Transparency of Government Reporting (AL0061)

Component I: Open Government to Increase Transparency in Government Reporting and
Improve Accessibility to Information
The policy objective of this activity is to guarantee a public finance system that promotes
transparency, accountability, fiscal discipline and efficiency in the management and use of public
resources to improve the quality of service delivery and economic development.
COMPONENTS I: OPEN GOVERNMENT TO INCREASE TRANSPARENCY IN
GOVERNMENT REPORTING AND IMPROVE ACCESSIBILITY TO INFORMATION
Leading institution Ministry of Finance and Economy
Other steakholders Government The Prime Minister's Office, the Ministry of Europe and Foreign
Affairs, Public Procurement Agency, Public Procurement
Commission, the High State Control, INSTAT, the General
Directorate of Taxation and the General Directorate of Customs
Civil society,
private sector
Status quo or problem / issue being
addressed
The vision of the PFM reform strategy is to guarantee a system of public
finances that promotes transparency, accountability, fiscal discipline and
efficiency in the management and use of public resources for the provision
of improved services and economic development
In the first half of 2018, MoFE launched the Mid-Term Review (MTR)
of the 2014-2020 Public Finance Management Strategy. The MTR's
objectives are to identify progress, achievements, challenges and gaps to
plan the next agenda and SMART approach to PFM reform.
The mid-term evaluation report of the PFM strategy contains a brief
description of the methodology followed, the progress of each component
of the pillar strategy during the years 2014 to the first half of 2018;
addressing the recommendations issued by international evaluation
reports; setting priorities for each pillar as well as describing a new
framework for revision of the strategy.
The Ministry of Finance, in the framework of Public Finance Management
(PFM) activities, fulfilling budget activities
/ documents that are criteria and required by the Open Budget Index (OBI)
so that the information on the budget is published on time, easily
accessible and understandable to the citizens, has undertaken to continue
further the progress on Budget Transparency.
Transparency is one of the eight basic principles of "Good Governance".
According to the OECD, budget transparency is defined as "full disclosure
of all relevant budget information in time and systematically".
Transparency in public finances is a key element of governance, which
leads to macroeconomic and fiscal stability, and determines higher rates
of economic growth. In addition, it helps to improve the efficiency of
16
public spending, while the increase of non-transparency leads to the
reduction of fiscal discipline.
The Ministry of Finance has paid attention to the transparency of the
budget, placing it in one of its priorities, materialized in the 2014-2020
Public Finance Strategy.
Lack of budget transparency leads to: lack of availability of required
information, lack of public information, reduction of citizens' confidence
in how public funds are spent, etc. Problems also arise when there is a lack
of publication of the monitoring reports, mid-year report, year-end report,
"Citizens Budget", which is a simple language pamphlet that illustrates the
main aspects of the annual budget, which should published on time and of
course, understandable to citizens.
However, despite the measures taken in this context, Albania, according
to the "Open Budget Survey 2015" report, is among the countries that had
declined in the state budget transparency, ranked first in the region, with
a score of 38 points 100 possible. In addition, it is necessary to further
advance with the improvement and increase of Budget Transparency.
Main objective / Purpose of the
policy
The policy objective of this activity is to guarantee a public finance
system that promotes transparency, accountability, fiscal discipline
and efficiency in the management and use of public resources to
improve the quality of service delivery and economic development.
OGP challenge affected by this meaure Improving
public
services
More
efficient
management
of public
resources
Increas
e
public
integrit
y
Increasing
corporate
accountabilit
y
Creating a safer
community
X X X
It is important in order to improve: Transparenc
y
Responsibilit
y
Citizen Participation Technology and
Innovation
X X
Measurable and
verifiable
achievements to
accomplish this
measure
Result
Indicators
Output
Indicators
Responsible
Institution
New or
continued
engagement
from the 2016-
2018 action
plan
Start
Date
End Date
1.1 Establish a
comprehensive
statistical system
covering the needs of
budgetary and semibudgetary entities.
1. Improved
statistical
system
2. The
standard skid
model
Drafting of
National
Government
Accounts
according to
International
Methodologi
es (ESA
INSTAT Continuous
engagement
2014 2022
1.2 Creating
standardized
information
17
1.3 Creating
alternative methods
for gathering
information
1. New
methods
developed
for the
exchange of
data
3. Standard
formats /
models
4. Report on
approved
results
2010 and
GFS 2014)
1.4 Integration of
Additional
Information on the
Treasury System
(AGFIS)
1.5 Integration into
New Templates for
Exchange of
Information
1.6 Compare the
results and approve
new information
1.7 Drafting a
detailed statement of
fiscal risks and
inclusion in the
budget
documentation
Statement of
Fiscal Risks
MFE Continuous
engagement
2014 2022
1.8 Monitor public
institutions regarding
the implementation of
FMC requirements
FMC
applications
applied
All budget
units will
use the
Internal
Financial
Control
requirement
s to improve
the internal
control
system and
to achieve
the
objectives
and results
MFE Continuous
engagement
2014 2022
1.9 Implementation
of FMC funds in
public sector entiti

