Fiscal Transparency During the COVID-19 Emergency : Bosnia and Herzegovina, North Macedonia, and Serbia Bosnia and Herzegovina, North Macedonia, and Serbia March 31, 2022 Transparency Initiative for the Western Balkans Prepared under the Good Governance and Investment Climate Reform (GGICR) Trust Fund (TF) with financial support from the Government of the United Kingdom. Acknowledgements This Report was produced by a team consisting of (Aleksandar Zdravkovic (consultant), Aura Martinez Oriol (GIFT), Jasmina Djikic (consultant), Marjan Nikolov (consultant), and Mitchell O’Brien (consultant) under the guidance of Verena Fritz, Zuhra Osmanovic-Pasic, and Mediha Agar (co- TTLs)). Juan Pablo Guerrero provided additional advice from GIFT. The team is grateful to contributions from (the peer reviewers – Christopher Sheldon, Iryna Shcherbyna, and Stephen Davenport). Stakeholder consultations were held with counterparts from all three countries in February and March 2022, and the team is very grateful to the time counterparts have taken in reviewing and responding on the draft document. The report is prepared under the overall guidance of Roby Senderowitsch (Practice Manager). This report was prepared under the Good Governance and Investment Climate Reform (GGICR) Trust Fund with financial support from the Government of the United Kingdom. The GGICR aims to strengthen the investment climate and transparency and accountability in the public sector in target countries. It does this by supporting reforms and initiatives related to several technical areas, including public financial management; public procurement; service delivery; organization of the state; state owned enterprises; public sector management; anti-corruption; and oversight institutions. 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Attribution—Please cite the work as follows: “World Bank. 2022. Fiscal Transparency during the COVID19 Emergency Response. © The World Bank.â€? Table of Contents Executive Summary ............................................................................................................................. 1 Snapshot of Key Findings.............................................................................................................................. 2 Proposed Actions ......................................................................................................................................... 4 A. Introduction................................................................................................................................... 7 I. Methodology ........................................................................................................................................ 9 II. Outline................................................................................................................................................ 11 B. Why Fiscal Transparency Matters ............................................................................................ 12 I. The global trend towards greater transparency ................................................................................ 12 II. Macro-fiscal outcomes and more effective disaster and emergency responses............................... 13 III. Addressing Corruption through Enhanced Transparency .................................................................. 15 IV. Trust by citizens and other stakeholders ........................................................................................... 16 C. Fiscal Transparency in the Selected Jurisdictions in the Western Balkans prior to the Covid-19 Pandemic .................................................................................................................... 17 I. Bosnia and Herzegovina ..................................................................................................................... 20 II. North Macedonia ............................................................................................................................... 21 III. Serbia ................................................................................................................................................. 22 D. Comparison of Fiscal Transparency Practices Across Jurisdictions during the Covid-19 Emergency .................................................................................................................................. 24 I. Period of Analysis ............................................................................................................................... 24 II. Transparency of COVID-19 Spending ................................................................................................. 26 III. Transparency of Special Assistance.................................................................................................... 33 IV. Transparency of COVID-19 related Public Procurement .................................................................... 41 V. Audit of Covid-19 Emergency Spending ............................................................................................. 48 IV. Information Accessibility .................................................................................................................... 51 E. Proposed Country and Regional Actions for Strengthening Fiscal Transparency for More Effective Emergency Responses ............................................................................................. 56 Sources of Information...................................................................................................................... 63 Annex 1: Methodology for Assessing Fiscal Transparency in the Jurisdictions....................... 66 Annex 2: Summary Table .................................................................................................................. 70 Tables, Graphs, and Case Examples Number Title Page Tables Table 1: Comparison of Key Budget Documents and Publication Timeline for OBI and PEFA 18 Table 2: Comparison of Fiscal Transparency Ratings for each Country and Sub-National 23 Jurisdiction from Recent PFM Assessments conducted in Non-Emergency Conditions Boxes Box 1: Inclusion of Fiscal Transparency in global tools aimed at enhancing the agility of PFM 14 systems to respond to natural disasters and emergencies Graphs Graph 1: State of Emergency Timelines for Jurisdictions 25 Graph 2: Budget Adoption and Revision Timelines for 2020 26 Graph 3: Information Provided when Rebalancing the Budget 27 Graph 4: Budget Classifications and Policy Information provided for Covid-19 Measures 28 Graph 5: Increase in the Ministry of Health budget 32 Graph 6: Transparency of Spending on Health Workforce 32 Graph 7: Availability of Information on Special Assistance by Beneficiary 33 Graph 8: Publication of Information by Jurisdiction based on Procurement Stage 42 Graph 9: Information Availability by Topic 52 Graph 10: Researchers’ Perception Measure of Information “Findabilityâ€? by State -Level 53 Jurisdiction Graph 11: Availability of Public Information in Machine-Readable Formats 54 Graph 12: Availability of Information in Machine-Readable Formats Published by Jurisdictions 54 Global and Regional Examples Global: France – Publication of Approved Emergency Expenditure using Program 29 Classifications Regional: North Macedonia - Disclosure of Individual Covid-19 Emergency Payments to 35 Businesses in Public Expenditure Records Regional: Republika Srpska (BiH) & Federation of BiH (BiH) - Disclosure of the Name of 35 Businesses and the Value of Guarantees Granted Global: Canada – Publication of Economic Response Plan with Targeted Population Groups 37 Global: Norway – Inclusion of Vulnerable Groups in Designing and Implementing the 38 Emergency Response Global: Mexico – Publishing Non-Financial Indicators in Fiscal Transparency Portal 40 Global: United Kingdom – Citizen Feedback on the Effectiveness of the Covid-19 Emergency 40 Response Regional: Sarajevo Canton (BIH) – Publication of Entities that Contracting Authorities are 43 procuring from on Anti-Corruption Agency Website Regional: North Macedonia – Publication of Covid-19 Specific Procurements 44 Global: Ukraine – Filtering Covid-19 Procurements on e-Procurement Platforms 45 Regional: North Macedonia – Proactive Audit of Covid-19 Emergency Measures 48 List of Abbreviations and Acronyms Abbreviation Definition BiH Bosnia and Herzegovina EU European Union GGICR Good Governance and Investment Climate Reform HIF Health Insurance Fund IBP International Budget Partnership IMF International Monetary Fund OBS Open Budget Survey OECD Organization of Economic Cooperation and Development PEFA Public Expenditure and Financial Accountability PFM Public Financial Management PI Performance Indicator PPE Personal Protective Equipment SAIs Supreme Audit Institutions SBL Supplementary Budget Law SME Small and Medium Enterprise UKPAC United Kingdom’s Parliamentary Public Accounts Committee UK United Kingdom UN United Nations YFEU Treaty on the Functioning of the European Union Fiscal Transparency during the Covid-19 Emergency Response Executive Summary Over recent years, countries around the globe have embraced fiscal openness to (i) live up to global fiscal transparency standards; (ii) sustain improved fiscal outcomes; and (iii) to encourage the efficient, effective, and proper use of public resources. These considerations are especially relevant during crises, given the sizable scale of funds that are deployed to address emergencies. Understanding how resources are used and for what purpose strengthens citizens’ and business’ confidence in the government’s stewardship during a crisis. Disclosure of information related to fiscal policy is necessary if citizens are to assess whether public resources are being effectively deployed, have achieved the desired outcomes, and shielded those most at risk during an emergency. While decisions need to be taken quickly during an emergency and some mistakes are likely, making information about spending available is an important step towards building trust, enabling learning from policy formulation and implementation during a crisis, and promoting the good use of funds. The speed, reach, and magnitude of the Covid-19 pandemic sent a shockwave around the globe that tested the capacity of Public Finance Management (PFM) systems to support governments’ responses to crises. Fiscal transparency was not a foremost priority for decision- makers during the crisis as they sought to put in place emergency measures with imperfect information and under rapidly changing conditions. This report, which complements existing public budgeting assessments that apply internationally recognized PFM frameworks on a regular basis, presents a comparative analysis focused upon experiences with and lessons about fiscal transparency in three countries in the Western Balkans - Bosnia and Herzegovina (BiH),1 North Macedonia and Serbia. It includes examples of good practices that were deployed in various countries - within the region and beyond - during their response to Covid-19. In doing so, it aims to distil lessons and provide recommendations about what could be done better in preparation for and during future emergency events. 1 BiH is a highly decentralized country with several levels of administration. Some regulations instituted at the federal level do not apply to sub-national jurisdictions, while other regulations promulgated by sub-national jurisdictions can overlap. When collecting primary evidence for BiH - to the extent possible - data was collected for multiple jurisdictions to accommodate for any discrepancies. Data was collected from the following BiH jurisdictions: BiH- Institutions; Federation of BiH (BiH); Republika Srpska (BiH); and Sarajevo Canton (BiH). 1. Snapshot of Key Findings Budget and Spending Transparency: Almost all jurisdictions’ original budgets were approved before the start of 2020, and they then adopted one or two subsequent rebalances in response to the pandemic.2 The study found information on budget rebalances from at least one publicly accessible source for each jurisdiction. A few governments published documents in machine-readable formats, including on pandemic-specific websites. Budget Adjustments: In most of the rebalanced budgets, budget adjustments or reallocations were not clearly delineated beyond aggregate balances. Reallocations were not presented in a single document, and in most cases, the information was not provided in machine readable formats. As such, when information related to budget adjustments was available, most of the data needed to be extracted and compiled manually to identify policy linkages and compare the adjustments to original allocations. Budget Classifications: The documentation supporting emergency fiscal policy packages did not include detailed budget classifications and were only tenuously linked, if at all, to other budgeting documents produced in the normal course of the budgeting year or the broader government policy framework published before the start of the crisis. At most, some jurisdictions provided a breakdown of expenditure according to administrative and economic classifications and a broad narrative as to the purpose of the spending. Even when providing justifications for rebalances based on actual rather than proposed expenditure, only aggregate information/ spending totals were provided rather than delineated information tagged to emergency initiatives. Extra-Budgetary Funds: Public resources used by the respective jurisdictions to respond to the pandemic were predominantly managed through the budget. This is a notable achievement as budget comprehensiveness and consistency are key PFM objectives. It was generally observed that the transparency of health insurance funds and spending from reserve allocations was lower than for main budget expenditures. This suggests greater consideration should be paid to fiscal transparency elements of emergency measures funded from off-budget resources. Health Sector Spending: All jurisdictions increased the Ministry of Health’s budget, except for BiH - Institutions as it does not have a health spending mandate. In most jurisdictions, information in the budget documents is sufficiently detailed to determine that additional resources were devoted to hiring health workers; however, the information did not detail the number of staff, type of services provided, payment levels, and the permanency of the posts. Special Assistance: All jurisdictions published some information on the emergency support provided to different beneficiaries as part of the Covid-19 response, whether Small and Medium Enterprises (SMEs) or vulnerable groups. However, there is a variance in transparency practices adopted by each jurisdiction regarding the beneficiary information that was published. o Vulnerable Groups - Some jurisdictions included a broad explanatory narrative detailing the vulnerable groups that emergency assistance aimed to support. However, jurisdictions did not provide disaggregated data on allocations or provide non-financial indicators, so it is difficult to gauge whether the expenditure was properly targeted to benefit vulnerable groups, such as the unemployed, poor, women and children. 2BiH-Institutions was the only exception; as the original budget was adopted in the middle of 2020, it already contained COVID-19 related spending. 2. o SMEs - Jurisdictions were generally more transparent about state aid provided to SMEs. Some jurisdictions outlined eligibility criteria for state aid, published the name of the SMEs that received assistance, the amount of state aid provided, and what form that aid was provided (i.e., grant/ loan/ guarantee). Publication of Emergency Procurement Information on e-Procurement Platforms: Legislation in all jurisdictions contain provisions governing abridged procurement processes during an emergency. Each jurisdiction manages e-procurement platforms for sharing procurement related information. The scope of information published on the e-procurement platforms is similar across jurisdictions (i.e., delineated according to the stages of the procurement process). Only one jurisdiction demarcated certain pandemic-related contracts by publishing the information on a dedicated Covid-19 website. The study could not verify that all procurement information in each jurisdiction, especially related to emergency procurements, was published on the e-procurement portals, the quality of the information, and/or whether the information disclosed covers all Covid related emergency procurements. Identification of Weaknesses in Emergency Procurement Processes through External Audits: The timely issuance of audit findings by Supreme Audit Institutions (SAIs) ensures the ongoing effectiveness of the government’s response, incentivizes proper management of funds throughout the crisis, and allows tangible lessons to be contemporaneously drawn from the experience. The study did not find any evidence of SAIs providing just-in-time audit services. However, several SAIs conducted targeted compliance audits focused on jurisdictions’ emergency measures. Audit findings in over half of the jurisdictions highlighted weaknesses in emergency procurement processes and the transparency of procurement information related to the emergency response. These audit reports were published in the second half of 2021. Information accessibility of Emergency Policy and Spending: Budget information and state aid for SMEs (i.e., beneficiaries of fiscal incentives and subsidies/ grants) were the topics about which information was most commonly available. Information on public procurement was also easily accessible due to the establishment of e-procurement portals. However, it is unclear whether the availability of procurement information per se indicates that the disclosure of procurement information was comprehensive. Health staffing and payroll were the hardest topics to find information about across all jurisdictions and such information was primarily sourced from government statements and press releases. Information on non-financial performance and the impact of emergency measures was lacking across all jurisdictions. Information Openness: Less than a third of the information disclosed by jurisdictions was in machine- readable formats. Most of the information was published in pdf documents, websites, press releases, and/or in government statements. Generally, sources of information were scarce, fragmented, and not linkable. Only one jurisdiction had a dedicated Covid-19 portal with data in machine-readable formats, including an open finance webpage where budget and transaction data was downloadable in CSV format. In other jurisdictions, the data published on different portals (e.g., public expenditure and procurement) or from different sources were normally not linked and often only published as one-off documents rather than building on previous budget documents or policy frameworks. As such, to track changes across time, citizens must manually compare the different data points. 3. Proposed Actions Lessons learned from the response to the Covid-19 crisis can serve to guide fiscal transparency reforms across the Western Balkans. Specifically, the analysis identifies five primary areas of action for strengthening fiscal transparency during possible future emergencies (including natural disasters, health emergencies, or economic shocks): transparency of emergency spending, transparency of special assistance, transparency of emergency procurement, audit of emergency measures, and information accessibility (i.e., ensuring information can be accessed and understood by individuals and groups impacted). Proposed actions in each area based on lessons from the comparative analysis are outlined below. 1. Transparency of Emergency Spending • Enhance Transparency of Within-Year Budget Adjustments: Budget rebalances and emergency fiscal policy measures, such as supplemental budgets, were essential tools used to respond to the health, social, and economic crisis. Published documents need to clarify how resource allocations in the approved budget are being adjusted as part of any emergency response or supplemental budgeting process. This allows citizens to better understand how resources are being reallocated compared to the planned budget. • Consistent Application of Budget Classifications for Emergency Related Expenditure: Disclosed documentation should include relevant budget classifications to provide a complete and coherent picture of emergency spending. Classifications should be applied consistently across budget documents so that citizens can understand the relationship between original budget expenditure, emergency policy measures, and budget rebalances. • Enhance Sector and/ or Functional Budget Classifications Related to the Emergency Response: Disclosing and classifying spending in areas relevant to the emergency response such as investment projects, health programs, and public sector wages, assists in identifying how public resources are being reapportioned to respond to crises. • Include Non-financial Indicators in Budget Documentation to Enable an Assessment of the Impact of Emergency Spending: It is important to track impact as well as expenditure. Performance is monitored through non-financial indicators that allow for the assessment of the efficiency and effectiveness of adjusted expenditure during an emergency. • Publish Mid-year Reviews and In-year Outturn Reporting: Mid-year reviews provide a comprehensive update on the implementation of the original budget, including revised forecasts underpinning the budget and updates of likely budget outcomes for the current fiscal year. Publication of mid-year reviews during an emergency enhance transparency around the implications of the emergency for the government’s existing program. In addition, in-year outturn reporting is necessary when emergency spending occurs after the mid-year mark to enhance transparency around actual aggregate expenditure compared to originally approved expenditure. Budget adjustments made in response to a crisis should correspond with any policy changes instituted as part of the emergency response. 4. 2. Transparency of Special Assistance • Disclose Information Related to State Aid for Small and Medium Enterprises (SMEs): SMEs are critical stakeholders for preserving jobs and economic activity, and for the economic recovery once the crisis subsides. All jurisdictions analyzed in this study established emergency measures focused on providing state aid to SMEs. To maximize the transparency of the public resources provided to SMEs as part of the emergency response, governments should publish the criteria they use to determine eligibility for assistance; the details of the SMEs that receive support under the emergency measure; the date state aid is provided; and the type of aid provided (i.e., whether the assistance is provided in the form of a grant/transfer, loan, or guarantee). • Disclose Information Related to Support Provided to Vulnerable Groups: The pandemic has impacted groups differently, as some, such as the poor, women, and children, etc. are more vulnerable to the effects of a crisis. Jurisdictions should disclose measures designed to support vulnerable groups including non-financial indicators used to measure the disaggregated impact of emergency spending on each identified vulnerable group. 3. Transparency of Emergency Procurement • All Jurisdictions Should Publish Procurement Information Related to Emergency Spending: All governments publish some information regarding public procurement. However, during emergencies procurement laws in all jurisdictions allow for by-passing regular procedures to facilitate faster purchasing. Agility is important in crisis situations; however, provisions that allow for circumventing normal procedures should prescribe how transparency will be maintained when normal processes are bypassed, including the documentation of key information that allows for ex-post review. 4. Audit of Emergency Measures • SAIs should conduct Targeted and Timely Audits of Emergency Measures as part of the Response: The timely issuance of audit findings ensures the ongoing effectiveness of governments’ emergency responses, incentivizes proper management of funds throughout the crisis, and allows tangible lessons to be contemporaneously drawn from the experience. SAIs’ legal mandate should be broad enough to allow them to use unique approaches to conduct audits during the emergency response. This can include short, targeted audits of specific emergency measures or real-time assurance and compliance audits. SAIs should publish the audit findings contemporaneously to maximize fiscal transparency. • Implement Recommendations in 2020 Annual Audit Reports to Bolster the PFM Response to Future Emergencies: Recent consolidated financial and compliance audit reports highlight weaknesses in managing expenditure during an emergency. Implementing audit recommendations related to strengthening emergency procurement processes and mandating the timely publication of emergency procurement details on e-procurement portals will prepare the PFM system to better respond to future crises. 5. 