Budget Transparency (AL0045)

Transparency in public finances is a key element of the government, so that budget information published on time, be easily accessible and clear to citizens. This commitment further enhances macroeconomic and fiscal stability as well as higher rates of economic growth. In addition, it helps to improve the efficiency of public expenditure. Ministry of Finance has paid great attention to budgeting transparency, placing it on top of its priorities, materialized in Public Finance Strategy 2014-2020. Improving budget transparency through this commitment will be achieved by: • Preparing all necessary documents required for budgeting, in such a format that their structures are clear and comprehensive for citizens; • Publishing on time these documents; • Publishing in the website of the Ministry of Finance and in the media, all the activities conducted by the Ministry, including hearings for budget mid-term programming to achieve the active participation of representatives from various organizations, including citizens, NGOs, civil society, from central and local government at all levels. Status quo or problem addressed by the commitment: Ministry of Finance, within the activities of the Public Finance Management (PFM), fulfilling activities/budget documents which are criteria and required by OBI (Open Budget Index), so that budget information published on time, be easily accessible and clear for citizens, in order to proceed with further progress on Budget Transparency. Transparency is one of the 8 basic principles of "good governance" (Good Governance). According to the OECD budget transparency is defined as "full disclosure of all relevant information on time and budget in a systematic way." Transparency in public finance is a key element of the government, which leads further towards fiscal and macroeconomic stability, as well as determinant for higher rates of economic growth. In addition, it helps to improve the efficiency on public spending, while growth in non-transparency leads to the reduction of fiscal discipline. The Ministry of Finance has paid a very great attention to transparency in budgeting, placing one of its priorities, materialized in Public Finance Strategy 2014-2020. Lack of budget transparency leads to: lack of information to the public, increasing the confidence of the citizens on how public funds are spent, etc.. Problems also occur when there is a lack of published reports monitoring report mid-year report of the budget, "Citizen Budget" which is a pamphlet written in simple language (available also online), which illustrates the main aspects of the annual budget, which must published in time and of course, understandable for citizens. Albania, according to the "Open Budget Survey 2015" results among countries that have seen a decline in the transparency of the state budget, with 38 points out of 100 possible. In addition, it is necessary to advance further the enhancement of budget transparency. Main Objective: The basic purpose of this commitment is to increase budget transparency by: • Preparing all necessary documents required for budgeting, in a format such that their structures be clear and comprehensive to citizens. • Publishing on time these documents. • Online publication on the MoF and the media of all the activities developed by the Ministry. • Active participation of representatives from various organizations based citizens, NGOs, civil society, government units in central and local level.

2. Budget transparency

Commitment Text:

Transparency in public finances is a key element of the government, so that budget information published on time, be easily accessible and clear to citizens. This commitment further enhances macroeconomic and fiscal stability as well as higher rates of economic growth. In addition, it helps to improve the efficiency of public expenditure. Ministry of Finance has paid great attention to budgeting transparency, placing it on top of its priorities, materialized in Public Finance Strategy 2014-2020.

Improving budget transparency through this commitment will be achieved by:

· Preparing all necessary documents required for budgeting, in such a format that their structures are clear and comprehensive for citizens;

· Publishing on time these documents;

· Publishing in the website of the Ministry of Finance and in the media, all the activities conducted by the Ministry, including hearings for budget mid-term programming to achieve the active participation of representatives from various organizations, including citizens, NGOs, civil society, from central and local government at all levels.

Responsible institution: Ministry of Finance

Supporting institution(s): Partners Albania, AIS, etc.

Start date: 2016 End date: 2018

Editorial Note: For full commitment text, please refer to https://www.opengovpartnership.org/wp-content/uploads/2001/01/Albania_NAP3_ENG.pdf.

Context and Objectives

The 2015 International Budget Partnership report for Albania noted that the Government provides the public with minimal budget information and has performed poorly in engaging the public in the budget process. To improve transparency and participation, the report suggests publishing a number of budget documents, including a Year-End Report and Mid-Year Review, and a 'Citizen Budget.' It recommends presenting more information on the classification of expenditures. To improve participation, the report recommends the government establish credible and effective mechanisms for capturing a range of public perspectives on budget matters. The Government has recently started to take steps to improve budget transparency. To a significant extent, the recent improvements are owed to the reforms and obligations Albania is carrying out in the framework of the European Union integration process, specifically in the domain of public finance management.

