USAID Partners with Georgia’s Ministry of Finance to Strengthen Public Financial Management at the Local Level

Speeches Shim

Tuesday, June 22, 2021

USAID’s 2020-2025 Country Development Cooperation Strategy for Georgia puts a major emphasis on strengthening local governance in Georgia - promoting transparent, citizen-responsive governance that can increase public confidence in the democratic process and help elected officials earn the trust of the people they serve.

Strong public financial management is an essential building block for any well-functioning democracy.  Effective and transparent financial management means that taxpayers can be confident they will receive the public services they deserve, which leads to increased trust in democratic processes and greater civic participation. This virtuous circle ultimately strengthens democratic institutions and reinforces good governance.

To bring these benefits to Georgia, the USAID Good Governance Initiative successfully worked with local governments in three municipalities - Kutaisi, Dedoplistskaro, and Dusheti - to strengthen their budgeting processes, a critical component of effective and transparent public finance management. As a result, the three municipalities qualified for grants from the Ministry of Finance of Georgia amounting to GEL 700,000 - funds that will benefit local communities. For example, the local government in Dusheti will install new heating systems in five kindergartens and build five new public sports facilities. For its part, the Kutaisi local government will use the funds for infrastructure projects selected by residents through a USAID-supported participatory budgeting process.

This work is part of a broader package of public finance management reforms that USAID has supported since 2007, first at the national level and now increasingly at the local level. To incentivize improved local financial management, the Ministry of Finance of Georgia is providing extra grants to municipalities that meet certain benchmarks. USAID is helping municipalities meet these benchmarks, building local budget experts’ ability to comply with national standards, including setting priorities, consulting with citizens, forecasting, and tracking budgetary performance. USAID is also working with municipalities to integrate gender analysis into public finance management.

In total, USAID is working to institutionalize these standards and practices in 17 municipalities, contributing to the Government of Georgia’s broader effort to promote accountable and citizen-responsive public finance management in all 64 municipalities across Georgia.

 

Last updated: June 22, 2021

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