Deputy Minister: Armenia moves to program budgeting from 2019

ArmInfo. Armenia has been  moving to program budgeting since 2019. Amendments to the Law on the  Budget System and a package of accompanying laws were made at an  extraordinary meeting of the National Assembly of the Republic of  Armenia on December 13.

Presenting the draft amendments, Atom Janjugazyan, Deputy Minister of  Finance of the Republic of Armenia, stressed that from 2019 the draft  state budget will be presented in the format of program budgeting.  Responsibility for the implementation of each individual program will  be borne by the appropriate authority. 

When implementing long-term programs in the package on the state  budget, information will also be presented in which the detailed  characteristics of these projects should be presented. In particular,  it is about the timing of the implementation of budget programs,  their impact on the state budget, and expectations for the next few  years.

Another change, according to the deputy minister, concerns accounts  of state non-profit organizations in commercial banks of the country.  The bill, Jianjugazyan continued, proposes to transfer these accounts  from commercial banks to the accounts of the State Treasury. Thus,  more serious mechanisms will be established to control these funds.  The same situation will be extended to joint-stock companies with  state participation.

It should be noted that as early as August 13, 2015, the Armenian  government approved the Strategy for transition to program budgeting.  The German Society for International Cooperation (GIZ) and the United  States Agency for International Cooperation (USAID) assisted in the  development of the Strategy for the transition to program-targeted  budget construction.

On March 31, 2016, the Armenian government approved a program of  actions to transition to the program budgeting system, which will  record not only financial indicators, but also non-financial,  results-oriented indicators. "The expenditures of the state budget  will be considered in terms of quantity, quality, time intervals.

Nevertheless, on July 17, 2017, during a press conference, Armenian  Minister of Finance Vardan Aramyan stated that Armenia will switch to  program budgeting not earlier than 2019. He promised that the budget  of Armenia for this year will be fully built on the basis of this  principle. As the minister pointed out, effective use of budget funds  is an important problem, especially in the context of limited  budgetary resources. 

Program budgeting, he said, if properly implemented and applied, can  be the convenient tool that will allow under these conditions to  determine priorities in the allocation of budgetary resources and to  achieve the maximum effectiveness of planned costs. At the same time,  the head of the Ministry of Finance pointed out the risks associated  with the fact that the development of the necessary competencies for  a full transition to the system of program budgeting will not be  achieved in the scheduled time. And this, in turn, is fraught with  the fact that, even after the introduction of the system, the maximum  level of efficiency of building the budget system of the country,  which the Finance Ministry claims, will not be received, he noted.