Control unit: Vitalie RUSSU senior specialist

Transcription

1 Control unit: Role and functions Vitalie RUSSU senior specialist

2 he Control Unit - a structural subdivision f the ANRE, composed of 6 members, arrying out its activit ty in accordance with s Internal Regulations.

3 ontrol Unit activity is coordinated by the General Director

4 Control Function - legal framework - Law on Energy; - Law on Natural Gas; - Law on Electricity; - Law on State Control of Entrepreneurial Activity; - Law on Petroleum Products Market;

5 OLE of Control Unit roviding a reasonable assurance of the fact hether license holders within the authorized ctivity observe the principles of maximum fficiency on minimum and strictly necessary osts.

6 OLE of Control Unit he control unit carries out its activity by erforming certain control ls in accordance with the ctivity program, both within ANRE institution and ithin control teams at the offices of entities ubject to control.

7 he activity (control) program approved by the General Director. cludes in average 5-7 entities that are to be subject to control long the period of one year, it is a public program and is placed n the webpage of ANRE. The CU can perform unannounced ontrols also, not included in the plan, initiated on request or ased on other information obtained by ANRE.

8 ontrol unit duties erforms controls on regulated activity of license holders through e efficiency and effectiveness equirements, according to the nnual approved activity program, in order to obtain assurance at financial and statistical report of regulated enterprises of nergy sector don t contain significant distortions and give a true nd fair view, and regulated rates are justified and correspond to e minimum and strictly necessary costs principle.

9 ontrol unit duties erforms thematic (Single-Issue) controls at the equest of other subdivisions of ANRE, including ontrol over the correctness and reliability of data cluded in the reports and informations presented ANRE, by the enterprises whose activity is egulated or by the other license holders.

10 1 ontrol unit duties U submits for examination and approval to ANRE ouncil of Administration draft decisions taken and rafted on the basis of the results of controls carrie ut by the CU;

11 1 ontrol unit duties ooperates with the Division of Tariffs and Economic nalysis in the examination of applications for adjustment r amendment of tariffs, in the process of setting the asic and real costs for being accepted and eventually cluded in the tariffs; rovides the necessary assistance in the examination of raft investment plans and reports regarding their xecution;

12 1 ontrol unit duties articipates in the drafting, amendment and improvement of draft laws ormative acts concerning ANRE activity, presenting the bservations, comments and substantiated proposals intended to btain an improvement of their contents; nalyzes and presents proposals of improvement of the normative amework in force concerning the regulation activity from the thermo- gas, water and petroleum nergetic sector, the sector of natural roducts; xecutes other duties resulting from the Agency Regulations;

13 1 U rights their activity, CU employees have the following rights: to have access to documents linked with the activities carried ou y economic agents under a license, including those which conta formation that is considered a state secret, commercial secret o ther confidential information; (with obligation to not disclose it) to obtain from the holders of licenses copies, extracts of ocuments linked with the verified activity, necessary additional formation;

14 1 U rights to request from other state bodies information linked with ntity s activity; to have access to materials, rep ports and other information held y other ANRE subdivisions regarding the activity of enterprises, e activity of which is regulated, or license holders, for using em in their authorized activity;

15 1 U rights to train, with council of ANRE s approval, specialists of other NRE subdivisions, for performing certain controls with elements pecific to their activity; to collaborate with subdivisions with control duties within other uthorities, institutions and organizations;

16 1 U responsibilities the accurate and timely execution of its duties, provided by its egulations; keeping the state or commercial secret, the confidentiality of ocuments and information, whic ch it has access to while xecuting its duties; submitting internal notes to the Council of Administration of the gency on the risks and deviations with elements of fraud, etermined during the execution of its duties, for information and r taking measures in accordance with legal provisions;

17 1 U responsibilities the coherent execution of functional duties based on rinciples of objectivity, efficiency, efficacy; detection and assessment in appropriate terms of ossible risks and deficiencie es existent in the activity of cense holders as regards the observance of the gislation, of the normative-methodological framework nd drafting proposals of their settlement;

18 1 U responsibilities the quality and authenticity of materials submitted for e approval of decisions by the Council of Administration f the Agency; assuring the drafting and co orrect storage of internal ocumentation;

19 1 ypes of control he CU carries out financial and conformity controls that uppose an evaluation of the legitimacy, the observance f regulations and principles and covers to a great extent n attestation of the financial responsibility of the given ntity, including:

20 2 ypes of control Compliance keeping accounting records, financial ports and patrimonial situations Evaluation of economic and financial activity indicators Compliance records of fixed assets. Revaluation of xed assets

21 2 ypes of control Compliance and justification of all components of xpenditure and consumption. The authenticity of the resented data for inclusion in the rate Compliance, justification an nd efficiency procurement of oods, works and services Compliance, justification and effective use of resources vested in capital construction, modernization, current nd capital repairs.

