Introduce program-based budgeting to improve transparency, effectiveness, and citizen-focused performance monitoring in Yerevan’s municipal finance system (AMERV0007)
Overview
At-a-Glance
Action Plan: Action plan – Yerevan, Armenia, 2025 – 2028
Inception Report: Not available
Commitment Start: Nov 2025
Commitment End: Mar 2028
Institutions involved:
- Yerevan Municipality
- "Union of Community Financiers" NGO
Primary Policy Area:
Primary Sector:
OGP Value:
- Access to information
- Civic Participation
- Public Accountability
- Technology and Innovation for Transparency and Accountability
Description
Commitment ID
AMERV0007
Commitment Title
Introduce program-based budgeting to improve transparency, effectiveness, and citizen-focused performance monitoring in Yerevan’s municipal finance system
Problem
Despite legal requirements for community budgets to be based on five-year development programs, Yerevan’s municipal budget documents lack clear and measurable performance indicators. This makes it difficult to evaluate the effectiveness of public spending — specifically, whether expenditures are delivering meaningful results for the community. Without non-financial indicators such as outcomes or quality measures, it is challenging for both internal stakeholders and the public to assess how well municipal resources are being used. The current system does not adequately link budgeting to policy outcomes or service delivery results, leading to possible inefficiencies and missed opportunities for strategic planning. Citizens have limited visibility into the impact of budgetary decisions, weakening public trust and civic oversight. Program-based budgeting — which ties financial inputs to clear objectives and measurable results — is needed to enhance transparency, accountability, and performance in municipal financial management.
Status quo
Program-based budgeting has been partially introduced in Yerevan through the annexed formats of the Medium-Term Expenditure Framework (MTEF). Some progress has been made: the municipality has developed expenditure programs based on its strategic vision, with defined goals, expected outcomes, and performance indicators. However, this practice is not yet fully institutionalized across all budgetary processes. Annual budgets are still largely input-based, and performance indicators are limited in scope and quality. They rarely include non-financial measures such as service quality or citizen satisfaction. As a result, public spending remains difficult to evaluate in terms of effectiveness and impact. Automation tools to support program-based budgeting are also lacking, and staff capacity in performance budgeting methodologies is still developing.
Action
The commitment entails the full implementation of program-based budgeting in Yerevan Municipality. It includes preparing the 2026 annual budget draft using the program budgeting format, developing and deploying specialized software to automate budgeting processes, and drafting the 2027 annual budget fully aligned with the new methodology. The process will be supported by capacity building, automation of related procedures, and enhanced performance indicators. Expected results include improved transparency, efficiency, and accountability in municipal financial management, with public access to detailed spending outcomes and service quality evaluations.
How will the commitment contribute to solving the public problem described above?
This commitment will directly address the inefficiencies and lack of transparency in municipal budgeting by linking expenditures to clear objectives and measurable outcomes. By implementing program-based budgeting supported by digital tools, it will improve financial planning, monitoring, and reporting processes. Expected outputs include detailed, publicly accessible budget documents, performance indicators, and service quality assessments. Outcomes will be greater transparency, enhanced accountability, and more effective resource allocation, ultimately leading to better public services and increased citizen trust.
What long-term goal as identified in your Open Government Strategy does this commitment relate to?
This commitment aligns with the long-term goal of enhancing transparency, accountability, and efficiency in municipal governance as outlined in Yerevan’s Open Government Strategy. By institutionalizing program-based budgeting, the commitment supports sustainable financial management, improved public trust, and strengthened civic engagement. It contributes to building an open government culture where resource allocation is transparent, results-driven, and responsive to citizen needs.
Primary Policy Area
Digital Governance, Fiscal Openness, Social Accountability
Primary Sector
Cross-sectoral, Public Services (general)
What OGP value is this commitment relevant to?
| Access to information | Because it ensures that budget and performance data are published in clear, accessible formats, enabling the public to understand how funds are allocated and what results are achieved. |
| Civic Participation | By providing transparent, results-based information, the commitment empowers citizens to engage in discussions about budget priorities and service quality. |
| Public Accountability | The commitment links spending to measurable outcomes, allowing both officials and citizens to evaluate performance and hold the municipality accountable for results. |
| Technology and Innovation for Transparency and Accountability | It includes the development of software tools to automate and modernize budgeting processes, improving transparency, data accuracy, and real-time reporting. |