NAB
26 June 2013
MFSI-II Works to Ensure Unity of Budget Process and Its Improved Transparency
On 25 June 2013, the Ministry of Finance held a joint meeting of the Task Force on interbudgetary relations reform and the National Advisory Board on effective public finance management. The meeting was attended by the Ministry of Finance, State Treasury Service, MFSI-II Project, academia, NGOs, and international organizations.
The participants discussed issues related to improving the regulatory and methodological framework of PPB application at the level of local budgets, as well as the results of a pilot project on the methodology of comparative analysis of efficiency of budget programs.
The Project and the Ministry of Finance have suggested that the procedures of public finance reporting and accounting at the national and local levels be unified. To this end, they have developed a standard program classification of expenditures and crediting of local budgets, which is fully in line with the structure of program classification at the State budget level.
Approving the proposed changes will make it possible for the first time to keep local budget records by program in the PPB format in full conformity with the State budget. Also, unifying budget classifications would enable the budget process to be automated at all levels through the development of the appropriate software.
Unifying and automating the approaches to the formation of both the State and local budgets will improve the transparency of the budget process and strengthen controls over the management of budget funds.
In addition, the approval of the new classification will provide an opportunity to start using it as of 1 January 2014 with the introduction of a fully functional planning and execution of PPB-based local budgets.
The meeting’s participants supported the new approaches and recommended that the appropriate amendments should be made to all documents used in the budget process.
At the meeting, the Project presented the results of the pilot project on the methodology for a comparative analysis of the efficiency of budget programs.
This methodology was developed by the MFSI-II experts in collaboration with the Ministry of Finance and disseminated among all experiment participants. The methodology provides for a formula-based approach to evaluating the efficiency of budget program execution. The Project ran a pilot project with the methodology using annual reports on the execution of budget program passports for four local budgets. The test’s results have proven the effectiveness of the methodology for evaluating budget programs.
The meeting participants approved the materials presented and emphasized that the introduction of such a methodology will make it possible to impartially analyze budget program execution efficiency in general as well as the individual tasks within them. It will provide a toolkit for top officials to make informed managerial decisions when allocating budget funds. This, in turn, will lead to improved transparency and efficiency in the planning and execution of PPB-based budgets.
The participants discussed issues related to improving the regulatory and methodological framework of PPB application at the level of local budgets, as well as the results of a pilot project on the methodology of comparative analysis of efficiency of budget programs.
The Project and the Ministry of Finance have suggested that the procedures of public finance reporting and accounting at the national and local levels be unified. To this end, they have developed a standard program classification of expenditures and crediting of local budgets, which is fully in line with the structure of program classification at the State budget level.
Approving the proposed changes will make it possible for the first time to keep local budget records by program in the PPB format in full conformity with the State budget. Also, unifying budget classifications would enable the budget process to be automated at all levels through the development of the appropriate software.
Unifying and automating the approaches to the formation of both the State and local budgets will improve the transparency of the budget process and strengthen controls over the management of budget funds.
In addition, the approval of the new classification will provide an opportunity to start using it as of 1 January 2014 with the introduction of a fully functional planning and execution of PPB-based local budgets.
The meeting’s participants supported the new approaches and recommended that the appropriate amendments should be made to all documents used in the budget process.
At the meeting, the Project presented the results of the pilot project on the methodology for a comparative analysis of the efficiency of budget programs.
This methodology was developed by the MFSI-II experts in collaboration with the Ministry of Finance and disseminated among all experiment participants. The methodology provides for a formula-based approach to evaluating the efficiency of budget program execution. The Project ran a pilot project with the methodology using annual reports on the execution of budget program passports for four local budgets. The test’s results have proven the effectiveness of the methodology for evaluating budget programs.
The meeting participants approved the materials presented and emphasized that the introduction of such a methodology will make it possible to impartially analyze budget program execution efficiency in general as well as the individual tasks within them. It will provide a toolkit for top officials to make informed managerial decisions when allocating budget funds. This, in turn, will lead to improved transparency and efficiency in the planning and execution of PPB-based budgets.
Glyanec