The government is looking to increase the amount of budget documents published and is seeking to expand civic participation by creating the opportunity for citizens and other stakeholders to participate in the preparation of budget documents.

The commitment clearly indicates the measurable deliverables with regards to the preparation and publication of specific budget documents. However, it is not clear what Ministry of Finance (MoF) activities will be published and it is also not clear how meetings with civil society will take place and what the level of involvement would be. Overall, the specificity of this commitment is medium.

If fully implemented, this commitment could have a moderate potential impact for increasing budget transparency. The government is taking important steps not only to publish budget information but to make it understandable for citizens. Furthermore, budget consultation with interest groups has historically taken place after budget design, and during parliamentary procedures for adoption. This consultation procedure often takes place on tight deadlines, allowing limited time for change. Involving interest group participation during the design process would enhance their influence in the decision-making process.

Completion

The 2016 budget, the 'Citizen Budget' and the list of public investments under the medium-term budget program have been published. While no information on the progress of implementation was presented by the government point of contact for this commitment, IRM investigation finds that this commitment has been implemented on time.

Although, the commitment intended to involve civil society and other interest groups in the budget design procedure with the Ministry of Finance, this did not occur. Rather, public consultation took place during the parliamentary procedure of budget adoption, which has been the government’s usual practice.

All necessary documents related to the draft budget are prepared and are online at MoF’s website.^{[Note50: MoF, http://www.financa.gov.al/al/raportime/buxheti/buxheti-ne-vite. ]} A 'Citizen Budget' was prepared and published for 2016 and 2017, and draft budgets have been published on the MoF website.^{[Note51: MoF, http://www.financa.gov.al/al/raportime/buxheti/buxheti-i-qytetarit. ]} The Ministry has also published gender budgeting for the medium-term budgetary program.^{[Note52: MoF, http://www.financa.gov.al/al/raportime/buxheti/buxhetimi-gjinor. ]} Monitoring reports for each ministry are published on the MoF’s website on a quarterly basis.^{[Note53: MoF, http://www.financa.gov.al/al/raportime/buxheti/raporte-monitorimi/viti-20171507096197 ]}

For the 2016 budget, the Government failed to deliver on the mid-year review which was recommended by the annual Open Budget report.^{[Note54: http://www.internationalbudget.org/budget-work-by-country/findgroup/group-data/?country=al. ]} However, it remains unclear whether and to what extent the published information has reached the public and target stakeholders. Businesses and media have reacted to various budget issues (mostly tax-related and business climate) only during the parliamentary review of the budget. There are no methods or publicly available tools in place to measure the extent of information usage by stakeholders.

Despite the improvements and the completion of this commitment’s stated activities, civil society monitoring for 2016^{[Note55: OSFA Report, http://www.osfa.al/publikime/fondacioni-prezanton-analizen-e-projektbuxhetit-2016-dhe-monitorimin-e-buxhetimit-te-prioriteteve-te-integrimit-ne-projektbuxhetin-2016. ]} and 2017^{[Note56: OSFA Report, http://www.osfa.al/publikime/fondacioni-prezanton-analizen-e-projektbuxhetit-2017-dhe-monitorimin-e-buxhetimit-te-prioriteteve-te-integrimit-ne-projektbuxhetin-2017. ]} suggests there is still room to improve the government’s performance, particularly in relation to the consultation of the draft budget. Specifically, for the 2017 draft budget which falls within the timeline of this commitment under the action plan, experts underlined that the Government did not comply with the legal deadline to submit the draft budget on 15 October 2017, thus reducing the time available for consultations with civil society and interest groups at the parliamentary standing committees.^{[Note57: Monitoring of Public Finances: Analysis of 2016 draft budget, page 4, https://www.osfa.al/sites/default/files/osfa_monitorimi_i_projekt-buxhetit_2017_0.pdf. ]} Since the consultation did not involve civil society and other interest groups in the budget design procedure, the IRM researcher could not code overall completion any higher than substantial.

