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Armenia/ 6. Financing of culture  

6.1 Short overview

Currently, financing of culture by the state is seeing a period of growth in comparison with previous years. The main source of cultural sector financing is the state budget, from the section on "Culture, information, sport and religion". The financing is realised on 2 administrative levels: ministry and marz administrations. The basis of the financing structure is annual programmes on preservation, distribution and development of culture, which are still limited in number and addressed to concrete organisations.

The financing of legal entities from the state budget is realised in 2 ways: via grants and subsidies through providing state orders (Decree of the Government N 1937- of 24 December 2003). According to the procedures, a subsidy is a reimbursement of the losses, or some part of them, sustained by the organisation as a result of the production, export and import of goods, execution of works and rendering of services by fixed prices (the lowest price as compared with a profitable price) from a given organisation.

At present, budgetary financing of cultural organisations is realised in the form of applications on the basis of the established cultural programmes. However, there is no precise division between the realised financing, grants awarded and expected results. On the other hand, this assistance has a targeted character and is directed to concrete state non-profit organisations functioning under the jurisdiction of the Ministry.

The Ministry of Culture is included in the Programmed Budgeting for approximately 3 years, which has been undertaken by the Ministry of International Development of Great Britain. According to this programme, the Ministry presents its programme in accordance with the conducted cultural policy.

The programme is a DFID project entitled "Support to the Roll-out of Programme Budgeting in Armenia" which is the continuation of the DFID project "Armenia: Assistance with MTEF". This is the second project in Armenia implemented by Atos Consulting (UK) in collaboration with the Armenian partner, International Centre of Human Development and Southern Cross International Inc. (New Zealand).

The goal of the project is to support the development and implementation of a strategy of introducing programme budgeting on a whole government basis. The programme budgeting project is also aimed at continuation and deepening of improvements to state agency budget classifications, specification of non-financial performance indicators, as well as at institutionalising performance planning, reporting and monitoring systems and practices. As a result of these improvements, integration of government policies and budgets, as well as of different processes of the government strategies, is anticipated.

At present, the project works directly with 32 budget agencies, including the Ministry of Culture. Programme budgeting work with the ministry started in 2005 with a primary focus on improving the budget classifications of the ministry in line with PB principles and development of volume indicators for services provided. Activities with the Ministry have included assistance for the preparation of MTEF submissions, performance specifications, as well as development of integrated financial and non-financial performance reports. As a result, a system of quarterly reporting has been introduced. In 2007, the ministry's annual integrated financial and non-financial report for 2006 budget programmes was prepared and submitted to the RA MFE and the National Assembly for the first time.

Support was also provided to the MoC in refining and finalising its revised budget classifications and in the preparation of their annual budget plan (which includes the ministry's strategy and performance indicators (quantity, quality, timeliness) for all budget programmes) for inclusion in the 2008 budget documentation. The aim of this work is to have better focus on services provided and performances achieved.

Chapter published: 22-05-2015

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