22 2 ontrol methodology ontrol evidences are collected from the entity subject to control, om third parties, such as the Customs Service, the National tatistics Office, etc., applying analytical and substance rocedures, by examining the regulating framework and financial tatements, concluded contracts, accounting registers and levant primary justifying documents. he duty of control teams consists in obtaining sufficient and asonable evidences for justifying ascertainments and onclusions.

23 2 years of experience he last 2 years, the control unit performed control missions in e thermo-energetic field, the field of natural gas, electricity and etroleum products market. s result of such controls, the employees of the CU detected a eries of irregularities and deviations within the existent gulating framework. Generally, these irregularities can be lassified as follows:

24 2 years of experience Expenses not provided by the calculation methodologies. sually in the controls are found the following expenses that are rovided by the methodologies but are included in tariff calculatio xpenditure on sponsorships, ex xpenditure on redundant losses, ranted awards, increments (additions) that are not classified as alary payments, payment of various fines, penalties, fees etc.

25 2 years of experience Procurements of goods, services and works through a series of termediaries, aiming at increasing the prices and including them e tariff, thus violating the principle of activity with minimum costs pon control at the enterprises fr rom the natural gas sector it was und that these enterprises have administered the inefficient pro f selecting suppliers, under conditions of limited transparency, in bsence of real competition, and as a result of these acquisitions ave generated additional costs to companies. Thus, for example cquisition of goods was done through intermediaries each apply rofit margin, and the final price of goods has doubled.

26 cheme of procurements within country 2

27 cheme of procurements 2

28 2 years of experience Investments performed including unnecessary expenses. ust as in the case of purchases of goods, in the framework of an vestment plan, regulated enterprises have admitted unnecessa pendings generated by acquisiti ions of goods and/or services at creased prices. As a result increasing the depreciation value, w ill be included in tariff calculation.

29 2 years of experience pon control, ANRE reviewed the admitted wear value in tariff alculation generated by the achievement of investment plans. An e Council of ANRE ordered to the Department of tariff to perform omparative analysis of venal value for all the goods of the same ategory. aving this experience, Control Unit has proposed amendments egulation for carrying out the acquisitions within the regulated nterprises, by tightening the procedures for the selection of supp f goods, works and services.

30 3 years of experience Incorrect reporting of consumptions and expenses between the gulated activity and other activities. ome companies practice reporting on regulated activity the cost epreciation, repairs, maintenanc ce of assets unused in this activi ased. Wrongful reevaluation of fixed assets by an unjustified increase eir value and diminishment of terms of exploitation.

31 3 xistent problems The lack of documented criteria based on which entities are selected for control; The lack of an internal regulatio on regarding the procedure of organizing and performing a control; The lack of performance controls for the assessment of vestments on principles of economic efficiency, cost-efficiency nd efficacy.

32 3 ain objectives proposed:.setting criteria for being included in the control program of gulated entities, based on fundamental principles of control, rovided by the Law on state control of entrepreneurial activity, mong which: performing the control based on the evaluation of risks;

33 3 ain objectives proposed: proportionality of control and opportunity of its initiation preventing the violation of legislation through the consultative control spect etc.

34 3 ain objectives proposed:.drafting an internal regulation on the organization and erformance of control, which would describe: The control planning stage: identification of risks; drafting of control program; The control performing stage: control performing procedures (examination, assessment, recalculation, etc.); sampling; documentation of control performing activity (controller s work documents);

35 3 ain objectives proposed: Reporting stages, including recommendations for remediation nd prevention of deviations. control report components..development of performance e controls for the carried out vestments..development of staff, its familiarization with the best control ractices of regulators from the EU states, USA, etc.

36 3 ain objectives proposed:. Intensification of collaboration with the control services of ompetition Council, by carrying out common controls, perative exchange of information, etc.. Conclusion of the Collaboration Agreement with the Tax ervice.

37 3 ccomplished objectives Approval of the internal Regulations of the control unit; Amendment of the legal framework for a clearer determination of ANRE competences in the field of control, including setting deadlines for controls and the presentation of the report to the controlled entity. Amendment of certain provisions of the Tax Code, by which NRE has obtained the right to request information, related to e business of the licensees. Conclusion of the Collaboration Agreement with the Customs ervice on exchange of information.

38 Thank you! 3