Even though the reforms in the area of rule of law started 20 years ago, the period of dynamic legislative and institutional changes has begun with preparations for opening negotiation chapters 23 and 24 in 2012. The adoption of the Action Plans for these two chapters in the following year, the contents of which was clearly and precisely guided by the recommendations contained in the screening reports, in the most comprehensive manner combines reform in a number of areas, like judicial reform, repression and preventive anti-corruption, all human rights, migration, asylum, border protection, the fight against organized crime, etc.

Five years later, the question of “cumbersomeness” of the approach to reforms appears as one of the possible obstacles to better managed reforms which go into the core of problems in the given areas. The complexity of the areas, a large number of planned measures, the involvement of numerous institutions, related policy documents that are being implemented simultaneously, etc, have led to several parallel reporting processes. None of these reporting processes fully satisfied the criteria of good monitoring and evaluation, which are a prerequisite for quality management of reforms.

The goal of this analysis is to point out to the gaps and omissions in reporting that make monitoring difficult and hamper the efforts towards reform processes attaining full impacts and expected effects. In addition, the analysis tends to provide an incentive for a shift in reporting from rigorously formalized (at the level of activities - “realized/ unrealized”) towards reporting focused on the impact and results.

This study examines the tax arrears of 16 Montenegrin municipalities in the context of increasing the efficiency of collection of tax arrears and ensuring more transparent financial reporting, which are the main goals of the 2016-2020 Public Finance Management Reform Programme. Municipal debts account for 40 percent of total tax arrears. These arrears are managed through a debt restructuring programme concluded between the Ministry of Finance and all legal and natural persons that owe taxes to the state. For this reason, important aspects of the overall public finance reform in Montenegro can be assessed through the lens of municipal debt management.

In 2015, in response to high levels of indebtedness of local self-governments Ministry of Finance concluded individual contracts with local selfgovernments to define the terms for the settling of EUR 90 million in arrears on tax payments and payments of social security contributions for employees of local self-governments. Among other, these contracts obliged local self-governments to reduce the number of employees in local government bodies, public institutions, agencies and municipally owned enterprises. Nevertheless, out of the 16 municipalities that signed such contracts, seven failed to live up to this obligation.

According to the Tax Administration, 95.15% of reprogrammed liabilities of local self- governments have been collected. The Tax Administration does not, however, provide breakdown of repayments by municipality, and maintains that such information is regarded as a tax secret. Refusing information on grounds of tax secrecy has become possible in the wake of the May 2017 amendment to the Law on Free Access to Information, which has thus directly undermined the transparency of public finances and with it the accomplishment of objectives laid out by the Public Finance Management Reform Programme.

In Montenegro, there has been a special prosecution office for organized crime, corruption, terrorism and war crimes, in different formats for last fourteen years. The Department for Suppression of Organized Crime, as part of the Supreme State Prosecution Office, started working on June 30, 2004. Since then, the Department and the related government bodies responsible for suppression of organized crime and corruption have been in a continuous process of reform under the supervision of the European Union.

During this period, the jurisdiction of the Department was expanded in 2008 to include corruption, terrorism and war crimes and therefore the number of special prosecutors increased; the new Criminal Procedure Code was adopted in 2010 which introduced prosecutorial investigation; the capacities of Prosecution Office, Police, Customs, Department for Public Revenues and Administration for Prevention of Money Laundering and Terrorist Financing were strengthened; their joint investigation team was formed in 2011. After all this, in 2015, the Special State Prosecution Office (hereinafter: SSPO), modeled after the Croatian “USKOK”, was established and its jurisdictions temporary expanded to include criminal offenses under the Election Law since August 2016.

The aim of this analysis is to contribute to the work of the SSPO and the Special Police Department through analysis of their work and the state in the field of the chosen interim benchmarks and through giving suggestions and recommendations for resolving the problems in their work.