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Transparency International Moldova launches the study "Monitoring the implementation of the Chamber of Accounts (CA) decisions: the case of the Ministry of Internal Affairs (MIA)"

How are the decisions made by the Chamber of Account being implemented? What are the main problems that hinder the process?  Have the officers who admitted to have abused their positions as managers of public property been held responsible for their actions? – these are the main questions which the authors of this study intend to answer.

On July 21st 2011, Transparency International - Moldova (TI-Moldova) launched the study “Monitoring the implementation of the Chamber of Accounts’ decisions: the case of the Ministry of Internal Affairs” at a common session with representatives of the national Council for Participation and the Club of Investigative Journalists. The study has been completed with the support of the Eastern European Foundation and financial resources granted by the Swedish Agency for Development and International Cooperation and the Danish Ministry of Foreign Affairs.

The study is a continuation of the monitoring process of the implementation of the decisions of the Chamber of Accounts, which TI-Moldova started in 2009. The purpose of the study is to evaluate the situation with respect to the implementation of CA’s recommendations by public authorities, to determine the obstacles that hinder the process and to find solutions. CA decision no. 5 from 26.01.2010 was selected as the object of monitoring, since it reflects multiple legal violations in the MIA activity. Specifically, it includes cases where the ministerial leadership avoided the legal use of special funds received from the Council of Europe and European Association of Police Colleges; supported expenditures in the interest of a certain political party and fraudulently appropriated real estate. It also addresses cases of public procurement in the absence of relevant budget allocations and without following the legal procedure. In turn, these cases caused considerable damage to the government budget.

Straightforward research methods have been applied: requesting information on measures taken by the MIA and other public authorities in order to implement CA decisions, conducting a focus group with civil servants on the systemic issues regarding the implementation of CA recommendations and on the ways to solve them, conducting sociological research regarding the quality of the CA audit.

Amongst the main conclusions of the study, the following are to be mentioned:

• All public authorities which have been contacted have responded to TI-Moldova’s information requests, however many answers are presented in a brief and elusive way, while access to information of public character is still restricted.
• MIA reported on the measures that have been taken with respect to the realization of CA’s decisions and attached a relevant link on their website (mai.gov.md/content/5882). Despite the ministry having implemented a considerable part of the recommended measures such as  establishing public commissions for procurement and control of subdivisions, approval of the List of Paid Services, conducting  internal audit (this has been confirmed by means of supporting documentation), the aim to assure maximum transparency in public procurement required under the Plan of Liquidation of Irregularities, approved by MIA, has not been accomplished.
• No high-ranking civil servant who committed violations, such as misappropriation and mismanagement of governmental funds, has been punished by the Ministry. The most common reason given being that "during the control these people were fired or they resigned after the control”
• The information provided by MIA regarding the disciplinary punishment of high-ranking civil servants ("disciplinary sanctions were not applied") contradicts the statement by the State Chancellery ("more high-ranking civil servants have been punished");
• So far, no high-ranking official from MIA has been charged with criminal sanctions. Out of six criminal cases started only four remained pending (one at the Law Court of the Centre district, two more are at the Center for Combating Economic Crimes and Corruption (CCECC), where their examination has not been completed, and one case was suspended). Out of three civil cases, the Court requested a partial recovery of damages for only one . Given the slow pace of the investigation and the fact that many of the irregularities under investigation took place in 2002 - 2009 (9 months), there is a risk that the prescription terms will expire, the guilty persons will not be held responsible and the damage caused to the state will not be compensated;
• There is no efficient cooperation among the public authorities that are responsible for the proper use of public funds and those that are responsible for the implementation of CA decisions (particularly the Ministry of Finance, General Prosecution, Centre for Combating Economic Crimes and Corruption (CCECC),  the Government and the Parliament/ relevant parliamentary committees);
• Various problems have been identified during the group discussions with representatives of public authorities on the implementation of CA decisions. These are:
• Legal problems - lack of a clear mechanism for the implementation of CA decisions, as well as absence of clear sanctions in case public authorities disregard CA decisions;
• Political issues - the actions of representatives of public authorities /institutions are determined by political affiliation and kinship. Furthermore, there are cases when public officials who admittedly committed violations are still being promoted within the same institutions or in other departments, because they have solid political coverage);
• Procedural issues that may delay or even prevent the implementation of CA decisions: the audited institutions do not perceive CA decisions as mandatory; difficulties in the process of investigating crimes and accumulating evidence material, as well as the difficulty of investigating ghost-enterprises;
• Low functionality and lack of transparency of internal audits: some managers of public institutions do not realize the importance of the internal audit;  there is a high risks that if managers commit violations the internal auditors will cover up the irregularities; internal auditors do not have sufficient experience in the field; in some public institutions access to internal audit reports is limited;
• There are tensions / animosities between institutions engaged in the prosecution.
• Lack/insufficient training of public authorities regarding the implementation of CA decisions: for example, the Parliament has not yet analyzed the 2008 and 2009 CA Reports. Also, even though CA has informed the Parliamentary Committee on National Security, Defense and Public Order about several irregularities found in MIA decisions (CC decision no. 19 of 28.05.2009, no. 5 of 26.10.2010, no. 19 of 15.03.2010, no. 58 of 07.09.2010 ), the Parliament has not yet taken a stand regarding the matter;
• Independence for the CA: there is a persistent risk that a politically affiliated person could be in charge of conducting the Chamber and influence the CA’s activity according to his/her political party’s interests (he/she will be in a conflict of interest).
• The results of the sociological research on the quality of CA audits have shown the following:
• In comparison with 2009, public institutions were more willing to participate in the survey and to answer questions, this shows an opening  towards civil society and an improvement in terms of truthfulness of the answers they give;
• Some slight improvement are attested in terms of the application of internal controls and audit systems in public institutions, the transparency of the controls/ internal audits and the enforcement of CA decisions, as well as a decrease of the level of involvement of policy-makers and state officials in preparing audit reports;
• Although there is some improvement, the situation remains unsatisfactory regarding the transparency of internal audits and the implementation of CA decisions;
• Although  one could see a modest progress regarding the internal controls and audits, these are usually not fully implemented, which creates an environment in which abuses in the management of public institutions are likely to occur;
• There has been a deterioration in terms of CA auditors’ objectivity, professionalism, courtesy, and respect towards the representatives of the audited institutions;
• A paradoxical situation persists when, on the one hand, respondents know about the external audits because CA decisions are being published, and on the other hand, they are not informed about the measures to implement CA decisions because this information is not published;
• The percentage of respondents who are aware of the existence of irregularities detected by internal audits has decreased, while the share of respondents who are informed about  the irregularities detected by CA audits has increased;
• The respondents’ expectation that those guilty of breaking the law by using public funds for personal interest will be punished became more "modest", which may encourage further violations of legislation in the administration of public funds.

