As the country embarked upon transition to democracy and market economy, the role of statistics organization in the society had to be re-defined and the regulation for it had to be reformed, and the institute faced an actual need for introduction of methodologies common in most countries. The previously practiced method of general observation in statistical data collection was abolished and other methods of statistics such as sample surveys and pilot studies were accepted to replace them, and a new legal environment was required to regulate statistical activities in the new democratic system. Following the standard practice of regulating statistical activities through a special law in developed economies, the work to develop the draft of the Law on Statistics commenced in Mongolia in 1991. In 1994, the State Great Khural passed the Law on Statistics of Mongolia, which was an act of great significance for creating a favorable legal environment to allow for transparency and professionalism of statistical activities in Mongolia. The first law on statistics comprised five chapters and 12 articles covering a multitude of issues including the principles of statistical activities, statistical reporting system, rights and duties of statisticians and users, structure of the statistical organization, its rights and duties, statistical data confidentiality, and liability issues - all required in maintaining efficient regulation of day-to-day statistical activities. The Law provided that the statistical system operates under the executive branch.
The Law on Statistics was amended later in 1997, 1999, 2004 and 2008 respectively to reflect the 10 fundamental principles of official statistics recommended by the United Nations to its member countries, which helped configure improved legal environment for statistical activities. The amendments defined and legalized that the statistics organization was an independent professional organization with science-based methodology.
In the light of ongoing socio-economic transformations, the Law gives legal basis for the NSO to produce official and impartial statistics, maintain data confidentiality, and provide users with valid statistical data.
According to provision 2 of Article 11, Chapter 4, of the Mongolian Law on Statistics, the structure of the statistical organization in Mongolia comprises an independent, centralized national statistics office with divisions and local statistics departments and units under the supervision of the Governors of provinces, sub-provinces and the capital city and its districts. Statistical activities are managed at sub-provincial level by deputy governors or administration staff, and at bag or khoroo level (the smallest administrative level inferior to sub-provinces) by their governors.
The National Statistical Office reports to and is supervised by the State Ikh Khural, the national Parliament.
The NSO is authorized to perform a total of 26 main tasks including provision of integrated professional management and coordination in overall national statistics activities, development of data collection methodology, rules, classification and standards, improvement of scientific bases, analyses and inferences on collected data, production estimates and models using long- and mid-term economic and social indicators.
Law on the Population and Housing Census of Mongolia approved on 3 January 2008 by the Parliament of Mongolia and this is the legal basis to conduct nation wide census for every 10 years, Inter-censual survey for every 5 years between nation wide censuses.
The NSO is assisted by the National Statistics Council, which consists of representatives of the State Ikh Khural, the government, scientific research institutes, and users.
The NSO is responsible for ensuring that the statistical information and data by the Government, its ministries and agencies do not overlap and duplicate with the official statistics, ensures the integrity of methodological support, approves and endorses indicators, methodologies and procedures, and evaluates the coverage and accuracy of statistical information.
There have passed 17 years since the United Nations approved the fundamental principles of official statistics. Mongolia follows and applies these principles in its development and adoption of legislations and methods regarding official statistical activities.