Serbia remains among the countries with limited budget transparency

Serbia ranks 55th out of 125 countries in the Open Budget Index (OBI) with 51 points out of a possible 100, which labels it as the country with "limited budget transparency", according to Transparency Serbia.

Progress of five points compared to the previous survey (from 2021) was achieved solely due to the fact that the Fiscal Strategy was adopted on time, i.e. in accordance with the deadline from the Law on budget system.

The worst score, only two out of 100 possible points, Serbia recorded again related to public participation in the creation of the state budget. Although the world average in this area is not high (15), it is noticeable that Serbia lags behind the countries of the region in this regard (for example, Albania and Slovenia have 9 points, Croatia 17).

A significant number of international standards, when it comes to budget transparency, has been included through reforms over the last 25 years into the Law on the Budget System and accompanying regulations. However, in practice, their implementation shows that the mechanisms for planning and scrutiny over the budget are not used adequately – Transparency Serbia points out. As an example, we can cite situations when, immediately after the adoption of planning documents or even the budget for the next year, unexpected regulations are adopted that have a significant impact on the budget and the obligation of budgeting according to programs, the implementation of which is not at all the subject of the parliamentary debate on the final budget account. Also, the scope of use of the allocation from the budget contingency during the budget year calls into question the principle of parliamentary control of the executive power in Serbia.

Among the countries of the former Yugoslav Republic, Bosnia and Herzegovina scored worse than Serbia, with a score of 27, North Macedonia with a score of 35 and Montenegro with a score of 48. Croatia has improved compared to 2021 and with a score of 67 is now ahead of Slovenia which has 64 points (two less than in 2021). The global average score is 45.

When it comes to key budget documents, Serbia still does not publish a semi-annual report on budget implementation, which is necessary to enable greater budget transparency.

The survey showed that the draft budget should include more information on tax expenditures, performance, as well as planned public policies financed from the budget. The final account should be more detailed in presenting the discrepancy between planned and accomplished.

In order to increase the score in the area of public participation in the budget process, the Government of Serbia should introduce pilot mechanisms for both the process of budget preparation and monitoring of budget execution. It is also necessary to improve the legal framework and organize the process of public consultations on investments (capital projects) that will be financed from the republic budget, in which not only experience from other countries can be beneficial, but also from numerous cities and municipalities in Serbia.

The National Assembly has established the practice of holding public hearings on the draft budget and the final budget account, however, they are held immediately before the adoption of the budget, so that they have no real impact on the Assembly's decision on these acts.

Ratings for Serbia are above the world average only in the category of scrutiny (56), although this score is also in the range of "limited budget openness". The relatively good score in this category was crucially influenced by the scope of audits carried out by the State Audit Institution (83 out of a possible 100 points), while parliamentary oversight, with the score of 42 out of a possible 100, needs to be significantly strengthened.

The OBI 2023 survey showed that the National Assembly of Serbia insufficiently oversees both planning and budget execution processes. To improve the score, the Serbian Parliament should discuss the budget policy prior to government submitting a draft budget, which should arrive at least two months before the start of the budget year. One of the recommendations is that the government should consult the parliament before redistributing budget funds between individual beneficiaries through transfers to and from contingency fund, because currently the Government disposes with as much as 4% of the total budget in this way. The research found that during the budget year a significant portion of these funds changes its purpose and beneficiaries, contrary to the approved budget and that this is done without proper elaboration and criteria.

The Open Budget Research is the only global, fact-based independent, comparative and research instrument that uses internationally accepted criteria for assessing public access to budget information, the tangible possibilities of the public to participate in budget preparation and the role of budget oversight institutions such as, in Serbia, the National Assembly, the State Audit Institution and the Fiscal Council.

The Washington-based International Budget Partnership (IBP) established the methodology and conducted a budget openness survey for the first time in 2006. The goal is for citizens around the world to better understand budget processes and to acquire the opportunity to influence the cumulation and public expenditures. In cooperation with IBP, the survey is conducted every two years by organizations independent of the Government (in Serbia, that is Transparency Serbia). These findings are verified by two independent experts, and representatives of the Government are given the opportunity to point out possible faults, after which the final results are drawn up.