Transparent Public Funding System (GE0077)

Commitment 12: Increasing transparency of the public grant funding system

Administration of the GoG will, together with partner agencies, start in 2018 work on reforming the existing grant funding system of state/public institutions in order to ensure transparency and efficiency of the given sphere.

To date, Georgian legislation does not provide for general principles and procedures for allocation of grants by ministries and legal entities of public law. No uniform regulatory standard for allocation of grants by public institutions exists.

Under this commitment, standards of financing for public agencies will be established and detailed principles will be written out. Administration of the GoG will, together with partner agencies, draft amendments to the Law on Grants to be considered with stakeholders and will submit it to Parliament of Georgia befor the end of 2019.

Commitment 12: Increasing transparency of the public grant funding system
Lead Agency Administration of the GoG
Other Involved Actors Public Agency Parliament of Georgia, Ministry of Finance
Civil Society / Private Sector /International organization Civil Society Institute
Issues to be Addressed To date, Georgian legislation does not provide for general principles and procedures for allocation of grants by ministries and legal entities of public law. Additionally, a number of public institutions, including self-governments are not included in the public granting system.
One of the components of the present initiative implies regulatory establishment of basic standards and principles (including unbiased and participatory decision making, preliminary identmification and publication of selection criteria, avoidance of conflict of interest, process t6ransparency, etc.). These should be sufficiently clear for making the grant funding a reliable and transparent process. At that, according to these standard-principles, individual state agencies will have a possibility of a detailed arrangement of the process.
The initiative incidentally implies authorization of local self-government with the use of the grant allocation mechanism, which shall, in a number of cases, facilitate better fulfillment of functions, encouragement of inter-municipal initiatives, active citizen participation in this process and on-site encouragement of different initiatives.
Main Objective Reforming the existing system of grant allocation by the state/public institutions; increasing its transparency, accessibility and efficiency.

OGP Principles Transparency Accountability Civil Participation Technology and Innovation
   
Milestones to Fulfill the Commitment New or ongoing commitment Start date End date
Holding consultations with different public institutions, CSOs, and experts for drafting legislative amendments New December 2018 December 2018
Drafting amendments to the Law of Georgia on Grants. New December 2018 September 2019
Submission of the draft amendments to the law to stakeholders New September 2019 December 2018
Initiation of the draft amendments to the law in Parliament of Georgia. New December 2018 December 2018
Indicator The draft amendments to the law have been submitted to Parliament of Georgia

Commitment 12: Increasing Transparency of the Public Grant Funding System

Language of the commitment as it appears in the action plan:

“Administration of the GoG will, together with partner agencies, start in 2018 work on reforming the existing grant funding system of state/public institutions in order to ensure transparency and efficiency of the given sphere.

To date, Georgian legislation does not provide for general principles and procedures for allocation of grants by ministries and legal entities of public law. No uniform regulatory standard for allocation of grants by public institutions exists.

Under this commitment, standards of financing for public agencies will be established and detailed principles will be written out. Administration of the GoG will, together with partner agencies, draft amendments to the Law on Grants to be considered with stakeholders and will submit it to Parliament of Georgia before the end of 2019

To date, Georgian legislation does not provide for general principles and procedures for allocation of grants by ministries and legal entities of public law. Additionally, a number of public institutions, including self-governments are not included in the public granting system.

One of the components of the present initiative implies regulatory establishment of basic standards and principles (including unbiased and participatory decision making, preliminary identification and publication of selection criteria, avoidance of conflict of interest, process transparency, etc.). These should be sufficiently clear for making the grant funding a reliable and transparent process. At that, according to these standard-principles, individual state agencies will have a possibility of a detailed arrangement of the process.

The initiative incidentally implies authorization of local self-government with the use of the grant allocation mechanism, which shall, in a number of cases, facilitate better fulfillment of functions, encouragement of inter-municipal initiatives, active citizen participation in this process and on-site encouragement of different initiatives.”

Milestones: 

1. Holding consultations with different public institutions, CSOs, and experts for drafting legislative amendments
2. Drafting amendments to the Law of Georgia on Grants.
3. Submission of the draft amendments to the law to stakeholders
4. Initiation of the draft amendments to the law in Parliament of Georgia

Start Date: December 2018

End Date: September 2019

Editorial note: For the full text of this commitment, please see https://www.opengovpartnership.org/documents/georgia-action-plan-2018-2019/.

