Ministry of Finance of the Republic of Moldova of March 2016

Ministry of Finance of the Republic of Moldova 2 Marth 10, 1993 Presidential Decree regarding State Treasury Account in NBM - State Budget Public institutions accounts in commercial banks - closed. Accounts for territorial treasuries – opened; Treasury Accounts for State Budget (SB) revenues; 3. Treasury Accounts for budgetary institutions. 1. Public institutions accounts in commercial banks - closed. Accounts for territorial treasuries – opened; Treasury Accounts for State Budget (SB) revenues; 3. Treasury Accounts for budgetary institutions Territorial Treasuries. Local Budgets Health Funds (revenues) Social Fund (revenues)

Ministry of Finance of the Republic of Moldova 3 * Closing the current accounts of public institutions in commercial banks and opening current accounts of territorial treasuries in commercial banks * Central Treasury Serving - National Bank Territorial Treasuries Serving - Commercial Banks Public Institutions Commercial Banks Economic Agents Territorial Treasuries Commercial Banks After 1998 Before 1998 Public Institutions Economic Agents

Ministry of Finance of the Republic of Moldova 4 1. State Budget, Social Fund, Health Funds (only revenues) closing accounts in commercial banks 1. State Budget, Social Fund, Health Funds and Local Budgets – revenues and expenditures 1. “Client-Treasury system” 2 Digital signature 3. Investment projects: from C.B. to Territorial Treasuries 1. Serving of Investment projects and self- managed Budgetary Institutions 2. E-docplat (paydoc) 1. Consolidation of special means and special funds with the core component. Opening of the separate accounts for the temporary entries of public institutions’ means direct participant of the AUTOMATED INTERBANK PAYMENT SYSTEM

Ministry of Finance of the Republic of Moldova 5 State Treasury State budget - 1 account Revenues of the Health Funds - 1 account Revenues of the Social Fund - 1 account Technical - 3 accounts Teritorial Treasuries (38) Local Budgets – 39 accounts 37 accounts – for SB execution TEPIM – 74 accounts Accounts for self-managed institutions - 38 accounts National Socials Insurance House National Health Insurance Company Expenditures of the Social Fund- 27 accounts Expenditures of the Health Funds - 7 accounts IP - 28 accounts National Bank of Moldova Nostro account State budget – 4 accounts (euro and dollars) IP (currency) accounts

Ministry of Finance of the Republic of Moldova 6

Ministry of Finance of the Republic of Moldova 7 Before 2007 MF Economic Agents Budgetary Institutions Territorial Treasury revenues expenditures

Ministry of Finance of the Republic of Moldova 8 Since Territorial Treasuries Social Fund Health Funds SETTLEMENT PAYMENT SYSTEMS: 1.Real-time gross settlement (RTGS); 2.Designated-time Net Settlement system (DNS). Budgetary Institutions

Ministry of Finance of the Republic of Moldova 9 Territorial Treasuries Budgetary Institutions Territorial Treasuries accounts in C.B. for: 1.Cash operations 2.Currency operations cash advance requests funding request cash, currency

Ministry of Finance of the Republic of Moldova 10 Revenues and expenditure forecast Bank statements Government Debt Cash Flow Forecast (annual, monthly, weekly and daily)

Ministry of Finance of the Republic of Moldova 11 Balance at the end of the month About 700 MM lei (35 MM $) SF transfers – about 300 (15$) MM lei Wages – about 200 (10$) MM lei HF transfer – 50 (2.5$) MM lei Local budgets – about 150 (7.5$)MM lei

Ministry of Finance of the Republic of Moldova 12 Priorities for financing; Attraction of foreign loans, state securities issuance; Receiving/granting loans from/to budgets, managed in TSA, to cover the temporary cash gap; Borrowing funds from investment projects financed by donors and from self-management institutions; Loans from financial institutions; Placements in deposit of the free temporary balance.

Ministry of Finance of the Republic of Moldova 13 1.Resistance from central and local authorities to transfer of cash to TSA; 2.Imperfect legal basis; 3.Imperfect information systems; 4.Treasury requirement, record control (application of BC,CA); 5.Political and economic instability; 6.Instability of financial-banking sector; 7.Lack of qualified staff.

Ministry of Finance of the Republic of Moldova 14 improve the legal framework develop human capacity develop information system divide responsibilities between TT and authority/public institutions improve methodology implement international standards

Ministry of Finance of the Republic of Moldova 15