Slovakia is the world leader in the budgeting of public finances

The history of BIS started in 1996. Until then, the Ministry of Finance (MF) SR was budgeting in the classic manner with paper, pencils and erasers. How did the need to change this arise?

In addition to the classics you mentioned they already had Excel software available. It was done by writing on paper sheets and then copying into tables on the computer. They used Excel to check the accuracy of results. However, these procedures were unsustainable in the long term. At that time, we had already been using a platform for information sharing and communication called Lotus Notes. It was something like a little predecessor of today’s Facebook for the corporate environment. Coincidentally, the MF SR had chosen this platform for the future and announced a tender for the supplier of software licenses and consequently the services for the development of applications in this environment. At the time there were three suppliers in Slovakia, including us. We were lucky and offered the lowest price and won this contract. At the time, the MF SR identified that they needed the most help in the budget area, where several workplaces had to communicate and share information. Over time it became clear that Lotus Notes was not ideal for budgeting. We gradually abandoned this platform and used another, more suitable one.

When was the breakthrough that allowed budgeting to significantly progress?

The breakthrough was a State Treasury project. The former finance minister, Brigita Schmögnerová, understood that public resources would be much more manageable if the state and its organizations stopped depositing them individually in commercial banks, but rather in a single common public budget account. The State Treasury has two sections: the bank one and the budget one. When this was discussed and they were satisfied with us at the MF SR, they decided to not procure the budget section, but to give us the opportunity to significantly expand it in order to meet all the necessary requirements.

The system expanded its functionality over the years. Does the system enable the Minister of Finance and his colleagues to have an overview of the budget situation at any moment?

Yes. The entire system works on-line and it is available centrally for all state administration entities. It is possible to view how the budget is set and it can be very quickly operatively adjusted during the course of the year. When a disproportion occurs, the process of managed budget change is triggered. It’s a very lively and dynamic system.

Is there a notification that highlights unwanted developments in some part of the state budget?

There is a very strict barrier, where it is not possible to use more funds for the given items.

The budget information system covers practically the entire sphere of public finances. Where do you see its further prospects?

We want to continue with its enhancement, increase its transparency, simplify its use and move it forward so it can be used as a prognostic tool. There are always opportunities to improve its quality. In addition, the BIS serves as the source data base for the interactive portal www.rozpocet.sk, through which the public budgets of state and self-government organizations are clearly visualized. We would also like this system to be implemented in other countries as well. It has good chances, because the level of the budgeting process is high in Slovakia and it goes hand in hand with the level of IT support.

Are we the world leader in this area?

Yes, I am sure about that.

For example, many countries recognize the Czechs as experts in central banking targeted inflation policies. Can Slovakia be globally recognized in the area of budgeting systems?

Slovakia can be very useful in this area. We are making practical steps, for example in Ukraine, where there is the will for the MF SR to give local partners the right to use the relevant software code. The only thing remaining would be the local implementation of the system. It could help them to better manage their public resources.

In recent years, Slovakia has been consolidating public finances and moving towards a balanced budget. Can an information system be a source of savings?

In this regard, the political will is absolutely crucial. If it exists, an information system can support the allocation efficiency of public finances. In other words, putting them where the government sees its priorities. We see the sense in politicians having the perfect input information, which will enable them to make professionally correct decisions. The important thing in this regard is the cooperation with MF SR, which is, in our opinion, the best performing government department in Slovakia.

Full article on teraz.sk