Under the scope of improving public financial management, Mongolia is aiming to introduce result-oriented medium-term budgeting, transitioning from the traditional input-based budgeting. This goal is aligned with development policy of Mongolia to shift from medium-term fiscal framework (MTFF) to medium-term expenditure framework (MTEF).

    For successful implementation of MTEF, it is crucial to focus on automating the budget process by data processing, data transmission and, featuring new functions for measuring performance results. As such, this initiative will be an important part of the reform that will ease the technical workload of the budget process and improve the reliability of the budget data while ensuring the needs of its diverse stakeholders.

    The updated version of the budget planning information system will enable the users to see the alignment between budget information and policy planning, to set budget ceiling, approve, allocate, and manage the program and activity budget. Moreover, the users will be able to make mid-term revenue and expenditure forecasts and measure the performance of the budget program.

    Based on the situation analyses on the current business process, the following necessary features and business requirements have been identified as an improvement of the budget planning system.

1. Level of users – Expansion of the scope of the users starting from the lowest budget unit. This is crucial for bottom-up data processing to be fast and efficient.
2. Automation – Online execution of budget proposal, monthly budget allotments and their amendments.
3. Integration – Integration of internal financial information systems of MOF and auxiliary systems of line ministries for data processing and transmission. This feature is needed for efficient data flow between the information systems eliminating mechanical errors, data overlapping and manual workload.
4. Public engagement – By introducing the budget information along with the results to be achieved to the public, transparency and public engagement in the budget cycle will be encouraged and boosted.
5. Data processing – A feature on expenditure forecasting with scenario analysis and cost drivers to facilitate informed decision making will be introduced. Partial automation of the consolidated budgeting process will be undertaken.
6. Performance framework of the bduget – The Annex 1 of annual budget law “The performance results of the budget governors” will be automated. The KPI library for performance indicators by budget governors will be created and respective data will be transferred from the auxiliary systems.