Improve Glass Account System (MN0030)

Status quo or problem addressed by the commitment: Activities to ensure budget and financial transparency have an important impact on the implementation of the Law on Glass Account (2014) and all government organisations are now beginning to their budget spending’s more transparent to the public. Despite this achievement, there is a public suspicion stating that government agencies are hiding their budget spending by dividing their expenses over 5 million on the actual budget spending. This it is necessary to reduce the transaction transparency threshold to MNT 1 million for government organisations. Main Objective: Increase transparency of the budget and financial activities Brief Description of commitment (140 character limit): Improve and refine indicators for measuring the budget and financial information transparency of government organisations. While strengthening response mechanisms to respond to complaints and feedback of citizens and civil society organisations.

9. Promoting glass account system

Commitment Text:

Improve and refine indicators for measuring budget and financial information transparency of government organizations. While strengthening the government's capacity to respond to complaints and feedback of citizens and civil society organizations.

Status quo or problem addressed:

Activities aimed at ensuring budget and financial transparency have had an important impact on the implementation of the Law on Glass Account (2014), and all government organizations are now beginning to make their budget spending more transparent to the public. Despite this achievement, there is public suspicion regarding government agencies hiding their budget spending by dividing their expenses over 5 million on the actual budget spending. Because of this, it is necessary to reduce the transaction transparency threshold to MNT 1 million for government organizations.

Main Objective: Increase transparency of the budget and financial activities

Milestones:

9.1. Promote an updated and improved online system for the Law on glass account on a regular and continuous basis.

9.2. In addition to the transaction information for the spending above 5 million in the budgets and finance, the government should upload information about decisions and main agreements in relation to this transaction.

9.3. Research and develop a mechanism for community members to monitor, report, and follow-up on spending of their community.

Responsible institution: Central Government Authority responsible for Budget and Finance

Supporting institutions: All regulators of budget, Units implementing the project 'Citizens monitor budget' NGO Network, NGOs for Audit and Monitoring, MNB, Mongolian Journalism Association MNCCI

Start date: 30 June 2016

End date: 30 June 2018

Context and Objectives

The Mongolian Parliament passed the Law on Glass Accounts in July 2014, which entered into force in January 2015 and requires all government agencies and legal entities with state involvement to make budgetary information available to the public.[Note95: Law of Mongolia on Glass Accounts, available in Mongolian at: http://www.legalinfo.mn/law/details/10497, and in English at: http://www.iaac.mn/old/pdf/law_en/8_on_glass_accounts.pdf.] Article 6.4.4 requires government agencies to disclose publicly-funded procurement contracts above 5 million MNT (~USD $2,100) in order to comply with the law. However, government budgets in Mongolia remain opaque with little public oversight. Notably, in its 2017 Open Budget Survey, the International Budget Partnership found that Mongolia provides the public with limited budget information and few opportunities to engage in the budget process.[Note96: International Budget Partnership, Open Budget Survey 2017 for Mongolia, available at: https://www.internationalbudget.org/wp-content/uploads/mongolia-open-budget-survey-2017-summary-english.pdf.]

This commitment seeks to make the online Glass Accounts system more open and responsive to the public. More specifically, the government plans to upload information on decisions and main agreements in addition to the transactions themselves, and to develop a mechanism for community members to monitor, report, and follow up on spending in their communities. In addition, the commitment plans to reduce the threshold for disclosing publicly-funded procurement contracts from 5 million to 1 million MNT. The commitment builds off Commitment 3.3.1.3 from the previous action plan, which created the integrated Glass Accounts system of the state budget. While Commitment 3.3.1.3 received a 'starred' rating in the IRM’s Progress Report, the IRM’s End of Term Report found that the government had still not disclosed social benefits for public servants, performance reports for government-funded projects, or non-budgetary income such as charities by the end of the first action plan period.[Note97: Independent Reporting Mechanism , Mongolia End of Term Report 2014-2016, https://www.opengovpartnership.org/wp-content/uploads/2001/01/Mongolia_EOTR_2014-2016.pdf, pg. 13.]

The publication of additional information on contract agreements and the reduction of the reporting threshold from 5 million to 1 million MNT makes the commitment the commitment relevant to the OGP value of access to information. The commitment includes implementation activities that are mostly verifiable, such as the creation of the feedback mechanism and the inclusion of publically- funded transactions over 1 million MNT. However, it is not entirely clear what type of 'decisions' and 'main agreements' regarding the transactions will be uploaded to the online system.

Additionally, while the commitment calls for the development of a mechanism, to 'monitor, report, and follow up on' community spending, it does not provide accountability obligations for government agencies to respond to complaints or feedback received. Therefore, the specificity is marked as medium. Publishing additional information to the Glass Accounts system would be a much-needed improvement to budget transparency in Mongolia, while the creation of the feedback mechanism would give citizens greater oversight for the allocation of government funds, particularly at the local level. Lowering the limit of the reporting threshold is also important because many daily transactions for local government authorities are far below 5 million MNT, and there is mounting public suspicion that government agencies are 'dividing their expenses' to hide spending above 5 million MNT. However, the commitment’s activities (particularly the feedback mechanism envisaged in milestone 9.3) are worded vaguely, and therefore it is unclear how they will change business as usual regarding the current opaqueness in budgetary information in Mongolia. Therefore, the potential impact is marked as moderate.