5. Information Accessibility • Legal Frameworks Should Require Fiscal Data Related to the Emergency Response be Published: Laws to support fiscal transparency during emergency responses should be enacted. This includes conferring a positive obligation on public institutions to disclose fiscal information – including during emergencies. Prescribed disclosure obligations should include key budgeting documentation, content standardization between emergency and non-emergency documentation, publication of emergency response measures in an open format, and how often the information should be updated. • Publish Spending Information on an Open Data Portal for Emergency Spending: Emergency spending information was scarce, fragmented, and not linkable. Publication of consolidated expenditure information is a practice that should be broadly adopted. However, utilizing expenditure identifiers and/or dedicated portals during a crisis consolidates relevant data and is even more important as it ensures emergency related expenditure information is accessible and understandable. • Available Data Should be Published in an Open Format: Jurisdictions should provide information in open formats that are searchable. Most information related to emergency responses was published in pdf formats. Using open formats allows citizens to better dissect and use the data to understand the emergency response. Six ‘must dos’ on fiscal transparency during emergencies (i) In preparation for emergencies, create a set of transparency related rules to apply during those situations that are clear and simple, with an emphasis on ‘keeping receipts’ and ex-post information sharing/publication (ii) Allow and encourage managers and staff to take decisions swiftly as needed to respond to the emergency (iii) Ensure that citizens and businesses are reached by information about available support and how to apply/obtain it (iv) Create systems and practices that practically ease information recording, aggregation, and sharing (v) Ensure information about beneficiaries and impacts is captured and made available (vi) Enable ex-post assessments and lessons learning and make adjustments to systems based on SAI recommendations and those from other stakeholders to enhance the efficiency, effectiveness and fairness of future emergency responses Source: authors 6. A. Introduction Governments have been under pressure to deliver emergency support during the global Covid- 19 pandemic and chart an economic recovery. Public Financial Management (PFM) systems are the primary tool governments use to deliver resources to health systems, vaccine programs, measures to provide additional social protection, and to support education, jobs and Small and Medium Enterprises (SMEs). Supplemental budgeting processes and other commonplace public finance measures provide flexibility for governments to respond to emergencies and external shocks. Prior to the pandemic there were discussions as to how to enhance the agility and flexibility of PFM systems globally to respond to natural disasters and emergencies.3 However, the speed, reach, and magnitude of the Covid-19 pandemic has sent a shockwave around the globe that has tested the capacity of PFM systems to support governments’ response to crises. Fiscal transparency refers to the comprehensiveness, clarity, reliability, timeliness, and relevance of public reporting on the past, present, and future state of public finances4 and the capacity of those impacted by public finance decisions to understand the implications. Western Balkan governments’ response to the emerging Covid-19 crisis was driven by the need for fast and flexible fiscal policy measures. Fiscal transparency was not an immediate priority for decision- makers during the crisis as they sought to put in place emergency measures with imperfect information under rapidly changing conditions. However, the disclosure of fiscal policy information is necessary to assess whether public resources are being effectively deployed, have achieved the desired outcomes, and shielded those most at risk during a crisis. Given the scale of public spending and decisionmakers’ need to foster public confidence in their management of the crisis, fiscal transparency should be prioritized as a goal for future emergency responses. During an emergency, the government’s legitimacy is critical to the success of the fiscal policy response.5 Fiscal transparency and public accountability help to bolster institutional legitimacy by facilitating an assessment of whether public resources are being deployed effectively. Budget disclosure during a crisis allows stakeholders to understand the goals, scope, and cost of the response and reassures citizens that public resources are not being squandered or misused. In this way, fiscal transparency can reinforce citizens’ trust in government and strengthen market confidence in the government’s stewardship of the crisis response.6 3 World Bank (2022), Disaster Resilient and Responsive Public Financial Management: An Assessment Tool. World Bank: Washington, DC. For a more detailed discussion on Transparency aspects of the Disaster Resilient and Responsive Public Financial Management (DRR-PFM) Assessment Tool please see Section B of this report. 4 IMF (n.d.), “Fiscal Policiesâ€?, https://www.imf.org/en/Topics/fiscal-policies/fiscal-transparency (accessed March 27, 2022). 5 Wendling, C., V. Alonso, S. Saxena, V. Tang, and C. Verdugo (2020), Keeping the Receipts: Transparency, Accountability, and Legitimacy in Emergency Responses . IMF Fiscal Affairs Department Covid Emergency Note, Washington DC: p.1. 6 Wendling, C., V. Alonso, S. Saxena, V. Tang, and C. Verdugo (2020), Keeping the Receipts: Transparency, Accountability, and Legitimacy in Emergency Responses . IMF Fiscal Affairs Department Covid Emergency Note, Washington DC: p.1-2. 7. One-off deviations from normal practices may be needed to maintain agility in an evolving environment; however, it is likely there will be occurrences of mismanagement during the emergency response – whether intentional or unintentional7 – making transparency even more important. ‘Keeping the books open’ matters as it allows for fair scrutiny of the management of the response, factoring in the extraordinary circumstances under which the measures had to be designed and implemented. Understanding how resources are used and for what purpose strengthens citizens’ and business’ confidence in the government’s stewardship during an emergency. Globally, many countries experienced some degree of mismanagement in spending and contracting, especially during the early stages of the pandemic.8 Some instances were errors in judgement made during a period that required an agile government response in a fast-moving and changing environment; while others were clear attempts by government officials to benefit from the emergency. Governments now have an opportunity to look back on the pandemic response and reflect on the weaknesses in their existing PFM systems, which allowed this mismanagement to occur. This includes the absence of adequate fiscal transparency measures. A closer examination of the successes and challenges in maintaining fiscal transparency during an emergency will allow governments to bolster existing PFM systems and processes so that they are better prepared to leverage fiscal transparency during future crises. As a health crisis that touched every corner of the globe and triggered cascading social and economic emergencies, the scale of the Covid-19 pandemic is unique. Future crises - such as climate induced natural disasters like flooding or landslides - may be more regional or have a narrower impact. The response to the Covid-19 pandemic presents a unique opportunity to study how governments responded to a broad, wide-scale emergency impacting many areas of government and society and to identify ways to better incorporate fiscal transparency to achieve greater impact in the future. This study distills lessons and identifies reforms aimed at building greater transparency in PFM systems so that they can respond to future emergencies with greater agility and openness. Fiscal transparency, public participation, and accountability are intractably linked. Citizen participation and effective checks and balances on fiscal policy rely on transparency and budget disclosure. This is equally so during a crisis. Constraints in the availability of comprehensive practice information and data on public participation and accountability for all jurisdictions during the emergency, and the desire to identify discrete reforms aimed at enhanced fiscal transparency in Western Balkan jurisdictions means the present analysis concentrates on the comprehensiveness, clarity, reliability, timeliness, and relevance of public reporting of public finances during the emergency. This does not diminish the need for future analysis of the interplay between transparency, participation, and accountability during an emergency response. 7 Steingrüber,S., M. Kirya, D. Jackson and S. Mullard (2020), “Corruption in the time of COVID-19: A double-threat for low income countriesâ€?, Chr. Michelesen Institute U4 Brief 2020:6: pp1-2; and See UN Global Task Force on Corruption (2021), “Corruption and COVID-19: Challenges in Crisis Response and Recoveryâ€?, UNODC Policy Paper, https://www.unodc.org/documents/Advocacy-Section/COVID-19-Crisis-responserecovery-WEB.pdf (accessed 23 January 2022). 8 Steingrüber,S., M. Kirya, D. Jackson, and Saul Mullard (2020) “Corruption in the time of COVID -19: A double-threat for low income countries.â€? Chr. Michelsen Institute (CMI) U4 Brief 2020:6 p.1-2; See United Nations Global Task Force on Corruption (2021), Corruption and COVID-19: Challenges in Crisis Response and Recovery . United Nations Office on Drugs and Crime (UNODC) Policy Paper, https://www.unodc.org/documents/Advocacy-Section/COVID-19- Crisis-responserecovery-WEB.pdf (accessed 23 January 2022). 8. Fiscal transparency practices used by governments during the pandemic in multiple jurisdictions across three Western Balkan countries - Bosnia and Herzegovina (BiH), North Macedonia, and Serbia - are compared. These three countries were eligible for support under the Good Governance and Investment Climate Reform (GGICR) Trust Fund at the inception of the study. Given the country’s decentralized governance, the analyses of fiscal transparency practices in BiH touches on practices in several sub-national jurisdictions. However, the remit of the study and the approach to data collection necessitated by the ongoing pandemic means the analysis predominantly focuses on state-level fiscal transparency. Sub-national fiscal transparency, especially related to Covid-19 spending and service delivery, is equally important. Complementary World Bank analysis of health sector PFM and procurement practices in two subnational jurisdictions in BiH is currently being prepared. 9 It is hoped the present study lays the foundation for a more detailed evaluation of subnational fiscal transparency in all three state-level jurisdictions during the global pandemic. As the evaluation examines PFM performance during the Covid-19 crisis, it focuses on fiscal transparency practices during the core emergency period from March 2020 to June 2021. Different fiscal transparency tools deployed by the respective jurisdictions during the emergency are assessed, and country and regional level actions are proposed. This analysis supplements existing public budgeting assessments previously conducted during non-emergency periods that applied internationally recognized PFM assessment frameworks. Those existing assessment frameworks focus on key budgeting documents produced in the normal course of the budgeting process and evaluate the comprehensiveness of information provided in the documents, timeliness of production, and extent of publication of the information. However, they place less emphasis on public expenditure processes that are heavily relied on during emergencies, such as contingency appropriations, emergency spending and contracting provisions, reallocations and virements, supplementary budgets, and external grants.10 The present analysis meets the need for a supplemental assessment focused on fiscal transparency during emergency conditions. I. Methodology The study was designed to evaluate the comprehensiveness, clarity, reliability, timeliness, and relevance of public reporting on the past, present, and future state of public finances during the Covid-19 emergency across three state-level jurisdictions.11 All research for this assessment is desk-based and drawn from information publicly available on official institutional websites, digital document repositories, and platforms supported by the government, independent institutions, or civil society platforms that draw on publicly available government data. 9 World Bank (2022), Strengthening Transparency, Integrity and Accountability of Public Procurement in the Bosnia and Herzegovina Health Sector: Pilot Study on Sarajevo and Tuzla Cantons , World Bank, Washington DC (forthcoming); and Pilot Study on Transparency and Accountability of Public Financial Management (PFM) in Health Systems of Sarajevo and Tuzla Cantons, World Bank, Washington DC (forthcoming). 10 See Saxena, S., and M. Stone (2020), Preparing Public Financial Management Systems for Emergency Response Challenges, IMF Fiscal Affairs Department Covid Emergency Note, Washington DC. 11 IMF (n.d.), “Fiscal Policiesâ€?, https://www.imf.org/en/Topics/fiscal-policies/fiscal-transparency (accessed March 27, 2022). 9. Gathering and organizing of information, data, and practice was conducted in three stages. They were: (a) Scanning for recent good practice guidance focusing on PFM in emergencies (i.e., primary knowledge products) and examples of fiscal transparency in emergency measures undertaken in other regions (i.e., global case examples) (b) Collection of evidence and data from jurisdictions that are the focus of this study, including information on the legal framework and the availability of key fiscal information; and (c) Thematic coding of the evidence to allow for a comparative analysis A literature review identified recently published international good practice guidance focusing on PFM in emergencies and the application of fiscal transparency principles. Examples of good practice guidance that the study drew on to set the parameters for data collection included: • Government Financial Management and Reporting in Times of Crisis12 • Managing Covid Funds: The Accountability Gap;13 and • Fiscal Data for Emergency Response Guide for COVID-19.14 The collection of evidence, data, and practices from jurisdictions that are the focus of this study was guided by an Information Analysis Framework (IAF)15 collaboratively designed by regional and global technical experts and practitioner networks, with input from country counterparts. The international good practice guidance and global case examples were used as inputs for the design of the IAF. This research tool anchored a structured, semi-standardized approach for country level experts to collect and distill evidence and practice information from the jurisdictions, thereby allowing for a detailed comparative analysis. The IAF was divided into two parts focusing on the: (i) Regulatory and Legal Framework; and (ii) Information Availability. The scope of evidence collection was broad and included data on the legal provisions that governed fiscal transparency, public finance, and/ or emergency measures; the level of public access to information especially related to emergency measures; and evidence of systemization of information disclosure. A thematic coding approach was used to organize the evidence gathered by country level experts, identify emergent themes, and more discretely organize the evidence according to those themes/ topics. The thematic coding organized the data inputs around legal and regulatory provisions that established mechanisms or prescribed different forms of fiscal transparency; types of information/ data published and the extent it was published; the variety of formal reports prepared and published and variances in practices from non-emergency periods; and the transparency implications 12 OECD (2020), Government Financial Management and Reporting in Times of Crisis, OECD Publishing, Paris, https://read.oecd-ilibrary.org/view/?ref=433_433120-4x64f30lbd&title=Government-financial-management-and- reporting-in-times-of-crisis (accessed January 23, 2022). 13 IBP (2021) Managing Covid Funds: The Accountability Gap , International Budget Partnership Report, Washington DC, https://internationalbudget.org/covid/wp-content/uploads/2021/05/Report_English-2.pdf (accessed January 23, 2022). 14 GIFT (2020), Fiscal Data for Emergency Response Guide for COVID-19 (Version 1.1), Global Initiative for Fiscal Transparency Guide, Washington DC, http://www.fiscaltransparency.net/documents/GuideforFiscalDataCOVIDV_1_1_0.pdf (accessed January 23, 2022). 15 Inputs on the scope and framing of the Information Analysis Framework were collected during the Project’s Virtual Launch Workshop with partners and counterparts on January 21, 2021. 10. of any proactive disclosure mandates. The thematic coding process also drew on the taxonomy of data formats outlined in the Fiscal Data for Emergency Response Guide for COVID-1916 to organize evidence on information availability. A common set of issues or challenges emerged during the thematic coding process. The challenges revolved around: • Transparency of COVID-19 spending • Transparency of the effectiveness and inclusivity of the COVID-19 response • Transparency of COVID-19 related public procurement; and • Information accessibility Supplemental desk research was conducted at the end of the study period to explore the application of the audit function to emergency measures. This data point was not included in the IAF as audit findings on emergency measures had not been published at that point. However, toward the end of the study period it became apparent that external audit was an important facilitator of information disclosure related to emergency measures and the audit findings included valuable lessons concerning fiscal transparency during the crisis. A detailed description of the research approach can be found in Annex 1: Methodology for Assessing Fiscal Transparency during the Covid-19 Emergency Response. This report was peer-reviewed and benefited from inputs from government representatives and fiscal transparency stakeholders in jurisdictions that are the subject of this analysis. II. Outline This report is divided into five sections. The purpose of each part is as follows: • Section A provided the conceptual framework and the reasons for enhancing fiscal transparency of emergency responses, as well as outlining the pedagogical approach to collecting and analyzing the data for this . • Section B presents a brief overview of why fiscal transparency matters, how it is linked to PFM performance, and initial impressions as to the extent fiscal transparency was maintained globally during the Covid-19 emergency response. • Section C draws on the results of PFM evaluations conducted during non-emergency periods to outline fiscal transparency performance in the jurisdictions that are the focus of this study prior to the pandemic. • Section D defines the emergency response period in the Western Balkans and uses the challenges identified through the thematic coding process and the external audit function to compare fiscal transparency practices across jurisdictions during the Covid-19 crisis; and • Section E concludes by proposing country and regional level actions for strengthening fiscal transparency for more effective emergency responses. 16 GIFT (2020), Fiscal Data for Emergency Response Guide for COVID-19 (Version 1.1), Global Initiative for Fiscal Transparency Guide, Washington DC, http://www.fiscaltransparency.net/documents/GuideforFiscalDataCOVIDV_1_1_0.pdf (accessed January 23, 2022). 11. B. Why Fiscal Transparency Matters Countries around the globe have embraced fiscal openness to live up to global fiscal transparency standards, benefit from improved fiscal outcomes, and ensure citizens can access information necessary to engage in processes that ensures the efficient, effective, and proper use of public resources.17 Governments can mobilize the economy for the benefit of all citizens through improved macro-fiscal performance. A government’s legitimacy is underpinned by the proper use of public funds generated by the economy to deliver government policies and services. Finally, transparency and budget disclosure facilitate citizen participation in fiscal policy setting and monitoring, while improving effective checks and balances on fiscal policy. I. The global trend towards greater transparency International fiscal transparency standards are drawn from practice principles and formally endorsed standards recognized by states. Nations endorse fiscal transparency standards directly or through participation in different international organizations and forums (e.g., the United Nations [UN], IMF, and World Bank); civil society forums; and fiscal transparency practitioner communities. The primary sources of international fiscal transparency standards are detailed below. The IMF Fiscal Transparency Code 2019 (the Code)18 is widely recognized as the international standard for disclosure of information about public finances. The Code was originally adopted in 1998 and has had several iterations, with the 2019 version being the most recent. 19 The Code covers what information should be included in fiscal reports, the timeliness and quality of the reports, and that the reports should be subject to external audit. The data and analysis included in fiscal reports should be internationally comparable, historically consistent, and enable budget stakeholders to link policy information with fiscal data. The High-Level Principles on Fiscal Transparency, Participation, and Accountability were endorsed by the UN General Assembly in 2013. Members of the UN affirmed the importance of ensuring citizens’ access to public finance information and obligated nations to publish this data. The High-Level Principles reinforce the need for fiscal information to be credible and published according to international standards, including the Code. The endorsement by the UN General Assembly of the High-Level Principles acknowledges the other international norms and standards they are built on, including the: • OECD Best Practices in Budget Transparency (2002) 17 See preamble to UNGA Resolution 67/218 endorsing the High-Level Principles on Fiscal Transparency, Participation, and Accountability (2013) – “Believing that access to high quality information, meaningful public participation, and effective accountability mechanisms: Enhance the integrity, quality and implementation of fiscal policies; Reduce corruption; Increase the legitimacy of and trust in government; Increase willingness to pay taxes and provide financing; Strengthen the effectiveness of development assistance, and thereby strengthen the efficiency, equity, effectiveness, stability and sustainability of fiscal policies and enhance the likelihood that fiscal policies have positive economic, social and environmental impacts.â€? 18 The IMF Fiscal Transparency Code has had several iterations. The Code was initially adopted in 1998 and revised in 2001, 2007, and 2019. 19 IMF (n.d.), “Fiscal Transparencyâ€?, https://www.imf.org/en/Topics/fiscal-policies/fiscal-transparency (accessed 23 January 2022). 12. • International Budget Partnership (IBP) Open Budget Index • International Public Sector Accounting Standards promulgated by the International Public Sector Accounting Standards Board • International Standards of Supreme Audit Institutions promulgated by the International Organization of Supreme Audit Institutions; and • Multi-agency Public Expenditure and Financial Accountability (PEFA) program. Following the UN endorsement of the High-Level Principles, the Council of the OECD endorsed the Recommendation on Budgetary Governance in 2015. The OECD Recommendation reaffirmed member nations’ commitment to ensuring budgeting documents and data be open, transparent, and accessible. Examples of formal regional obligations include Article 15 of the Treaty on the Functioning of the European Union (TFEU),20 which places obligations on European Union (EU) institutions and agencies to conduct their work as openly as possible.21 Furthermore, the TFEU conveys a right on any citizen of the Union and any natural or legal person residing in or being registered in a Member State, to access documents of the Union's institutions, bodies, offices, and agencies, whatever their medium. 22 Although framed in terms of EU institutions, it establishes practice expectations for EU member states. This right is framed broadly, therefore, incorporates fiscal data. This provision is only circumscribed by Article 16, which outlines citizens’ right to the protection of personal data. II. Macro-fiscal outcomes and more effective disaster and emergency responses Generally, fiscal transparency has a beneficial impact on macro-fiscal outcomes. Using broad measures of transparency, evidence suggests fiscal openness helps lower deficits and debt, borrowing costs, and either directly or indirectly limits unnecessary fiscal schemes.23 Also, timely and comprehensive reporting has been linked to better budget credibility, namely a reduction in the discrepancy between what a government budgets as compared to what it spends and between revenue forecasts and revenue collections.24 In response to the global debate as to how to enhance the agility and flexibility of PFM systems to respond to natural disasters and emergencies, 25 the World Bank designed the Disaster 20 European Union, Consolidated version of the Treaty on the Functioning of the European Union, 13 December 2007, 2008/C 115/01. 21 European Union, Consolidated version of the Treaty on the Functioning of the European Union , 13 December 2007, 2008/C 115/01: Article 15 (1) 22 European Union, Consolidated version of the Treaty on the Functioning of the European Union , 13 December 2007, 2008/C 115/01: Article 15 (3) 23 de Renzio, P., and J. Wehner (2015), The Impacts of Fiscal Openness: A Review of the Evidence. GIFT & IBP Incentives Research, Washington DC p.23. 