The Swedish National Audit Office (Swedish NAO) has a well-established cooperation and has in various forms partnered with the SAI of Moldova, The Court of Accounts of the Republic of Moldova since 2007. The current cooperation agreement was entered into in January 2021 and runs until December 2023.
The purpose of the cooperation is to strengthen the SAI’s opportunities for development through support in several areas. In recent years, support has mainly focused on HR issues, management and leadership skills, communication, and quality assurance systems. Our assessment is that the cooperation has led to strengthened leadership and laid the foundation for a well-functioning quality assurance function and certification of financial auditors.
The main focus of the cooperation between the Swedish NAO and the SAI of Moldova covers:
- alignment of the law with applicable international principles and standards
- financial audit
- certification of financial auditors
- leadership development
- quality control of audit operations.
The Swedish NAO’s cooperation with the SAI of Moldova began in 2007. Support has been delivered in several phases with partly diverging focus, but has always included support for alignment of the law with applicable international principles and standards, support in financial auditing, leadership development, HRM and exchange of experience with the SAIs of Georgia and Latvia.
The SAI of Moldova has been a member of INTOSAI and EUROSAI since 1994. On 1 January 2009, a new law came into force that laid down the new remit and mandate of the SAI of Moldova. However, the law was not able to guarantee the SAI of Moldova’s independence, this was not done until December 2017.
The pay structure for the SAI of Moldova’s staff is still governed by a special law on state employees, which limits the independence of the agency and makes it difficult for them to retain staff and fill vacancies. This affects its ability to deliver in accordance with the operational plan.
The SAI of Moldova may conduct compliance, financial and performance audits in accordance with international standards. The SAI decides itself on its annual operational plan and how the audits are to be conducted.
The law provides for a number of mandatory audits to be carried out annually by the SAI of Moldova. This applies to financial audit of the government’s accounts of the executed state budget, the state social insurance budget and the health insurance fund. The SAI is also to audit the ministries’ accounts annually. The results of the mandatory audits are reported to the parliament’s Public Finance Control Committee.
The SAI also reviews other agencies at central, regional, and local levels. The SAI decides who and what should be audited in accordance with its mandate and present their annual report to the Parliament.
The SAI’s Degree of Independence
The World Bank’s SAI Independence Index is an index of SAIs’ independence. The index is designed using a ten-point scale where 0 is low and 10 is high. Moldova’s 2021 index was in the range 8.0–8.5, placing the SAI in the category of “substantial independence”.
The third phase of cooperation was evaluated in 2017 in a “light touch review” by a team consisting of two external consultants and one financial auditor from the Swedish NAO. The evaluation was based on interviews and workshops in Sweden and Moldova, document studies and a questionnaire survey.
Our assessment is that the cooperation has led to important results, including strengthened leadership, and laid the foundation for a well-functioning quality assurance function and certification of financial auditors. The SAI of Moldova is described in the 2017 evaluation report as an ambitious SAI with plans to develop in accordance with international standards.
One of the most important roles of the HR function is to support management and understand employees’ needs in order for them to contribute their full potential. In the cooperation with the SAI of Moldova, HR has been identified as a key development area. The SAI has therefore conducted its first staff survey, supported by the Swedish NAO. The aim was to measure employee satisfaction and identify improvement potential in the work environment. The survey shows that new employees are more dissatisfied than those who have worked longer and that motivation is a problem. The results have been analysed and discussed with the SAI’s management, and the survey has helped managers better understand and accept certain shortcomings and development areas. An action plan based on the results has also been developed. It aims to support managers to work on improvements, together with their teams, and to highlight more overall needs for improvement to the strategic plan. The results of the staff survey have also formed the basis for the work on the SAI’s strategic plan for 2022–2025.
One of the most important components of the cooperation has been the development of quality assurance systems. The Swedish NAO and the SAI of Moldova have carried out several activities to increase knowledge and practical skills in the field. The SAI of Moldova has also, with our support, conducted an internal evaluation of this function in relation to international standards ISSAI 140. The evaluation has resulted in a report and action plan that points to areas of improvement, including the organisational affiliation of the quality assurance system and the development of professional ability to operate it.
The Swedish NAO’s support to the SAI of Moldova has also contributed to the upcoming certification of the SAI’s financial auditors. At the time of writing, partners have developed a draft framework for the certification in question. The framework describes, among other things, how the work should be organised, for which target group, and what role and responsibilities different committees should have. The SAI of Moldova has also, in cooperation with the Swedish NAO, prepared a draft training programme for financial auditors. The programme is to enable the auditors concerned to obtain the certification that is central to the SAI’s compliance with its mandate to audit other agencies.
Costs of the Swedish NAO's cooperation that are charged to international development cooperation.
Source: Swedish National Audit Office Annual Reports for 2019, 2020 and 2021 and budget for 2022.
Brief Facts about Moldova
On 1 January 1992, the Soviet Union ceased to exist and the Republic of Moldova formally became an independent country. Since then, developments in Moldova have been characterised by political instability, short-term economic and political decisions, difficult social and economic conditions, widespread corruption scandals and attempts to move closer to the EU. According to the Transparency International Corruption Index, Moldova ranks 105 out of 180 countries.
In 2020, the Moldovan people voted Maia Sandu as the new president. President Sandu’s political agenda consists of closer relations with the EU, the fight against corruption in the country, efforts to improve the living conditions of the population, unification of the country and good governance and administration.
Moldova is among Europe's poorest countries with major social and economic divides. The economy has grown relatively rapidly since the turn of the millennium, where agriculture, food industry and exports are crucial. Due to low wages, Moldova has problems with labour emigration. There are also traces of Soviet rule with centralised control over budget and planning processes.
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