ArmInfo. The terms of projected budget capsulation transition starting with 2018 will be observed in Armenia. This was stated by Vardan Aramyan, the Minister of Finance, in his interview to ArmInfo.
According to the Minister, the effective utilization of budget sets is an important problem, especially under the conditions of limited budget resources. The projected budgeting , according to him, in the case of its proper implementation, could become that right tool giving an option to define the priorities while allocating budget resources and to reach maximum efficiency of expenditures planned.
The idea of transmission to target-projected approach of budget formation, according to Aramyan, was initiated not today or yesterday. The implementation of the system is already under process - at the National Assembly of Armenia the presentation of expenditure items of the budget is being carried out for all the entities separately in a programmed format. " This means, that each and every expenditure unit will be reviewed from the point of its quantity and quality," Aramyan described. As the Finance Entity Head accentuated, during last 6-7 months he personally pays a special attention to the estimation of costs and expenses of given entity according to appropriate Key Performance Indicators, which will allow to analyze the efficiency of any activities, as well as the level of targets implementation.
At this stage the main goal of Finance Ministry activities is to make managing personnel to use new approaches in building the new financial system of the country. The accent , according to Aramyan, should be relocated from the demand for assets needed to implement state functions, to the issue of results the state will obtain from budget expenditures, i.e, after all, to understanding the goals that executing agencies ask the money for, and the results that the public will get for that money in the end. " We should step by step go for the new model of communication of the Ministry with partners, and that communication should not be restricted with discussions on if the employees salary was calculated properly and so on. It is preferable to have a justification of such given number of personnel and the added value generated," the Finance Minister if Armenia said.
At the same time, as of today, Armenian Finance Minister however sees the risks related to the fact that the development of competences necessary for the full transition to the projected budgeting system, will not be reached within the terms set forth. And that, in its turn, may cause the situation when the maximum level of efficiency that Ministry of Finance stands for, will not be reached. To reach the maximum efficiency of the policy mentioned, it is very important to have the public participation and public access, and more exactly - public control. "Every entity should be reportable in its work. For example, the Ministry of Finance should be reportable to the people for every single penny spent, for the foreign debt increase, for the paths and approaches of this debt management. Only after implementation of such approaches and culture of cooperation with the public any essential results in respect to budgeting efficiency could be reached," he summarized.
As it was informed earlier, in 2018 Armenia will fully switch to a program budgeting system. 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.