Armenian Government approves action plan on transition to program budgeting system

The deputy minister promised that not only the financial but also non-financial result-oriented indices will be registered. "The state budget expenditures will be considered in terms of quantity, quality and time," he said.    

 

"The introduction of the given system is of much importance and it will make it possible to assess the efficiency of the budget expenditures, especially in the light of allegations about wasteful spending of budget funds," the prime minister said.    

 

To recall, Deputy Finance Minister of Armenia Pavel Safaryan said during the parliamentary hearings on October 30 that in 2018 Armenia will fully switch to a program budgeting system. He said that on August 13, 2015, the Armenian Government approved the strategy on 

transition to program budgeting. The document was elaborated with the support of the USAID and the German Society for International Cooperation (Deutsche Gesellschaft for Internationale Zusammenarbeit (GIZ). The deputy minister stressed that the work on the transition from the clause-by-clause state budgeting to program budgeting started in 2002. Huge work has been done and 15% of the state budget programs (25% of all expenditures) will have better key indices in 2016. The draft basic economic law of the country will be elaborated by the Supreme Council headed by the Prime Minister.  The Council will include the heads of all departments concerned, MPs, representatives of the Control Chamber and the Coordination Council. One of the key tasks of the Council will be to elaborate the legal framework. In 2017, an amendment related to transition to program budgeting will be introduced in the Law "On Budget System". In addition, a detailed action plan will be ready by February 2017. A working group will include members of the Government, Parliament, and Control Chamber.  It is envisaged to conduct institutional reforms in the executive power bodies and in the judicial system, as well as to prepare an e-database. According to the new model of the state budget formation, the budget is to be drafted on the basis of not only quantitative but also qualitative assessments of expenditures. So, the ministries will be able to adjust their future budget programs with due regard for the previously achieved results. The logic of budget drafting will also change. Moreover, the administrations of the ministries will have to gain financial knowledge to assess the efficiency of their programs and the efficiency of the new programs. In this light, nearly 5,000 specialists will be trained at the Training Center of the Armenian Ministry of Finance. The deputy minister said that the new system will enhance the efficiency of the budget and will make it more transparent.