Early Results

Although the actions taken to implement this commitment note a positive development for budget transparency in Albania, they are not enough to ensure active participation of citizens. Firstly, they do not guarantee that easy-to-digest information on the budget reaches citizens at large. None of the participants in the focus group conducted by the IRM researcher was aware of the 'Citizen Budget' brochure published on the MoF website.^{[Note58: IRM Focus Groups with youngsters and participants from remote areas, August – September 2017.]} Secondly, participation of civil society and other interest groups in the parliamentary standing committees reviewing the draft budget remains limited. Furthermore, civil society experts suggest that they need to be consulted earlier than the time draft reaches the parliament in order to provide for an additional consultation channel. Often, interest groups are not consulted at the parliamentary hearings on the draft budget or their suggestions are ignored.^{[Note59: Java News, http://www.javanews.al/dhomat-e-tregtise-kunder-paketes-fiskale-nuk-u-thirrem-per-konsultime/. ]}

Next Steps

The IRM researcher suggests a follow up to this commitment consisting of proactive measures encouraging participation and actions to meaningfully involve citizens and interest groups in the design of the budget. Furthermore, it is important to address the recommendations of the Open Budget report for Albania,^{[Note60: 2015 Open Budget Survey, http://www.internationalbudget.org/wp-content/uploads/OBS2015-CS-Albania-English.pdf. ]} particularly those related to participation and oversight:

· In both law and practice, ensure the legislature is consulted prior to the virement of funds in the Enacted Budget and the spending of contingency funds that were not identified in the Enacted Budget; and

· Hold legislative hearings on the state of the economy that are attended by the executive and open to the public.

Additionally, the government and civil society should invest more efforts in improving the usability of the budget information which largely depends on the capacities of final recipients (public) and the intermediaries helping the public to better understand the budget—media, CSOs, other interest groups. In this context, the following measures would help the impact of budget transparency:

· Introduce easy-to-digest information in schools and higher education courses;

· Carry out 'understanding budget' public campaigns; and

· Train journalists on state finances and budget related matters.

2. Budget transparency

Commitment Text:

Transparency in public finances is a key element of the government, so that budget information published on time, be easily accessible and clear to citizens. This commitment further enhances macroeconomic and fiscal stability as well as higher rates of economic growth. In addition, it helps to improve the efficiency of public expenditure. Ministry of Finance has paid great attention to budgeting transparency, placing it on top of its priorities, materialized in Public Finance Strategy 2014-2020.

Improving budget transparency through this commitment will be achieved by:

• Preparing all necessary documents required for budgeting, in such a format that their structures are clear and comprehensive for citizens;
• Publishing on time these documents;
• Publishing in the website of the Ministry of Finance and in the media, all the activities conducted by the Ministry, including hearings for budget mid-term programming to achieve the active participation of representatives from various organizations, including citizens, NGOs, civil society, from central and local government at all levels.

Responsible institution: Ministry of Finance

Supporting institution(s): Partners Albania, AIS, etc.

Start date: 2016 End date: 2018

Editorial Note: For full commitment text, please refer to https://www.opengovpartnership.org/wp-content/uploads/2001/01/Albania_NAP3_ENG.pdf.

Commitment Aim:

This commitment aimed to improve transparency and public participation in the process of drafting the state budget. The intention was to increase access to and the amount of budget documents as well as to make it understandable for citizens. These measures came in the framework of EU accession reforms and also in response to findings of the International Budget Partnership, which recommended in its 2015 Open Budget Survey that Albania publish a number of budget documents, including a year-end report and mid-year review, and a “Citizen Budget”. [6]

Status

Midterm: Substantial

By the midterm, this commitment was substantially completed. A Citizen Budget for 2016 and 2017 and the list of public investments foreseen by the medium-term budget program (a three-year forecast of the state budget) had been published on time. Gender budgeting (budgets prepared and analyzed from a gender perspective) for the medium-term budgetary program [7] and regular monitoring reports for each ministry were published on the Ministry of Finance (MoF)’s website on a quarterly basis. [8] Yet, the MoF did not involve civil society or other interest groups in the budget design process. Public consultation took place during the parliamentary procedure of budget adoption but not during the budget design.

