Tbilisi Budget Lacks Transparency and Social Policy
28 June, 2012
Tbilisi Budget Lacks Transparency and Social Policy

The budget of the capital of Georgia lacks transparency and social policy, three non-governmental watchdogs - the PMC Research Center, the Economic Policy Research Center (EPRC) and the Caucasus Economic and Social Research Center (CESRC) report in their mid-term monitoring of Tbilisi budget.


The Tbilisi budget dynamics for the past several years, public health and social programs financed from the budget, purposeful spending of the funds allocated from the reserve fund, the efficiency of preschool education financing and other areas of

spending of Tbilisi budget fall under the focus of non-governmental organizations. The outcomes of the mid-term monitoring were unveiled on June 12, 2012.

The monitoring of Tbilisi budget since 2007 to date has shown that the funding of the sphere of culture has increased on an annual basis.

“In 2011-2012 budget expenses were reduced.  Budget spending on public order, security, recreation and cultural activities is steadily growing, while funding of such important fields as protection of environment and education is coming down,” Kakha Kukava, an EPRC representative, said.

Health and social program monitoring results showed a decrease in the financing of the sphere in the budget 2012.  Moreover, details of spending on health and social programs are not available, which complicates the process of getting information on the expenses made on medical laboratory services, the overhaul and repair of medical entities and other public health costs.

Moreover, the process of spending money from the reserve fund is obscure.

“Disbursement of funds from the reserve fund is no subject to the procurement law requirements, such as announcing a tender, price quotation etc., which contributes to non-transparent and improper spending of the reserve fund money”,  Shota Murghulia, a representative of the Caucasian Institute for Economic and Social Research (CIESR), said.

As for city cleaning and sanitation, the household garbage disposal and utilization services have been provided by Tbilservice Group Ltd. since 2011.  According to the law, taxes paid by citizens and other beneficiaries for the services (in this case the tax on waste collection) must go to the budget, however they go instead to Tbilservice Group’s bank account, access to which is totally restricted on the grounds of commercial secrecy.  This decreases the quality of transparency of public finances.

In the process of the preschool education monitoring the NGOs focused on co-funding procedures. Co-financing is based on three categories differentiating socially vulnerable families whose children kindergarten tuition City Hall covers completely; average income families with less than GEL 40 thousand annual income are co-financed in the following way: family covers  the fixed charge [that fluctuates between GEL 30-60] for the first child completely, the second child tuition is co-financed by  50% , and the third and more children are exempted form charge; and high income families with at least annual income of GEL 40 thousand to whom kindergartens fix GEL 80 but City Hall adds 25% in bonus.  According to the statistics, in kindergartens number of the children from relatively high-income families exceeds the number of children from socially vulnerable families.  The analysis showed that the co-funding scheme in kindergartens is unfair and not working efficiently as the better-off family gets more financing in fact through bonuses. Besides the tuition charge is defined by kindergartens themselves that triggers them to fix higher tariffs to get higher bonuses.

Procedures of purchasing food and other products for kindergartens are also obscure.  It is impossible to identify the purchaser and the form in which the items are purchased.

According to the report, obtaining public information from kindergartens proved especially difficult.  Often it is impossible to make comprehensive analysis on the basis on the data obtained from kindergartens.

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