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.