I. Open Government to Increase Transparency in Government Reporting and Improve Accessibility to Information

Language as it appears in the commitment: [1]

Main Objective: The policy objective of this activity is to guarantee a public finance system that promotes transparency, accountability, fiscal discipline and efficiency in the management and use of public resources to improve the quality of service delivery and economic development.

Milestones:

• Establish a comprehensive statistical system covering the needs of budgetary

and semi-budgetary entities.

• Creating standardized information
• Creating alternative methods for gathering information
• Integration of Additional Information on the Treasury System (AGFIS)
• Integration into New Templates for Exchange of Information
• Compare the results and approve new information
• Drafting a detailed statement of fiscal risks and inclusion in the budget documentation

• Monitor public institutions regarding the implementation of FMC requirements

1.9 Implementation of FMC funds in public sector entities

Start Date: 2014

End Date: 2022

Context and Objectives

This commitment is linked to Albania’s 2014–2020 Public Finance Management (PFM) [2] and seeks to make the country’s public finance system more transparent and efficient. According to an interviewed specialist from the Institute of Statistics (INSTAT), Albania’s legal framework on statistical infrastructure is partly in line with the European Statistics Code of Practice, and classifications are in line with EU standards. Albania adopted a five-year program on official statistics for 2017–2021 in February 2017 but does not yet have a detailed action plan. Also, INSTAT’s budget and staffing are insufficient to fully implement the EU acquis in statistics. [3]

The Ministry of Finance and Economy (MoFE) facilitates public access to budget data. The has established a “Transparency Portal” on local finances on its website, and publishes a variety of important budget-related documents to its website as well. According to the International Budget Partnership’s 2017 Open Budget Survey, [4] Albania scored 50 out of 100 possible points on budget transparency (slightly higher than the global average). [5] Since 2017, the MoFE has prepared and published a Mid-Year Report. [6] Furthermore, some progress has been made on raising awareness on managerial accountability, piloting external audit manuals in line with international standards, and establishing quality control measures. However, several institutions do not fully implement the public internal financial control (PIFC) legislation, and the rate of implementing internal and external audit recommendations remains low. [7]

This commitment includes a variety of activities that could help INSTAT close some of the gaps between the legislation and statistical practices in the Statistical System of Government Financial Statistics (GFS). This could help build a more transparent and independent statistical system that produces timely and reliable GFS data. It could also help bring Albania in line with EU standards, like the EU’s European System of National and Regional Accounts (ESA 2010). [8] The commitment is relevant to the OGP value of access to information by seeking to improve transparency of government statistics in the implementation of internal control systems and the effective management of public funds. The milestones are verifiable. For example, one can check whether a statistical system has been established, additional information on the Treasury System has been integrated, and if detailed statement of fiscal risks has been drafted.

According to a 2017 Public Administration Reform (PAR) report, there is need to improve transparency and comprehensiveness of budget reporting and scrutiny in Albania. [9] This commitment could help build a more transparent and independent statistical system that produces timely and reliable GFS data. It could also help bring Albania in line with EU standards, like the EU’s European System of National and Regional Accounts (ESA 2010). [10] During the ongoing monitoring of the Financial Management and Control (FMC) staff on the evaluation of internal control systems for 2018, it is noted that institutions have already created the necessary conditions for effective control with all its constituent elements, but there are some problems in the FMC system. These include the risk management process, lack of accurate documenting of the work-flow processes, and lack of written procedures concerning the reporting form within institution and subordinate units. [11] Milestones 1.7–1.9, if fully implemented, could contribute to improving the performance in the implementation of an internal FMC system. However, given the lack of detailed performance indicators for the milestones, the commitment’s overall potential impact is considered minor.

