Treasury Performance Measuring and Monitoring in Kyrgyz Republic

Legislation regulating the Treasury’s activity Budget Code of Kyrgyz Republic. PFM Development Strategy for 2017-2019, approved by GoKR Resolution No.696, dated 22.12.2016. Instruction “On procedures of an authorized public body for forecasting and executing the budget, accounting and reporting” (GoKR Resolution No.488, dated August 16, 2017). Guidelines on organizing accounting in budget institutions (GoKR Resolution No. 224, dated May 16, 2011) as amended by the Order No. 97-P, dated June 29, 2017, of the Ministry of Finance of Kyrgyz Republic “On Approval of Guidelines on Accounting and Financial Reporting”. Order of the Ministry of Finance of Kyrgyz Republic “On drafting a Report on the Kyrgyz Republic Budget Execution Results for a Relevant Reporting Period”. Budget Classification, based on the PFS 2001 Law No. 72 “On Public Procurement”, dated 03.04.2015г.

Treasury Mid-term Action Plan to Implement the PFM Development Strategy Areas Actions Finalize implementation of the Treasury Single Account (IV quarter.2019) - Development of new more advanced PFMIS software; - Establishing and usage of TSA ensures timely accounting of and control over public finances and a full transparency of budget procedures; - Minimize number of bank accounts and cash transactions; Implementation of Liabilities Management (IV quarter 2019) - Analyze the liabilities management system and describe business processes; - Liability control methodology development and approval; - Establish overdue payments control and monitoring; - Analyze the impact of and assess currency exchange risks in the course of formulating and executing the budget; Transfer of the Social Fund’s Transactions to the Treasury System -Develop and approve the legal basis for the transfer; - Establish accounts for the transactions of SF and its territorial branches; - Cash service for the accounts of extrabudgetary funds that are part of the Social Fund’s budget system;

Improving cash management Treasury Mid-term Action Plan to Implement the PFM Development Strategy Areas Actions Integration of external funding of public investments into the Treasury system (until 2020) ; Automation of the budget execution process within the framework of the FMIS (IV quarter 2019) - Procedures for automation of the budget execution process while implementing FMIS; Improving cash management (2018) - Analyze and describe cash management business processes; - Develop and approve legislation for cash management; Develop short—term revenue and expenditure forecasts.

Share of expenditures distributed by key sections of the National Budget, 2014 -2016 Section Name Percentage in 2014. Percentage in 2015. Percentage in 2016. General purpose public services 12.8 13.7 13.5 Defense, civil order and security 15.5 15.8 Economic issues 8.7 10.5 9.9 Environmental protection 0.7 0.8 Housing and utilities 2.4 2.0 1.3 Health care 11.8 11.2 11.0 Recreation, culture and religion 2.6 4.0 Education 21.8 24.0 Social protection 23.7 22.1 19.7 TOTAL 100

National Budget Expenditure Arrears 2016 Expenditures 123,395.1 mln. Arrears 4,369.1 mln. 3.5% 2015 109,436.8 mln. 4,255.4 mln. 3.8% 2014 95, 424.0 3, 936.6 mln. 4.1%

Budget Expenditure Arrears: reasons and self-assessment using PI components 22.1 and 22.2 Payroll, social and sovereign debt service payments are paid annually at 100-% level. Therefore there are no expenditure arears in these areas. A large share of arrears falls on the payments for goods and services. Restricting cash limits, inappropriate control over liabilities by chief controllers of appropriations and supervising departments of the MoF increase the amount of expenditure arrears every year. - Component 22.1 Expenditure Arrears assessment – В - Component 22.2 Expenditure Arrears Monitoring assessment – В

Implementing measures to improve the PI-22 score 1 Adoption of the Budget Code in 2016 Defining expenditure arrears (30 days) Automation of budget execution accounting and reporting 2 Adoption of the Law “On Public Procurement” Creating a web-portal for public procurement (2016) Integration of the public procurement portal into the Treasury information system. (control over liabilities) 3 Transition to national budget execution cash-based planning Improving independence of budget institutions in current distribution of funds. Control over expenditure arrears