Completion

To comply with the Law on Glass Accounts, government agencies publish their budgetary plans and performance reports to the Glass Account Portal http://www.shilendans.gov.mn (in operation since 2015). While government agencies continue to update their information on the Glass Account Portal on a monthly basis, the type of information available on the Portal has not changed since the previous action plan period. Additionally, the government has not developed an efficient mechanism for citizens to monitor, report, and follow up on the information available in the Portal, nor has the reporting threshold been lowered to MNT 1 million.

The IRM asked the Cabinet Secretariat to provide information on the mechanism for community members to minor and report on spending, the percentage of compliance with the Glass Account system among government agencies. However, the Cabinet Secretariat did not respond to this request. For more details, see Section IV: Methodology and Sources. Therefore, the implementation of this commitment is assessed as having not started at the end of the first year of the action plan period.

Next Steps

The IRM recommends carrying this commitment forward to the next action plan, but with greater clarity on which information on transactions will be published to the Glass Account Portal. The commitment should also provide greater detail on how the proposed feedback mechanism will function, such as the procedures for submission of questions on spending, complaints about the misuse of funds, and the obligations of government officials to respond to these public inquiries.

9. Promoting glass account system

Commitment Text:

Improve and refine indicators for measuring budget and financial information transparency of government organizations. While strengthening the government's capacity to respond to complaints and feedback of citizens and civil society organizations.

Status quo or problem addressed:

Activities aimed at ensuring budget and financial transparency have had an important impact on the implementation of the Law on Glass Account (2014), and all government organizations are now beginning to make their budget spending more transparent to the public. Despite this achievement, there is public suspicion regarding government agencies hiding their budget spending by dividing their expenses over 5 million on the actual budget spending. Because of this, it is necessary to reduce the transaction transparency threshold to MNT 1 million for government organizations.

Milestones:

9.1. Promote an updated and improved online system for the Law on glass account on a regular and continuous basis.

9.2. In addition to the transaction information for the spending above 5 million in the budgets and finance, the government should upload information about decisions and main agreements in relation to this transaction.

9.3. Research and develop a mechanism for community members to monitor, report, and follow-up on spending of their community.

Responsible institution: Central Government Authority responsible for Budget and Finance

Supporting institutions: All regulators of budget, Units implementing the project “Citizens monitor budget” NGO Network, NGOs for Audit and Monitoring, MNB, Mongolian Journalism Association MNCCI

Start date: 30 June 2016

End date: 30 June 2018

Editorial Note: This is an abridged version of the commitment text. For the full commitment text from the Mongolian National Action Plan, see: https://www.opengovpartnership.org/wp-content/uploads/2017/05/Mongolia-NAP2-Final-Eng_0.pdf

Commitment Aim

This commitment aimed to make the online Glass Accounts system more open to the public, including publication of decisions and contracts. The commitment also specified the intention to lower the threshold for disclosure of payments and contracts, and to develop a mechanism for community members to monitor, report, and follow up on spending in their communities.

The Law on Glass Accounts entered into force in January 2015 and requires all government agencies and legal entities with state involvement to make budgetary information available to the public.

Status

Midterm: Not Started

To comply with the Law on Glass Accounts, government agencies published their budgetary plans and performance reports to the Glass Accounts Portal http://www.shilendans.gov.mn (in operation since 2015). While government agencies continued to update their information on the portal on a monthly basis, the type of information available on the portal had not changed since the previous action plan period (Milestone 9.1).

Similarly, at the midterm, the government had not developed an efficient mechanism for citizens to monitor, report, and follow up on the information available on the portal, nor had the reporting threshold been lowered to MNT 1 million (Milestones 9.2 and 9.3).

In the first half of 2017, the Open Society Forum (OSF), a CSO active in the area of budget transparency, conducted monitoring of the implementation of the Law on Glass Accounts for municipal and aimag governments, and some selected state-owned enterprises. [55] According to the OSF’s monitoring report, implementation was sufficient until the end of the first half of 2016. [56] However, according to the report, implementation was weaker in the latter half of 2016 and this was attributed to the change in government resulting from the 2016 parliamentary election.

For more information, please see the IRM 2016-2017 Progress Report. [57]

End of term: Limited

Did It Open Government?

Access to Information: Marginal

Public Accountability: Marginal

The commitment did not result in the publication of additional information on decisions and contract agreements on the Glass Accounts Portal. It also did not see a lowering of the reporting threshold to transactions under MNT 1 million, and thus such transactions remained undisclosed. Key government commitment holders did, however, release a promotional video to encourage citizens to engage with the system, and also provided directions on the use of a feedback and complaints mechanism. Though limited in scope, this represents a marginal improvement in citizen access to government-held information.

While the milestone lacked specificity as written and the real effectiveness of the mechanism remains unclear, the government’s framing of the public-facing feedback and complaints mechanism in practice introduces a clear obligation on government to respond to citizen complaints and feedback. As a result, this commitment has also contributed to a marginal improvement in public accountability.

Carried Forward?

The commitment is not included in Mongolia’s third action plan.