Polska pomoc

 

Effective management of local finances in Moldova

In May 2010, the government of Prime Minister Vlad Filat initiated a decentralisation reform. Under the strategy adopted by the government, territorial reform and public finance reform was to be carried out. The reform aims to improve the efficiency of performed services and changes the division of responsibilities among individual public administration levels. Within the planned reforms, the Parliament of Moldova wants to change the existing system for financing local government structures. These changes are also to concern division of income among local government units. The implementation of transparent rules of operation for local government finance will in first order rationalise spending and will also introduce clear criteria for the division of funds transferred from the state budget.

The project implementer, the Union of Rural Municipalities, has many years of experience cooperating with the Ministry of Finance as well as Parliament in the creation of Poland’s public finance policy. Through its experts, it wants to propose technical assistance consisting of joint preparation, together with the Congress of Local Authorities of Moldova (CALM), of draft legislative changes concerning revenues of municipalities, including the manner of calculating and collecting them, division of PIT, CIT, VAT, and excise tax collected by the state and transfers of funds from the centre to local authorities.

Effective management of local finances in Moldova

The activities proposed in the project were closely linked with the concept of changes proposed by the Congress of Local Authorities of Moldova (CALM) in the document “Decentralisation of public finance.” They included the creation of a framework for effective use of public funds by local governments and a participatory system of lawmaking where the point of view of all institutions is taken into consideration, including local governments, and with impartial monitoring of the effects of legal regulations. These three elements create a system that allows for effective lawmaking and control over the effects of implementation of laws. It was very important that the project take into consideration the interests of small rural self-governments which constitute the majority of local governments in Moldova. It was directly addressed to CALM, which represents Moldovan local governments in contacts with the central government and parliament.

It was expected that most activities related to project implementation would be carried out in Chisinau, the headquarters of CALM. Seminars for Primaria and Rayon representatives were held in three localities: Cahul, Belz and Chimisliya. A study visit was organised to Poland, where CALM representatives visited the headquarters of the Union of Rural Municipalities in Poznan and Warsaw to meet with representatives of the Ministry of Finance and become acquainted with the concepts of changes in the system of local government financing.

Effective management of local finances in Moldova

The changes will make it possible to create a stable and effective system for managing public finance at the central and local level of financing, with the inclusion of services provided by the Moldovan local government, and to increase their accessibility and effectiveness. A direct outcome of the project will be strengthening of local government organisations, representing the interests of the Primaria and Rayon communities in relations with central authorities. The preparation of draft legislative changes related to transfers of expenditures under the disposal of the local governments for services provided for residents by the local government of the regions will help improve the living standards of residents.