Georgia’s Efforts to Promote Line Ministries’ Role in the Budget Process
Together with the Dutch National Academy of Finance and Economics (NAFE) we welcomed senior officials of ministries of finance in South East Europe at a regional conference held in January 2015. The aim of this conference was to share experience and identify good practice in strengthening the role of line ministries in the budget process. With NAFE, we aim to co-facilitate in-country meetings between ministries of finance and line ministries upon their request as follow up to the conference. We joined such meeting initiated by the Georgian Ministry of Finance on March 15.
The Budget Department of the Ministry of Finance of Georgia has been promoting cooperation with line ministry finance officials already for some time, i.e. since starting initial efforts to introduce Program-Based Budgeting (PBB) in 2009. Gradually, PBB has been rolled out to more line ministries and the methodology kept updated. Effective introduction of PBB has been connected with the success of overcoming a range of challenges linked to the coordination between the Ministry of Finance and line ministries, i.e. to bring top down budgeting more in line with bottom up planning. Coordination challenges have been identified, for example, with respect to the matching of policy making and budget preparation; the understanding of program outputs, outcomes and indicators; the costing of program activities; and the effective monitoring and evaluation of program execution.
To make the Medium-Term Budget Framework (MTBF) fully functional, several Georgian line ministries took a lead in strengthening their coordination with the Ministry of Finance. With the support of the Budget Department of the Ministry of Finance, they have established specialized working groups to ensure a more comprehensive approach. Those groups have been coordinated by senior finance officials of the line ministries (i.e. from the financial, budget or economic departments) and involve officials from the different policy units, delegates of other subgroups, and representatives of the Ministry of Finance.
To take stock of the progress made and the challenges ahead, Natia Gulua, Head of Budget Policy Division at the Ministry of Finance of Georgia, proposed a joint meeting, following the approach of the regional conference that she attended in Ljubljana in 2015. On March 15, 2016, the Academy of the Ministry of Finance hosted such meeting of 30 officials from all ministries. NAFE and the CEF co-facilitated the discussions that started with presentations from the Ministry of Finance and case studies on related processes in the Netherlands. During break-out sessions, participants elaborated a range of challenges they experience regarding the functionality of the MTBF, the rolling out of PBB, the internal fiscal coordination within line ministries, and the budget process in general.
Natia Gulua: «Sharing experience on the budget process, and on accountability and responsibility of two countries was very informative and useful for all participants. One of the main issues during the workshop was Public Finance Management Reform (implemented so far / planned in the near future) in Georgia. Also, the „world café“ discussion was very fruitful for better understanding existing challenges in this process. It helped participants to express their opinions in the group sessions, and to then share the key issues with each other. This workshop was very beneficial for the Ministry of Finance to see the readiness of the line ministries for the planned reforms.»
Participants expressed appreciation for the Ministry of Finance’s leading role in strengthening coordination processes, and shared a range of good practices. For example, they commended involving program managers in the working groups as good direction. Participants from ministries involved in the PBB and MTBF pilots put forward their good practice with sharing their initial experience with other ministries. And, the role of the e-budget system was emphasized in ensuring good coordination. Participants agreed to jointly keep developing the coordination process further to strengthen the performance-orientation and monitoring of programs, and to ensure that the annual budget process and MTBF function well.
The Georgian good practice will be incorporated in our efforts to support capacity development of finance officials across different ministries in South East Europe. We look forward to continue the good cooperation with NAFE and the Dutch Ministry of Finance, for example, in our upcoming Blended Learning Initiative on Strengthening Line Ministries’ Budget Preparation.