Fiscal Transparency Management in Theory and Practice: the Case of Kosovo

Abstract

In the framework of reforms envisaged in the Public Administration Reform (PAR), Kosovo aims to provide a modern Public Finance Management (PFM) system, in line with international standards and best practices. This will enable the efficient and effective functioning of all phases of Public Finance Management. As part of the joint dialogue between the Government of Kosovo and the European Commission (EC), in the meetings of the Special Group for PAR (GVRAP), financial support was provided through Sector Budget Support (SBS) from the funds of the Instrument of the European Union (EU) Pre-Accession Assistance (IPA). Currently, a sectoral budget support agreement for the first two pillars of the PAR is expected to be signed under IPA 2016. While the second sectoral budget support is also expected to be finalized for the PFM sector under IPA 2017. Initially, with Decision no. 105/2015, in September 2015, a Responsible Team (EP) was established for the drafting of the Strategy, in the composition of which were appointed representatives of all relevant actors of Kosovo governmental institutions. The team, with the support and expertise provided by OECD / SIGMA, initially analyzed the relevant assessment documents in the area of PFM like PEFA, SIGMA, TADAT and 2015 Report of the Office of the Auditor General (OAG). Based on the findings, four pillars and 12 strategy priorities have been agreed. Despite the results achieved, this analysis identifies many shortcomings that are needed to be addressed in order to increase fiscal transparency. Transparency should increase, inter alia, through increasing the role of Parliament in the budgetary procedure. In this context, we emphasize the need to increase the role of the Parliament on the basis of the following factors: a) increasing the parliament's ability to access important budget documents; b) increasing the role of parliamentary committees in budget control; c) Increasing parliament's capacity and opportunity for budget research and analysis; and d) enhancing the dynamics of political parties