Project description

Title: Support for the implementation of programme budgeting in the Armenian National Assembly and Control Chamber
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Armenia
Lead executing agency: The National Assembly and Control Chamber of the Republic of Armenia
Overall term: 2010 to 2011

Context

The introduction of programme budgeting in Armenia began in 2005 under the supervision of the Armenian Ministry of Finance. The Government of Armenia wants to move from traditional line-item budgeting to programme budgeting, the purpose of which is to increase efficiency and transparency regarding the use of public funds and hence boost their effectiveness. This is a cross-cutting undertaking as it affects most of the processes in the budget cycle and all government institutions and adjunct authorities, which must move to the new system and adapt to its requirements.

The Armenian Parliament itself, especially the MPs and the staff administering the Budgetary Committee, and the Control Chamber, are also affected, since they have to apply the new systems for assessing and scrutinising the budget. Neither institution is yet able adequately to implement the new structural, conceptual and operational requirements for carrying out their oversight and scrutiny functions appropriately.

Parallel to the ongoing introduction of programme budgeting, in the past few years the expertise of staff working in the parliamentary administration and of members of the Budgetary Committee and the Control Chamber has grown. It is not yet sufficiently developed, however, for them to provide comprehensive support for the constitutionally anchored task of parliamentary oversight of the budget or the exercise by the Control Chamber of its scrutiny function.

Objective

The skills and resources of the National Assembly and of the Control Chamber to support Parliamentary oversight and external financial scrutiny are strengthened as part of the introduction of programme budgeting.

Approach

The project supports Armenia’s National Assembly, and in particular the Budgetary Committee and the Control Chamber, by providing expert, strategic and organisational advice to experts and managers within both institutions as they implement programme budgeting.

Budgetary Committee. Staff working in Parliamentary administration and MPs on the Budgetary Committee are becoming familiar with the distinction between line-item budgeting and performance budgeting. They are drawing on experiences in programme budgeting, particularly in the German federal state of Hesse.

Control Chamber. Staff of the Control Chamber receive advice from colleagues at the Audit Office of the German federal state of Hesse.

The Armenian Control Chamber has been given a ground-penetrating radar (GPR) system to enable it to audit performance in road-building. Staff working for the Control Chamber are being trained to operate and maintain the equipment.

Advice from German experts in the fields of financial and Parliamentary administration and financial audit, study trips, workshops and training events are strengthening the skills resources and capacity of the MPs serving on the Budgetary Committee, other MPs, Parliamentary administration staff and the staff of the Control Chamber.

Results achieved so far

Budgetary Committee. In collaboration with the Budgetary Committee, a comparative analysis has been carried out of the budgetary format of the German federal state of Hesse and the existing Armenian state budgetary format. The aim was to establish similarities and differences and to devise a format that will ensure greater transparency and scrutiny. A study trip to Hesse consolidated the expertise gained, and the analysis has been presented to the Armenian Ministry of Finance as a proposed amendment to Armenia’s budgetary format.

During a study trip to Germany, Members of the Armenian Parliament held discussions with representatives of Hesse’s Ministry of Finance, its Audit Office, GIZ (until December 2010: GTZ) and BMZ on putting programme budgeting in Armenia on a sounder footing and on continuing collaboration on the introduction and implementation of programme budgeting.

After the study trip, experts from Hesse’s Audit Office and Ministry of Finance were invited to intensify their collaboration as part of the project. Using German expertise has contributed to, among other things, strengthening the skills of the experts and managers of the Control Chamber and the Budgetary Committee.

The visit by German colleagues led to a one-off round-table meeting of all three parties involved in the budgeting process. There was a frank discussion of the introduction of programme budgeting and of the difficulties, shortcomings and weaknesses associated with it.

The project is promoting further dialogue between the institutions involved in the budgetary process.

Control Chamber. The GPR system acquired for performance auditing in road-building enables the quality of road-building work to be assessed without the need for test-drilling, which would damage newly-built roads. The equipment is used for infrastructure assessment and anti-corruption purposes. Staff working for the Armenian Control Chamber have received in-service training from a German expert in the use, operation and maintenance of the GPR system and two members of the Control Chamber have received post-training accreditation. This gives the Control Chamber modern equipment for identifying defects in the execution of civil engineering projects that will make it possible to generate data admissible in legal proceedings.