End of term: Substantial

In 2018, the government continued the implementation of measures related to budget transparency, albeit to a lesser extent. A Citizen Budget for 2018 was published on the MoF website [9] while seven (out of 11) line ministries and nine independent institutions have published monitoring reports. [10] By the end of 2018, the MoF published the performance monitoring analyses that show how multiple institutions spent their budget for the first quarter of 2018, which is a step backward compared to the situation at the midterm. [11]

On 26 October 2018 the Minister of Finance announced the adoption of the 2019 draft budget by the Council of Ministers. [12] The MoF published the 2019 draft budget online in October 2018. [13] No information on public consultations was published and the IRM researcher could not track any event being carried out about the draft budget with interest groups.

Did It Open Government?

Access to Information: Marginal

Civic Participation: Did Not Change

Government action to increase budget transparency and public participation in its design has been uneven during the reporting period. While for the 2017 state budget the progress was substantial with few deficiencies in the public consultation element, in 2018 the progress has been slower. In fact, no draft budget or other “necessary documents required for budgeting” (as foreseen by the commitment) have been published by the Ministry of Finance in 2018. The draft budget for 2019 was adopted by the government at a session held on 26 October 2018, and the draft budget was subsequently published on the MoF website. Civil society monitoring [14]^{, [15]} suggests there is still room to improve the government’s performance, particularly in relation to the consultation of the draft budget. Besides, although the actions taken note a positive development for budget transparency in Albania, they are not enough to ensure active participation of citizens.

As a result, the changes brought about by this commitment can be described as marginal to the value of access to information only. This is because the commitment’s implementation did not increase public participation in the design phase of the budget for either 2018 or 2019, although it has offered some information that can enhance public understanding and help other stakeholders (e.g. media and business associations) to track budget implementation. Although a few CSOs have been referred to in the action plan as supporting institutions, the MoF has not involved them in the implementation of this commitment.

Carried Forward?

At the time of writing this report, the next action plan has not been published. The IRM researcher recommends that measures are included in the next action plan to ensure that participation and publication of budget documents are legally required. Moreover, the IRM researcher suggests the MoF should introduce proactive measures to encourage participation and meaningfully involve citizens and interest groups in the budget design. The MoF could also invest more efforts in improving the usability of the budget information.

[6] Open Budget Survey 2017 for Albania, International Budget Partnership, https://www.internationalbudget.org/open-budget-survey/results-by-country/country-info/?country=al

[7] “Infographic Gender budgeting for the medium-term budgetary program 2016-2018”, Ministry of Finance, http://www.financa.gov.al/wp-content/uploads/2017/12/infographic-budgeting-AL-1.pdf

[8] Monitoring reports of line ministries for 2017, Ministry of Finance, http://www.financa.gov.al/raporte-monitorimi-nga-ministrite-e-linjes-2017/

[9] “Citizen Budget for 2018”, Ministry of Finance, http://www.financa.gov.al/wp-content/uploads/2018/06/Buxheti_2018.pdf

[10] Reports available on the MoF website, http://financa.gov.al/raporte-monitorimi-nga-ministrite-e-linjes-2018/

[11] Analysis of institutions’ performance monitoring, http://financa.gov.al/monitorimi-4-mujori-i-pare-2018/

[12] Press conference by Minister Ahmetaj, http://oranews.tv/article/buxheti-2019-ahmetaj-rritje-pagash-edhe-perpunonjesit-e-burgjeve-e-diplomatet

[13] See http://financa.gov.al/projektbuxheti-2019/.

[14] OSFA Report 2016, http://www.osfa.al/publikime/fondacioni-prezanton-analizen-e-projektbuxhetit-2016-dhe-monitorimin-e-buxhetimit-te-prioriteteve-te-integrimit-ne-projektbuxhetin-2016

[15] OSFA Report 2017, http://www.osfa.al/publikime/fondacioni-prezanton-analizen-e-projektbuxhetit-2017-dhe-monitorimin-e-buxhetimit-te-prioriteteve-te-integrimit-ne-projektbuxhetin-2017