SIMILAR ARTICLES

BNR analysis: Radiography of investments in Romania – under what conditions capital accumulation occurs

Foreign direct investment (FDI) and expectations regarding the demand have a positive influence on capital accumulation in Romania, while uncertainties play an inhibiting role, especially… Mai mult

National gross minimum wage: in Romania and EU countries

  Romania ranks second to last among EU states in terms of national gross minimum wage, according to data published by Eurostat, at a level… Mai mult

Some charts: Perfect chaos in Romanian budgets. A 4-year analysis of difference between law and implementation

Although at first glance it is difficult to draft them, Romania’s public budgets are, in fact, a series of indicators and lists of revenues and… Mai mult

Tax authority’s “armed arm” was handed over to Prognosis Commission. How strongest governmental structure looks?

ANAF’s new president, Mihaela Triculescu, handed over to the National Commission for Strategy and Prognosis – CNSP the power to decide what companies are to… Mai mult

Current account deficit – Romania goes to opposite direction compared to EU countries

Romania is clearly distinguishing itself within the EU in terms of current account deficit evolution, with the second highest current account deficit in 2017 and… Mai mult

Cronicile

All it takes against public money: Court of Auditors – mutilated and thrown at Administration’s feet. Commission warns that will suspend European funds

de Razvan Diaconu , 25.6.2018

The Senate, under its role as the decision-making chamber, in this case, will discuss in plenary amendments to Law 94/1992 on the functioning and organization of the Court of Auditors.

If senators keep the amendments approved by deputies, Romania risks the freezing of all payments for European financed projects in the current budget exercise.

In the European Commission’s view, some of the amendments approved in the lower chamber do not meet international standards and affect the institution’s independence.

In the initiators’ view, however, changes were made precisely to align the law with the international auditing standards. The correlation with the international regulations is the pretext invoked in the Explanatory Memorandum of this legislative intervention and of other bills harshly criticized by the European institutions. For example, the case of the “reform” of the laws on the judiciary.

Interventions on Law 94/1992 undoubtedly have the potential to severely affect the independence of the Court of Auditors in several ways:

  • extend the functions of the president (appointed by a political decision, by the Parliament) to the detriment of the collective management, through the Court’s plenary
  • allow the interference of other institutions in the Court ‘s activity
  • create loopholes for heads of public institutions who have illegally spent public money

For Romania, the stake of these amendments means over EUR 20 billion. For PSD and ALDE, the authors of the dangerous amendments, the stake is the political control of the Court of Auditors, so that local elected representatives and heads of institutions cannot be accountable for the unlawful or unnecessary spending of public (national and European) funds.

The draft amendment to Law 94/1992 on the Court of Auditors received a final vote in the Chamber of Deputies on 25 April and received all the opinions of the Senate committees involved in the proceeding.

Decision concentrated to only one hand: extending the role of the president, to the detriment of the Court of Auditors’ Plenary

The proposed amendments effectively annul the Court of Auditors’ collective management and the most important tasks are transferred from the plenary comprising 18 independent accountants to the president of the institution (a political figure appointed by the Parliament).

At this moment, the president is Mihai Busuioc (photo), a social-democrat loyal to Liviu Dragnea. Former Secretary-General of the Government, after PSD-ALDE came into power, he was the main pawn used by Liviu Dragnea inside Victoria Palace to prevent Sorin Grindeanu and Victor Ponta from taking over the Executive.

Mihai Busuioc was appointed to the Court of Auditors last year for a nine-year term.

Extended functions to the president:

  • “The organizational structure of the General Secretariat and the functions of its departments are established by the Plenary of the Court of Auditors,” the current law provides. The amendment voted by deputies adds that these things will be done following the proposal of the CC president.
  • It is the CC’s president who will decide whether he or she notifies prosecutors of the irregularities found. The fate of mayors, heads of institutions, etc. who spent the public money in violation of the law will exclusively depend on the will of a person who is a political appointee. At present, Article 33 says the notification is made by the head of the department who found “the existence of acts on which there are indications they were committed in violation of the law.”
  • The president approves the functions of departments and compartments within the General Secretariat and the President’s apparatus” will be added to Art. 60.
  • A new structure is established under the president’s authority – “President’s apparatus” (Article 8). It is a distinct structure from the general secretariat and the president’s office and will check all reports before they are transmitted.

Court of Auditors is no longer the supreme authority to certify data from implementation accounts verified

The draft approved in the Chamber of Deputies abrogated art. 31 of the current law, which now provides:

  • The Court of Auditors shall certify the accuracy and veracity of the data in the implementation accounts audited.
  • No other authority can issue an opinion on the data registered in the implementation accounts, except on a provisional basis.

This means that the CC is the decisive authority in the matter of discharge – the granting of the compliance certificate to certify the implementation of the accounts in a public authority.

By repealing the article, any entity may decide on the certification of public accounts and the Court of Auditors is obliged to accept the report of the auditor paid by the audited entity.

Measures to protect officials with criminal problems

  • It is repealed the CC’s obligation to request “the suspension from office, according to the law, of persons accused of committing acts causing significant damages or serious financial irregularities, ascertained during controls or audits, until the final settlement of the cases in which they are involved” (Article 45).
  • 54, which required the suspension of Court of Auditors members and external public auditors who are taken to court. The draft adopted by deputies provides for the suspension from office only when a conviction has been decided in a first instance.

