Consultancy Assistance Program for North Caucasus Regions October 2005 – October 2006

Share of federal transfers in total revenues of the NC republics, 2005 RepublicTransfers, % Adygeya69.3 Chechnya89.1 Dagestan85.8 Ingushetiya90.0 Kabardino-Balkariya60.1 Kalmykiya71.9 Karachayevo- Cherkesiya 75.4 North Ossetia65.3

North Caucasus regions in the program National Republics -Adygeya -Chechnya -Dagestan -Ingushetiya -Kabardino-Balkariya -Kalmykiya -Karachayevo- Cherkessiya -North Ossetia Other regions -Rostov oblast -Stavropol kray -Krasnodar kray* * Civil servants from Karsnodar attend only training events hosted in the region

Program objectives  Improve regional and local public finance management  Improve performance of regional and local governments These objectives were presented in the Medium Term Action Plan of the Presidents’ Envoy to the South District (strengthening public administration in the regions)

Core program components I.Training regional and municipal civil servants in public financial management and intergovernmental fiscal relations II.Development of performance monitoring systems on the regional and local levels III.Assistance in rehabilitation of the regional governments’ finance systems

I. Training public and municipal civil servants in public finance and IGFR  Major beneficiaries  Regional and municipal administrations  Civil servants from 11 participating regions  Training themes  Intergovernmental fiscal relations  Management of public expenditures  Sources of local and regional government revenues and policies aimed at strengthening revenue autonomy  Regional and local borrowing  Training events  Round table for top regional finance officers (October, 2005 Moscow)  Core training courses (December, 2005 Essentuki)  Extensive training courses (February, 2006 Tuapse)  Extensive training courses (March, 2006 Tuapse)  Core training courses (May, 2006 Tuapse)

Means and forms of training  Roundtable discussions  Interactive moderated sessions and group assignments  Traditional class-room lectures

Training in facts and figures  Overall people trained – 298  Number of training events - 5  Female\male participation ratio – 1.2  Municipal\regional participation ratio – 5.6  Highest participation rate - Karachaevo- Cherkessia

Participation in training by regions

Participants and trainers of the first seminar

Top-rated municipal issues, based on seminar participants survey  Delimitation and transfer of real property and revenue sources from municipal districts to settlements, titling of the municipal property  Taxation on the local level, i.e.: land tax administration, introduction of the property tax  Equalization transfers to municipalities (estimation of expenditure needs and revenue capacity)  Development strategies for municipalities  Public services delivery improvement  Introduction of the public expenditure reviews on municipal and regional level  Public participation in budget process

Major beneficiaries of the technical assistance  Administration of the Presidential Envoy in the Southern Federal District  Pilot regions II. Development of performance monitoring systems on the regional and local levels

Deliverables  Development of the system of indicators for Rating of the level of public administration in the NC regions  Development of a system of indicators for evaluation of the impact of the federal, regional and municipal public administration bodies on social and economic development of the regions  A program for setting up monitoring systems in individual regions of the Northern Caucasus

Rating of the level of public administration in the NC regions 1.Development of public administration a.Financial management b.Property management c.Human resources management 2.Social and economic development a.Business activity b.Social and demographic situation 3.National projects a.Quality education b.Healthcare c.Affordable and comfortable housing d.Agricultural complex development 4.Other social institutions 5.Provision of infrastructure

General unemployment rate (ILO methodology), per cent

Gross regional product per capita, thousand roubles

Child mortality per 1000 children born alive

Number of students in state and municipal secondary schools, per 1 personal computer

Number of registered crimes, committed by under aged (14-17) per people

Impact of federal, regional and municipal governments on regional economic and social development How the situation in the region depends on activities of each level of government? Areas of government responsibilities:  General government issues  National defense  Public security and law enforcement  National economy  Public utilities and housing  Environmental protection  Education  Culture and sport  Healthcare  Social security

Indicators - Public security and law enforcement

Indicators - Education

Indicators - Public utilities and housing

III. Regional finance rehabilitation Article 132 of the RF Budget Code: if federal transfers account for more than 50% of regional government revenues, the region should conclude an agreement with the RF Ministry of Finance on improving its financial position  1-st pilot region - Republic of Adygeya  other regions under consideration – Dagestan, Kabardino-Balkaria, Karachaevo- Cherkessia

Deliverables  Consultations & needs assessment study  Diagnostic and training seminar with municipal finance officers and heads of municipalities  Implementation of performance budgeting approaches on the regional level - development of the performance oriented budget bids of the republican government departments

Upcoming activities 1.Continuation of consultancy activities in the first pilot region - Adygeya 2.Selection of another pilot region 3.Implementation of monitoring systems 4.Continuation of training NC public servants  3 more training events for regional and municipal public servants  Round table for regional Finance Ministers 5.Local capacity building  Strengthening local partner – Pyatigorks Branch of the Northern Caucasus Academy of Public Administration  Selection of the local trainers  Training of the local trainers