The assignment was carried out within the Framework Service Contract ECFIN/012/2011 for Operational and PEFA Assessments. The specific objectives of the Moldova PEFA 2011 Assessment were to:

• Track the progress since last PEFA assessment of 2008 needed to measure PFM performance over time, and to inform and strengthen the dialogue between the Government of Moldova and EU, but also the donor community, on strengthening PFM;
• Assist the Government of Moldova and donor community to assess current PFM reforms and to identify potential PFM areas where further institutional support is required;
• Assist the EU and other interested donors in determining the eligibility of Moldova for future budget support and macro-financial assistance programmes.

Four Assist, as leader firm, implemented this project in consortium with PHP Audit CJSC (Armenia). The Government of Armenia had initiated reforms in the area of the public sector internal audit. The project was funded by the World Bank in the form of an IDF grant to assist the Ministry of Finance. The objective was to strengthen the institutional framework and build capacity in public sector internal audit in Armenia.

The project supported the Central Harmonization Unit (CHU) of the Ministry of Finance to:

• test on a broader scale the internal audit methodology developed in the Ministry of Finance, government agencies, municipal and community administrations and non-commercial organisations;
• based on broader piloting, update the legislative framework and develop a detailed implementation strategy;
• design a robust Unified Internal Audit Information Management System (UIAIMS) which will help enforce the methodology and ensure consistency in its application across various internal audit units;
• assist in skill development of the CHU staff; and
• conduct pilot internal audits and standard training for the transfer of knowledge and skills needed to implement the methodology (including training of trainers).

This assignment was carried out within the Framework Service Contract ECFIN/012/2011 for Operational and PEFA Assessments. Our experts joined a World Bank PEFA team on behalf of DG Economic and Financial Affairs (ECFIN). The following PEFA indicators were covered by our experts:

Internal audit:

• PI-20 Effectiveness of internal controls for non-salary expenditure
• PI-21 Effectiveness of internal audit

External Scrutiny and Audit:

• PI-26 Scope, nature and follow-up of external audit
• PI-27 Legislative scrutiny of the annual budget law
• PI-28 Legislative scrutiny of external audit repo

Inter Governmental Finance:

• PI-8 Transparency of inter-governmental fiscal relation

Donors practices:

• D-1 Predictability of Direct Budget Support
• D-2 Financial information provided by donors for budgeting and reporting on project and program aid
• D-3 Proportion of aid that is managed by use of national procedures

Customs part of revenue related indicators (excluding the tax administration side):

• PI-13 Transparency of taxpayer obligations and liabilities
• PI-14 Effectiveness of measures for taxpayer registration and tax assessment
• PI-20 Effectiveness

DG ECFIN chose our the consortium composed of BDO LLP (UK), leader firm, and Four Assist Development Consulting Ltd. to conduct Operational Assessments (OAs) in order to acquire a thorough understanding of the nature and prospects of public financial management (PFM) in countries that benefit from, or are earmarked for, macro-financial assistance and/or budget support (general, sector, SPSP). The objective of the assessments is to provide a detailed analysis of the operation of various administrative bodies (central banks, ministries of finance, auditing bodies) involved in managing Community funds in the countries receiving macroeconomic aid in its various forms from the European Commission. In addition, the consortium takes part, on an ad hoc basis, in 'Public Expenditure and Financial Accountability' (PEFA) studies on behalf of DG ECFIN, mainly in neighbouring countries, in cooperation with the World Bank and other international donors. The total value of the framework contract is €1.250.000.