Moldova’s problems are connected not to lack of financial means for realizing and implementing projects, but to misuse and poor management of money flows, said economist of the Independent Analytical Center Expert-Grup Tatiana Savva during Tuesday’s news conference at Infotag.

 

She said that as a result of adopting a new variant of the Law on local public finance, central authorities provided to localities an unprecedented financial autonomy.

 

“According to reports of the Accounts Chamber, one-third of the identified violations worth 8 billion lei account for local administrations. It is not about losses, but about mismanagement. Thus, there were identified cases when the money, designed for road repairs, was directed to schools. We do not say this is wrong, we just point that the money was used not in correspondence with efficiency principle”, Savva said.

 

According to her, such transactions bring real losses worth at least 10% to the state budget.

 

“The major losses are being registered in the field of public procurement, where the wrong usage of money accounts for around 1 billion lei. It is about the process of organization, monitoring and fulfillment of public procurement. In this case, 20% (approximately 200 million lei) are direct losses. Also, the department for public property suffers serious losses (650 million lei) with direct losses worth 65 million lei; losses in revenues due to taxpayers’ debts (120 million lei)”, the expert said.

 

Savva said that the cause of such results is in lack of political will of central and local authorities, lack of competent personnel and mechanisms of internal inspection.

 

“Nobody is engaged in audit at the local scale. Ministries of finance and of labor, social protection and family are inactive. At the level of politicians we can see that this issue is being thrown from one official to another with populist statements about lack of money. There is money in the country, it just should be correctly used”, she said.

 

Talking about Chisinau, Savva said that as a result of dubious financial transactions, Chisinau primaria failed to correctly use over 1.2 billion lei (US$67.6 million) from the state budget, 10% of which were simply lost.

 

According to Savva, another major problem in all the localities is management of the reserve fund.

 

“The reserve fund has clearly motivated goals, linked to extraordinary situations. Local administrations and central authorities usually replenish the reserve fund for emergencies. But in Moldova everything is different: money is used for concerts and sport events. These are political actions but not emergency situations”, she said.