24 de Renzio, P., and C. Cho (2020), Exploring the Determinants of Budget Credibility. IBP, Washington DC. 25 World Bank (2022), Disaster Resilient and Responsive Public Financial Management: An Assessment Tool. World Bank: Washington, DC. 13. Resilient and Responsive Public Financial Management (DRR-PFM) Assessment Tool. A DRR- PFM Assessment helps a country strengthen its PFM systems to prepare for, respond to, and recover from disasters. The DRR-PFM Assessment has eight pillars, made up of multiple elements that allow governments to quickly collect data that describes PFM practices in disaster situations, highlighting potential weaknesses and strengths. DRR-PFM Pillar 5 focuses on Budget Management, Control, and Reporting and draws on international fiscal transparency standards to guide reforms aimed at ensuring resources for the post-disaster response and recovery period are used as intended in a transparent manner. Element 5.6 outlines issues policymakers should consider when seeking to enhance the transparency of disaster-related expenditure (See Box 1). Box 1: Inclusion of Fiscal Transparency in global tools aimed at enhancing the agility of PFM systems to respond to natural disasters and emergencies Disaster Resilient and Responsive Public Financial Management (DRR-PFM) Assessment Tool Pillar 5: Budget Management, Control, and Reporting during Disasters Element Issues 5.6 Transparency 1. Does the government prepare and publish the following disaster-related of Disaster- information in a timely and transparent manner? Related a. Entitlements for persons, households, and businesses for disaster relief, Expenditure response, and recovery and how these entitlements can be accessed b. Programs for persons, households, and businesses for disaster relief, response, and recovery and how these programs can be accessed c. Budget allocations for disaster-related expenditures d. Information on disaster-related programs and their intended activities e. Periodic budget execution reports for disaster-related expenditures and annual reports on specific funds dedicated to disaster response f. Public procurement contracting information for disaster response and recovery activities, including both ex-ante (list of pre-qualified/pre-selected contractors) and ex-post (contract awards, basis of awards) data g. Disaster response implementation reports summarizing financed activities and associated results 2. Is disaster-related expenditure and program information made available in open data formats and with adequate privacy safeguards? Source: DRR-PFM Assessment Tool The pressure on governments to deliver a swift and agile response altered the orderly conduct of the annual budgeting process in many jurisdictions. Governments adapted quickly through new spending and reprioritization of public resources. Common budgetary mechanisms deployed by governments include contingency appropriations, emergency spending provisions, reallocations and 14. virements, supplementary budgets, and external grants.26 In parallel, governments have had to ensure liquidity and manage existing and new domestic and international debt. The need for speed and flexibility also led to the adoption of ad hoc public budgeting practices, such as suspending fiscal rules, removing expenditure ceilings, fast tracking allocations to spending units, and streamlining and digitalizing procurement and payments processes. 27 While necessary, these actions have not been without cost. The OECD has noted the adoption of extraordinary practices have in some instances come at the expense of internal and external controls and fiscal transparency.28 Clarity and transparency of spending decisions and implementation have been a major concern in many countries’ response to the pandemic.29 III. Addressing Corruption through Enhanced Transparency A range of studies have correlated increased transparency with reduced corruption.30 From the outset of the Covid-19 crisis the IMF has advised its members to “spend what you [sic] need, but keep the receipts.â€?31 Accordingly, the IMF has asked member countries requesting emergency assistance to commit to: (i) Enhanced reporting of crisis-related spending (ii) Undertaking and publishing independent ex-post audits of crisis-related spending (iii) Ensuring procurement transparency by, for example, publishing procurement contracts; and/or (iv) Preventing conflicts of interest and corruption by publishing the beneficial ownership information of firms awarded procurement contracts. Additional measures have been suggested to mitigate corruption vulnerabilities during budget execution in an emergency. They include: • Budget execution should be conducted within the prevailing legal framework and in accordance with good practices, activating emergency provisions where available. 26 See Saxena, S., and M. Stone (2020), Preparing Public Financial Management Systems for Emergency Response Challenges. IMF Fiscal Affairs Department Covid Emergency Note, Washington DC. 27 OECD (2020), Government Financial Management and Reporting in Times of Crisis , Tackling Coronavirus (Covid- 19) Policy Brief, OECD Publishing, https://read.oecd-ilibrary.org/view/?ref=137_137068-ud1l74u5hs&title=Legislative- budget-oversight-of-emergency-responses (accessed 23 January 2022). 28 OECD (2020), Government Financial Management and Reporting in Times of Crisis , Tackling Coronavirus (Covid- 19) Policy Brief, OECD Publishing, https://read.oecd-ilibrary.org/view/?ref=137_137068-ud1l74u5hs&title=Legislative- budget-oversight-of-emergency-responses (accessed 23 January 2022). 29 OECD (2020), Government Financial Management and Reporting in Times of Crisis , Tackling Coronavirus (Covid- 19) Policy Brief, OECD Publishing, https://read.oecd-ilibrary.org/view/?ref=137_137068-ud1l74u5hs&title=Legislative- budget-oversight-of-emergency-responses (accessed 23 January 2022). 30 de Renzio, P., and J. Wehner (2015), The Impacts of Fiscal Openness: A Review of the Evidence. GIFT & IBP Incentives Research, Washington DC p.17. 31 IMF (2021), Beyond “Keeping the Receiptsâ€?: Initial Governance Lessons from Covid Emergency Spending, https://www.imf.org/en/News/Seminars/Conferences/2021/04/12/beyond-keeping-the-receipt (accessed January 23, 2022). 15. • Controls should be adapted and streamlined to ensure timeliness without compromising safeguards. • All transactions should be recorded to facilitate comprehensive monitoring and reporting; and • An adequate audit trail should always be maintained to facilitate ex-post assessment and evaluation.32 IV. Trust by citizens and other stakeholders Fiscal transparency is a pillar of open and inclusive government. The OECD defines ‘open government’ as “a culture of governance based on innovative and sustainable public policies and practices inspired by the principles of transparency, accountability, and participation that fosters democracy and inclusive growth.â€?33 Fiscal openness facilitates a dialogue with citizens around policy priorities and the costs of certain decisions, coalesces stakeholders around certain policy objectives, and instills a collective responsibility for citizens and public institutions to work toward achieving the goals that are collectively agreed. Transparency of the government’s policymaking when responding to a crisis, such as the Covid-19 pandemic, has been recognized as a key ingredient in the successful design and implementation of emergency measures.34 In extraordinary circumstances it is important that citizens trust that their government is competent and is working toward their interests; a government can foster trust by being responsive, reliable, ethical, fair, and open.35 The OECD defines trust as “a person’s belief that another person or institution will act consistently with their expectations of positive behavior.â€?36 Greater transparency instills citizens’ and firms’ confidence in the policies a government seeks to implement. Confidence in the government’s ability to respond to an emergency reinforces trust in government. Requirements attached to international financing for emergency measures affirms the importance of transparency and accountability to the effective implementation of the Covid-19 response. For instance, in the Western Balkans, the International Monetary Fund (IMF) is providing financial assistance and debt service relief to Albania, Bosnia and Herzegovina, Kosovo, Montenegro, and North Macedonia as part of its Covid-19 emergency relief. 37 Those arrangements include a commitment on the part of borrowing countries to promote reforms that facilitate the accountable and transparent use of funds. These requirements are driven by a need for financial assurance and a recognition that fiscal transparency and accountability are critical ingredients for the successful implementation of emergency measures. 32 Khasiani, K., Y, Koshima, A. Mfombouot, and A, Singh (2020), “Budget Execution Controls to Mitigate Corruption Risk in Pandemic Spendingâ€?, Fiscal Affairs Department Covid Emergency Note, IMF, Washington DC. 33 OECD (2016), Open Government: The Global Context and the Way Forward , OECD Publishing, Paris: p.5. 34 Davenport, S.; E. Kalluar, and J. Kunicova (2020), Coming Together While Staying Apart: Facilitating Collective Action through Trust and Social Connection in the Age of Covid-19. World Bank, Washington DC: p.20. 35 OECD (n.d.), “Trust in Governmentâ€?, https://www.oecd.org/gov/trust-in-government.htm (accessed 23 January 2022). 36 OECD (2017), OECD Guidelines on Measuring Trust. OECD Publishing, Paris: p.42 37 See IMF Member Country governance commitments on the IMF Covid-19 Financial Assistance and Debt Service Relief portal, https://www.imf.org/en/Topics/imf-and-covid19/COVID-Lending-Tracker (accessed 23 January 2022). 16. C. Fiscal Transparency in the Selected Jurisdictions in the Western Balkans prior to the Covid-19 Pandemic International budgeting and public finance standards establish a set of principles which governments across the world have largely embraced. Performance and assessment frameworks provide a means for governments, international organizations, and independent civil society to measure and compare actual practices with international standards, and to identify reforms based on the international standards. The Open Budget Survey (OBS) and the Public Expenditure and Financial Accountability (PEFA) Framework are examples of two globally recognized assessment frameworks that draw on international standards and principles - including those related to fiscal transparency - to assess existing practices. The OBS seeks to measure budgeting performance globally over a specific period. It is an independent, comparative evaluation conducted by the International Budget Partnership (IBP) biennially to assess countries’ PFM practices related to budget disclosure, public engagement in budgeting, and checks and balances on the budget process.38 The OBS traditionally focuses on open budgeting at the state-level. With respect to fiscal transparency, the data from the survey is used to assign a Transparency Score to each jurisdiction, which measures public access to information related to the budget process in 117 countries by assessing the online availability, timeliness, and comprehensiveness of eight key budget documents 39 using 109 equally weighted indicators and scoring each country on a scale of 0 to 100. In the most recent survey prior to the onset of the pandemic (i.e., OBS 2019), a Transparency Score above 61 indicated there was enough published material to support informed public debate on the budget.40 In 2019, the average global OBS transparency score was just 45; for the Western Balkan jurisdictions examined in this regional analysis, it was only 39.4.41 The PEFA Program was initiated in 2001 by the European Commission, IMF, World Bank, and the governments of France, Norway, Switzerland, and the UK, to harmonize the assessment of PFM across jurisdictions by standardizing the method for PFM diagnostic assessments. The PEFA Framework provides a methodology for assessing PFM performance at a specific point in time based on 94 characteristics (dimensions) across 31 key components of PFM (indicators) in 7 broad areas of activity (pillars). The PEFA Framework can be replicated across successive assessments to measure performance over time.42 There are multiple versions of the Framework; the initial PEFA 2005 version, the updated PEFA 2011 Framework, and the most recent PEFA 2016 38 See IBP (n.d.), “Open Budget Surveyâ€?, https://www.internationalbudget.org/open-budget-survey (accessed January 23, 2022). 39 The key budget documents are: (i) Pre-Budget Statement; (ii) Executive’s Budget Proposal; (iii) Enacted Budget; (iv) Citizens Budget; (v) In-Year Reports; (vi) Mid-Year Review; (vii) Year-End Report; and (viii) Audit Report. 40 See IBP (n.d.), “Open Budget Survey Transparency Scoreâ€?, https://www.internationalbudget.org/open-budget- survey/rankings (accessed January 23, 2022). 41 The OBS 2019 Transparency Scores for each of the three countries are: Bosnia & Herzegovina 33; North Macedonia 41; and Serbia 40. 42 The PEFA assessment framework is updated periodically, therefore, has several iterations. Most recently, the PEFA 2016 assessment framework replaced PEFA 2011. The latest framework includes more explicit measures related to fiscal transparency. 17. Framework. PEFA 2016 builds on the 2005 and 2011 versions through the addition of four new indicators, expansion and refinement of existing indicators, and recalibration of baseline standards for good performance in many areas. All three jurisdictions have benefited from periodic PEFA assessments using different iterations of the PEFA Framework. The most recent federal PEFA assessment in Bosna and Herzegovina was conducted in 2014 using PEFA 2011, North Macedonia in 2015 using PEFA 2011 with adjustments for revisions anticipated in the new PEFA 201643, and in Serbia in 2020 using PEFA 2016. The sequencing, emphasis, and number of dimensions included in each Performance Indicator (PI) across each iteration of the PEFA Framework differs. As such, similar PIs in different PEFA Frameworks are not directly comparable. However, the subject areas covered by PEFA 2016 PI-5 “Budget Documentationâ€?, PI-9 “Public Access to Fiscal Informationâ€?, and PI-10 “Fiscal Risk Reportingâ€? are sufficiently like PEFA 2011 PI-6 “Comprehensiveness of information included in budget documentationâ€?, PI-9 “Oversight of aggregate fiscal risk from other public sector entitiesâ€?, and PI-10 “Public access to key fiscal informationâ€? to inform a broader discussion about respective jurisdictions’ fiscal transparency performance. 44 PEFA 2016 PI-9 examines the comprehensiveness of fiscal information provided by the government and the extent of the public’s timely access to the information while PI-10 assesses reporting on fiscal risks related to public corporations, subnational governments, and the government’s contingent liabilities.45 Aspects common to both the OBI and PEFA 2016 include measuring the publication of key budget documents, timeliness of publication, comprehensiveness of information contained in the budget documents, the format in which the information is published, and whether summaries of budget information are provided. Interestingly, the budget documents that each performance framework focuses on and the timeline for publication differs. Table 1 below compares the budget documents each performance framework assesses and the timeline they are measured against. 43 At the time of publication, the results of the most recent North Macedonia PEFA Assessment are yet to be released. 44 See PEFA Secretariat (2017), PEFA 2016: Guidance on Tracking PFM Performance for Successive Assessments. PEFA Secretariat, Washington, DC, https://www.pefa.org/sites/pefa/files/resources/downloads/Tracking%20PFM%20Performance- Revised%20Guidelines%20New%20Logo_Feb20.pdf (accessed 23 January 2022). 45 There is a broad substantive alignment between PEFA 2011 PI-8 & PI-10 and PEFA 2016 PI-9 & PI-10. 18. Table 1: Comparison of Key Budget Documents and Publication Timeline for OBI and PEFA 2016 PEFA 2016 PI-5 Open Budget Index (9 Key Budgeting Documents) Budget Documents (8 Key Budgeting Documents) Basic Additional Documents46 Documents47 Macroeconomic Available within 1 week of their Forecasts endorsement Published at least 1 month before the Published at least 4 months Pre-Budget Statement budget proposal is submitted to before the start of the fiscal parliament year Published while the parliament is still Annual Budget Published within 1 week of considering the proposal and before the Proposal submission to parliament budget’s approval Citizens Budget: Published while the parliament is still Published within 2 weeks of Summary of Budget considering the proposal and before the the budget proposal being Proposal budget’s approval submitted to parliament Published within 3 months of the Published within 2 weeks Enacted Budget budget’s approval of the budget’s approval Citizens Budget: Published within 3 months of the Published within 1 month of Summary of Approved budget’s approval the budget’s approval Budget Routinely available to the In-Year Budget Published within 3 months after the public within 1 month of Execution Report reporting period ends issuance Published within 3 months after the Mid-Year Review reporting period ends Published within 6 months Annual Budget of the end of the fiscal Execution Report year 46 The Audited Annual Financial Report and the External Auditor’s Report are considered 1 budget document in the PEFA 2016 Framework but for purpose of comparison with other PFM Assessment Frameworks, are represented as 2 separate documents in the Table. 47 The Pre-Budget Statement and the Citizens Budget are considered 1 budget document in the PEFA 2016 Framework but for the purpose of comparison with other PFM Assessment Frameworks, are represented as 2 separate documents in the Table. 19. Published within 12 Year-End Financial Published within 12 months of the end of months of the end of the Statement the fiscal year fiscal year Published within 12 Published withing 18 months of the end External Audit Report of the fiscal year months of the end of the fiscal year Other External Audit Published within 6 months of Reports submission Source: Open Budget Index and PEFA Framework The variance between the definition of key budget documents (i.e., form) and the emphasis on the quality of the information published (i.e., function) lends itself to a comparison of the lessons and recommendations from the respective assessments rather than a direct comparison of specific rankings. It should be noted that the main budgeting documents that these assessments focus on do not explicitly include the budgeting measures that are most heavily relied upon during emergencies, such as contingency appropriations, emergency spending and contracting provisions, reallocations and virements, supplementary budgets, and external grants. The key fiscal transparency findings from OBS 2019 and the relevant state-level PEFA Evaluation for each country are described below. I. Bosnia and Herzegovina The OBS 2019 for Bosnia and Herzegovina only covered the state-level jurisdiction (i.e., BiH- Institutions). This includes the BiH Council of Ministers, the highest executive body of state-level governance in Bosnia and Herzegovina, and other state-level institutions. PEFA assessments have been conducted at the BiH-Institutions level in 2014 along with three sub-national jurisdictions, namely the Federation of BIH (BiH), Republika Srpska (BiH), and the autonomous Brcko District. Transparency data on the Federation of BiH (BiH) and Republika Srpska (BiH) were collected for this report along with other subnational jurisdictions that have yet to benefit from a separate PFM assessment during non-emergency conditions, such as Sarajevo Canton (BiH). For the sake of comprehensiveness, transparency ratings from assessments of sub-national jurisdictions conducted during non-emergency conditions have been included as subsets in Table 2 below, which summarizes the fiscal transparency ratings using globally recognized PFM assessment frameworks. Due to the diffused governance arrangements in Bosnia and Herzegovina, BiH-Institutions has the weakest mandate but is generally considered the most open. Nonetheless, it only received an OBS 2019 Transparency Score of 33. At the time of the survey, only five of the eight key budget documents the framework measures were available to the public. 48 The Government has never published a Citizens Budget or Mid-Year Budget Review and since OBS 2015, the In-Year Reports have been published late. Amongst the key budget documents that were published, the assessment raised concerns over the quality of the Executive’s Budget Proposal. It recommended additional revenue and expenditure information be included in future Budget Proposals. In addition, the comprehensiveness of the Enacted Budget was raised as an area for improvement. Specifically, the 48 Pre-Budget Statement, Executive’s Budget Proposal, Enacted Budget, Year -End Report, and Audit Report. 20. inclusion of expenditure estimates for individual programs, additional information on individual sources of revenue, and estimates of internal debt were identified as areas for strengthening. The 2014 federal PEFA Evaluation for Bosna and Herzegovina used the PEFA 2011 framework, which used a less stringent measure to assess fiscal transparency. Bosnia and Herzegovina met the threshold for five of the nine information benchmarks related to the publication of key budgetary documents.49 All key information, including budget documentation, execution, and audit reports as well as contract awards were found to be made available to the public in timely manner. However, the documentation did not contain information on financial assets for different institutions and information about the previous year’s budget out-turn was not presented in the same format as the budget document. As such, the comprehensiveness of information included in budget documentation (PEFA 2011 PI-6) was given a B rating while the orderly publication of fiscal information (PEFA 2011 PI-10) received an A rating as five of the six publication benchmarks were met (and the final one was not applicable). II. North Macedonia North Macedonia received an OBS 2019 Transparency Score of 41. Seven key budget documents were available to the public.50 Even though the Executive’s Budget Proposal that was submitted to the legislature for approval details the sources of revenue, allocations to ministries, proposed policy changes, and other information important for understanding the country's fiscal situation, the overall quality of this budget document was weak compared to the comprehensiveness of other budgeting documents published. In comparison to past rounds of the OBS, in 2019 North Macedonia recorded improvements in the publication of the Pre-Budget Statement and the Citizens Budget was published for the first time. Consistent with previous assessments, the Mid-Year Review was not published. After achieving its lowest Transparency Score of 35 in OBS 2012, North Macedonia – to its credit - has gradually improved its performance during each subsequent OBS round. To continue to improve its fiscal transparency performance, the OBS 2019 recommended that additional policy and fiscal risk information be included in the Executive’s Budget Proposal and the comprehensiveness of the Citizens Budget be strengthened by including additional information on the main policy initiatives in the budget, follow-up mechanisms and contact information to improve citizen engagement and access to follow- up information. OBS 2019 also recommended that the Mid-year Review, consistent with international standards, include a review of the economic assumptions underpinning the budget and an updated forecast of budget outcomes as well as a comprehensive update on the implementation of the budget as of the middle of the fiscal year. 49 The number of Key Budget documents differ between PEFA 2016 and PEFA 2011. PEFA 2011 PI-10 “Public Access to Key Fiscal Informationâ€? used 6 benchmarks to rate a country’ s performance: (i) Budget documentation submitted to parliament; (ii) Public access to in-year budget execution reports; (iii) Public access to year-end financial statements within 6 months after the completion of the audit; (iv) External audit reports published within 6 months of the completion of the audit; (v) Contracts over $100,000 published at least quarterly; and (vi) Information about resources available to primary service units [i.e., schools and health clinics] published at annually or available on request. BiH-Institutions (BiH) met the threshold for benchmark (i), (ii), (iv), and (v). 50 Pre-Budget Statement, Executive’s Budget Proposal, Enacted Budget, Citizens Budget, In -Year Reports, Year- End Report, and Audit Report. 21. North Macedonia is presently finalizing a PEFA evaluation using the PEFA 2016 Framework (not yet published), following a previous round in 2015. As for Bosnia and Herzegovina, the previous 2015 assessment was conducted using the earlier PEFA 2011 framework. The previous evaluation did apply several new criteria that were intended for the updated PEFA 2016 framework but had, at the time, not been formally adopted. In the 2015 assessment, North Macedonia received an A for public access to key fiscal information (PEFA 2011 PI-10), a B for the comprehensiveness of the budget information in the budget documents (PEFA 2011 PI-6) as only six of the nine information benchmarks were met. Limitations identified in the assessment included the absence of cash balances or other financial assets in the Fiscal Strategy or the Budget Documents to allow for a comparison of the previous year’s budget out-turn against the proposed budget. In addition, summarized budget data for both revenue and expenditure were absent, key budget documents did not include summaries of proposed expenditure related to budget classifications, analysis of the impact of proposed policies was not provided, and there was limited information about fiscal risk and contingent liabilities.51 In the draft 2021 assessment, North Macedonia retains an ‘A’ rating for public access to key fiscal information, but only a D for the comprehensives of budget information, as the number of overall elements included in the budget documentation dropped to five out of a total of 12 requirements (based on the 2016 PEFA methodology). III. Serbia Serbia has a OBS 2019 Transparency Score of 40. Like Bosnia and Herzegovina, only 5 key budget documents were available to the public.52 After achieving a Transparency Score of 47 in OBS 2015, Serbia’s overall transparency performance declined to 43 in OBS 2017. The OBS 2019 score marked another downward shift in Serbia’s fiscal transparency performance, despite the publication of an additional key budget document for the first time leading up to the OBS 2019 assessment, namely the Citizens Budget. The OBS framework assesses both the form and function of key budgeting documents. Despite, the publication of the Citizens Budget, there is potential for the document to be strengthened over the coming years to ensure the content is presented in a way that is more accessible. The Mid-Year Review was produced in 2019 for the first time since 2012 but was only for internal use and not published. A Pre-Budget Statement and the Year-End Report were not produced at all. In the case of the Year-End Report, this is a step back from the previous assessments when this document was published. Serbia can improve its fiscal transparency performance by publishing the remaining key budget documents it did not routinely publish at the time of the 2019 assessment (i.e., Pre-Budget Statement, Mid-Year Review, and Year-End Report), improving the comprehensiveness of the Citizens Budget, incorporating additional policy and fiscal risk information in the Budget Proposal, and expanding the scope of regular audits conducted by the SAI within its existing mandate. In 2021, Serbia completed a PEFA evaluation using the PEFA 2016 framework. In relation to fiscal transparency measures, PEFA 2016 PI-9 measures the comprehensiveness of fiscal information available to the public based on key documents or elements of information that are published. In Serbia, two of the basic documents are not published in a way that allows the information to be accessible to the public. The In-Year Budget Execution Reports are produced but not made publicly available in a format that allows for comparison with the enacted budget. The Annual Budget 51 Wiggins, J., J. Philip, B. PogaÄ?ar, and A. Bajo (2015), PEFA Assessment of the Former Yugoslav Republic of Macedonia Report, DFC International Consultants: p.7 & 35, https://www.pefa.org/node/921 (accessed 23 January 2022). 