Context and Objectives

Currently, Georgia lacks uniform procedures for issuing governmental grants, despite an increased number of new government grant opportunities in recent years. [64] Without uniform regulations, individual agencies will provide grant funds based on internal procedures, which might differ greatly among agencies and projects. According to a representative of Transparency International (TI) Georgia, this ambiguity regarding grant applications can create a lack of transparency and corruption risks. [65]

This commitment, therefore, aims to introduce a national regulatory standard for issuing governmental grants. To do this, the Administration of Government will collaborate with stakeholders (such as public agencies, civil society organizations, and experts) to draft amendments to the Law of Georgia on Grants and introduce these amendments in Parliament. The preparation of the amendments in consultation with nongovernmental stakeholders makes the commitment relevant to the OGP value of civic participation.

This commitment consists of specific and verifiable steps, such as consulting stakeholders while drafting the amendments to the Law of Georgia on Grants and submitting the amendments to Parliament. However, the scale and scope of the consultations for the amendments are not entirely clear.

According to an interviewed TI–Georgia representative, introducing unified regulations could help provide municipal governments with the legal basis for issuing grants at the local level. That representative noted the regulations could possibly help reduce corruption associated with grant funding. [66] Furthermore, grant recipient stakeholders argued that a unified regulatory standard could improve the management and transparency of government spending for grants. [67] The introduction of the unified regulatory standard would be more reasonable if the government had a practice of providing grant opportunities to nonprofit organizations that work on social issues, for example, those regarding elderly persons, homelessness, and the environment. But currently, grant opportunities are available only for scientific research, educational scholarships, and start-up projects, which limits the scope of this commitment. The implementation of this commitment can be assessed as an important step forward in the overall governmental grant management system in Georgia. Thus, it is considered to have a moderate potential impact.

Next steps

Stakeholders and grant recipients assess the commitment as an important step toward improving the governmental fund system nationwide. Accordingly, the IRM researcher recommends continuing this commitment but strengthening it through the following recommendations:

• Add a tool for monitoring and evaluation (M&E) of the unified standard regulations. This tool could not only provide a unified M&E standard and guideline for public agencies that issue grants, but also enable grant recipients to monitor and evaluate subgrantees and report back to public agencies. The tool could also allow the Administration of the Government of Georgia and public agencies to create an internal control system, assess pre-award process, and ensure results through performance monitoring and cost-effectiveness analysis (and other criteria). Those parties could also use the tool to evaluate and identify shortcomings and provide evidence for successful projects.
• Stakeholders recommend creating a unified website that will serve as a repository for all the governmental grant opportunities and unified standard regulations. (This website cold include links to detailed information webpages.) Such a portal could strengthen the link to access to information. It would provide information on all governmental grant opportunities in one easily accessible portal with a user-friendly interface.

[64] Examples of public grant-funding opportunities include, but are not limited to, Enterprise Georgia, https://bit.ly/2LXzyGK; projects funded within Georgia’s Innovation & Technology Agency, https://bit.ly/2YSSLNu; and projects funded within the Agricultural and Rural Development Agency, https://bit.ly/2Sd6MDe.

[65] Giorgi Topuria, Senior Analyst at Transparency International–Georgia, interview with IRM researcher, 22 May 2019.

[66]Topuria interview, May 2019.

[67] Natia Goliadze, Chairwoman at Export Development Association and Head of Business Administration Department at the University of Georgia, interview with IRM researcher, 19 June 2019.

12. Increase transparency of public grant funding system

Theme III: More Effectively Managing Public Resources

Limited

The Administration of Government, in cooperation with the Civil Society Institute (CSI) prepared the first draft package of amendments to the Law of Georgia on Grants. However, due to the number of different laws that needed to be amended and the number of stakeholders involved (the Ministry of Finance, the Public Procurement Agency, the Ministry of Regional and Infrastructure of Georgia), the process was prolonged, and the bill was not finalized by the end of the action plan. [50]