Taking into consideration the above mentioned, the following recommendations to improve the efficiency of the implementation of CA decisions have been developed in the study:

• To introduce legal sanctions for failing to implement CA decisions;
• To increase the Government attention towards irregularities unveiled by the CA in the activity of the Executive (examining the implementation problems, organizing governmental hearings of the heads of public authorities/ institutions regarding the measures they take to execute the CA decisions, applying sanctions when necessary);
• To increase the awareness of the Parliament of the necessity to take a stand regarding the implementation of CA decisions (examining the CA Report on Administration and Public Financial Resources at a session of the Parliament;  creating a working group that will examine the implementation of CA decisions;  upon necessity, holding meetings at a parliamentary committee level with hearings of representatives of audited institutions that failed to implement CA recommendations, to allow relevant committees to request Reports from the Government etc.);
• To examine the possibility of establishing joint liability in the activity of the committees that take decisions;
• To hold accountable and punish adequately those guilty of infringement and misuse of public funds, but also those who evade the implementation of CA decisions;
• To assure CA’s independence and to mitigate the political influence over this entity (possibly by creating a Parliamentary Commission to Control the Use of Public Money and Public Property, which would collaborate with CA but will be reporting to the opposition );
• To strengthen the internal audit in public institutions and to ensure its independence: full implementation of internal control and audit, continuous training and information for auditors, ensuring that managers of public institutions are aware of the benefits and functions of an internal audit;
• To ensure that the activities of public authorities are transparent, specifically to ensure that their websites are regularly updated and contain information on measures taken to implement CA decisions, results of internal audits (e.g. the reports on internal audits), the use of foreign assistance, public procurement (the annual procurement plan, information about the economic agents participating in auctions, the Procurement Commission’s decisions designating the winners, etc.);
• To reduce the length and frequency of external audits;
• To ensure the CA audit’s objectivity, and to increase the credibility and professionalism of CC employees;
• To strengthen CA employees’ work-ethic, while cultivating a respectful attitude towards the representatives of the audited organizations.