52 Executive’s Budget Proposal, Enacted Budget, Citizen’s Budget, In -Year Reports, and Audit Report. 22. Execution Report is not published before the final accounts are sent to parliament. The absence of these basic documents means performance was rated as a D. There was also concern about the lack of performance information included in key published budgeting documents. PEFA 2016 P-10 measures the extent to which fiscal risks are reported. The assessment acknowledged that the Government is developing these capacities; however, it stressed the need to strengthen its analysis of fiscal risk. The published Fiscal Strategy is meant to describe and quantify fiscal risk, whether associated with adverse macro-fiscal situations, financial positions of sub-national governments or public corporations, and contingent liabilities of the central government. However, at the time of the assessment there was limited data to conduct the analysis, which restricts the potential publication of this information in the Fiscal Strategy. This contributed to an overall C + rating for this indicator. Table 2 below provides a comparison of the ratings that each state-level jurisdiction received for fiscal transparency indicators during the most recent PFM performance assessments. Although OBI assessments have not been conducted at the sub-national level in Bosnia and Herzegovina, the PEFA assessment ratings for Federation of BiH (BiH) and Republika Srpska (BiH) are included in the table to provide a more complete summary of non-emergency PFM assessment outcomes across the jurisdictions covered by this report. Table 2: Comparison of Fiscal Transparency Ratings for each Country and Sub-National Jurisdiction from Recent PFM Assessments conducted in Non-Emergency Conditions PEFA Assessments Budget Public Access Fiscal Risk Country/ OBI Documentation/ to Key Reporting Sub-National Transparency Comprehensiveness Information [PEFA 2016 PI- Jurisdiction Score 2019 [PEFA 2016 PI-5 or [PEFA 2016 PI-9 10 or closest closest PEFA 2011 or closest PEFA PEFA 2011 equivalent (i.e., PI-6)] 2011 equivalent equivalent (i.e., (i.e., PI-10)] PI-9)] BIH-Institutions (BiH) 33 C (2014) A (2014) A (2014) Federation of BiH NA C (2014) B (2014) D (2014) (BiH) Republika Srpska NA B (2014) A (2014) C+ (2014) (BiH) North Macedonia 41 D (2021) A (2021) C (2021) Serbia 40 B (2021) D (2021) C+ (2021) Source: Authors based on OBI and PEFA reports. 23. D. Comparison of Fiscal Transparency Practices Across Jurisdictions during the Covid-19 Emergency This part of the analysis identifies patterns across jurisdictions and how practices during the Covid-19 emergency compared to international examples. An evaluation of implementation gaps during this period is provided, outlining disparities between legal transparency mandates and actual emergency implementation practices. This is complemented by an evaluation of the accessibility and openness of fiscal information more generally. The comparative assessment is framed around five key themes, namely Transparency of Covid-19 Spending; Transparency of Special Assistance; Transparency of COVID-19 related Public Procurement; Audit of Covid-19 Emergency Spending; and Information Accessibility. Each of the topics are covered in greater detail below. I. Period of Analysis The rule of law provides checks against an abuse of power by the state; irrespective the level of planning, there will be unforeseen events that existing laws and procedures are not designed to respond to, and extraordinary circumstances require governments to act with greater agility. Many countries have established legal mechanisms where, under prescribed conditions, a government can declare a State of Emergency. This declaration allows governments to exercise greater power or forego certain controls in the short-term to maintain agility in the face of an emergency. Broad emergency declarations can suspend normal rules and processes contained in budgeting and PFM laws, such as the need to obtain parliamentary approval for new expenditure, and to reallocate funds within the budget without external approval or complying with regular procurement processes. Some PFM legislation has discrete provisions that allow the government to disregard policy or process constraints for a short period, independent of a declared State of Emergency, so long as a justification is provided. For instance, in Serbia the Budget System Law recognizes extraordinary circumstances and allows temporary deviations from fiscal rules. In such a situation, the Government is obliged to prepare a report outlining how it will re-comply with the fiscal rules and submit it to the National Assembly withing 30 days or through the next Fiscal Strategy. The Republika Srpska (BiH) Fiscal Responsibility Law also allows such exemptions and requires a justification to deviate from the rules and the presentation of a strategy to return to compliance. Due to the scope, scale, and speed of the global pandemic, many governments formally declared a State of Emergency. In the case of the Western Balkans, all jurisdictions that are the subject of this analysis declared at least one State of Emergency. All jurisdictions were operating under a formal emergency in the second quarter of 2020. The exact period that each jurisdiction had a State of Emergency is detailed in Graph 1 below. 24. Graph 1: State of Emergency Timelines for Jurisdictions. Source: Authors based on materials collected Although the pandemic continues as of 2022, this report focuses on fiscal transparency rules and practices in the selected Western Balkan jurisdictions during the initial year of the Covid- 19 pandemic response, specifically March 2020 to June 2021. For the purposes of data collection, the study adopted the period when formal emergencies were declared in the Western Balkan jurisdictions (namely March 2020) as the starting point for the crisis. The fiscal year in all jurisdictions aligns with the calendar year. The study continued to collect data through until normal budgeting mechanisms reengaged in the next fiscal year (i.e., early in 2021). Desk research continued through 2021 to monitor transparency related to the implementation of emergency measures and capture lessons from external audit findings published over the course of 2021. 25. II. Transparency of COVID-19 Spending Budget and Spending Almost all the reviewed governments’ original budgets were approved before the start of 2020. After the onset of the crisis, each jurisdiction needed to approve one or two subsequent rebalances in response to the pandemic. The specific budgeting timelines are outlined in Graph 2 below. Graph 2: Budget Adoption and Revision Timelines for 2020 Source: Authors based on materials collected BiH-Institutions53 were the only exception to this trend. The Government54 adopted its original budget in the middle of 2020; therefore, the initial budgeting documents already included Covid-19 related spending. Sarajevo Canton (BiH) adopted its second budget adjustment by July 2020. Serbia, North Macedonia, and Republika Srpska (BiH) adopted second adjustments before the end of the year. The Federation of BiH (BiH) only had one budget adjustment for the period that is the focus of the analysis. Information on budget rebalances from at least one publicly accessible source for each jurisdiction were located. Some jurisdictions, such as North Macedonia, published documents in machine-readable formats, including on pandemic-specific websites. However, there were no specific provisions in the budget adjustments/ supplemental budget documents that addressed the need for fiscal transparency or incorporated tailored processes or actions aimed at enhancing fiscal transparency through the emergency measures. 53 The research covers the following BiH jurisdictions – BiH-Institutions, Sarajevo Canton (BiH), Republika Srpska (BiH), and Federation of BiH (BiH). 54 The term “Governmentâ€? is used to refer to the “BIH Council of Ministersâ€?, the highest executive body at the BiH - Institutions level of governance. 26. In most of the rebalanced budgets, budget adjustments or reallocations were not clearly delineated beyond aggregate balances. Graph 3 below details the information each jurisdiction provided when rebalancing the budget. Reallocations were not presented in a single document and, mostly, did not provide the information in machine readable formats. As such, when information related to budget adjustments was available, most of the data needed to be extracted and processed manually if it was to be understood in the context of the broader budget and policy framework for the jurisdiction. Graph 3: Information Provided when Rebalancing the Budget Source: Authors based on materials collected South Africa is an example as to how governments can maintain fiscal transparency around supplementary budgeting processes, especially during an emergency. In 2016, South Africa created an Open Budget Portal as part of its efforts to implement its third Open Government Action Plan.55 Conditions arising from the Covid-19 pandemic meant the Government of South Africa had to prepare a supplementary budget. Spending information and adjustments were disclosed on the Open Budget Portal,56 including the main budget balance, tax revenue shortfalls, and non-interest increases in expenditure related to emergency measures. Supplemental spending was mapped according to key emergency measures (such as support to vulnerable households, the health system, municipalities, frontline services, and SMEs) as well as allocations to departments and spending units, programs. Importantly, disclosed information included the policy and financing trade-offs that were reflected in the disclosure of information about the 20 programs with the biggest decrease in funding. 55 Government of South Africa (2016), South Africa’s Third National OGP Action Plan 2016-18. Open Government Partnership: https://www.opengovpartnership.org/members/south-africa/commitments/ZA0017/ (accessed March 28, 2022). 56 Government of South Africa (2020), “Supplementary Budget 2020/21.â€? Web publication through vulekamali/ SA Online Budget Data: https://vulekamali.gov.za/covid-19-response/supplementary-budget-2020-21/ (accessed March 28, 2022). 27. Budgeting totals were only broadly demarcated; however, the greatest hurdle to understanding how public resources were being directed as part of the emergency response was the limited application of budget classifications for different types of expenditure. Basic administrative and functional classifications are essential for monitoring allocative and operational performance. Even in the absence of program-based budgeting, governments can add classifications to track and monitor resources allocated to different emergency programs. Ideally, program and expenditure classifiers adopted for emergency measures should align as closely with those used during normal budgeting processes. This would provide a clearer bridge between the expenditure contained in the original budgeting documents and subsequent adjustments and targeted emergency response measures. The documentation supporting the emergency fiscal policy packages generally did not include detailed budget classifications and were weakly linked to other routine budget documents published before the start of the crisis. Graph 4 details the different approaches and level of budget classification applied to budgeting documents in each jurisdiction. Despite the lack of budget classifications, it was possible to manually identify major re-allocations (except for BiH-Institutions) based on differences in overall budgeting totals (e.g., variance in Health Department budgets) and, in some cases, administration classifications. Graph 4: Budget Classifications and Policy Information provided for Covid-19 Measures Source: Authors based on materials collected There was limited use of detailed classifications in emergency responses. Even when basic classifications were published, such as in Serbia, Republika Srpska (BiH), and Sarajevo Canton (BiH) they were not published in an open format, so had to be manually correlated against emergency policy objectives and previous budget allocations. The Serbian "Program of Economic Measures to Reduce the Negative Effects Caused by the COVID-19 Virus Pandemic and Support the Serbian Economy" only showed aggregate spending amounts per measure. The justification for the second budget rebalance, which was based on actual expenditures, also only offered aggregate information rather than delineated information tagged to specific initiatives. 28. North Macedonia has a Covid-19 dedicated webpage with a list of government institutions responding to the crisis and transfer recipients that benefitted from state aid. However, there is no way to connect this information with budgeting documents produced in the normal course of the budgeting year or the broader government policy framework as only a broad explanatory narrative of the estimated expenditures was provided. The Federation of BIH (BiH) included information about Covid-19 transfers in their rebalanced budget, which provides a breakdown of estimated expenditures by administrative and economic classification. Sarajevo Canton (BiH) also provided estimates for each spending measure and applied administrative and economic classifications in their budget expenditure reports. Meanwhile, Republika Srpska (BiH) only published the details of businesses that received state aid as part of the emergency response on two websites. Problematically, none of the information published in any jurisdiction identified the budget trade-offs for the emergency measures that were adopted. As outlined above, effective functional classification in the budget documents is a useful tool for governments to show how public funds are being mobilized to respond to a crisis. France used program classifications to identify Covid-19 spending in the state budget. The first Supplementary Budget Law (SBL) detailed the broad policy goal of tackling the pandemic and established two programs that were to be funded through the SBL. As the emergency evolved, a second SBL established and appropriated funds for two additional programs. Data regarding emergency response spending could be monitored through program classifications in the budget, disclosed through the French Open Data Portal, which proactively disclosed the flow of resources to key response areas. Global Example: France – Publication of Approved Emergency Expenditure using Program Classifications Source: data.gouv.fr Another global example of the publication of budget classification in key budget documents is Peru. Peru provided emergency response budget classification information by publishing a Covid-19 open format dataset that included all relevant regularly used budget classifications, linked emergency expenditure to regular budget datasets, and identified subsequent budget adjustments as part of the regular budgeting framework. 29. The government created a devoted Covid-19 section on the Peru Open Data Portal 57 that consolidated information and datasets on budget spending, procurement procedures, and other health and demographic data points such as Covid-19 cases by region, mortality rates etc. The spending dataset includes relevant core metadata such as update frequency, the institution responsible for maintaining the data, and license information. The dataset has identifiers and labels for administrative, economic, functional, and programmatic classifications for budget allocations and is available in CSV and XLSX formats (three-star linked data 58). The dataset has original budget allocations and adjusted budget columns incorporating Covid-19 measures and uses the same variables as in its regular budget dataset,59 allowing linkages to be easily made. Trust Funds, Extra-budgetary Funds & Emergency Specific Funds Public resources used by the respective jurisdictions to respond to the pandemic were predominantly managed through the budget. 60 This is a notable achievement as budget comprehensiveness and consistency are key PFM objectives. The few exceptions were: • Serbia’s Health Insurance Fund (HIF), which was bolstered by RSD 85 billion (approximately US$ 85 million) primarily for the prevention and mitigation of Covid-19. The HIF had a large funding gap owing to the decline in social contributions because of the pandemic. The gap was mainly covered by budget transfers from the Ministry of Finance and the Ministry of Health. • Serbia established a Development Fund that provided off-budget support to SMEs by providing loans that businesses could use for liquidity and working capital. The Decree on Determining the Program of Financial Support to Economic Entities for Maintaining Liquidity and Working Capital in Difficult Economic Conditions due to the COVID-19 Pandemic Caused by the SARS-COV-2 Virus provided the legal basis for the fund and laid out the institutional arrangements, policy rationale, reporting/auditing requirements, and estimated and actual total expenditure. • Only Republika Sprska (BiH) has an emergency fund that was managed off-budget. Published documentation includes its legal mandate, policy rationale, institutional arrangements, and estimates of income. • Donor-funds in Serbia, BiH-Institutions, and Sarajevo Canton (BiH) were managed off- budget. There were no donor-funds reported in budgeting documents in North Macedonia and Federation of BiH (BiH) and no significant donor grants were recorded in Republika Srpska (BiH), despite media and donor reports to the contrary. 57 See the Peruvian Government administered “Plataforma Nacional de Datos Abiertosâ€? platform - https://www.datosabiertos.gob.pe/dataset/ejecuci%C3%B3n-presupuestal-consulta-amigable-ministerio-de- econom%C3%ADa-y-finanzas-mef/resource-7 (accessed 23 January 2022). 58 See Berners-Lee, T. (2009), “Up to Design Issuesâ€? for more information about the Linked Data star system, https://www.w3.org/DesignIssues/LinkedData.html (accessed 23 January 2022). 59 See the budget execution reports for the years 2014 to 2021 on the Peruvian Government administered “Plataforma Nacional de Datos Abiertosâ€? platform - https://www.datosabiertos.gob.pe/dataset/ejecuci%C3%B3n- presupuestal-consulta-amigable-ministerio-de-econom%C3%ADa-y-finanzas-mef/resource-7 (accessed 23 January 2022). 60 North Macedonia has a Health Insurance Fund (HIF); however, based on a published information, it is unclear if the HIF was used it for the COVID-19 emergency response. 30. It was generally observed that the transparency of HIFs and spending from reserve allocations was lower than for main budget expenditures. This suggests greater consideration should be paid to fiscal transparency elements of off-budget emergency response measures. Public Investments Information on public investment is scarce across the region. Researchers compared budget documents, budget execution reports, results from internet searches, and information on official government websites. Contrary to global trends, there are no dedicated portals on public investment. Most countries did not disclose information about new, accelerated, or decelerated public investment projects as part of the response to the economic crisis or the medium to long-term spending implications of changes in public investments. For Serbia and North Macedonia, no systematic sources of information related to public investment and Covid-19 spending was identified. In Serbia, capital project allocations in the budget were reduced or postponed during the early phase of the pandemic, but this was not explicitly announced. Only general information about public investments could be garnered from comparing the original and rebalanced budgets and/or through internet searches. It appears that there were budget cuts to public investment in Republika Srpska (BiH) across the period analyzed. No new public investments spending was disclosed in BiH-Institutions. Accessible information suggests public investments were generally downsized in Federation of BiH (BiH), but specific information could only be found for one of the major investment projects. Sarajevo Canton (BiH) was the exception to the regional trend regarding publication of public investment information. Through budget documents, it was possible to identify Covid-19 related changes in public investment in the health, education, and civil protection areas. Health Sector Spending All jurisdictions increased the Ministry of Health’s budget,61 except for BiH-Institutions as it does not have a health spending mandate. The overall increase documented in the budget documents is outlined in Graph 5. 61 In BiH and Serbia the researchers used the Health Ministry for this assessment (administrative classification), while in North Macedonia, the increase refers to the health function (functional classification). 31. Graph 5: Increase in the Ministry of Health budget (amounts in million euros)* *North Macedonia’s increase refers to the health function (functional classification). Source: Authors based on materials collected Information in the budget documents is sufficiently detailed to determine additional resources were devoted to hiring health workers in all jurisdictions responsible for financing health services, aside from Republika Srpska (BiH).62 However, the budget documents do not provide information about the number of staff, type of services provided, payment levels, and the permanency of the posts created. The type of information about additional workforce expenditure published by the jurisdictions is outlined in Graph 6. Serbia provided the most information about the workforce expenditure, followed by Sarajevo Canton (BiH). Research in North Macedonia only showed the government hired new staff. Republika Srpska (BiH) published limited data aside from information verifying there were no salary increases. Graph 6: Transparency of Spending on Health Workforce Source: Authors based on materials collected 62BiH-Institutions and Federation of BiH (BiH) are not included. BiH-Institutions does not provide health services. In Federation of BiH (BiH), health services are provided directly by cantons. Only certain public and tertiary-level health services are financed by the Federation of BiH (BiH) level. 32. III. Transparency of Special Assistance Special assistance has been a critical pillar of governments’ responses to the crisis across the globe. All jurisdictions examined in this report have state aid laws that stipulate rules for support to different beneficiaries. All three countries instituted special arrangements for the allocation of assistance during the emergency relying on a myriad of instruments including decrees and temporary frameworks. All governments 63 published some information on the support given to different types of beneficiaries as part of the Covid-19 response. The primary beneficiaries of special assistance measures have been SMEs that received state aid and individuals belonging to vulnerable groups who received social support. Graph 7 provides a breakdown of the broad clustering of beneficiaries the respective jurisdictions supported through special assistance. Graph 7: Availability of Information on Special Assistance by Beneficiary *The “Other vulnerable beneficiariesâ€? category includes beneficiaries that the researchers considered vulnerable in their respective countries, such as the unemployed, women, single parents, and pensioners. Source: Authors based on materials collected 63 Except for BiH-Institutions due to its limited mandate related to this responsibility. 