Increased Transparency and Participation in State Budgeting (MN0061)

What problem does the commitment aim to address? Fiscal policy has an important effect on reducing the level of poverty and unemployment of Mongolian population. The Law on Budget stipulates following principles: "Ensure the completeness and accuracy when planning, approving and implementing the budget; implement proper financial and budget management; ensure transparency and responsibility". However, the transparency of the budget is not fully ensured, and violations related to the budget spending are revealed by the state audit. It is observed that the transparency of decisions related to capital budget projects, purchases and transactions above 5 million MNT is fragile. In order to increase the efficiency of spending budget funds, it is necessary to seriously discuss the efficiency and priority of the projects when the Parliament discusses the planning of new investment projects included in the current year's budget. Budget transparency plays an important role in improving fiscal responsibility. Therefore, it is necessary to improve the transparency of local budget planning, to release state budget information following the requirements of open data, and to reveal the priority information of new investment projects included in the current year's budget. In addition, there is a need to create a regulation to disclose the selection and financing of special funds, related decisions on purchases of state-owned companies exceeding 5 million MNT, and the decision to declare and dispose of state property.

What are the causes of the problem? Information on the efficiency and priority of new projects to be implemented with budget investment is not disclosed, and the Parliament does not pay enough attention to this issue when discussing the budget. Disclosure of state budget information following the requirements of open data, release of information on the priority of new investment projects included in the current year's budget, as well as the selection and financing of special funds' budgets, purchases of state-owned companies over 5 million MNT, the decision to declare and dispose of state property regulations are not reflected enough in the the relevant law.

What has been done so far to solve the problem? There are positive changes in the state budget law and legal environment, but it is observed that the transparency of local budget planning is not implemented according to the law. Disclosure of state budget drafts and presentation annexes following the requirements of open data, selection and financing of special fund budgets for glass accounts, need to disclose related decisions on budget procurement selection, financing, purchases of state-owned companies exceeding 5 million MNT, declare and dispose of state property, information on the efficiency and priority of new investment projects on glass account, all have witnessed little progress in this area.

What solution are you proposing? 1.Ensure the transparency of local budget planning (corroborate the implementation of relevant provisions of the Law on budget); 2.Following the "Regulations on establishing common standards and content of information to be posted on the website of the glass account" approved by Resolution No. 29 of 2016 by the Government of Mongolia, to disclose the annexes of the project and presentation of the current year's budget at national and local level following the requirements of open data; 3.Include provisions on the selection and financing of the special funds budget, and the disclosure of relevant decisions of state-owned companies on purchases of more than 5 million MNT in the law and regulations of the glass account. Incorporate regulations for information disclosure of the decisions to declare and dispose of state property; 4.Disclosure of information related to the priority of new investment projects to be implemented in the current year's budget; 5.The information related to the budget adjustment, including the reduction and increase of investment by the budget modification, to be issued as an appendix; 6.Increase citizen participation in the development, submission and approval of local budget projects.

What results do we want to achieve by implementing this commitment? The transparency of state and local budgets will increase, and budget planning and spending will become rational. This will contribute to directing the state budget to solve the country's developmental issues.

Milestones | Expected Outputs | Expected Completion Dates

Commitment 5.1. Improve budget transparency

5.1.1.Implement measures related to ensuring the transparency of local budget planning. | Budget general administrators will follow the Law on Budget and ensure budget transparency when planning and approving the budget of the province and the capital city. | 2024-2025

5.1.2.Include annexes of the project and presentation of the current year's budget at national and local level in the "Regulations on establishing common standards and content of information to be posted on the website of the glass account" approved by Resolution No. 29 of 2016 by the Government of Mongolia, and to follow the requirements of open data. | By including the relevant regulations in the "Regulations on establishing common standards and content of information posted on the website of the glass account", the information related to the budget project of the state and local government for the current year will become transparent and open. | 2024

5.1.3.Incorporate regulations on the procurement selection and financing of the special funds budget, disclosure of relevant decisions of state-owned companies on purchases of more than 5 million MNT, information disclosure of the decisions to declare and dispose of state property in the "Regulations on establishing common standards and content of information to be posted on the website of the glass account" approved by Resolution No. 29 of 2016 by the Government of Mongolia. | By including relevant provisions in the “Regulation on setting common standards and content of information posted on the web page of the glass account”, the activities related to the spending of special funds and the purchase of state-owned companies will become transparent and open. | 2024

5.1.4.Disclosure of information related to the priority of new investment projects to be implemented in the current year's budget. | Information about investment projects included in the budget will become open to citizens and voters. | 2024-2025

5.1.5.The information related to the budget adjustment, including the reduction and increase of investment by the budget modification, will be issued as an appendix. | In case of budget adjustment, the modified law draft will include transparent and open information of the reduction and increase of investment. | 2024-2025

5.1.6.Update the http://www.shilendans.gov.mn website in order to ensure coordination between the budget implementation and transparency systems, equal participation of parties, exchange of opinions, and development based on research. | The http://www.shilendans.gov.mn website will improve the coordination between the systems used to ensure budget implementation and transparency. The development of http://www.shilendans.gov.mn will be improved. | 2024-2025

5.1.7.Register and upload information related to foreign loan aid in the http://www.ODAMIS.mof.gov.mn system in detail, ensure coordination of fields, secure coordination of funding and operational results, disclose to the public and improve regulation of procurement procedures for projects. | Information related to foreign loan aid will be transparent and open. | 2025

Commitment 5.2.Increase citizens' participation in drafting local budgets

5.2.1.Take measures related to increasing the citizen participation in the drafting of local budgets. | Citizens are provided with opportunities and conditions to participate in the drafting of the local budget. | 2024-2025