1. Strategic plan of the Internal Audit Department Livia Jandîc, Budva, Montenegro, March 3-5, 2014 The Ministry of Finance of the Republic of Moldova

2. Content  The aim and the necessity of activity planning  The elaboration stages of the Strategic plan: ● SWOT analysis ● priorities and objectives ● distribution of the time resource  The methodology of risk assessment  Annual plan

3. The goal of the Strategic Plan Resources Requirements

4. The planning requirements Insurance

5. Strategic plan content Context Mission Vision Values The profile of the department SWOT Analysis Mid-term priorities Strategic objectives The audit requirements The methodology of risk assessment The necessary and available resources Annual activity plan Conclusions

6. Stages of developing the Strategic Plan I.Defining the mission, vision and values of the DIA and the SWOT analysis of the curent situation ; II.Determining the activity’s priorities for the medium term ; III.Identification of the operational systems and processes for the Ministry of Finance ; IV.Risk assessment based on the manager’s expectations ; V.Determining the period of the Strategic Plan and frequency of the missions ; VI.Assessment of the needed and available resources ; VII.Defining the Strategic Plan and the Annual Plan of the DIA.

7. 7 SWOT Analysis SWOT Analysis FactorsStrengthWeakness Internal  New division, without a negative experince, assessed by the auditors from the Court of Auditors as functional  Open attitude of the MF’ management  Objective and Independent character Focused on system and performance audit versus the compliace audit High level of theoretical and practical experience- 4 from the 5 auditor have the Qualification Certificates Limited resources for the integral realization of the Strategic Plan The flow of personnel Lack of financial resources directed for the contracting of the spcialized audit services and/or specialized consulancy

8. 8 Analiza SWOT FactorsOpportunitiesThreats External The existence of a legal framework of the PIFC and IA accroding to the international standards Possibility of multipling the international experience through the study visits Access to different forms of professional training Low awareness of the operational management toward the role and function of the PIFC and IA Low tolerance of the operational managers toward the opposing views Low remuneration of the internal auditors

9. Mid-term priorities Correlated with the Public Internal Financial Control Development Program and Strategic Development Program of the Ministry of Finance for 2012-2014: Increase the quality of the internal audit activity; Development of the FMC system; Promoting and disseminating the internal audit function.

10. 10 Strategic goals Goal nr.1 Development of an appropriate system of managerial control inside the MF Goal nr.2 Strengthening the current assessment system, reporting the financial management and control and issuing the declaration on good governance Goal nr.3 Strengthening the efficiency of the internal audit activityGoal nr.4 Promoting externally and internally the function of the internal audit Goal nr. 5 Insuring a relevant regulation and functioning framework of the DIA activity

11. Distribution of the time resource Nr.Type of activity% from total resources 1. Performing the insuring audit mission, following how are implemented the recomandations 60% 2.Performing the insuring audit missions inside the subordinated institutions10% 3.Performing the audit conciliation mission5% 4. Following the standardization of the DIA to the national and international standards- supervising the audit missions 5% 5.Planning, assessment and reporting of the activity of the internal audit4% 6. Coordination of the autoevaluation process of the MFS system of the MF 4% 7. Continuous professional improvment of the employees of the DIA, as well as trainers 3% 8. Performing ad-hoc audit missions 2% 9. Performing and update of the internal functioning acts of the DIA 2% 10.The activity as a member in councils, commissions and profile organizations2% 11. Conciliation activity 1% 12. Maintaining the functionality of the MFC system inside the DIA 1% 13. Participation at the elaboration of the normative framework in PIFC 1% TOTAL100%

12. Risk assessment methodology Materiality with a share of - 15 % Control environment - 10 % Sensitivity -10 % MF’ Management concerns-15 % Complexity of the process-10 % Changes of people and of system-10 % The integrity of the data processing environment-5 % The last audit mission-15 % The results of the last audit mission-10 % Each criteria is marked with a point from 1 to 5 (1-lowest level of risk, 5-highest risk level)

13. Risk Matrix

14. Calculation of the risk score Materiality * 15% Control environment * 10% Sensibility * 10% MF’s management concerns * 15% Complexity of the process * 10% Changes of people or system* 10% Integrity of the data processing environment * 5% The period of the last a.m * 15% The results from the last a.m. * 10% 19 june 2012 Risk score 5

15. Risk categories Risk categoryThe score of the riskPriority level Very low < 20 low Low 20-40 Moderate 40-60 medium High 60-80 high Very high 80 < 19 june 2012

16. Sample

17. Annual action plan 2014

18. Sample