33. There is a variance in transparency practices adopted by each jurisdiction regarding the beneficiaries of these emergency measures. No pre-existing laws or emergency measures in any jurisdiction requires disclosure of information or analysis related to the different types of beneficiaries for state aid. For instance, in North Macedonia the state aid law only prescribes the submission of annual reports by agencies on overall expenditure and in BiH-Institutions there have only been calls for issuing bylaws establishing conditions for awarding aid. North Macedonia and Serbia include an explanatory narrative and state aid eligibility criteria in their budgeting documents. It is notable that North Macedonia is the only jurisdiction that published the estimated and actual Covid-19 support given to all categories of beneficiaries. Serbia provides information on expected and actual expenditure but does not have disaggregated information on social support, not even socio-economic data. As such, it is difficult to determine the extent of support being provided to the poor or other target groups. BiH jurisdictions published limited information on individual beneficiaries. Sarajevo Canton (BiH) was the only jurisdiction that released information on the estimated support provided to unemployed workers. None of the governments released information allowing a discrete disaggregation of information by gender. Serbia was the only country that mentioned support to women within the scope of its response, mainly through the provision of hygiene packages and essential food supplies. Transparency of State Aid for SMEs All governments published information on the support provided to business beneficiaries.64 For example, from information disclosed, Serbia provided direct financial support to businesses that did not reduce their number of employees by more than 10 percent and/ or focused on the agriculture, tourism, and health sectors. They also provided loans to SMEs that could establish they were financially stable before the pandemic. Information about individual businesses that benefited from government aid during the emergency is available in most jurisdictions. North Macedonia had a pillar of its Covid-19 response titled “private sector to keep economic activity and jobs aliveâ€?. The measure included eligibility for support under the pillar. North Macedonia subsequently disclosed Covid-related payments to business beneficiaries, including providing an individual budget classification for each transfer. 64 Except for BiH-Institutions due to its limited mandate related to this responsibility. 34. Regional Example: North Macedonia - Disclosure of Individual Covid-19 Emergency Payments to Businesses in Public Expenditure Records Source: koronavirus.gov.mk In the BiH jurisdictions, Republika Srpska (BiH) and Federation of BiH (BiH) published a list of businesses benefitting from grants and/ or the Guarantee Fund established in response to the emergency. Sarajevo Canton (BiH) published information as to those businesses its response measure was targeting. Regional Example: Republika Srpska (BiH) & Federation of BiH (BiH) - Disclosure of the Name of Businesses and the Value of Guarantees Granted Example of Republika Srpska (BiH) Disclosure of Business Beneficiaries Source: Authors based on materials collected 35. Example of Federation of BiH (BiH) Disclosure of Business Beneficiaries Source: Authors based on materials collected Transparency of Social Support for Vulnerable Groups Information about social assistance provided to vulnerable groups is the least clear. Jurisdictions did not use budget classifications for special assistance measures for vulnerable groups either related to budget allocations or payments.65 The lack of disaggregated demographic, socio- economic or regional data make it difficult to assess if social assistance was properly targeted and which groups received the greatest support. This limits any independent assessment of the impact or effectiveness of relief measures. Monitoring the effectiveness of social protection measures during the Covid-19 emergency response requires disaggregated expenditure data classified according to vulnerable beneficiaries. All the jurisdictions broadly articulated the vulnerable groups emergency measures were targeting, whether they were the poor, minority populations, women and children, and/ or other vulnerable beneficiaries. However, there were not any differentiated estimates of support for each vulnerable group or actual expenditure for those specific groups. Only Serbia and Republika Srpska (BiH) provided some follow-up information on expenditure. The former published aggregate data by type of incentive in their second adjusted budget, while the latter presented specific amounts per beneficiary on the Tax Administration website. 65 The only jurisdiction to use budget classifications for special assistance was North Macedonia, which only classified individual Covid-19 emergency business support payments provided as part of its state aid to SMEs as “Otherâ€?. 36. Identifying Vulnerable Groups in the Design and Delivery of Emergency Responses Canada provides an international example as to how to include delineated data in an economic response plan. The Annex66 to the Canadian Government’s Economic Response Plan specifies each measure’s targeted population group, disaggregated by gender, income distribution, and generation. It also details the findings from a gender-based analysis conducted during the first policy stage of the emergency response. This example illustrates that the impact of policies on specific beneficiaries can be included during the design stage, even during the preparation of a response to a crisis. Global Example: Canada – Publication of Economic Response Plan with Targeted Population Groups Source: Government of Canada - https://www.canada.ca/en/department- finance/services/publications/economic-fiscal-snapshot/gba-summary-economic-response-plan.html 66 See Government of Canada (2020), “Economic and Fiscal Snapshot 2020â€?, https://www.canada.ca/en/department-finance/services/publications/economic-fiscal-snapshot/gba-summary- economic-response-plan.html (accessed January 23, 2022). 37. Engaging Citizens in the Design and Delivery of Policies helps Identify Vulnerable Groups and Monitor Implementation of Emergency Responses Even during a crisis, citizens and organized groups can participate in the design of the emergency policy response. Norway’s experience illustrates public participation can help target the government’s emergency response to the community’s needs. Public participation also presents an opportunity for citizens to shape how to measure the impact of the government’s emergency policies and engage citizens in tracking implementation. Norway was the only country in the IBP’s 2021 Managing Covid Funds: The Accountability Gap study67 where both the executive and legislative branches of government consulted broadly before designing and implementing emergency response packages. Both institutions: • Used a variety of participation processes that could be leveraged during a pandemic • Made efforts to include vulnerable groups in those process; and • Provided comprehensive background information to inform public participation and disclosure of agreed measures that provide the basis for subsequent feedback. Global Example: Norway – Inclusion of Vulnerable Groups in Designing and Implementing the Emergency Response Norway's legislative branch publishes a list of consultations on proposed reforms at https://stortinget.no/no/Hva-skjer-pa-Stortinget/Horing/. The public were invited to provide written comments on temporary amendments to the Communicable Diseases Act proposed in response to the Covid-19 pandemic.68 The website shows the written comments provided and the status of the amendments. 67 IBP (2021) Managing Covid Funds: The Accountability Gap, International Budget Partnership Report, Washington DC: pp.7-8, https://internationalbudget.org/covid/wp-content/uploads/2021/05/Report_English-2.pdf (accessed January 23, 2022). 68 See Parliament of Norway (2020), “Consultations on Temporary Amendments to the Infection Control Act (Regulations relating to isolation and restrictions on freedom of movement to prevent the transfer of SARS-CoV-2) Prop. 131 L (2020-2021)â€?, https://stortinget.no/no/Hva-skjer-pa-Stortinget/Horing/horing/?h=10004329 (accessed January 23, 2022). 38. The government has a complementary website that discloses public consultations69 including deadlines, contact data, and other relevant information. Measuring the Effectiveness of Special Assistance During Emergencies Jurisdictions did not include non-financial indicators to measure the performance or impact of state aid provided to different beneficiaries as part of the emergency response. North Macedonia did provide a high-level explanatory narrative of the expected performance and impact of its response measures.70 However, five out of the six jurisdictions did not publish any information on estimated non- financial inputs, targets, or results. In addition, none of the emergency measures identified the short or medium-term trade-offs needed to implement the response. This is particularly important for vulnerable beneficiaries, such as the poor, women, and children, who are more exposed during a crisis and continue to be disproportionately burdened once the emergency subsides. 69 See Government of Norway (2020), “Historical Archive on Corona Act Hearingsâ€?, https://www.regjeringen.no/no/tema/Koronasituasjonen/forskrifter-med-hjemmel-i-koronaloven/koronaloven-og- forskriftsendringer/id2695161/ (accessed 23 January 2022). 70 Countries initiated budget management reforms aimed at introducing program budgeting over a decade ago; however, the reforms are still in the implementation stage. As such, budgets are planned and adopted with limited performance information. 39. Mexico regularly reports on non-financial indicators related to its budget programs. The Ministry of Finance publishes this information in their Budget Transparency Portal71 as open data and using infographics. Global Example: Mexico – Publishing Non-Financial Indicators in Transparency Portal Indicators are linked to program expenditure and published through the government’s budget portal. When an indicator shows a goal has not been reached or if the goal is adjusted, the responsible institution is required to input the rationale for the change in Mexico's non-financial indicators monitoring information system. Although there is not a unique variable identifying Covid-19 related changes, public sector institutions have used general reporting fields in the non-financial indicators monitoring information system to explain changes in budget program goal performance influenced by the response to the Covid-19 pandemic. Global Example: United Kingdom – Citizen Feedback on the Effectiveness of the Covid- 19 Emergency Response The United Kingdom’s Parliamentary Public Accounts Committee (UKPAC) is an example as to how PFM institutions can engage the public after the implementation of an emergency measure to provide non-financial feedback on the effectiveness of the response. The UKPAC is undertaking work to hold the government accountable for its implementation of Covid-19 response measures. Its website provides explanations of governmental program intentions and invites citizens to submit evidence of their experience by specified deadlines. Government responses, oral evidence transcripts, and written evidence information is also available for download. The UKPAC then published its report, including recommendations for addressing performance deficiencies. 71 See Government of Mexico (n.d.), “Transparencia Presupuestaria Observatorio del gasto,â€? https://www.transparenciapresupuestaria.gob.mx/es/PTP/programas (accessed January 23, 2022). 40. The UKPAC’s assessment of program implementation and recommendations is subsequently published. Source: UKPAC - https://committees.parliament.uk/committee/127/public-accounts-committee IV. Transparency of COVID-19 related Public Procurement All the jurisdictions have procurement laws that include provisions specifying key procurement stakeholders and their roles, the types of procurement processes to be followed, electronic systems for tender processes, and the disclosure of procurement plans and contracts. BiH enacted its procurement law (which applies to all BiH jurisdictions) in 2014; North Macedonia in 2019; and Serbia enacted a new law in July 2020. The new Serbian legislation increased the thresholds above which contracting authorities must conduct public procurement, introduced new criteria for awarding contracts, and established mandatory electronic communication and data exchange through the Public Procurement Portal. Importantly, legislation in each of the jurisdictions contains provisions governing changes to procurement processes during an emergency. For example: • In BiH and North Macedonia, procurements are permitted without public notice in urgent cases unrelated to the operations of the contracting authority. During the pandemic the procurement authority in BiH exempted some urgent procurements from normal provisions in the procurement law; however, the rest of government contracts needed to be processed using the direct contracting or negotiated procedure without prior publication procurement method; and • In Serbia, procurements are permitted without publishing notices in cases of extreme urgency (owing to events not flowing from government actions) that make it impossible to act within requisite open, restricted, or competitive procurement process timelines. 41. Information Published on e-Procurement Platforms Irrespective whether it is an emergency, procurement processes require that information on tenders, awards, and contracts be published online. Each jurisdiction manages e-procurement platforms for sharing related information. Graph 8 outlines the scope of procurement information demarcated by the procurement stage that is published in each jurisdiction. The scope of information published on the e-procurement platforms is similar across jurisdictions. Jurisdictions publish at least some procurement information up until the issuance of a contract. Notably, North Macedonia is the only jurisdiction that publishes some information pertaining to contract implementation. However, researchers were unable to verify if all procurement information was published for those stages up until a contract is awarded, the quality of the information published, and/or whether the information disclosed covers all Covid related emergency procurements. Graph 8: Publication of Information by Jurisdiction based on Procurement Stage Source: Authors based on materials collected Serbia and North Macedonia have centralized e-procurement portals that all government institutions use to electronically manage procurements. Processing of contracts up to a prescribed threshold can be manual; however, any procurements above the thresholds need to be processed electronically. Although procurement in BiH is governed by a national-level procurement law, implementation is decentralized and relies on the actions of individual contracting authorities (i.e., public institutions) in the respective BiH jurisdictions. The national-level public procurement agency monitors the implementation of the law and administers a unique online system. The use of the central online system is only partially standardized for the bidding phase of the procurement cycle. The procurement law requires the contracting authorities publish their procurement plans, which include high value procurements, procurement notices, contract award notices, and elements from the formal agreements, such as the value of the contract, on the central public procurement portal. However, this makes it difficult to assess the level of transparency of the procurement process administered by individual contracting authorities. 42. Despite challenges in the centralized disclosure of procurement information in BiH, there are interesting examples of efforts to increase transparency of procurement related data through designated online platforms within the same jurisdiction. For instance, Sarajevo Canton (BiH) publishes certain procurement data on parallel fiscal transparency and accountability platforms as part of the Government’s broader effort to combat corruption. This facilitates enhanced monitoring for impact and proper use of funds. Regional Example: Sarajevo Canton (BIH) – Publication of Entities that Contracting Authorities are procuring from on Anti-Corruption Agency Website Sarajevo Canton (BIH) Government established a central database on public procurements conducted by contracting authorities in the canton. The database, administered by the Government’s Anti-Corruption and Quality Control Office, retrieves selected procurement data from contracting authorities’, compiles them based on pre-defined parameters, and makes them publicly available on the Government website. Source: Authors based on materials collected Delineation of Covid-19 Emergency Response Contracts The research team had to conduct extensive searches to locate publicly available COVID-19 specific information despite the regular publication of procurement information across all jurisdictions. North Macedonia was the only government that delineated pandemic-related contracts through a dedicated Covid-19 website. In Serbia, pandemic related contracts can only be found indirectly, using keywords and search filters. Meanwhile in Republika Srpska (BiH) and Federation of BiH (BiH), the individual contracting authorities’ websites had to be scoured to identify pandemic related contracts. 43. Emergency procurements during the Covid-19 pandemic included vaccine supply agreements, and contracts for ventilators and Personal Protective Equipment (PPE), such as medical masks. There were universal challenges around the transparency of vaccine contracts due to strict commercial in confidence clauses in the supply contracts.72 During the early stages of the crisis, countries were outbidding each other to get scarce supplies of ventilators and PPE. There were at least some instances of politically connected companies and individuals receiving lucrative contracts to source and supply some of these scarce goods.73 A requirement to publish emergency related procurements even when normal processes are bypassed would enhance transparency around with whom governments are contracting, the value of the contract, and the substance of the contract. Also, greater fiscal transparency around budget allocations would have, at least, allowed for an assessment of the proportion of emergency spending devoted to procurement. Serbia’s new Law on Public Procurement, which came into force on July 1, 2020, requires the publication of all contracts, aside from those related to the security sector. Therefore, any pandemic procurements made after this date (but not before) are meant to be disclosed. The increasingly wide use of e-procurement portals helps with the publication of contract details and facilitates public access. However, an ongoing challenge for stakeholders is assessing the comprehensiveness of the information posted. Regional Example: North Macedonia – Publication of Covid-19 Specific Procurements North Macedonia was the only jurisdiction that published a Covid-19 specific website containing key variables for the more than six thousand pandemic-related contracts. The website allows Excel files to be downloaded and links contracts with the e-procurement portal. 72 See Apuzzo, M., and S. Gebrekidan (2021), “Governments Sign Secret Vaccine Dealsâ€? (2021), New York Times, https://www.nytimes.com/2021/01/28/world/europe/vaccine-secret-contracts-prices.html (accessed 23 January 2022); and Kuloglija., N. (2021), "Bosnia Entity’s Secrecy Over Vaccine Procurement Draws Criticism,â€? BalkanInsight, Sarajevo, https://balkaninsight.com/2021/07/08/bosnia-entitys-secrecy-over-vaccine-procurement-draws-criticism/ (accessed January 23, 2022). 73 See Associate Press (2020), “Bosnia: imported ventilators from China useless for COVID-19.â€? May 11, 2020. AP News, Web: https://apnews.com/article/china-technology-medical-equipment-europe-global-trade- 5363cf8ab0c788c0a6d7e25eb3577f09 (accessed March 26, 2022). 44. The e-procurement portal has additional information on the tender and award stages, such as the tendered lots, number of bidders, highest and lowest bids, and the award criteria. Source: Authors based on materials collected The following global example highlights how other governments were able to disclose Covid-19 related emergency procurement information. Global Example: Ukraine – Filtering Covid-19 Procurements on e-Procurement Platforms Ukraine's national procurement system "ProZorro" 74 allows for the filtering of Covid-19 related procurements by completion status. 74See Proz rro (n.d.), “Electronic Open-Source Government e-Procurement Systemâ€?, https://prozorro.gov.ua/en (accessed January 23, 2022). 45. Each entry is accompanied with relevant procurement information such as the procuring entity’s details, expected value of the contract, supplier’s name, and price of items per unit. The platform and related procedures allow for the easy reporting of violations of the procurement legislation. Source: Authors based on materials collected 46. ProZorro also has a business intelligence application75 that shows different dashboards with relevant procurement statistics that can be filtered by Covid-19 procurement procedures. Dashboards show information for key procurement processes and include information on tender/lots, procuring entities, and bidders. The former dashboard shows the bidder’s name and relevant data such as the number and value of bids received, the number and value of winning bids, and the current value of contracts. The data in each dashboard can be exported in xlsx format. Ukraine’s coding of procurement processes demonstrates emergency contracts can be delineated using tags and that web applications and visualizations can draw on this data to share procurement information in a consolidated and accessible format. 75 See Proz rro (n.d.), “Electronic Open-Source Government e-Procurement System Qlink Hubâ€?, https://bi.prozorro.org (accessed January 23, 2022). 47. V. Audit of Covid-19 Emergency Spending External audit is a key component of an effective emergency response.76 SAIs have a role in ensuring that public resources deployed as part of the emergency response are used with probity and achieve the intended objectives of the policy measures. The findings of audits conducted by the SAI also provide a basis for distilling lessons for strengthening the PFM response to future crises. The publication of the information that the audits are based on and the analysis supporting the recommendations bolsters fiscal transparency and accountability. The timely issuance of audit findings ensures the ongoing effectiveness of the government’s response, incentivizes proper management of funds throughout the crisis, and allows tangible lessons to be contemporaneously drawn from the experience. SAIs can support the emergency response by exploring unique ways to conduct audits. This can include short, targeted audits of specific measures or conducting audits during the implementation of government programs to provide real-time assurance and compliance with new regulations. Given the timeframe of this analysis, publication of audit reports by SAIs was not included in the Information Assessment Framework originally used to gather evidence about each jurisdictions’ PFM response. Most audit reports about 2020 expenditures have only been published in late 2021. Hence, a brief supplementary ex-post analysis was conducted to determine what relevant audit reports had been published by late 2021, and any key findings related to the issue of transparency. The Federation of BiH (BiH) was one of the first jurisdictions to publish audit findings on the emergency response with the release of a performance audit on Efficiency of Planning and Implementation of COVID Response Measures in June 2021. The audit focused on activities implemented by the FBIH Government, FBIH Ministry of Finance, FBIH Tax Administration and FBIH Development Bank across the period March–December 2020, and identified limitations in the emergency response, including a lack of clearly defined objectives and performance indicators for most of the measures as well as detailed and transparent expenditure planning. Inadequate monitoring and reporting on the implementation of the Covid-19 response measures inhibited the SAI’s ability to monitor progress and there was no public access to data on the implementation of measures, spending and impact. Despite the legal provisions authorizing the emergency measures sunsetting in July 2020 and implementation closing by the end of 2020, the Government still has not published comprehensive data on implementation of all measures. The Federation of BIH (BiH) SAI considered conducting an additional performance audit on the effectiveness of specific elements of the Covid-19 response, focusing on the Government’s management of special assistance to SMEs and vulnerable groups. Prima facie evidence in summer 2021 confirmed an additional audit was warranted, but the lack of available data made an effective audit problematic. As such, the SAI opted not to proceed with the additional performance audit. 76 IDI (2020), Accountability in a Time of Crisis: How Supreme Audit Institutions and Development Partners can Learn from Previous Crises and Ensure Effective Responses to Covid-19 in Development Countries, INTOSAI Development Initiative Paper, https://www.idi.no/elibrary/covid-19/986-accountability-in-a-time-of-crisis/file (accessed January 23, 2022): p.5. 48. A parallel Federation of BiH (BiH) SAI financial and compliance audit of the Federal Civil Protection Administration, included qualified findings related to the compliance audit. One reason for the adverse findings was questionable Covid-19 emergency procurements, which are being reviewed by the Prosecutors’ Office to determine what additional action should be taken against senior public officials. Regional Example: North Macedonia – Proactive Audit of Covid-19 Emergency Measures The North Macedonian State Audit Office (SAO) provides a regional template for the swift recalibration of audit activities to respond to an emerging crisis. In reaction to the emerging global pandemic, the SAO proactively amended its 2020 Annual Work Program in February 2020 - before the first emergency declaration in North Macedonia was even called - to include two compliance audits focusing on the Government’s Covid-19 response. These emergency audit activities included an examination of the awarding of public procurement contracts during the pandemic and the public sector’s management and control of non-financial assistance, such as donations of equipment and goods like PPE, used for protection against Covid 19. The procurement compliance audit targeted the period March to October 2020 and the audit of non-financial assistance focused on the period March to November 2020. The SAO completed both audits in a timely manner, despite circumstances making auditing more challenging (e.g., audit staff were working remotely during this period, there were difficulties in reaching the responsible persons in the audited institutions, and delays in receiving key information and documents that were necessary to finalize the audit). Auditors had sufficient access to key information, documentation, and public sector personnel to successfully complete the compliance audits. The Compliance Audit Report on the Awarding of Public Procurement Contracts during the Covid-19 Pandemic and the Compliance Audit Report on Non-Financial Assistance were published on the SAO website in July 2021. The reports were accompanied by media releases in three languages (Macedonian, Albanian, and English) that were distributed to more than 190 stakeholders. 