General Overview
Concentrating its efforts on the realization of the objectives and tasks of the Government strategy and starting from the needs and priorities set for improving the financial management in the public sector, the Ministry of Finance has initiated and is implementing Public Financial Management Project (PFMP) as the main tool in the realization of the public financial management consolidation objectives emphasized in the Economic Growth and Poverty Reduction Strategy (EGPRS).
The project supports the Government in the implementation of EGPRS by the World Bank within the Country Assistance Strategy 2005-2008; the offered credit was the first one out of the US $ 90 million reserved for the Republic of Moldova within the mentioned program.
In this regard, on 7 July 2005 between the Government of the Republic of Moldova and the International Development Association there was signed the Development Credit Agreement in value of 5,7 million Special Drawing Rights (US$ 8,548 million equivalent) to be used for the implementation of the Public Financial Management Project.
The Credit is provided to the Government of the Republic of Moldova according to the standard terms of the International Development Association, with a repayment period of 40 years inclusively with a grace period of 10 years and an interest rate of 0,75% annually.
The total cost of the Project is estimated at about US $ 15,331 million to be implemented with the co finance provided by the Government of Netherlands (grant in amount of US $ 4,028 million) and the Swedish International Development Agency (grant in amount of US $ 2,017 million) as well as from the contribution of the Government of the Republic of Moldova in amount of US $ 0,738 million (contribution already provided for the procurement of the computers for the Ministry of Finance needs).
Project implementation period: 2006-2009.
Project objective is the effective management of public finances which contributes to the development of economic growth and poverty reduction programs.
The project comprises 4 components:
Component 1, Budget planning and execution system, will deal with budget planning and system execution by improving medium term expenditure policies, modernizing budget classification and introducing a single chart of accounts for the public sector according to Government Finance Statistics 2001 as well as by implementing an integrated Financial Management Information System.
Component 2, Internal Control and Audit, will develop an internal control and audit system within government authorities in accordance with the best international practices and standards.
Component 3, Training capacity in financial management and training, will institutionalize the training capacity, as well as will develop and provide training to public servants in 18 modules related to financial management.
Component 4,Project management, monitoring and evaluation, will ensure effective project implementation, monitoring and reporting on its activities and results.
PFM Project beneficiaries will be:
- Central public administration authorities (~28)
- Local public administration authorities of the second level (~35)
- Local public administration authorities of the first level (~900)
- Spending units (~2500)