficit budget environment, allocations may be reallocated to other priority purposes.
Expenditure flows
Problems in the management of capital expenditures make investment inefficient. In 2024, allocations of 1,904.2 million lei were approved for 64 investment projects, which represents 2.3% of the total budget expenditures. The financing was carried out in the ratio of 82.7% from external sources (1,573.9 million lei) and 17.3% (330.3 million lei) from general resources. Compared to the previous year, the allocations from external sources decreased by 533.4 million lei.
The capital investments were mainly directed to the road infrastructure. At the same time, the Road Development program accounted for 74% of the total expenditures. Other important directions of resource allocation were directed to the program “Support for national defense services” – with a share of 15.7%, the program “Water supply and wastewater disposal” – 4.4%, as well as the program “Sustainable development of phytotechnics and horticulture sectors” – 1.9%.
Among the main shortcomings that affected the management of state investments, the Accounting Chamber names the planning process. Thus, after the amendment of the Law on State Budget for 2024, 25 investment projects were excluded, worth 607.2 million lei (31.9 per cent of the initially approved amount).
At the same time, 10 new projects were included, totaling 260.8 million lei, of which: 253.6 million lei, or 97.2%, are allocated from funds financed from external sources, and 7.3 million lei, or 2.8%, constitute the Government’s contribution from the total resources for the realization of capital investments financed from external sources.
However, the level of implementation of capital investment expenditures has not reached the target value. Despite some progress in implementation, the total volume of capital investments execution amounted to 1,601.6 million lei, which constitutes 86.1% of the envisaged allocations. The distribution by sources of financing shows that 84.8% of financing was realized from external sources (1,300.3 million lei) and 92.4% from general resources (301.3 million lei).
The main reasons for non-execution of capital expenditures were delays in the ratification of financing agreements, non-fulfillment of preconditions for their entry into force, as well as technical and administrative shortcomings, such as lack of complete project documentation, delays in public procurement procedures or lack of appropriate bids.
At the same time, only 29 out of 50 projects were 90-100% implemented, and no expenditures were incurred for 5 projects. Among the institutions with the lowest level of implementation: the Ministry of Health – 24.4%, the Ministry of Economic Development and Digitalization – 53.0% and the Ministry of Education and Research – 57.6%.
