On January 27, 2021, the Armenian government adopted amendments to the decision on how grants and subsidies to legal entities are allocated from the state budget. The amendments contribute to a more conducive CSO environment by aiming to ensure transparency and accountability of the process. In particular, they further regulate the organisation of activities of the grant selection committee, conflict of interest issues, and transparency of the selection process.
Initially adopted in 2003, the procedure of grant allocation defined competitive selection mechanisms. Yet in practice, most of the state grants were allocated on a non-competitive basis, based on a definition of the list of grantees in the annual state budget and specific government decisions. The current amendments were proposed by the Ministry of Finance in 2019 following the second commitment of the Armenia OGP 2018-2020 Action Plan.
CSO Meter used to identify challenges and find solutions
The 2019 CSO Meter research identified a number of issues related to the state funding, concluding that the procedures of state funding allocation, as well as monitoring and evaluation of outcomes of funded projects were not clear and transparent. Based on the CSO Meter recommendations, in early November 2019, Transparency International Anticorruption Center (TIAC) initiated discussions with CSOs on improving the state funding and taxation environment for CSOs and prepared an alternative draft procedure of state funding.
Process of advocacy and improvements included
After the publication of draft amendments by the Ministry of Finance, TIAC met with the Ministry representatives to discuss its concerns and suggestions, and organised another public discussion with participation of Ministry representatives.
The Ministry of Finance considered the proposals made by CSOs during public consultations, revised the draft and published it in late December 2019. The revised draft incorporated TIAC’s suggestion to set criteria for assessing project proposals in the amendments, and the possibility to involve outsourced experts in the selection committee in case the representatives of the state body do not have the necessary professional skills. Additionally, TIAC proposed to hold the selection committee meetings in closed format to avoid biased decision, and to dismiss the provision on providing possibility to competition participants to get copies of other participants՛ proposals (which could be a violation of copyright). The controversial provisions were dismissed in the final amendments adopted by the government.
Next steps
The first positive step of amending of the procedure was completed. However, the Government still needs to fully implement the novelties in the procedure to contribute towards more transparent and efficient state funding of CSOs.
In addition, the government also needs to launch an electronic platform on state grants. This will allow for online submission of project proposals and timely publication of information on grant projects in one place. Such a platform will further ensure the accessibility, transparency, and accountability of state granting.