49. Media Release for the Publication of the Compliance Audit on Public Procurement for the Prevention and Protection against Covid-19 Consolidated Annual Audit Reports facilitate a better understanding of already available information by synthesizing audit findings and identifying emerging challenges across all spending units. In December 2021, the North Macedonian SAO released a consolidated Annual Audit Report for 2020 that drew on the full breadth of audit activity for fiscal year 2020 including the two emergency compliance audits. The consolidated Annual Audit Report included sections focused on Covid-19 related procurements, the HIF and public healthcare institutions, the pension and disability insurance program, and the management and control of non-financial Covid-19 support. The targeted audits and the consolidated Annual Audit Report highlight public procurement as a major challenge during the emergency response. The audit identified several shortcomings, including a heavy reliance on non-advertised procurements (88 percent), a lack of clarity around the scope of procurements, whether items procured were fit for purpose, discrepancies between tender documents and contracts, and a reluctance by some spending agencies to voluntarily publish data in the electronic public procurement system. These findings have broad implications for performance across all government departments. From a fiscal transparency perspective, a consolidated Annual Audit Report that draws together the key findings of previously published individual audits improves information accessibility. Consolidated Annual Audit Reports synthesize audit findings and identify emerging challenges across all spending units. In this way, consolidated reports also facilitate a better understanding of already available information. 50. The 2020 audit reports for Serbia and Republika Srpska (BiH) were only published at the end of 2021; therefore, are not able to be comprehensively reviewed as part of this study. 77 However, Republika Srpska (BiH) published a consolidated Annual Audit Report for 2020, which touched on the transparency of emergency procurements and included audits of the HIF. In contrast, Serbia separately published individual audit reports without consolidated analysis or distillation of lessons that help improve citizens’ understanding of the audit findings. It is a positive sign that, despite the discrepancy in the length of time it took different agencies to publish their audit findings, a majority of SAIs are focusing on their respective jurisdiction’s response to the crisis and providing recommendations for improving the PFM system. For instance, the North Macedonian SAO included four performance audits in its 2021 Annual Work Program that explicitly examine the effectiveness of the economic measures the Government used to tackle the Covid-19 crisis. The ongoing publication of audit findings on governments’ fiscal policy response to the Covid-19 emergency by SAIs in all jurisdictions are key inputs when reflecting on how to strengthen the PFM response and fiscal transparency during future crises. IV. Information Accessibility The cornerstone of fiscal transparency is the publication of comprehensive fiscal information and policy details to facilitate independent analysis and promote public accountability.78 An underlying principle is that fiscal information is provided in a timely and uniform fashion that can be readily accessed free of charge on the internet.79 Information accessibility is achieved when key budgeting information and government policy is readily available, can be easily found by citizens when searching for the information online, and is published in open formats to promote analysis. Information Availability Publicly available information on budget adjustments was used as a proxy for measuring overall information availability during the emergency response. Graph 9 maps information that is available across state-level and sub-national jurisdictions by topic at the end of the period of analysis. This graph illustrates whether data are publicly available, rather than being a measure of the quality of information published. Jurisdictions published information on almost every topic covered by this analysis. Non- financial indicators, subsidies, health staffing and payroll were the hardest topics to find information about across all jurisdictions. Data on health staffing and payroll information were primarily derived from government statements and press releases, while information on goals, performance, and the impact of emergency response measures was lacking across all jurisdictions. 77 See North Macedonia State Audit Office (2021), Annual Report on Performed Audits and Operation of the State Audit Office for 2020, https://dzr.mk/sites/default/files/2021-06/Godisen_izvestaj_DZR_2020_ANG.pdf (accessed 23 January 2022); Republic of Serbia State Audit Institution (2021), Annual spending agencies’ audit reports for 2020 published 31 December 2021, https://www.dri.rs/revizije/poslednji-iizvestaj.136.html (accessed January 23, 2022); and consolidated 2020 Republika Srpska Supreme Audit Institution (2021), Consolidated Financial and Compliance Audit for 2020, https://www.gsr-rs.org/static/uploads/report_attachments/2021/08/20/RV029-21_Cyr.pdf (accessed January 23, 2022). 78 IMF (2007), Manual on Fiscal Transparency, IMF Fiscal Affairs Handbook, Washington DC: p.66. 79 IMF (2007), Manual on Fiscal Transparency, IMF Fiscal Affairs Handbook, Washington DC: p.66. 51. Budgets and state aid (i.e., beneficiaries of fiscal incentives and subsidies/ grants) were the topics about which information was most commonly available. Information on public procurement was also easily accessible due to the proliferation of e-procurement portals across all jurisdictions. However, it is uncertain whether the availability of procurement information per se indicates that the disclosure of procurement information was comprehensive. Graph 9: Information Availability by Topic Source: Authors based on materials collected Information “Findabilityâ€? There is a distinction between information that is published and the ease to which citizens can access the information. “Findabilityâ€? or “searchabilityâ€? are common measures to assess access to information on digital platforms. These measures focus less on the information published and more on the extent the target audience can find the information they are looking for without assistance.80 Findability measures use a qualitative approach to assess the ease with which it was possible to access information on different topics relative to each other within jurisdictions. Country- level experts ranked nine topics81 relative to each other from the easiest (1) to hardest (9) topic to research. Factors that influenced respondents’ ranking included the availability of information, how information could be accessed (i.e., whether it was in open format), whether raw data was available, the level of analysis/ summaries provided, the ability to easily link policies and expenditure etc. 80 This approach has been used by: (i) private sector actors to inform outreach strategies; (ii) governments to design user-centered information platforms (e.g., open budgeting portals); and civil society organizations to perform open data assessments (e.g., assessments conducted by the Open Data Barometer). 81 The topics are Budget; Extra-budgetary Funds; Public Procurement; Emergency Specific Funds; Public Investments; Beneficiaries of Fiscal Incentives; Non-financial Indicators; Subsidies and Grant; and Health Staffing and Payroll. 52. It is assumed country-level PFM researchers – as subject matter experts – are more experienced mining published sources for fiscal information than citizens generally; therefore, a qualitative assessment would skew towards greater “findabilityâ€?. A ranking methodology, where the respondent must rank each topic in relation to the other, was applied to minimize experimenter bias. The results do not provide the empirical basis for direct comparison; however, the results are informative and shed light on perceptions of the comparative “findabilityâ€? of key fiscal information during the emergency response. Graph 10 captures these views on the ease of finding publicly available information. The higher the rating, the more difficult it was for researchers to find that type of information through open sources. Overall, budget information in BiH and North Macedonia was perceived to be the most easily accessible; whereas the same information was difficult to find in Serbia. Graph 10: Researchers’ Perception Measure of Information “Findabilityâ€? by State-Level Jurisdiction Source: Authors based on materials collected Serbia was assessed overall as the jurisdiction with the least information “findabilityâ€? as budget information was not published in an open format. Raw budget data was accessible; however, extracting the information and understanding the expenditure that was being modified was difficult and time-consuming. Re-allocations could only be identified by manually comparing the original and rebalanced budget item by item. Serbia and North Macedonia have centralized e-procurement portals where, commendably, data can be found in open formats on Covid-19 procurements. However, Serbia does not directly identify Covid-19 contracts, inhibiting information findability and emergency procurement information could only be manually identified using keywords and filters. 53. Information Openness A key element of information accessibility is the publication of information in a machine- readable format. Less than a third of the information disclosed by jurisdictions was in machine- readable formats. Most of the information was published in pdf documents, websites, press releases, and/or in government statements. Graph 11 compares the amount of information published by jurisdictions on key topics relative to each other. The lines in the bars on the graph track the extent the information disclosed on each topic was published in machine-readable formats. Graph 11: Availability of Public Information in Machine-Readable Formats Source: Authors based on materials collected Graph 12 uses the same data; however, it maps the type of information four jurisdictions publish in a machine-readable format. Graph 12: Availability of Information in Machine-Readable Formats Published by Jurisdictions Source: Authors based on materials collected 54. Generally, sources of information were scarce, fragmented, and not linkable. North Macedonia was the only jurisdiction to set up a Covid-19 dedicated portal with data in machine-readable formats. It has an open finance webpage where budget and transaction data are downloadable in CSV format. However, the data from this website is not connected to the emergency response measures published by the government. The same holds true for the rest of the jurisdictions analyzed. In Serbia, most data on the emergency fiscal measures came from documents presented on a one-off basis and only core budget data has identifiers that allowed for changes to be tracked over time. Unfortunately, this information is not correlated with public procurement information. In BiH, it was not possible to connect data from different budget documents and emergency measures, and information was only published as pdf documents or other non-machine-readable formats. 55. E. Proposed Country and Regional Actions for Strengthening Fiscal Transparency for More Effective Emergency Responses The proposed country and regional actions outline fiscal transparency reforms based on PFM practices in BiH, North Macedonia, and Serbia during the response to the Covid-19 emergency, drawing upon regional and global practice. They seek to bolster jurisdictions’ readiness to leverage fiscal transparency to effectively respond to future crises. Actions are organized around the main topics which arose during the thematic coding process, which formed the basis for the regional comparative analysis. 1. Transparency of Covid-19 Spending 1.1 Enhance Transparency of Within-Year Budget Adjustments: Budget rebalances and emergency fiscal policy measures, such as supplemental budgets, were essential tools used to respond to the health, social, and economic crises associated with the pandemic. It is important that published documents clarify how resource allocations in the approved budget are being adjusted as part of any emergency response or supplemental budgeting process. This allows citizens to better understand how resources are being allocated compared to the planned budget. Actions to support this reform: • North Macedonia and the Federation of BiH (BiH) already have an original and adjusted variable in their published budget adjustments information. As an improvement, these governments should consider adding - o The previous year’s approved budget and actual outcome o Information for each rebalance done throughout the year, including its date o The absolute amount of changes in the rebalanced budget compared to the original budget o The percentage variation in the rebalanced budget compared to the original budget; and o A draft/estimated budget execution calendar. • Serbia, Republika Srpska (BiH), and Sarajevo Canton (BiH) should consider adding at least an original budget column in their rebalanced budgets. Including the variables as is done in North Macedonia and Federation of BiH (BiH) would be a considerable improvement. 56. • BiH-Institutions did not have a rebalanced budget owing to their original budgets being released mid-year. Consistent with international standards, BiH-Institutions should consider publishing the draft budget at least three months82 before the end of the fiscal year. 1.2 Consistent Application of Budget Classifications for Emergency Related Expenditure: Disclosed documentation should include relevant budget classifications to provide a complete and coherent picture of emergency spending. Classifications should be applied consistently across budget documents so citizens can understand the relationship between original budget expenditure, emergency policy measures, and budget rebalances. Actions to support this reform: • Serbia should consider adding budget classifiers in its emergency fiscal policy packages. Program budget classifications were not included in the "Program of Economic Measures to Reduce the Negative Effects Caused by the COVID-19 Virus Pandemic and Support the Serbian Economy" making it difficult to understand how resources were allocated to achieve the objectives of the Program. • North Macedonia made efforts to disclose Covid-19 related spending in a dedicated portal, and it also added the program identificatory P1 to categorize Covid-19 spending. However, the information is not comparable to published pandemic emergency response measures. North Macedonia should consider including the same budget identifiers in all its publications, thereby, connecting information sources. • For BiH there was no observable way to link information from different documents or sections within them. All levels of government should consider using budget identifiers more consistently thereby enabling data from multiple sources to be connected. • All jurisdictions should consider using one or several budget identifiers to flag existing Covid-19 expenditure and use the same protocol for related expenditure. This identifier should then be used consistently in all disclosed documents enabling the correlation of data from multiple sources. 82 See OECD (2017), OECD Budget Transparency Toolkit: Practical Steps for Supporting Openness, Integrity and Accountability in Public Financial Management, OECD Publishing, Paris, https://www.oecd.org/corruption- integrity/reports/oecd-budget-transparency-toolkit-9789264282070-en.html (accessed January 23, 2022) which states that the tabling of the executive’s budget proposal should allow enough time for the parliament to undertake in -depth scrutiny and that three months is a useful benchmark, although the quality and depth of review are important. 57. 1.3 Enhance Sector and/ or Functional Budget Classifications Related to Emergency Measures: Disclosing spending on areas relevant to the emergency response such as investment projects, health programs, and public sector wages, assists in identifying how public resources are being reapportioned to respond to the crisis. None of the jurisdictions had accessible sector/ functional information. For example: • Manually comparing budget documents was the principal source of public investment adjustments information. Sarajevo Canton (BiH) was the only government that identified projects prioritized due to the pandemic. • Health personnel information was only able to be found using press releases or by comparing budgets. Data was not disclosed systematically. 1.4 Include Non-financial Indicators in Budget Documents to Measure Impact: It is important to track impact as well as expenditure by using non-financial indicators that measure the efficiency and effectiveness of adjusted expenditure. Jurisdictions did not disclose performance indicators related to emergency spending. Actions to support this reform: • All jurisdictions should consider disclosing non-financial indicators. • All jurisdictions should consider developing or using existing non-financial indicators linked to specific emergency programs to assist in tracking performance and impact. • North Macedonia was the only country that prepared a specific Covid-19 budget program. It should consider linking non-financial indicators to its emergency response to enhance transparency and assist in monitoring outcomes. 1.5 Publish Mid-year Reviews and In-year Outturn Reporting: Mid-year reviews provide a comprehensive update on the implementation of the original budget, including revised forecasts underpinning the budget and updates of likely budget outcomes for the current fiscal year. Publication of mid-year reviews during an emergency enhance transparency around the implications of the emergency for the government’s existing program. In addition, in-year outturn reporting is necessary when emergency spending occurs after the mid-year mark to enhance transparency around actual aggregate expenditure compared to originally approved expenditure. Budget adjustments made in response to a crisis should correspond with any policy changes instituted as part of the emergency response. Actions to support this reform: • All jurisdictions should publish mid-year reviews during emergency periods that include the following – o Revisions to the economic assumptions o An assessment of the impact of the crisis on the original budget estimates; and o Justifications for any deviations from approved spending and revenues. 58. 2. Transparency of Special Assistance 2.1 Disclose Information Related to State Aid for SMEs: SMEs are critical stakeholders for the economic recovery and the main generator of employment. The scale and speed of the health, social, and economic emergency negatively impacted SMEs as well as individuals. For this reason, countries established emergency measures focused on providing state aid to SMEs. Jurisdictions should disclose measures designed to support SMEs during the emergency. Budgeting classifications should be attached to the expenditure to allow for monitoring of state aid and to assess if public resources are being properly targeted. Actions to support this reform: • All jurisdictions should disclose the following information regarding state aid to SMEs during an emergency – o The criteria for assistance o Details of the SMEs that receive support under the emergency measure o The date state aid was provided; and o The type of aid provided (i.e., grant or transfer/ loan/ guarantee) 2.2 Disclose Information Related to Social Support for Vulnerable Groups: The pandemic has impacted groups differently. Some groups, such as the poor, women and children, etc. are more vulnerable to the effects of a crisis. Jurisdictions should disclose measures designed to support vulnerable groups that are disproportionately impacted by the emergency. Disclosed information should include non-financial indicators used to measure the disaggregated impact of emergency spending on each identified vulnerable group. Actions to support this reform: • All jurisdictions should disclose the following information regarding state aid to vulnerable groups during an emergency – o Specific data on the support provided to poor beneficiaries. Only North Macedonia and Sarajevo Canton (BiH) published limited information on policies and expenditure targeted to poor citizens. o Amounts of aid provided per beneficiary and vulnerable group disaggregated by gender; and o Non-financial indicators regarding population coverage to monitor the impact of support provided. 59. 3. Transparency of Covid-19 Emergency Procurement 3.1 All Jurisdictions Should Publish Procurement Information Related to Emergency Spending: All countries publish some information regarding public procurement. However, during emergencies procurement rules can be suspended. Procurement laws in all jurisdictions facilitate by-passing of procedures in emergency situations. Although this provides agility in crisis situations, these abridged processes undermine the standard procurement data that would otherwise be captured and published such as the amount of the contract, the name of the contractor, and the procedure used to identify the vendor. For this reason, information related to emergency public procurement is not easily accessible, and the completeness of information is uncertain. The information available did not directly link procurements to emergency measures. Also, in all but one jurisdiction procurement information is only gathered up until the awarding of the contract. Actions to support this reform: • All jurisdictions should – o Publish sufficient procurement information in a format that allows citizens to follow public expenditure from the original budgetary allocation/ authorization that the funds for the contract are committed against, identifying a vendor, committing to a contract, and monitoring execution of the terms of the procurement; and o Link procurement data to emergency response spending. Currently only North Macedonia connects emergency spending to specific contracts. 4. Audit of Covid-19 Emergency Spending 4.1 Empower SAIs to Conduct Targeted and Timely Audits of Measures During the Emergency Response: The timely issuance of audit findings ensures the ongoing effectiveness of the government’s emergency response, incentivizes proper management of funds throughout the crisis, and allows tangible lessons to be contemporaneously drawn from the experience. Actions to support this reform: • All jurisdictions should – o Broaden SAIs’ legal mandate to allow them to use unique approaches to conduct audits during the emergency response consistent with IDI/ INTOSAI guidance. This can include short, targeted audits of specific emergency measures or conducting audits during the implementation of government programs to provide real-time assurance and compliance with emergency regulations/ decrees; and o Authorize SAIs to contemporaneously publish audit findings from unique audits of emergency measures to maximize fiscal transparency during emergency responses. 60. 4.2 Implement Recommendations in 2020 Annual Audit Reports to Bolster the PFM Response to Future Emergencies: Recent consolidated financial and compliance audit reports highlight weaknesses in managing expenditure during an emergency. Emergency procurement processes and requirements for publication of procurements have been identified by several SAIs as a vulnerability during the emergency response. Actions to support this reform: • All jurisdictions should – o Implement recommendations included in consolidated 2020 Annual Audit Reports, especially related to strengthening laws and regulations around the use of emergency procurements and timely publication of contract information during an emergency on e-procurement portals. 5. Information Accessibility 5.1 Publish Spending Information on a Devoted Emergency Information Portal or Dedicated Sections on Existing Public Budgeting Portals: Emergency spending information across all jurisdictions was scarce, fragmented, and not linkable. Utilizing expenditure identifiers and/or dedicated portals consolidates relevant data, making it more accessible and understandable. Actions to support this reform: • Serbia already has an Open Data Portal that can incorporate a window on COVID-19 or future emergency related spending. • North Macedonia has a dedicated public budgeting website. The website could be strengthening by connecting the information contained on the portal is not connected to the emergency response measures. • BiH has different government institutions and levels, with fragmented data. A unified portal in each jurisdiction with information organized according to function would improve accessibility to emergency spending information. 5.2 Available Data Should be Published in an Open Format: Jurisdictions should provide information in open formats that are searchable/ malleable. Most information related to emergency responses was published in pdf formats. Using open formats allows citizens to better dissect and use the data to understand the emergency response. Actions to support this reform: • All jurisdictions should use international data standardization mechanisms. 61. 