Transparency of the State Budget (AM0029)

Issue subject to regulation: Currently, citizens of the Republic of Armenia have the opportunity to become familiar with the structure of the State Budget of the Republic of Armenia and the estimated and actual expenditures in accordance with functional classification via the online electronic interactive budget posted on the websites of the Government of the Republic of Armenia and the Ministry of Finance of the Republic of Armenia. The disadvantage of the system is that even though it provides users with the above-mentioned information on the State Budget of the Republic of Armenia, it is not built upon the “open data” principles. The system does not provide users with an opportunity to download the information and process it for own purposes.; Main objective: Besides the expenditure part, improvement of the system of interactive electronic budget will provide an opportunity to interactively show not only the estimated revenues, but also the actual revenues through sources of generation, to make the search for particular data possible by applying relevant advanced instruments (for example, the distribution of expenditures of the State Budget among state bodies of the Republic of Armenia, etc.), as well as to make the information machine-readable for further processing by users. It will ensure that the information on the State Budget of the Republic of Armenia is user-friendly and will improve transparency of information on actual expenditures and collected revenues of the State Budget of the Republic of Armenia.; Brief Description of commitment: Improvement of transparency of the State Budget based on the “open data” principle. OGP challenge addressed by the commitment: Improvement of public services, Enhancement of public integrity; Relevance to OGP values: Interactive online presentation of the revenue and expenditure items of the State Budget through the application of the “open data” principle contributes to increase in accessibility and transparency, through the use of innovation and technologies.; Ambition: Application of the “open data” principle will allow making the State Budget of Armenia more accessible and understandable for analysts, journalists and citizens. The system will allow writing a comparative analysis of the budget expenditure, finding consistent patterns and identifying the problems. In the long run, the instrument will allow planning more effectively on the basis of fact-based analysis.

3. Interactive budget: Open Data principle

Commitment Text:

Title: More Interactive budget: Ensuring transparency of the State Budget applying the Open Data principle

Besides the expenditure part, improvement of the system of interactive electronic budget will provide an opportunity to interactively show not only the estimated revenues, but also the actual revenues through sources of generation, to make the search for particular data possible by applying relevant advanced instruments (for example, the distribution of expenditures of the State Budget among state bodies of the Republic of Armenia, etc.), as well as to make the information machine-readable for further processing by users. It will ensure that the information on the State Budget of the Republic of Armenia is user-friendly and will improve transparency of information on actual expenditures and collected revenues of the State Budget of the Republic of Armenia.

The activities under this commitment are as follows:

1. Discussions with private companies and civil society aimed at clarifying the scope of activities (Oct 16 - Jan 17).

2. Drafting of the terms of reference and implementing procurement (Feb 17 - Jun 17).

3. Improvement of the interactive budget system based on the open data principle also with the option of presenting actual revenues according to the sources of generation thereof (Jul 17 - Jun 18).

Responsible institution: Ministry of Finance of the Republic of Armenia

Supporting institution(s): Staff of the Government of the Republic of Armenia

Start date: December 2016 End date: June 2018

Context and Objectives

Currently, the structure of the state budget and the estimated actual expenditures are published in accordance with functional classification via the online electronic 'interactive budget' tool available on the websites of Armenia’s electronic government^{[Note114: Electronic government of the Republic of Armenia, Interactive Budget, https://www.e-gov.am/interactive-budget/ ]} and the Ministry of Finance.^{[Note115: Ministry of Finance, Interactive Budget, http://minfin.am/en/page/interactive_budget/ ]} The 'interactive budget' is a visual tool, which with step-by-step clicking on specific budget categories, provides data on the relevant budget expenditures, including procurement contracts where applicable. The disadvantage of the system is that it is not built on 'open data' principles. The system does not provide users with an opportunity to easily find, download, process and re-use information, nor does it include information on budget income by source.

This commitment entails improvement of the interactive budget platform through providing downloadable data with a search and filter option. The intended results are improved accessibility and transparency of the state budget through online presentation of revenues and expenditures with possibility of analysis.

The commitment text specifies the main characteristics of the 'interactive budget' including possibilities to search by specific criteria, and downloading and processing data. However, it does not specify a detailed level of information on expenditures (e.g. the general expenditure article or the costs, the vendor, etc.). According to the representative of the NGO which provided the suggestion to include this commitment, the intended result was to open up the expenditure broken down to the cost lines incurred by state agencies.^{[Note116: Gharib Harutyunyan (Compass Research, Training and Consultancy Center NGO), interview by IRM researcher, 9 November 2017]}

The potential impact of this commitment is assessed as minor. The commitment provides for a new format of the budget data, while the relevant data has already been published in different formats through the interactive budget tool and budget reports. The main value added by the commitment is a more user-friendly and less time-consuming search of information. The system will allow publishing data within one day of reporting the spending to the Ministry of Finance.^{[Note117: Zhirayr Titizyan (Ministry of Finance), interview by IRM researcher, 15 November 2017]} The actual impact in terms of changes in practice would depend on the level of usage of the budget platform and subsequent public oversight.

