Areas and activities of the Project

The project covers the 12 areas, each of which, on the one hand, on their own, and on the other – is part of a system designed to improve the efficiency of budget spending.

1. Long-term financial planning

For the time being in Kaliningrad the long-term financial plan remains a formal document, involving only 5-year period and cannot be used as an analytical instrument. Practical instrument was implemented in Gdansk and several Russian municipalities; the regional system of long-term financial planning is being worked out. Today there is a need in dissemination of this tool and development of system for consolidation of data for use in a regional model of financial planning. The main goal of this task is practical coordination of long-term strategically and long-term budgetary planning.

2. Independent public examination of the laws and regulations in the area of financial management and budgeting

Procedures for independent public examination of the regional normative-legal acts in the field of financial management and budgeting were adopted by the legislation; means of informing the public about planned and ongoing legislative activities of the state were developed. Now there is a need of further adaptation of legislation and development of real existing mechanisms to work with community and public organizations, including creation of a platform for communication in the Internet. The work should be carried out at both the regional and municipal level.

Under this activity the independent public expertise of normative on financial management, long-term financial planning and capital investment planning acts will be developed and popularized. The feedback from the society will be established.

3. Introduction of more transparent presentation of budgetary expenditures (Register of spending liabilities)

Register of spending liabilities is an important mechanism for the modernization of the budgeting system as the modern budget should be formed on the basis of real needs, goals and objectives of the executive bodies. However, the quality of RSL in the municipalities is very weak. The registers are frequently nominal, and are not used effectively in the financial planning and budgeting. Some methods of calculation of expenditure liabilities are considered as doubtful and are not provided with adequate norms and standards.

It necessary to conduct an analysis of expenditure liabilities in accordance with the level of public entities, as well as evaluating the levels of budget spending liabilities based on the authority of public law entity (region, municipality, settlement). Within this framework, recommendations will be developed on maintaining of register of expenditure liabilities in the municipalities. Current expenditure obligations will be analyzed by monitoring of assessing expenditure liabilities methods and procedures for the adoption of new ones. Principles and approaches to regulation and standardization of registers will be developed at the municipal and regional levels. Analysis of expenditure commitments levels of public education, the assessment of levels of expenditure commitments budgets will be held on the basis of authority of public law entity (region, municipality, settlement).

4. Development of program – oriented method

Program and target oriented method is one of the key economic instruments, which specific and conditions (the need for fundamental change unfavorable proportions, structure, trends in economic and social development, the complexity of the problem, etc.) are fully consistent with the specifics of the transition period and allow us to consider it as one of the main methods of qualitative changes in the socio-economic situation both at the state, regional and municipal levels. Further development and its implementation, including the development of goal-setting in program planning is particularly important.

5. Monitoring of financial management system

At the present time is needed to optimize the performance system to assess the financial situation and quality of financial management of municipalities. The system of financial control should be enhanced by audit functions. Financial control will become not only a way to identify weaknesses and errors in financial management, but also a source of advice and recommendations for improvement. Also the analytical instruments should highlight the issue of municipal statistics. Proper collection and use of municipal statistics will more fully reveal the socio-economic performance indicators and, consequently, the financial needs of municipalities in respect of the provision of municipal services, and to simplify the determination of the tax capacity of municipalities to optimize inter-budgetary relations.

6. Trainings for public servants

Polish self-governments are forced to continuously perfect the management tools to answer the arising challenges. New public finance law recently introduced in Poland lay additional duties upon the local governments units e.g. preparation of long term financial forecast. As a result public servants need to acquire new competencies to stand up to laid responsibilities. Therefore it is crucial to build up the knowledge of public servants by conducting trainings devoted to the financial management. Development of human capital in public intuitions is of wide concern not only by the public servants themselves, city authorities but also local communities, as they are the final beneficiaries of good governance.

7. Development of IT Tools and purchase of equipment

Modern public finance management especially financial and capital investment planning need to be supported by proper IT tools. Implementation of software solution greatly enhances the accuracy and efficiency of financial management.

8. Implementation of modern forms of public service provision

Until now, many budgetary institutions operate in isolation from the modern approaches to development, governance and the principles of optimality and adequacy. Transfer of budgetary institutions in autonomous institutions occurred in large numbers and work in this direction must continue and expand, which requires additional methodological support. It is necessary to implement expenditure planning in budget institutions on the basis of the volume of their services, rather than proceeding from the need to maintain existing facilities. Careful adjustment of the structure of many budgetary organizations is needed to optimize the ongoing costs and increase their efficiency and, consequently, increase citizen satisfaction of their services.

9. Capital investment planning

Implementation of strategic planning in modern municipalities is inseparable from the processes of municipal capital investment. There is a need to improve the transparency of the implementation of capital investment, improvement of practical methods to assess recent and planned facilities of capital investment, improvement of procedures for the selection of investment projects. This can be realized by unifying decision-making procedures for new capital investment projects, monitoring their implementation and the procedures for the allocation and use of capital investments and subsidies for capital investments. City of Gdansk and Gdynia have wide experience in preparing capital investment plans that can be used by Kaliningrad Oblast to improve the quality of Kaliningrad municipalities capital investment planning. . In order to exchange the knowledge and expertise on CIP Gdansk will be the host of study tour for Kaliningrad’s and Gdynia’s representatives. Study tour will be the opportunity to exchange experiences and find common solutions aiding the process of capital investment planning.

Results of these activities – A system of planning of capital investment, unified decision-making procedure for the selection of investment applications, system including feedback from the community and methods that allow citizens to submit for the consideration the ideas for investment projects is implemented as well as the system of forming an investment plan strengthened by the implementation of the necessary software. The activities within this framework will be conducted jointly, as well as the study tour and seminars.

10. The development and unification of the PPP system

It is necessary to carry out the complex measures for the development of PPP, adapting and unification of the results of PPP experiences gained in Kaliningrad and Poland, the development of mechanisms to able attracting of foreign private partners for projects and programs, implemented at the municipal and regional levels.

11. Public procurement

There is a need to form a transparent, competitive, fair and effective system of budgetary procurement in Kaliningrad Region. This will ensure the effectiveness and efficiency of budgetary funds spending. Planned activities will involve in the public procurement process the maximum number of participants from border territories of Poland and Lithuania. Publications and workshops for representatives of Polish business in order to attract them to participate in public procurement were held.

12. Promoting and improving the quality of knowledge about the functioning of the Public Finance

In order to promote and improve the quality of knowledge in the field of public finance, a library of literature on public finance will be collected, which will contain a selection of relevant regulatory and legal acts in the field of regional and municipal financial management. Availability of these documents and their classification will contribute to improvement of financial specialist knowledge and enable greater use of the experience of neighboring countries in addressing similar problems on the functioning of financial institutions. Systematized electronic database of financial literature of the normative and legal acts will be created, implemented its translation where necessary.