1

2

 Strategy of public finance management for  Law on public finance and budget and tax responsibility # 181, of ;  Law on local public finance # 397-XV, of ;  Annual Law on the Budget;  Methodological norms for cash execution of budgets of which the national public budget is comprised through the treasury system of the Ministry of Finance ( Order # 215, of ) 3

 Collection of revenues and other receipts approved in budgets that are components of the national public budget is provided for by revenue administrators (Tax Service, Customs Service)  In cases when the legislation does not envision a body that is responsible for administration of certain budget revenues, the Ministry of Finance appoints administrators of corresponding budget revenues  All payments that are accrued but not transferred to the budgets that are components of the National Public Budget by the date of closing the fiscal year are received in the accounts of relevant budgets next year Budget receipts 4

 Accrual and accounting for payments in components of the National Public Budget is provided for by means of the treasury system of the Ministry of Finance  The MoF concludes agreements with commercial banks and the SE “Post of Moldova” on accrual of payments to the budget ( individuals, tax collectors, tax officers )  Revenues of budgets from which the National Public Budget is comprised are systematized on the basis of the economic classification  Revenues collected by budget entities (special funds) are received in the relevant budget  For the purpose of accrual of revenues to the budget the General Directorate of the State Treasury maintains the Registry of IBAN Codes Budget Revenues 5

From January 1, 2016 The Ministry of Finance provides for generation of IBAN codes IBAN calculator on the MoF website: code of the Economic classification district in which the payer is located code of the payer’s locality Type of IBAN code structures IBAN code type ”G”general revenues IBAN code type ”P” interbudgetary transfers and revenues collected by budget entities (special funds) The procedure for accrual and accounting for payments in the national public budget by means of the treasury system of the Ministry of Finance → annual Order of the MoF 6

The structure of the IBAN code of type ”G” used for general revenues MD XX TR NBMST  ”MD” – code of the Republic of Moldova;  ”XX” – check digit;  ”TR”– code identifying the bank code;  ”G” – code identifying the structural type of a treasury account that is included in IBAN;  ”AAA” – code identifying information on the bank account;  ”EEEEEE” – chart of accounts code (economic classification);  ”LLLL” – locality code;  ”0000” – ”zeroes” (to fill in the IBAN code up to necessary 24 characters) ; 7

Structure of the IBAN code of type ”P” used for interbudgetary transfers, accrual of revenues of budget entities (special funds) and also for making payments MD XX TR P AAA EEEEEE A IIIII AA NBM ST ”MD” – code of the Republic of Moldova; ”XX” – check digit; ”TR” – bank code; ”P” – code identifying the structural type of a treasury account that is included in IBAN; ”AAA” – code identifying information on the bank account; ”EEEEEE” – chart of accounts code (economic classification); ”A” – code of the current account of a budget entity that contains information on combinations of the following budget classification codes: S1S2; ORG1; ORG2; F1-F3; P3 (if it is a draft); ”IIIII” – digital code designating code ORG2 regular or ORG2 AG of a budget entity according to the organizational classification; ”AA” – letter code designating other codes of the budget classification that are not contained in the current account 8

Budget Expenditures 1.Non-cash expenses (transfers) The Ministry of Finance participates in SAPI transfers → directly to the recipient of budget funds without involvement of commercial banks 2.Payments in foreign currency (government debt, projects financed from external sources) The MoF is a client of the National Bank of Moldova 3. Receipt of cash and expenditures of budget entities in foreign currency - a commercial bank that serves the treasury system of the MoF 9

Liability Management  Budget entities are responsible for receiving, paying, accounting for liabilities and reporting on them in accordance with the legislation.  Incurrence of liabilities by budget entities is allowed only for the purpose and within the limits of budget allocations.  Within the limits of expenditures forecasted for these purposes for corresponding years, it is allowed to incur long-term, up to three years, capital expenditure commitments.  Budget entities have to revise contractual relations with suppliers of goods and services and to cut expenditures if during the year budget allocations decreased as a result of budget adjustments. 10

 Budget entities are responsible for concluding agreements, for their implementation and for the state procurement procedure  Agreements of budget entities have to be registered with territorial treasuries serving them Liability Management 11

 The General Directorate of the State Treasury and territorial treasuries check payment orders for compliance with the budget classification and check commitments incurred by the budget entity.  In the course of making payments, upon request of the treasury, if necessary, a budget entity submits supporting documents Liability Management 12

Submission of payment documents to the Treasury from 2015 → in the electronic form - module “Entity – Treasury” (transfer of payment documents in the electronic form) on paper: agreement supporting documents (if necessary) power of attorney to receive cash 13