Completion

At the end of the first year of implementation, the overall completion of the commitment was limited, although the first two activities have been completed. The discussion with private companies and civil society took place prior to the implementation period—that is, during the discussion of the third action plan. Throughout the implementation period, terms of reference have been drafted and the software was procured from the sole source. The vendor is LSOFT Ltd, which has already provided similar services to the Ministry of Finance. The contract was signed in August 2017 with a two-month delay as of action plan (due June 2017).^{[Note118: State procurement contract No RA MF 17/5, 29.08.2017, https://www.e-gov.am/procur_files/40772838-pg.PDF ]} The planned date of completion was end of December 2017 according to the ToR attached to the contract. The funding for this work was allocated from the state budget and comprises 4.8 million AMD. Although outside of the assessment period, most of the technical work was carried out by October 2017.

Next Steps

The commitment is planned to be completed on time. The IRM researcher recommends organizing a discussion of the test version of the budget platform with civil society and other stakeholders through a public presentation before finalization, to take into account comments and suggestions from users. CSOs interviewed noted that the term ‘interactive’ does not reflect the concept of the product and recommend changing the title to ‘visual’, as in this case the budget data does not provide any opportunity for feedback from the public.^{[Note119: Focus group discussion in Gyumri, 23 November 2017]} In the next action plan, the government could consider including a commitment on an interactive platform for public discussion of the budget in the planning stage, which would require both online and offline consultation tools and measures, including usage of online platforms, public discussions, and expert roundtables.

3. Interactive budget: Open Data principle

Commitment Text:

Title: More Interactive budget: Ensuring transparency of the State Budget applying the Open Data principle

Citizens of the Republic of Armenia have the opportunity to become familiar with the structure of the State Budget of the Republic of Armenia and the estimated and actual expenditures in accordance with functional classification via the online electronic interactive budget posted on the websites of the Government of the Republic of Armenia and the Ministry of Finance of the Republic of Armenia. The disadvantage of the system is that even though it provides users with the abovementioned information on the State Budget of the Republic of Armenia, it is not built upon the 'open data' principles. The system does not provide users with an opportunity to download the information and process it for own purposes. Besides the expenditure part, improvement of the system of interactive electronic budget will provide an opportunity to interactively show not only the estimated revenues, but also the actual revenues through sources of generation, to make the search for particular data possible by applying relevant advanced instruments (for example, the distribution of expenditures of the State Budget among state bodies of the Republic of Armenia, etc.), as well as to make the information machine-readable for further processing by users. It will ensure that the information on the State Budget of the Republic of Armenia is user-friendly and will improve transparency of information on actual expenditures and collected revenues of the State Budget of the Republic of Armenia.

The activities under this commitment are as follows:

1.Discussions with private companies and civil society aimed at clarifying the scope of activities (Oct 16 - Jan 17).

2.Drafting of the terms of reference and implementing procurement (Feb 17 - Jun 17).

3.Improvement of the interactive budget system based on the open data principle also with the option of presenting actual revenues according to the sources of generation thereof (Jul 17 - Jun 18).

Responsible institution: Ministry of Financeof the Republic of Armenia

Supporting institution: Staff of the Government of the Republic of Armenia

Start date: December 2016 End date: June 2018

Commitment Aim

This commitment entailed improving the existing interactive budget platform, which includes planned and actual expenditure, by providing downloadable data with search and filter options, as well as information on budget revenues. It intended to improve accessibility and transparency of the state budget through online presentation of revenues and expenditures with possibility of analysis.

Before the commitment’s adoption, the state budget and the estimated and actual expenditures were published via the online electronic “interactive budget” tool available on the websites of Armenia’s electronic government [Note19: Electronic government of the Republic of Armenia, Interactive Budget, https://www.e-gov.am/interactive-budget/ ] and the Ministry of Finance. [Note20: Ministry of Finance, Interactive Budget, http://www.minfin.am/hy/page/grafik ] This is a visual tool that provides data on the relevant budget expenditures, including procurement contracts where applicable. However, this information was not available in open data format. In contrast, the new interactive budget platform environed in this commitment would provide users the opportunity to easily find, download, process, and re-use information, and would include information on budget income by source.