5.3 Legal Frameworks Should Require Fiscal Data Related to the Emergency Response be Published: Current legal transparency provisions are either non-binding (i.e., suggested practice) or difficult to enforce (i.e., unclear processes and points of contact for remedying information discrepancies and non-publication). This is compounded by broad exemptions that undermine fiscal transparency. Actions to support this reform: • All jurisdictions should ensure the legal framework is in place to support fiscal transparency during emergency responses. This includes – o Conferring a positive obligation on public institutions to disclose prescribed fiscal information – including during emergencies. Prescribed disclosure obligations should include content standardization, publication in an open format, and the frequency the information is published. o Narrowing exemptions public officials can rely on to withhold data and information from publication; and o Establishing clear avenues for citizens to question the absence of critical fiscal information. 62. Sources of Information Reports and Articles Davenport, S.; E. Kalluar, and J. Kunicova (2020), Coming Together While Staying Apart: Facilitating Collective Action through Trust and Social Connection in the Age of Covid-19. World Bank, Washington DC. de Renzio, P., and C. Cho (2020), Exploring the Determinants of Budget Credibility. IBP, Washington DC. de Renzio, P., and J. Wehner (2015), The Impacts of Fiscal Openness: A Review of the Evidence. GIFT & IBP Incentives Research, Washington DC. GIFT (2020), Fiscal Data for Emergency Response Guide for COVID-19 (Version 1.1). Global Initiative for Fiscal Transparency Guide, Washington DC. IBP (2021), Managing Covid Funds: The Accountability Gap, International Budget Partnership Report, Washington DC. IDI (2020), Accountability in a Time of Crisis: How Supreme Audit Institutions and Development Partners can Learn from Previous Crises and Ensure Effective Responses to Covid-19 in Development Countries. INTOSAI Development Initiative Paper. IMF (2007), Manual on Fiscal Transparency, IMF Fiscal Affairs Handbook, Washington DC. Khasiani, K., Y, Koshima, A. Mfombouot, and A, Singh (2020), “Budget Execution Controls to Mitigate Corruption Risk in Pandemic Spendingâ€?, Fiscal Affairs Department Covid Emergency Note, IMF, Washington DC. Nestulia, V. (2020), Data & transparency of emergency COVID19 procurement: an example from Ukraine, Open Contracting Partnership Case-Study, https://docs.google.com/document/d/1dBDIjDiCb_dOD80Nwz83YjZ7eY84uKL_ZiI-6KhbLNw/edit (accessed January 23, 2022). OECD (2016), Open Government: The Global Context and the Way Forward, OECD Publishing, Paris. OECD (2017), OECD Budget Transparency Toolkit: Practical Steps for Supporting Openness, Integrity and Accountability in Public Financial Management. OECD Publishing, Paris. OECD (2017), OECD Guidelines on Measuring Trust. OECD Publishing, Paris. OECD (2020), Government Financial Management and Reporting in Times of Crisis, OECD Publishing, Paris. PEFA Secretariat (2017), PEFA 2016: Guidance on Tracking PFM Performance for Successive Assessments. PEFA Secretariat, Washington, DC. Saxena, S., and M. Stone (2020), Preparing Public Financial Management Systems for Emergency Response Challenges, IMF Fiscal Affairs Department Covid Emergency Note, Washington DC. Steingrüber,S., M. Kirya, D. Jackson and S. Mullard (2020), “Corruption in the time of COVID-19: A double-threat for low income countriesâ€?, Chr. Michelesen Institute U4 Brief 2020:6. UN Global Task Force on Corruption (2021), “Corruption and COVID-19: Challenges in Crisis Response and Recoveryâ€?, UNODC Policy Paper. 63. Wendling, C., V. Alonso, S. Saxena, V. Tang, and C. Verdugo (2020), Keeping the Receipts: Transparency, Accountability, and Legitimacy in Emergency Responses. IMF Fiscal Affairs Department Covid Emergency Note, Washington DC. Wiggins, J., J. Philip, B. PogaÄ?ar, and A. Bajo (2015), PEFA Assessment of the Former Yugoslav Republic of Macedonia Report, DFC International Consultants. World Bank (2019), Disaster Response: A Public Financial Management Review Toolkit. World Bank Inclusive Economic Management in the Caribbean Externally Funded Approach Note, Washington DC. World Bank (2022), Disaster Resilient and Responsive Public Financial Management: An Assessment Tool. World Bank, Washington DC. Primary Documents and Datasets Consolidated version of the Treaty on the Functioning of the European Union, 13 December 2007, 2008/C 115/01. Statute of the International Court of Justice, 18 April 1946. UNGA Resolution 67/218 endorsing the High-Level Principles on Fiscal Transparency, Participation, and Accountability. World Bank (2021), “Information Analysis Framework (IAF) Survey Reponses and Data Collection,â€? GGICR Fiscal Transparency Project, Washington DC. Media Reports Apuzzo, M., and S. Gebrekidan (2021), “Governments Sign Secret Vaccine Deals.â€? January 28, 2021. New York Times, https://www.nytimes.com/2021/01/28/world/europe/vaccine-secret- contracts-prices.html (accessed January 23, 2022). Associate Press (2020), “Bosnia: imported ventilators from China useless for COVID-19â€?, May 11, 2020. AP News, Web: https://apnews.com/article/china-technology-medical-equipment-europe- global-trade-5363cf8ab0c788c0a6d7e25eb3577f09 (accessed March 26, 2022). Djugum, A., E. Bajrovic, and A. Heil (2020), “How Did A Bosnian Raspberry Farm Get A State Contract To Acquire 100 Ventilators?â€? May 5, 2020. Radio Free Europe, Web: https://www.rferl.org/a/bosnia-ventilators-scandal-covid-19-raspberry-farm-multimillion-deal- procurement/30594315.html (accessed January 23, 2022). EWB (2020), “Serbian government’s procurement of medical equipment during the pandemic still a secret.“ September 25, 2020. European Western Balkans Centre for Contemporary Politics Web Portal, https://europeanwesternbalkans.com/2020/09/25/serbian-governments-procurement-of- medical-equipment-during-the-pandemic-still-a-secret/ (accessed January 23, 2022). Kuloglija, N. (2021), "Bosnia Entity’s Secrecy Over Vaccine Procurement Draws Criticism.â€? July 8, 2021. BalkanInsight, Sarajevo, https://balkaninsight.com/2021/07/08/bosnia-entitys-secrecy- over-vaccine-procurement-draws-criticism/ (accessed January 23, 2022). 64. Digital Platforms and Websites Government of Canada (2020), “Economic and Fiscal Snapshot 2020â€?, https://www.canada.ca/en/department-finance/services/publications/economic-fiscal- snapshot/gba-summary-economic-response-plan.html (accessed January 23, 2022). Government of France. (n.d.). “Les données relatives au COVID-19 en France - data.gouv.fr,â€? https://www.data.gouv.fr/fr/pages/donnees-coronavirus (accessed January 23, 2022). Government of Mexico (n.d.), “Transparencia Presupuestaria Observatorio del gasto,â€? https://www.transparenciapresupuestaria.gob.mx/es/PTP/programas (accessed January 23, 2022). Government of Norway (2020), “Historical Archive on Corona Act Hearingsâ€?, https://www.regjeringen.no/no/tema/Koronasituasjonen/forskrifter-med-hjemmel-i- koronaloven/koronaloven-og-forskriftsendringer/id2695161/ (accessed January 23, 2022). IBP (n.d.), “Open Budget Surveyâ€?, https://www.internationalbudget.org/open-budget-survey (accessed January 23, 2022). IBP (n.d.), “Open Budget Survey Transparency Scoreâ€?, https://www.internationalbudget.org/open- budget-survey/rankings (accessed January 23, 2022). IMF (2021), “Beyond “Keeping the Receiptsâ€?: Initial Governance Lessons from Covid Emergency Spendingâ€?, https://www.imf.org/en/News/Seminars/Conferences/2021/04/12/beyond-keeping- the-receipt (accessed January 23, 2022). IMF (n.d.), “Fiscal Transparencyâ€?, https://www.imf.org/en/Topics/fiscal-policies/fiscal-transparency (accessed January 23, 2022). IMF (n.d.), “IMF Covid-19 Financial Assistance and Debt Service Relief portalâ€?, https://www.imf.org/en/Topics/imf-and-covid19/COVID-Lending-Tracker (accessed January 23, 2022). OECD (n.d.), “Trust in Governmentâ€?, https://www.oecd.org/gov/trust-in-government.htm (accessed January 23, 2022). Parliament of Norway (2020), “Consultations on Temporary Amendments to the Infection Control Act (Regulations relating to isolation and restrictions on freedom of movement to prevent the transfer of SARS-CoV-2) Prop. 131 L (2020-2021)â€?, https://stortinget.no/no/Hva-skjer-pa- Stortinget/Horing/horing/?h=10004329 (accessed January 23, 2022). Proz rro (n.d.), “Electronic Open-Source Government e-Procurement Systemâ€?, https://prozorro.gov.ua/en (accessed January 23, 2022). Proz rro (n.d.), “Electronic Open-Source Government e-Procurement System Qlink Hubâ€?, https://bi.prozorro.org (accessed January 23, 2022). 65. Annex 1: Methodology for Assessing Fiscal Transparency in the Jurisdictions This study aims to build-on and supplement the existing public budgeting assessments by examining fiscal transparency as an element of PFM performance during a crisis. Lessons learned from the most recent response to the Covid-19 pandemic can guide fiscal transparency reforms across the Western Balkans aimed at enhancing future responses. Existing assessment frameworks focus on key budgeting documents produced in the normal course of the budgeting process and evaluate the comprehensiveness of information provided in the documents, timeliness of production, and extent of publication of the information. However, less emphasis is placed on public expenditure processes heavily relied on during emergencies, such as contingency appropriations, emergency spending and contracting provisions, reallocations and virements, supplementary budgets, and external grants. 83 Hence the need for a supplemental assessment focusing on fiscal transparency during emergency conditions. This report compares how fiscal transparency was used during the Covid-19 emergency response in three Western Balkan jurisdictions – Bosnia and Herzegovina (BiH), North Macedonia, and Serbia.84 As the analysis examines PFM performance during the crisis, it focuses on fiscal transparency practices from March 2020 through until June 2021. All research for this assessment is desk-based and drawn from information publicly available on official institutional websites, digital document repositories, and platforms supported by the government, independent institutions, or civil society platforms that draw on publicly available government data. This report has been peer-reviewed and benefited from inputs from government representatives and fiscal transparency stakeholders in jurisdictions that are the subject of this analysis. Information gathering was conducted in three stages: (a) Scanning for recent good practice guidance focusing on PFM in emergencies (i.e., primary knowledge products) and examples of measures undertaken in other regions (i.e., global case examples) (b) Collection of primary evidence including information on the legal framework and the availability of key information; and (c) Thematic coding of evidence to allow for a comparative analysis Each stage is detailed in greater depth below. 83 See Saxena, S., and M. Stone (2020), Preparing Public Financial Management Systems for Emergency Response Challenges, IMF Fiscal Affairs Department Covid Emergency Note, Washington DC. 84 These three countries were eligible for support under the Good Governance and Investment Climate Reform (GGICR) Trust Fund at the inception of the project. Given the country’s decentralized governance, the analyses of practices in BiH covers several sub-national jurisdictions. 66. A. Scanning Global Practices Greater openness around allocations, policy objectives, and execution information enhances citizens’ confidence in the governments’ response, reduces the risk of budget mismanagement and corruption, and helps with monitoring and measuring impact of the emergency response. There is no internationally recognized PFM assessment framework focusing on the role of fiscal transparency in PFM systems during a country’s emergency response. As such, the research team scanned recent examples of international organizations and independent fiscal transparency actors capturing and framing global good practice related to this issue. The ‘primary knowledge products’ that have distilled fiscal transparency principles and practices during the recent crisis are: • Government Financial Management and Reporting in Times of Crisis85 • Managing Covid Funds: The Accountability Gap86; and • Fiscal Data for Emergency Response Guide for COVID-1987 These ‘primary knowledge products’ guided the framing of evidence gathering efforts in the Western Balkans that were conducted early in the research process. In addition, the scanning process surfaced examples of measures undertaken globally by countries that leveraged fiscal transparency to improve the PFM response to the Covid-19 pandemic. The information captured by the research team was used to contrast and compare experiences from other regions with those in BiH, North Macedonia, and Serbia and identify aspirational reforms and practices that could be introduced to Western Balkan jurisdictions to improve performance. B. Collection of Primary Evidence Regional and global technical experts and practitioner networks, with input from country counterparts, reviewed the analysis from the global scanning process. The primary knowledge products and global case examples informed the design of the Information Analysis Framework (IAF).88 The IAF was a survey instrument that focused on key data points, legal frameworks, information availability, and systemization of information disclosure. This research tool anchored a structured, semi-standardized approach for country level experts to collect and distill evidence and practice information from the jurisdictions that are the subject of this study. The IAF was divided into two parts: (i) Regulatory and Legal Framework; and (ii) Information Availability 85 OECD (2020), Government Financial Management and Reporting in Times of Crisis, OECD Publishing, Paris, https://read.oecd-ilibrary.org/view/?ref=433_433120-4x64f30lbd&title=Government-financial-management-and- reporting-in-times-of-crisis (accessed 23 January 2022). 86 IBP (2021) Managing Covid Funds: The Accountability Gap, International Budget Partnership Report, Washington DC, https://internationalbudget.org/covid/wp-content/uploads/2021/05/Report_English-2.pdf (accessed 23 January 2022). 87 GIFT (2020), Fiscal Data for Emergency Response Guide for COVID-19 (Version 1.1), Global Initiative for Fiscal Transparency Guide, Washington DC, http://www.fiscaltransparency.net/documents/GuideforFiscalDataCOVIDV_1_1_0.pdf (accessed 23 January 2022). 88 Inputs on the scope and framing of the Information Analysis Framework surfaced during the project’s Virtual Launch Workshop with partners and counterparts on 21 January 2021. 67. BiH is a highly decentralized country with several levels of government so some regulations instituted at the federal level do not apply to all layers of government, while other regulations promulgated by sub-national jurisdictions can overlap. When collecting primary evidence for BiH, - to the extent possible - data was collected for selected jurisdictions to accommodate for any discrepancies due to BiH’s federated governance system. Therefore, the survey instrument was applied to the following BiH jurisdictions: • BiH-Institutions • Federation of BiH (BiH) • Republika Srpska (BiH); and • Sarajevo Canton (BiH) Legal Framework The survey instrument focused on legal or regulatory provisions that establish mechanisms or prescribe different forms of fiscal transparency, detail the type and extent of documentation, detail the types of reports to be produced and published, and any disclosure mandates (proactive transparency). In addition, provisions governing emergency allocation processes and their disclosure were also examined. The main legal and regulatory instruments that were reviewed include: • Fiscal responsibility law/legislation • Budget law/legislation • Procurement law/legislation • State aid legislation • Access to information law/legislation • Open data law/legislation • State of emergency regulations (usually at the constitutional level); and • Specific decrees and guidelines related to the financial response to COVID-19 Filters were applied to this data. They included: (i) Regulatory storyline/ context (ii) Clarity and comprehensiveness of the regulatory framework regarding fiscal transparency for the COVID-19 crisis (iii) Transparency in the implementation of the regulatory framework; and (iv) Any highlights and challenges surfaced during the research 68. Information Availability The survey instrument adopted the taxonomy outlined in the Fiscal Data for Emergency Response Guide for COVID-1989 as to the data and data formats that should be available. Questions in the IAF related to the following topics: • Budget adjustments and spending • Emergency specific funds • Efficiency and effectiveness of the measures included in emergency response packages (indicators) • Subsidies, grants, and other support provided to vulnerable groups • Public investment • Staffing and payroll for medical and emergency response related staff • Public procurement • Beneficiaries of tax incentives and/or tax relief measures; and • Trust funds or extra-budgetary funds Country focused researchers followed the IAF to gather evidence for each jurisdiction. The results were shared with the GIFT/ IBP/ WBG technical teams to review the responses, provide feedback, and propose follow-up questions to guide additional data collection required to extrapolate and compare fiscal transparency practices. C. Thematic Coding Initial evidence collection and analysis based on the IAF used deductive coding as the data was collected using a common survey instrument. A thematic coding approach was then used to broadly organize the evidence gathered by the country level experts, identify emergent themes, and more discretely categorize the evidence according to those themes/ topics. This allowed the researchers to compare thematic practices more consistently across jurisdictions. The primary topics that emerged during the thematic coding process were: • Transparency of COVID-19 Spending • Transparency on the Effectiveness and Inclusivity of COVID-19 Response • Transparency of COVID-19 related Public Procurement; and • Information Accessibility These themes form the basis of the jurisdiction comparative analysis. 89 GIFT (2020), Fiscal Data for Emergency Response Guide for COVID-19 (Version 1.1), Global Initiative for Fiscal Transparency Guide, Washington DC, http://www.fiscaltransparency.net/documents/GuideforFiscalDataCOVIDV_1_1_0.pdf (accessed January 23, 2022). 69. Annex 2: Summary Table Addressing efficiency and Transparency of COVID-19 Transparency of COVID-19 related Monitoring, audit & control on COVID- Possible explanations (based on the inclusivity (of minorities and responses Public Procurement 19 expenses normative comparative analysis) vulnerable groups) Budget adjustments and Public procurement Efficiency and effectiveness of the Budget adjustments and spending Fiscal responsibility and budget spending measures included in emergency laws response packages (indicators) 1- Overall, the performance of these 1- No priority analysis is available as 1- Five out of six governments 1- Overall, information on emergency countries in fiscal transparency was of identifying the trade-offs (i.e., enacted and published at least one public procurement is not made easily 1- All countries present information about low and it was consistent with the human rights vs. emergency rebalanced budget following a accessible. All countries procurement the set of measures with explanatory overall global levels of fiscal measures). regular or urgent adoption narratives and general estimates in transparency. According to the IBP procedure in 2020. laws include provisions that allow financial outputs, but none of them provide assess of fiscal transparency during starting procedures without previous Efficiency and effectiveness of the detailed information on expected COVID19, these countries are in the measures included in emergency 2- For most governments, announcement when an performance and impact. “Limitedâ€? accountability level. response packages (indicators) comparisons of the changes in unforeseeable emergency occurs 2- However, they have also shown appropriations between the original (that is not related to the 2-However, none of these governments some significant efforts to disclose budget and rebalanced budget(s) government´s decisions). presented information on the actual 2- The information about inputs and COVID19 related information, is technically difficult, due to the performance measured in non-financial outputs of the actions undertaken to particularly in procurement and poor format of budget data indicators, and only North Macedonia mitigate the effects of the pandemic beneficiaries. presentation. published data on the planned are scarce and fragmented, especially 3- None of the analyzed countries 2- All governments disclosed at least performance of non-financial indicators, at the level of the beneficiaries of publishes a Mid-year review, which in some tender, awards and contract 3- However, North Macedonia and although it only included a broad emergency measures, which impedes the context of COVID-19 is a relevant information. Federation of BiH (BiH) published explanatory narrative. assessing the efficiency and document for the assessment of rebalanced budgets where re- effectiveness of the implemented changing circumstances. The key 3- North Macedonia was the only allocations were easily 3- None of the countries produced and measures. elements for this document include government that directly specified distinguishable. These documents published a document with the rationale, 3- None of the governments extensive revisions of the pandemic-related contracts at a included original and adjusted analysis and justification of the targets and presented data on non-financial macroeconomic circumstances, Findings across COVID-19 specific website. amounts in separate columns. specific policy initiatives within the set of indicators that measure the policies' revenue, and expenditure trends. the board measures to address the COVID-19 crisis. performance and impact on poor 4- There is an area of opportunity in 4- Only in North Macedonia, beneficiaries, women, and girls, or strengthening rules to ensure fiscal Federation of BiH (BiH), and 4- Lack of public reporting on the other vulnerable groups. discipline and the role of oversight Sarajevo Canton (BiH), the implementation of policy initiatives institutions. Also, monitoring of fiscal information about one program hampers efforts to establish success and Subsidies, grants, and other risks can improve. includes regular budget identifiers. learn valuable and shareable lessons for support to vulnerable groups other countries. 4- All governments published Access to information law 5- There is a wide margin of information on planned subsidies, 5 - There is no guidance for reporting opportunity for data publication in grants, and other support (except for the implementation of the budget for accessible ways and open formats. BIH-Institutions), at least of a broad the COVID-19 crisis and no guidance It can be done by building a user- number of intended business on how to implement the access to friendly dedicated portal or using beneficiaries. information law in case of emergency. existing institutional websites 5- Serbia disclosed aggregate While these countries made important where information is available in information on the actual support information available to the public in formats such as XLSX or CSV. given to individual businesses, while the areas mentioned before, their Republika Srpska (BiH) and levels of transparency are null in 6- However, compared with good Federation of BIH (BiH) detailed areas such as non-financial indicators international practices, the amounts of grants or guarantees per on efficiency and effectiveness, accessibility of information is recipient. vulnerable group targeting, presenting limited and in no country is 6- The Sarajevo Canton (BiH) actual spending data in any of the possible to identify neither the publishes information on planned relevant classifications, presenting rationale for the specific measures subsidies for specific groups like information in a way where trade-offs or the trade-offs brought about by 70. Addressing efficiency and Transparency of COVID-19 Transparency of COVID-19 related Monitoring, audit & control on COVID- Possible explanations (based on the inclusivity (of minorities and responses Public Procurement 19 expenses normative comparative analysis) vulnerable groups) COVID-19 response. International agricultural sectors and the can be identified, nor extra-budgetary practices include the streaming of unemployed. funds. COVID-19 response and relief packages in the IFMIS through Open Data Law specific programs, or budget 6- There are no standards for tagging, tagging of procurement publishing available information, so data, inclusion of georeferenced most data is only accessible in PDF information, publication of format. documents with cross sector 7- Legal framework lacks provisions analysis, new interactive platforms that ensure quality and enforce or adaptation of existing ones, publishing of the fiscal data and whistle blower platforms, etc. information. The latter results in non- existing or non-binding terms to publish data collected or documents produced by the public institutions and the lack of requirements on the standardization of the content and frequency of the reports. 8- To make sustainable advances in fiscal transparency, strong political commitment at the high level is necessary to change the administrative culture of public institutions. 