Mongolia shows improvement in public finance management
Ulaanbaatar, October 12, 2021 – Mongolia’s public financial management has improved, but further reforms are needed in some areas to reach international best practice standards, recently
Conclusions of the World Bank assessment.
The recently completed Public spending and financial accountability (PEFA) report, which assessed the performance of Mongolia’s public finance management system against international benchmarks, concluded that Mongolia performed well in terms of access to public information, the process of preparing the budget, integrity of financial data and external audit. In the application of international accounting standards, fiscal risk management, medium-term budgeting and the use of performance assessment to improve public service delivery, further reforms are needed to strengthen fiscal discipline, ensure that resources are allocated as planned and improve service delivery, the report found.
“Public Spending and Fiscal Accountability provides an excellent basis for Mongolia to measure its progress in improving its public finance management,” noted Andrei Mikhnev, World Bank Country Director for Mongolia. “The current report will also be used to assess the success of our current programs supporting effective governance in Mongolia. and in the design of future programs.”
“The European Union and Mongolia have a broad and long-term partnership. Report demonstrates Mongolia’s commitment to further improve public finance management,” noted Designated Ambassador Axelle Nicaise, Head of the European Union Delegation to Mongolia. “The EU will continue to support Mongolia in its public financial management reform programme, also under our budget support programme.”.
Mongolia has gradually undertaken reforms to strengthen fiscal discipline and the public finance management system, the report notes. The first phase of reforms between 2003 and 2008 established the basic elements of the system, including strengthening internal controls, cash management, accounting and reporting. The second phase of reforms between 2008 and 2011 included improvements in fiscal policy, budget planning, and the decentralization of roles and resources to subnational governments. More recently, Mongolia has pursued a number of initiatives aimed at improving macro-fiscal management and public service delivery.
The report assesses the progress of reform over the past five years. Of the 31 indicators in the assessment framework, 12 indicators show improvement, 13 indicators are unchanged and three have deteriorated.
The most significant gains since a 2015 assessment were in budget credibility, predictability and control of budget execution, revenue administration processes, budget publication processes, cash recording and debt and payroll checks. Comprehensiveness and transparency, policy-based budgeting, accounting and reporting, and external review and audit were elements of public financial management that remained relatively consistent over the years. time.
“The World Bank commends the institutions involved in the progress made to improve public financial governance. noted Alma Kanani, World Bank Governance Practice Lead for East Asia and the Pacific. “It is very good to see that the government’s continued commitment to reform is producing results.”
The evaluation was made possible through funding from the EU-funded Mongolia Governance Strengthening Project. The publication of the report coincides with a planned review and update of the public financial management reform strategy and action plan, and the assessment will provide an important input into the design of future reforms aimed at further strengthening fiscal governance and public finance management.
For more information, please visit: www.worldbank.org/mongolia
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