Mongolia’s public financial management has improved, but further reforms are needed in some areas to meet international standards of good practice, a recent
World Bank assessment results.
The recently completed Public expenditure and financial responsibility (PEFA), which assessed the performance of Mongolia’s public financial management system against international benchmarks, concluded that Mongolia had performed well in terms of access to public information, the process budget preparation, financial data integrity and external audit. In applying international accounting standards, managing fiscal risks, medium-term budgeting and using performance appraisal to improve public service delivery, further reforms are needed to strengthen fiscal discipline, ensure resources are allocated as planned and improve service delivery, the report found.
“Public expenditure and financial responsibility The assessment provides an excellent basis for Mongolia to measure its progress in improving its public financial management â, said Andrei Mikhnev, World Bank Country Director for Mongolia. âThis report will also be used to assess the success of our current programs to support effective governance in Mongolia. and in the design of future programs. ”
“The European Union and Mongolia have a long-term and broad partnership. The report demonstrates Mongolia’s desire to further improve the management of its public financesâSaid Ambassador-designate Axelle Nicaise, head of the European Union delegation in Mongolia. “The EU will continue to support Mongolia in its public financial management reform program, also with our budget support programâ.
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 of 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 carried out a number of initiatives to improve 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 evaluation 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 over budget execution, revenue administration processes, budget release processes, cash flow recording, and debt and payroll checks. Completeness and transparency, policy-based budgeting, accounting and reporting, and external review and audit were elements of public financial management that have remained relatively consistent over the course of the period. time.
“The World Bank congratulates the institutions involved in the progress made to improve the governance of public finances. said Alma Kanani, World Bank governance practices manager for East Asia and the Pacific. âIt is very good to see that the government’s continued commitment to reform is bearing fruit.
The evaluation was made possible by funding from the EU-funded Mongolia Governance Strengthening Project. The report’s release coincides with a planned review and update of the PFM reform strategy and action plan, and the assessment will provide an important input into the design of future reforms to further strengthen fiscal governance and public finance management.