71. Addressing efficiency and Transparency of COVID-19 Transparency of COVID-19 related Monitoring, audit & control on COVID- Possible explanations (based on the inclusivity (of minorities and responses Public Procurement 19 expenses normative comparative analysis) vulnerable groups) Budget adjustments and Public procurement Efficiency and effectiveness of the Efficiency and effectiveness of the Fiscal responsibility and budget spending measures included in emergency measures included in emergency law 1- The current Law on Public response packages (indicators) response packages (indicators) 1- Information on emergency fiscal Procurements (LPP) (in force since 1- Provisions of current legislation on policy packages is part of the July 1, 2020) has improved 1- There was no information on goals, 1- Serbia lacks information about the emergency and pandemic, when budget reports, and other transparency in case of "state of performance, and impact of the measures, effect or impact of measures on jointly applied, allow the executive to disclosures that public institutions emergency", but vague provisions that using non-financial indicators. vulnerable groups. declare the state of emergency in produce and publish regularly. regulate monitoring of procurement case of pandemic without consent of implementation and law exemptions in the parliament and temporarily 2- The Government did not display case of capital projects of building line Subsidies, grants, and other derogate human rights. specific efforts or initiatives to infrastructural facilities. support to vulnerable groups inform the public on COVID-19 2- The most relevant fiscal 2- The Budget System Law does not related spending. transparency improvement has been 2- Serbia published information on the contain provisions that regulate the to remove provisions from the support given to vulnerable groups budgeting process during the state of 3- The information about the previous law that allowed exceptions such as pensioners, temporary benefit emergency; consequently, no original and rebalanced budget from the public procurement beneficiaries, and women. provisions on fiscal transparency in was published using the same procedures in case of a state of emergencies exist. format and classification, which emergency. However, there is a step 3- it also disclosed financial support allows for comparison. However, back in terms of vague mechanisms for specific economic sectors such as 3- The organic PFM regulation is set given the format used for for monitoring the implementation of Agriculture, Tourism and Hospitality, by the Budget System Law, which publication, it can only be done public procurement procedures. It and Health. Serbia used eligibility also encompasses provisions on manually, which is time-consuming also represents a backward step in criteria to support companies and fiscal responsibility. While the LBS and prone to error. higher thresholds for exempting diminish employee layoffs. covers in detail the budget cycle in procurements from the LPP. “normalâ€? times, it does not contain Serbia 4- The limited availability of fiscal 3- The Government has discrete 4- However, this information is not yet provisions on the budgeting process information about the power to suspend the LPP for capital published in a structured, open, nor during the state of emergency. implementation of measures, projects related to building line consolidated format. It is expected to especially in disaggregated levels, infrastructural facilities. The latter be published when/as part of what? 4- The LBS recognizes “extraordinary impedes full assessment of the resulted from adopting the Law on circumstancesâ€? and allows temporary efficiency and effectiveness of Special Procedures for the deviations from fiscal rules. In such measures. Realization of Projects for the situation, the Government is obliged Construction and Reconstruction of to prepare a plan for restoring fiscal 5- Except for the Public Line Infrastructure Facilities, at the precepts and submit it to the National Procurement Office, no other beginning of 2020. Assembly. Nevertheless, the LBS institution participating in the PFM does not contains provisions to process at the central government ensure that rules are binding. level uses the Open Data Portal for regularly publishing information. 5- The LBS lacks provisions that Searching fiscal data and make fiscal responsibility binding, information comes down to encouraging violation of the Law. checking individual internet Most notable examples of the latter in presentations, which are, often, recent years are a constant violation heterogenous and untimely of the fiscal rule on the level of public updated. Even in the individual debt (since 2012), deviations from the presentations, data is fragmented budget calendar during the budget and in non-machine-readable preparation, and deviations from the formats. legal obligations of the Government to submit Mid-Year and Year-End reports to the National Assembly. 72. Addressing efficiency and Transparency of COVID-19 Transparency of COVID-19 related Monitoring, audit & control on COVID- Possible explanations (based on the inclusivity (of minorities and responses Public Procurement 19 expenses normative comparative analysis) vulnerable groups) Availability of information: Availability of information: Availability of information: Availability of information: - Serbia has a limited level of accountability, according to the IBP - Macroeconomic and Procurement: Minimal. - Performance: Minimal. Recipients: Minimal. report. aggregate budget info: - Role of legislatures: Limited. - 54.5% of the 22 countries in the Adequate. - Role of national audit offices: eastern Europe and central Asia - Policy measures: Limited. Minimal. region have the same level of - Sources of financing: - Public participation: Minimal. accountability. Managing Covid Limited. - Six countries (27.3%) from the Funds: the - Reporting on execution: region reached a higher level ("Some accountability Some. Accountability"- Bulgaria, Croatia, gap (Serbia) - Extrabudgetary funds: Not Kyrgyz Republic, Poland, Slovakia, applicable. and Slovenia). - Four countries (18.2%) scored the lowest level ("Minimal Accountabilityâ€?- Albania, Hungary, Tajikistan, and Turkey). - No country from this region reached the highest level of accountability ("Adequate Accountability"). Budget adjustments and Public Procurement Efficiency and effectiveness of the Efficiency and effectiveness of the Fiscal responsibility and budget spending measures included in emergency measures included in emergency law 1- The government does not publish response packages (indicators) response packages (indicators) 1- Government was proactive in information on actual results of the - Even though the government increasing fiscal transparency and procurement related to the There was no information on goals, 1- North Macedon lacks information declared a State of Emergency during providing data to the public through implementation of emergency fiscal performance, and impact of the measures, about the effect or impact of such the COVID-19 pandemic, public the Open Finance Portal and the policy packages. using non-financial indicators. Currently, measures on vulnerable groups finance management operated COVID-19 expenditure portal. North Macedonia only presented a broad according to constitutional 2- The Bureau for Public Procurement explanatory narrative on estimated Subsidies, grants, and other procedures. Also, the legislative and 2- Expenditures from the budget publishes regular procurement financial inputs. support to vulnerable groups executive powers respected the program P1 (COVID-19 related) processes for all contracting procedures and responsibilities are available at a 6-digit level authorities in a unique centralized 2- North Macedonia disclosed between them. (Account type) as well as the system called ESSP. The website information on estimated support recipient of the transfer. contains information on procurement given to the individual, business, poor, Recap: no FRL – were there any Unfortunately, this data doesn't link plans, tenders, awards, contracts, and and other vulnerable beneficiaries other rules on deficits or debts that to specific policy implementation, but not clear such as single parents and laid-off applied or had to be suspended? North initiatives/measures of the identification for COVID-19 related workers, using eligibility criteria. Macedonia packages, so it is impossible to purchases is presented. verify the implementation of the 3- There is also information on the promised/planned measures in the 3- The contracts are COVID-19 actual support given to the individual, emergency fiscal package. tagged and easily to access by ticking business, poor, and other vulnerable the COVID-19 tag. beneficiaries, although it is not clear if 3- In North Macedonia, there is no eligibility criteria were implemented Fiscal responsibility law, but the accordingly. Strategy for public debt management 2021-2023 (with 4- The data is available in open prospects till 2025) discusses the formats. However, the website has COVID-19 context. issues exporting data according to the filters selected by the user. 4- Government was proactive in increasing fiscal transparency and providing data to the public through the portals: • Open finance portal: 73. Addressing efficiency and Transparency of COVID-19 Transparency of COVID-19 related Monitoring, audit & control on COVID- Possible explanations (based on the inclusivity (of minorities and responses Public Procurement 19 expenses normative comparative analysis) vulnerable groups) https://open.finance.gov.mk/mk/ho me, • COVID-19 expenditure portal: https://finansiskatransparentnost.k oronavirus.gov.mk/#/payments- details Availability of information: Availability of information: Availability of information: Availability of information: - North Macedonia has a limited level of accountability, according to the IBP - Macroeconomic and Procurement: Some. - Performance: Limited. Recipients: Limited. report. aggregate budget info: - Role of legislatures: Limited. - 54.5% of the 22 countries in the Adequate. - Role of national audit offices: eastern Europe and central Asia - Policy measures: Some. Minimal. region have the same level of - Sources of financing: - Public participation: Minimal. accountability. Managing Covid Minimal. - Six countries (27.3%) from the Funds: the - Reporting on execution: region reached a higher level ("Some accountability Minimal. Accountability"- Bulgaria, Croatia, gap (North - Extra-budgetary funds: Not Kyrgyz Republic, Poland, Slovakia, Macedonia) applicable. and Slovenia). - Four countries (18.2%) scored the lowest level ("Minimal Accountabilityâ€?- Albania, Hungary, Tajikistan, and Turkey). - No country from this region reached the highest level of accountability ("Adequate Accountability"). 74. Addressing efficiency and Transparency of COVID-19 Transparency of COVID-19 related Monitoring, audit & control on COVID- Possible explanations (based on the inclusivity (of minorities and responses Public Procurement 19 expenses normative comparative analysis) vulnerable groups) Budget adjustments and Public Procurement Efficiency and effectiveness of the Efficiency and effectiveness of the Fiscal responsibility and budget spending measures included in emergency measures included in emergency law 1- The Legislative framework in BIH response packages (indicators) response packages (indicators) 1- For the BIH around fiscal transparency is 1- The fragmented governance -Institutions, the information on fragmented in all areas except Public 1- There was no information on goals, 1- BIH lacks information about the structure leads to fragmentation in public spending only became Procurement where one Law applies performance, and impact of the measures, effect or impact of such measures on public finances, emergency reaction publicly available several months to the whole country. This creates the using non-financial indicators. vulnerable groups rules, health care, and other key after preparing the reports. same legal requirements for all segments of public administration and institutions in BIH. Nonetheless, 2 - The level of detail required to do Subsidies, grants, and other services. Centrally set public 2- Federation of BiH (BiH) procurement procedures are monitoring, audit and control on COVID-19 support to vulnerable groups procurement rules are a rare published information for the Fund decentralized and there is no unique related expenditure is not publicly exception. for economy stabilization by e-procurement platform. There is a available. 2- There are no requirements in any administrative classification in the procurement portal that publishes legislation reviewed for publishing 2 - The complexity also partly comes 2020 budget rebalance. This is a notices and some information about 3- There is no parliamentary oversight or detailed data sets on given grants, from overlapping regulations, leaving consolidation of various types of the procurement procedure. review of the existence, duration nor the transfers, and subsidies. uncertainty in attributions and expenditures that are disbursed 2- Procurement Law applies to all scope of an emergency situation. responsibilities. using said vehicle, i.e., guarantees levels of government and requires 3 - However, Republika Srpska (BiH), provided to the Federation of BiH publishing information on Federation of BiH (BiH), and Sarajevo 3- The fiscal rules deviations are (BiH) Development Bank, direct procurement procedures up to the Canton (BiH) published planned planned for only in RS legislation, but funding provided to companies, contract stage. However, it's not easy amounts for businesses. there is no obligation to provide etc. Most of the resources in this to verify if that happens since regular reports after invoking an fund were transferred to cantons. procurement is decentralized. 4- Republika Srpska (BiH) and exception. There is no legislation at Information should be centralized on Federation of BiH (BiH) disclosed any level that foresees specific 3- Republika Srpska (BiH) the public procurement portal as per information on total actual amounts reporting and transparency published both original and the Procurement Law. given to businesses. The former requirements for emergency Bosnia and rebalanced budget with only one 3- Sarajevo Canton (BiH) COVID published information about direct situations. Herzegovina column for the budget amount, economic measures didn't have public grants given to businesses, while the which requires any comparison procurement component. However, latter disclosed guarantees, under a Access to information law between the two budgets to be there is a register of public guarantee program, per recipient. done manually. procurements on its Anti-corruption 4- While the legal framework for Agency web site that allows for 5 - The information is available on public access to information is in 4- The information published by searches on procurements by different websites and formats. place, there is a rise in the number of Sarajevo Canton (BiH) shows institution. This register is voluntary Republika Srpska (BiH) uses PDF citizen complaints recorded by evidence of the potential and additional to the legal format on the Tax Administration Ombudsmen. identification of budget trade-offs requirements from the BIH website and Excel on the Guarantee due to the emergency. However, procurement law [which also applies Fund portal, while Federation of BiH 5- The law does not allow for access all the published documents are in to Sarajevo Canton (BiH)]. (BiH) only discloses the data as a list to information to be blocked in PDF format. on the Guarantee Fund website. emergency situations. 5- Sarajevo Canton (BiH) is more 6- The law does not contain the advanced than other levels of concept of proactive disclosure of government in BIH in terms of level information. of details provided in monthly budget execution reports. 6- Sarajevo Canton (BiH) is the only analyzed government where major COVID-related investments were identifiable. Such increase was noted in three areas: health care facilities, education, and civil protection. 75. Addressing efficiency and Transparency of COVID-19 Transparency of COVID-19 related Monitoring, audit & control on COVID- Possible explanations (based on the inclusivity (of minorities and responses Public Procurement 19 expenses normative comparative analysis) vulnerable groups) - Bosnia and Herzegovina has a Availability of information: Availability of information: Availability of information: Availability of information: limited level of accountability, according to the IBP report. - Macroeconomic and Procurement: Some. - Performance: Minimal. Recipients: Minimal. - 54.5% of the 22 countries in the aggregate budget info: - Role of legislatures: Some. Eastern Europe and Central Asia Some. - Role of national audit offices: region have the same level of - Policy measures: Minimal. Minimal. accountability. Managing Covid - Sources of financing: - Public participation: Minimal. - Six countries (27.3%) from the Funds: the Minimal. region reached a higher level ("Some accountability - Reporting on execution: Accountability"- Bulgaria, Croatia, gap (Bosnia and Limited. Kyrgyz Republic, Poland, Slovakia, Herzegovina) - Extrabudgetary funds: Not and Slovenia). applicable. - Four countries (18.2%) scored the lowest level ("Minimal Accountabilityâ€?- Albania, Hungary, Tajikistan, and Turkey). - No country from this region reached the highest level of accountability ("Adequate Accountability"). - France used its programmatic - Ukraine leveraged their current - The European Court of Auditors - Croatia published their list of Recommendations and trends budget framework to introduce work streams with the open published beneficiaries from support to specific COVID-19 programs that contracting approach to regulate and a first review of the European Union’s entrepreneurs in activities affected by 1- Access to information regulatory cut across ministries and agencies monitor emergency COVID-19 emergency response until mid-2020 and the COVID-19 pandemic in a tabular frameworks that mandate proactive as well as published spending procurement through their renowned announced that one-quarter of its audits in fashion, as well as downloadable publication of fiscal information in information on dedicated tool ProZorro. 2021 would focus on the European datasets in jsons format and through states of emergency. transparency portals, providing a As emergency procurement is response to fighting the pandemic. an API for developers, to directly comprehensive picture of support excluded from the procurement law; a query the databases. 2- Provisions within the Budget laws expenditure that is updated structured list of goods was adopted. - Georgia's Budget Monitor is a unique with specific transparency mandates promptly. This structured reporting for all signed citizen participation web platform from the - Norway is the only of 120 countries and specific provisions for emergency contracts is mandatory and framed Georgia State Audit Office that provides analyzed in IBP's rapid assessment spending. - Norway is one of 4 countries that within the current technological comprehensive analytical information on where both the executive and the provided adequate information for framework, generating data that public finances, thereby enabling legislature carried out consultations 3- Provisions within the regulations Relevant accountability in early COVID-19 complies with Open Contracting Data Members of Parliament, civil society with key stakeholders—including that create emergency funds with experience in fiscal policy responses. Standard. The abovementioned associations, and the general public to various disadvantaged groups— both specific transparency mandates. Europe and allowed for a separate reporting monitor government budget processes. during the formulation and the Central Asia dashboard and a business In a dynamic way, with the use of implementation of the government’s 4- Open Data regulatory frameworks intelligence tool. diagrams, infographics and tables, users response packages. (the more specific their secondary have access to information on the income legislation is, the better). and expenses of state institutions, from which they can request audits and send 5- Use of existing (or creation of) proposals for next year's audit plan. standardization and open data tools. - United Kingdom, the Parliament’s 6- Take into consideration the specific Public Accounts Committee set up a demand from national and program of work to hold the government to international civil society account for its use of taxpayers’ money in organizations and media, mostly response to the COVID-19 pandemic, regarding procurement processes and including an inquiry into emergency economic relief benefits recipients. government procurement. - Colombia and Honduras, have - In Honduras, Peru, Sierra Leone, and 7- Pre-existing dedicated teams within Relevant Ministries of Finance, with the - Brazil presented detailed added a module in their e- South Africa, the respective supreme - Australia and Bangladesh experience at experience and mandate to information on relevant categories procurement platforms that presents audit institutions have undertaken interim published extensive reports detailing the global level implement fiscal transparency in an of spending, for example, by audits to uncover irregularities and tackle the implementation of specific policy 76. Addressing efficiency and Transparency of COVID-19 Transparency of COVID-19 related Monitoring, audit & control on COVID- Possible explanations (based on the inclusivity (of minorities and responses Public Procurement 19 expenses normative comparative analysis) vulnerable groups) administrative, economic, and detailed information on all emergency governance vulnerabilities as they measures, and their impact on various emergency context as a policy functional groups; by beneficiary; procurement related to COVID-19. happen. disadvantaged groups, including priority. and by region. - In Jamaica, the Auditor General women, the elderly, children and - Ecuador, through the procurement published three concurrent audit reviews those living in poverty. 8- High-level political endorsement for - Colombia, Honduras, and agency’s emergency procurement of the government’s cash transfer fiscal transparency initiatives. Peru—have published spending platform provides open data access to program, the COVID-19 Allocation of - Canada’s Gender Based Analysis information on dedicated all COVID-related procurement Resources for Employees (CARE) Plus (GBA+) approach was applied to 9- Integrate innovations and good transparency portals, providing a contracts, allowing for civil society Programme. The Ministry of Finance held the government’s COVID-19 practices that emerged during the comprehensive picture of support action and better accountability. up payments until after the audit had Economic Response Plan to assess COVID-19 crisis—such as user- expenditure that is updated happened, and worked closely with the the potential impact of various policy centered information, enhanced promptly. - Jordan and Papua New Guinea SAI to follow up on audit initiatives on gender, income, and procurement transparency or publish information on procurement recommendations inter-generational inequalities. innovative monitoring and auditing - Honduras and Rwanda, have contracts, including their beneficial - Mexico, through their regular reporting practices—into regular budget tagged COVID-19 spending in their ownership, in line with their and publication platforms for open data on - In Peru, a joint government-civil processes and procedures going information systems. commitment when accessing IMF performance indicators for budgetary society working group, Mesa de forward. emergency funding. programs, presented information on non- Concertación para la Lucha contra la 10- Having strong internal financial - Paraguay and the United financial indicators target goals being Pobreza (MCLCP), published a report management systems allows for States, presented open access to - In Paraguay, civil society affected by the emergency and the fund looking at the impact of the better readiness and prompt microdata. organizations use the publicly reallocation; allowing for the identification government’s COVID response on response. available public procurement of trade-offs. various populations. The working - The Philippines provided an information, including that of COVID- - Paraguay included efficiency indicators group used data about budget 11- Incorporate publication of non- overview of the COVID-19 19 specific contracts, and targets and goals for the measures in the execution, poverty, employment, financial and performance publication, response (including off-budget contextualize it in a publicly available response package and published updates implementation of social and health both of the estimated inputs and measures). website that allows for cross- in their fulfillment through their public programs, and COVID-19 statistics to outputs, and on actual results and comparisons with payroll information website. - In Sierra Leone, the Audit make a series of proposals for impacts, paying special attention to - South Africa has published and historical data on procurement Service used real-time auditing response measures. the expected and achieved impacts in prompt information on its dedicated (adjusted by inflation). This tool also approaches honed during the Ebola crisis vulnerable populations. trust fund, the Solidarity Fund, a enables an artificial intelligence to publish a report on COVID-19 spending mostly private COVID-19 relief algorithm that publishes that led to the Anti-Corruption Commission 12- Incorporate specific monitoring, specific trust fund, that has been inconsistencies through a twitter taking up several investigations and audit and control mechanism that recognized (IMF, 2020) for its account. detaining top government officials. allow for “liveâ€? oversight processes, robust and transparent financial - In South Africa, more than one-third of both from oversight institutions, and reporting as well as for regularly the auditees have taken actions to from members of the public, disclosing information on resources address identified irregularities; particularly civil society organizations. and disbursements regularly both the Unemployment Insurance Fund has through impact reports, and recovered R3.4 billion (US$220 million) of through a dedicated website. incorrect payments, and the president has set up a high- level task force to address allegations of corruption. Note: the word information refers to the contents any kind of document published regardless of its format. The word data refers to information that specifies quantitative amounts (expenditures, beneficiaries, etc.). Open data refers to data published in machine readable formats. 77. 78.