ISSUE No. 6/1999

Services-Oriented Budget Process

by Deni Kamenov, Training Coordinator, LGI

The Municipalities of Dobrich, Svishtov and Belene, assisted by the Local Government Initiative Program, began preliminary work for the introduction of a new approach to drafting municipal annual budget. It aims to include in the budget all aspects of the services provided to citizens, not only the input resources. The new method will allow local governments to:

provide services based on citizens demand;

manage the results, and not only the invested resources;

have at their disposal instruments for management control and internal communication;

determine the general and specific goals of every activity/function and service;

develop monitoring indicators for the set goals;

relate the different levels of management with the financing of services and activities;

decentralize operational decision-making.

This process for budget development will allow municipalities to acquire budget estimates, which reflect their policy; a fiscal plan for policy implementation; operational guidance and communication means. It will lead municipalities to increase their effectiveness and the transparency of activities. This will create incentives for municipal administrations and councils to achieve results for the benefit of the citizens. At a certain stage, it will even oblige municipal administrations to rely on public participation. Consequently, the credibility of local self-government institutions will increase. The new approach will transform municipal government from a bureaucratic institution into a decentralized structure, capable of making effective decisions at each and every level.

The management and specialists from the Municipality of Razgrad are pioneers for Bulgaria in the service-oriented budget process. Their experience, enhanced with the assistance of American and Bulgarian specialists, already has followers - the Municipalities of Dobrich, Svishtov and Belene. The experts Borislav Borisov, Ivan Marchevski and Sultanka Mincheva, who were involved in the training process and in the follow-up advisory services, shared the opinion that the new approach could experience difficulties, because it required a higher degree of commitment and responsibility on the part of the municipal officers. Traditional habits and practices would have to change. They consider that the new method has many advantages, and that in the course of the training they received understanding and support from the respective municipal specialists. Their optimistic statements made me believe that the local governments of Dobrich, Svishtov and Belene would in practice follow the positive experience of Razgrad. Let us hope that other municipalities will also join the effort for introducing the new service-oriented budgeting process.