Status

Midterm: Limited

At the end of the first year of implementation, the Ministry of Finance completed the first two activities of the commitment. The discussion with private companies and civil society took place prior to the implementation period—that is, during the development of the third action plan, in the framework of OGP Working Group meetings and discussions with the CSO that had proposed the commitment. [Note21: Zhirayr Titizyan (Ministry of Finance), interview by IRM researcher, 15 November 2017] Throughout the first year of implementation, the Ministry of Finance prepared the terms of reference and completed software procurement process. As a result, the ministry signed a contract with LSOFT limited liability company (LLC) in August 2017: [Note22: State procurement contract No RA MF 17/5, 29.08.2017, https://www.e-gov.am/procur_files/40772838-pg.PDF ] according to the Term of Reference (ToR) attached to the contract, the planned completion date for the budget platform software development was the end of December 2017. Although, after the midterm period, most of the technical work on platform software was carried out by the contractor by October 2017. For more information, see the Armenia IRM Progress Report 2016–2017. [Note23: IRM Armenia Progress Report 2016-2018 (Year 1), 03 Transparency of the State Budget, https://www.opengovpartnership.org/commitment/03-transparency-of-state-b... ]

End of term: Complete

In December 2017, the commitment-responsible official at the Ministry of Finance organized a discussion around the draft platform with interested CSOs and companies in order to improve the format of the information to be available, and the suggestions were taken into account when finalizing the platform. In late May 2018, the Ministry of Finance accomplished the testing and data input process and delivered the platform to National Security Service for approval, which is an ordinary procedure for government electronic platforms. [Note24: Zhirayr Titizyan (Ministry of Finance), interview by IRM researcher, 17 September 2018] However, the security checks took longer than expected, and the platform was not available online until late August 2018.

At the time of writing the report (September 2018), the platform was available at the webpage of the Ministry of Finance under the “State Budget” section. It provides the possibility to search and filter budget information by several criteria, including the state agency, functional classification section, group and class, functional program, economic classification, and the possibility to view related contracts. [Note25: Ministry of Finance, Interactive Budget, http://budget.minfin.am:82/ ] The results of the search can be downloaded in Excel format. In addition to the information provided by the existing “interactive budget” platform, the new platform provides supporting documentation for all spending, and includes spending of Project Implementation Units (PIU). The data on expenditures and revenues is updated on a daily basis. [Note26: Zhirayr Titizyan (Ministry of Finance), interview by IRM researcher, 17 September 2018] Budget revenues are also available with search options by agency, budget section, group, and account. Apart from revenues and spending, there is a page on budget deficits where the sources and calculations of deficit are presented in a table with a possibility for download.

In the section of spending, the contracts are presented in PDF format. However, the IRM researcher noticed that some of the PDF documents under the “Contracts” sections are in fact not the contracts themselves but the verification documents for the relevant spending (a one-page document including the name of the recipient, budget line, and amount), or signed invoices along with acceptance acts. [Note27: See, for example, randomly found verification documents: http://budget.minfin.am:82/xml/storage/43263812-sca43.pdf, http://budget.minfin.am:82/xml/storage/42259239-13015.pdf, and a link to invoice and acceptance act provided under “contract” section: http://budget.minfin.am:82/xml/storage/43050172-sca55.pdf ]

Did It Open Government?

Access to Information: Major

Although budget data was published in different formats before this commitment’s implementation, including through the existing interactive budget tool and quarterly budget reports, this commitment significantly improved the accessibility of the budget information as well as the scope of the information available to the public. In contrast to the existing graphical interactive budget, the accessibility of the information has been ensured in the new platform through the search and filtering options with the possibility to download. For example, users can download information on a specific state agency and/or budget line (e.g., education, housing, health), or compare planned and actual expenditure of various state agencies by type of cost (i.e., communication costs, representative costs, insurance costs). More detailed searches can also be carried out by selecting a specific functional class or program. For example, in the area of education, users can select higher education in the functional classification, and if needed, have further opportunities to select from a range of economic classification lines such as salaries, trip expenses, allowances, etc. The scope of the information has been enlarged to include purchase contracts or other verification documents, spending of PIUs, and extrabudgetary spending. In contrast to the quarterly budget reports provided in Excel format on the webpage of the Ministry of Finance, in the new platform, the information is updated daily.

The IRM researcher contacted CSOs working in the area of budget analysis and fiscal transparency, including CSOs participating in initial consultations and the meeting in December 2017 to provide feedback on the platform. Most were not aware of the platform at the time of writing the report, but indicated interest and found that the platform would be useful for their work. Specifically, it would aid in checking the actual spending of specific budget lines, updated daily, to analyze the expenditure in the areas of public interest. However, since there are no guidelines or tutorials on platform usage, users must have a basic understanding of the budget structure and try the platform several times to gain better understanding on how to use it.

The commitment has had a major contribution to improving the scope and mechanisms of the access to information on the budget. At the same time, there is a need to implement awareness-raising activities and disseminate the information on the platform through various channels to ensure its usage and impact in terms of better transparency and public oversight.

Carried Forward?

At the time of writing this report (September 2018), Armenia has not finished developing its fourth action plan. The IRM researcher recommends the government and other stakeholders to carry out public awareness-raising activities to ensure usage of the platform as well as to provide brief information on the platform and user guidelines on the platform page.

For Commitment detail, see Armenia End-Term Report 2016-2018.