Public Procurement Agency controls itself and findings become mandatory for Court of Auditors

According to an approved amendment, the Court of Auditors will be obliged to acknowledge all the findings made by the National Public Procurement Agency, a politically controlled institution under the Government’s authority. “Opinions expressed by the National Public Procurement Agency at the request of the Court of Auditors or when issuing their own control documents are mandatory“, states an amendment to Article 29 of the current law.

Similarly, it is stated that the audit Authority (from the Court of Auditors: checks how European funds are spent by institutions, public administrations, etc.).

Enforcing compliance with the findings of the Public Procurement Agency (ANAP) is bizarre, as there is a similar precedent that led to the suspension of payments for European projects in 2011.

The funds were then blocked precisely because of the ANAP’s involvement (more exactly, its predecessor, the National Authority for Regulating and Monitoring Public Procurement) in the management authorities’ activity, because the ANRMAP’s opinion was taken into consideration when the acquisitions were verified.

European Commission threatens to freeze European funds if Court of Auditors’ independence is affected

The European Commission sent the presidents of the two parliamentary chambers – Liviu Dragnea and Calin Popescu Tariceanu – a letter warning them that Romania risks the suspension of all payments on the European projects if the Court of Auditors is no longer independent.

In these letters, the European Commission asks the Parliament to cancel the proposed amendments to Law 94/1992, as they would endanger the independence of the audit Authority, informs G4Media.ro

Official warning letters were signed by representatives from three DGs: DG Regio, DG Competition and DG Mare (maritime affairs and fisheries).

Mergeți în homepage ›

Publicat la data de 25.6.2018

Lăsați un comentariu


NEWS

"Iceberg" operation: ANAF announces that it selected 487 companies which are to be audited based on risk analysis

Virgil Pirvulescu, Vice President of ANAF at PwC Annual Tax Conference The National Agency for Tax Administration (ANAF) has identified 487 large and medium-sized companies… Mai mult

Commissioner Corina Cretu: There is a risk that Magurele Laser will not be completed during this budget implementation

In the absence of a rapid response from the Romanian Government to the European Commission, there is a risk that Magurele Laser can no longer… Mai mult

Romania joins countries that recognize Juan Guaidó as interim president of Venezuela

The Presidential Administration announced on Friday that President Klaus Iohannis, "as the head of Romania’s foreign policy decisions and Romania's representative at the external level,… Mai mult

AmCham Romania: Counterproductive public policies have reched an alarming level

Further to the message on the impact of OUG 114/2018 transmitted on Thursday to the organizations in the Coalition for Development of Romania (CDR), AmCham… Mai mult

Finance minister stopped borrowing money from the market. Teodorovici: We have funding resources for minimum six months

Minister of Public Finance (MFP), Eugen Orlando Teodorovici, has ordered to stop borrowing operations on the market because MFF would have all the money needed… Mai mult

BNR: If we sold foreign currency to defend Romanian leu, as PSD wants, interest rates would explode and ROBOR would go over 5-7 percentage points

The National Bank of Romania wants a "loyal cooperation" with the Ministry of Public Finance, and that involves a prior consultation with the central bank… Mai mult

Tax on bank assets was not included in 2019 draft budget

The tax on bank assets was not included in the 2019 draft budget, published on Thursday evening by the Ministry of Public Finance (MFP). According… Mai mult

Eruption on foreign exchange market: Mechanism of spiralling depreciation. Euro - sudden surge to 4,759

The average euro exchange rate, calculated by the National Bank of Romania (BNR), suddenly climbed sharply to a new record level of 4.7569 RON /… Mai mult

ANAF starts controls at large taxpayers. Mission stated: Combating phenomenon of externalisation of profits

The National Agency for Fiscal Administration has publicly announced the start of the "Iceberg" operation - a large fiscal control action targeting big companies operating… Mai mult

It becomes increasingly harder for the state to borrow: Finance Ministry has attracted only a quarter of targeted 400 million

The Ministry of Finance (MFP) has only managed to sell five-year government bonds amounted to RON 110 million out of the RON 400 million issued… Mai mult

"Perfect storm" that "calls for a crisis": Bankers - about "greed ordinance"

The most important bankers in Romania say that the effects of the tax on greed will be very serious and difficult to repair over time.… Mai mult

Increasing energy price - miners' strike brings imports up to 16% of consumption

  Rovinari power plant, part of Complex Energetic Oltenia, closed one of its energy groups on Wednesday night because of the lack of coal, as… Mai mult

A flow of initiatives against compensatory appeal: 188 of detainees released committed robberies, rapes, crimes

USR will file on Monday a bill on repealing the compensation appeals law, based on which thousands of detainees were released from prison before completing… Mai mult

Mugur Isarescu: "Ordinance weird thing" reduces monetary policy efficiency, which will not help Government

The National Bank of Romania (BNR) will convoke the National Committee for Macro-prudential Supervision, where the Ministry of Finance will be required to clarify the… Mai mult