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Budget transparency in Serbia at the level of the global average

Serbia has made moderate progress and is in 59th place out of 120 countries in the international Open Budget Index (OBI) survey with 46 points out of a possible 100, which ranks it among countries with "limited budget transparency".

An improvement of six points compared to the previous survey (from 2019). it is almost exclusively a consequence of the practice of adopting the final accounts of the budget that was finally established. In contrast, serious weaknesses, especially concerning the possibility of the public influencing the budget, have still not been resolved, Transparency Serbia stated.

With a score of 32, Bosnia and Herzegovina is the only country among those included in the survey rated worse than Serbia. Slovenia is the most transparent, with a score of 66, Croatia has a score of 64, and Albania has a score of 52. The average score in the world this year is 46.

The research showed that the final account needs improvements to make visible the differences between the original estimates of expenditure, income and debt and their execution at the end of the year (and not only concerning the budget after rebalancing), as well as the differences concerning the original macroeconomic forecasts. The poor rating was influenced by the fact that in the observed year (budget for 2021), the fiscal strategy was not adopted on time, by the budget calendar, and because the half-yearly report on the execution of the budget is still not published.

Serbia has the worst score, only two out of 100, in the area of ​​public participation in budget creation. The world average is 14. Of the countries in the region, Albania has six points, and Bosnia and Herzegovina has nine. At the same time, Croatia, with nearly 17, is a shade above the world average.

The scores for Serbia are above the world average only in the supervision category (54), although that score is also in the "limited budget openness" range. The relatively good score in this category was decisively influenced by the comprehensiveness of the audits performed by the State Audit Institution (83 out of a possible 100 points), while parliamentary supervision, where the score is 39 out of a possible 100, needs to be significantly strengthened.

In order to improve such a poor rating, the research recommended that Serbia introduce and test a mechanism for engaging the public and civil society in budget formulation, but also for monitoring the implementation of the budget, among other things, through the organisation of public hearings in the Parliament.

To increase the rating of budget openness, apart from respecting the budget calendar, it is also necessary for the Government to start preparing a half-yearly report on budget execution following international standards. The National Assembly should more actively monitor the performance of the budget it approved, the impact of new laws on public finances, the implementation of SAI recommendations, and discuss the Fiscal Strategy and analysis of the Fiscal Council. Certain recommendations also refer to the improvement of audit reports and the scope of information presented in the Civic Budget.

The OBI 2021 survey showed that the National Assembly of Serbia insufficiently supervises the budget's planning and execution (score 39). The Parliament should discuss the budget policy to improve the ratings before the Government adopts the budget proposal. The survey particularly emphasised the need for the Government to consult the Parliament before redistributing budget funds between individual users through transfers to current budget reserves and from budget reserves because, currently, the Government disposes of as much as four per cent of the total budget in this way. The research found that during a year, a significant part of these funds changes the purpose and the beneficiary compared to the approved budget. No appropriate explanations and criteria are available.

According to global findings, the COVID-19 pandemic did not have lasting effects on reduced budget openness, and some countries have even improved their systems, thanks to the increased digitisation of information. The average rating of budget transparency in the world has increased by more than 20 per cent since 2008, while the rating recorded by Serbia after ups and downs is the same as in the initial year of the survey.

The Open Budget Survey is the world's only independent, comparative, and fact-based instrument that uses internationally accepted criteria to assess public access to budget information, real opportunities for public participation in budget preparation and the role of budget oversight institutions such as the National Assembly, the State Audit Institution and the Fiscal Council in Serbia.

The Washington-based International Budget Partnership (IBP) established the methodology and first conducted a budget openness survey in 2006. The goal is for citizens around the world to better understand budget processes and gain the ability to influence how public funds will be collected and spent. In cooperation with IBP, the survey is conducted every other year by organisations independent of the Government (in Serbia, it is Transparency Serbia). Two independent experts verify these findings, and the government representatives get the opportunity to point out possible omissions, after which the final results are composed.