Next steps

The improvement of government statistics, the implementation of internal control systems, and the effective management of public funds could provide an important foundation for greater accountability. For effective implementation of this commitment, the IRM researcher recommends that the MoFE makes information on institutional innovations and lessons learned available on Albania’s OGP website. Moving beyond the current action plan, the IRM researcher recommends the following:

• Publish open data about the government statistics on Albania’s OGP website through an “open data” window;
• Publish information about the performance of financial internal control systems, including public institutions' financial data;
• Provide formal opportunities for the public to engage in the budget process in order to develop a more structured citizen engagement budget; and
• Provide actions and tools to measure the citizen’s satisfactory on the public service delivery.

[1] For the complete text of this commitment, see: “The Open Government Partnership Fourth Open Government National Action Plan for Albania 2018–2020”, Open Government Partnership, 10 January 2019, https://www.opengovpartnership.org/wp-content/uploads/2019/01/Albania_Action-Plan_2018-2020_EN.pdf.

[2] “Albania Public Finance Management Strategy 2014–2020”, Republic of Albania Ministry of Finance, December 2014, https://financa.gov.al/wp-content/uploads/2017/09/Albanian_PFM_strategy_2014-2020-1.pdf.

[3]2 Vjollca Simoni, specialist at Institute of Statistics (INSTAT), interview by IRM researcher, 17 July 2019.

[4] “Open Budget Survey 2017”, International Budget Partnership, January 2018, https://www.internationalbudget.org/wp-content/uploads/open-budget-survey-2017-report-english.pdf.   

[5] “Open Budget Survey 2017: Albania”, International Budget Partnership, https://www.internationalbudget.org/wp-content/uploads/albania-open-budget-survey-2017-summary.pdf.

[6] See: https://financa.gov.al/raporti-i-mes-vitit-mbi-zbatimin-e-buxhetit-2018/.

[7] “Commission Staff Working Document: Albania 2018 Report”, European Commission, 17 April 2018, https://ec.europa.eu/neighbourhood-enlargement/sites/near/files/20180417-albania-report.pdf.

[8] “About ESA 2010”, Eurostat, European Commission, https://ec.europa.eu/eurostat/web/esa-2010.

[9] “The Principles of Public Administration: Albania”, SIGMA, OECD, European Commission, November 2017, http://www.sigmaweb.org/publications/Monitoring-Report-2017-Albania.pdf .

[10] Ibid.

[11] Data collected from the questionnaire fulfilled by the Ministry of Finance and Economy staff. This refers to the 2018 assessment report on the functioning of the FMC system in the public institutions.

1. Open Government in order to Increase Transparency of Government Reporting and Improve Accessibility to Information

Substantial:

This commitment focused on improving and implementing internal procedures and methodologies for financial management and control including a standardized and comprehensive statistical system, integrating information into the Treasury’s system, drafting statements of fiscal risks, and monitoring the implementation of financial management and control in public institutions. 

For Milestones 1.1-1.6: The government self assessment states that in 2019 INSTAT successfully developed data exchange systems aiming to create a sustainable statistical system for General Government Units. Ministry of Finance and Economy (MFE) representatives said it improved the compilation of National Accounts from 50 percent in 2018 to 75 percent in 2019, in accordance with European and international standards. [1] The EU has reported that progress has been made on alignment with ESA 2010 standards but compliance can be further improved. [2] Ministry representatives said that by the end of the implementation period, it was still testing the data exchange system it created which aims to establish a sustainable statistical system for the General Government Units. [3] The COVID-19 pandemic has led to the postponement until December 2021 of a project by the EU’s State Secretariat of Economic Affairs (SECO) that would further assist Albania in producing government finance statistics. [4]

For Milestone 1.7, 1.8, and 1.9: The government self assessment states that it published fiscal risk assessments for the annual budget in 2019 and 2020. Regarding the implementation of financial management control systems, the self assessment states that five public institutions were monitored for which an official letter was prepared with the relevant findings and recommendations for improvement.

Although not part of the commitment, the MFE said 149 government officials received training on the role and importance of implementing financial management instruments, and that the ministry developed and published a citizen’s budget guide with training provided to 25 CSOs. [5] This guide aims to provide better understanding of the entry points for CSOs in the budget framework and budget cycle, as well as methods and tools for analyzing and monitoring budget data.