GEO

Georgia’s program budget should be voted into law

07 November, 2013

Program budgeting is a results-orientated budgeting system, which, contrary to conventional budgeting, gives detailed costs of every activity and program rather than just the agency spending the money. This links the resources to be spent with the results to be achieved.

In 2011 the government committed to a results-orientated system of budgeting for government agencies. We believe that it is impossible to hold government agencies accountable for failing to achieve the results specified in their budgets without such a results-orientated system of budgeting -- which is why the program budget should be voted into law along with the rest of the country’s budget.

Rather than moving towards more detailed budgeting, a comparison of the 2011-2014 (supposedly program) budget and the 2010 (conventional) budget shows a steadily decreasing level of detail in the program activities specified by government agencies.

Although Georgia has had a program budget provision for three years now, the country’s 2014 budget, as was the case with the previous budgets, is going to be voted into law without its program budget chapter.

The program budget methodology of 2011 had set a three-year period for rearranging the country’s conventional budget along the requirements of the new format (by the 2014 draft budget). Within this period, the Ministry of Finance was meant to have detailed a performance measurement methodology and indicators of achievement to allow for an accurate estimate of results by budgeting agencies.

The Ministry of Finance states in its methodology that if the program budget chapter is approved by Parliament then it will allow for government agencies to be held responsible for failing to achieve their specified outcomes. The Ministry contends that it has not yet put the program budget chapter to vote because at the initial stage of program budgeting it is quite difficult to identify expected results and indicators of achievement with any appreciable degree of accuracy.

This is now the third year that the Georgian government has had the program budgeting provision and not used it. We believe that failure to apportion responsibility for outcomes prevents a results-orientated budgeting system from materialising – this encourages careless drafting of the budget and wastes taxpayers’ money. We believe that implementing agencies should immediately be held accountable for their outcomes. Failing this, the applicable legislation should set a timeframe within which this must happen.

Author: Mikheil Kukava