: / Analytics / Local Governance Assessment in Kyrgyzstan (2005)

Kyrgyzstan Review, 10 years ago

Indicator 3. Interaction with state authorities is effective

Despite the fact that a number of decrees and laws proclaim financial decentralization in Kyrgyzstan, and the entitlement of AOs to manage their budgets independently, the situation is far from changing at the grassroots level. The most of the AOs still depend greatly on the decisions of the district finance departments, which retain the final power to approve and manage local budget expenses. Although baseline reporting had mentioned that the revenue side of local budgets was typically based on local taxes and other fees, they are accumulated in the rayon budgets. The baseline assessment reported an overlap in the budget oversight responsibilities of AO and rayon financial authorities: according to the new law on LSG and local administration, Aiyl Keneshes, as local representative bodies, were given the mandate to oversee local budgets. At the same time, rayon financial officials are the main authority having any real power to control AO budgets.
The present LG assessment indicated a minor change in this issue. The relation between district authorities and LSG bodies is still far from the significant change seen at the local level. Although AOs demand more independence in local budget decisions, the state authorities still do not allow this.
We are still not independent in using of our funds, the district finance unit is insisting on the controlling figures... yet the law and real situation are different Chinara Imanalieva, AK deputy, member of the budget commission, AO Syntash, Chui.
Although the budget design process is managed by the AOs, most of the key decisions on money expenditures should be authorized by the state finance department. Some of the respondents during FGDs had mentioned that the finances from the special account, where the AO collects its own income, are less controllable by the district authorities.
We havent heard about the document which regulates the relations with the finance unit. Such a document is necessary Omuralieva Nurgul, Streat Head, Lyuksemburg AO, Chui.
Although all the income sources are in our hands, we cannot control them. For instance for the opening of the local statue we have transferred 60000 soms chief of the finance department. AO Ivanovka, Chui.
The influence of the district finance unit is great. Every decision is to be consulted with the district unit, the use of the funds we discuss during sessions with AK deputies Bakyt, AK deputy, AO Leninskoye, Jalalabad.
The relations between AOs and district controlling departments in the pilots has not changed significantly mainly due to the short time which passed after the laws came into force. Another reason for this is the piloting activities, which had had quite a short time span. It is early to judge whether the project was helpful in regulating the relations between these two entities.
In one Northern AO (Novopavlovka) for instance, the leader wants to resign his leadership position since he experiencing difficulties in meeting the citizens claims and working under the pressure of the district authorities.
Yet there are some initial changes that were recorded from the data received from the interviews with AO leaders. Diagrams 7a and 7b illustrate the answers of the AO leaders to the question about whether their decisions were independent. The second graph indicates that a proportion of such decisions that were made.
Also, according to the interviews with leaders from pilot AOs, 56% of them indicated that documenting such relations with the district finance unit would help them to successfully interact with the district authorities.
Another piece of data that could be retrieved from the report cards is that pilot AOs indicate an ability to manage budgets more independently than non pilots. For instance, the average score variation is 2.6 in pilots and 2.4 in non pilots.
From Diagram 8 it is clearly seen that citizens gave higher scores to the ability of the AOs to manage their own budgets independently. One of the possible reasons for this could be that they look to the problem more realistically and practically. They may have to see the results of the independent budget management before giving higher scores. Another side of this finding is that citizens may have less information about the problem. In addition, interaction between the AO and authorities may not be well publicized and citizens might think that AOs are independent in making the decisions on budgets.
When controlling for external forces on one side and citizens pushing for changes from on the other, there are several AO leaders who wish to take off from their positions. If this happens in the pilot AOs, the expected impact from such a turnover might of LSG leadership might lead to one of the following: a) the new AO leader might need additional trainings on budgeting; b) a more skilled person might lead the AO who would be ready to accept the obligations and lobby for changes in relations with the district finance unit and maintain local budgets in more efficient way.