Parallel Funds for Granting One-off Social Assistance: Millions at the Government’s Discretion

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In 2017, nearly two million euros were allocated from the state budget for one-off social assistance. Of this, only €700.000 were allocated to the most vulnerable cases. Almost twice as much was spent on employees in state institutions and ministries through non-transparent procedures. Social cases, thereby, can count on one-off assistance through social work centres in the amount of five, ten or twenty euros, while employees in the state administration receive 500, or even several thousand euros.

Another four million were distributed for various forms of assistance by the decisions of the Government’s Inner Cabinet and the Commission for Allocation of Funds from the Budgetary Reserve, documentation on which was declared secret.

The budget for 2018 envisages a similar sum for granting one-off assistance to employees in the state administration. Experts call for termination of this practice.

The Ministry of Labour and Social Welfare confirmed to the Centre for Investigative Reporting of Montenegro (CIN-CG) that in the last year it proposed €700.000 for payment of one-off social assistance to the most vulnerable population categories and that this was accepted. They wash their hands for the rest of the amount.

“It is not under the authority of the Ministry of Labour and Social Welfare to define which state bodies can pay out one-off financial assistance, nor determining the amount of one-off assistance for employees,” stated the department.

Several CIN-CG collocutors stress the vast space for abuse of this money which is allocated without adequate control and in a non-transparent procedure. Therefore, experts say that funds of this kind should be abolished, system centralized, the Law on social and child protection respected, and the money directed to those who are indeed in a state of need.

The Law on social and child protection stipulates that through social work centres, one-off social assistance is granted to persons in a state of need due to difficult material, housing or health condition. The Law on budget, however, also provides money for this type of assistance to employees in state institutions and ministries.

In the state administration and institutions, 39.300 employees are on the budget, with an average salary of €593 in November. Sector collective agreements stipulate that one-off money is provided solely for the death of an employee or close family member, for longer and severe illnesses, for acquisition of medicines, for health rehabilitation and for eliminating consequences of natural disasters. Each ministry and state administration body should adopt bylaws, rulebooks regulating this area, but, according to CIN-CG findings, managers often give themselves right to decide which of their employees are in need of money.

Also, the problem is that ministries and institutions are free in assessing what they consider to be social assistance, so for somebody training abroad, printing books, home canning etc. fall in this category. It is also controversial that all these institutions control themselves on how they spend this money. “Determining priorities in certain areas, the way and legality of budget spending is solely under the authority of the budget user,” as the Ministry of Finance informed CIN-CG.

In addition, the budget review shows that the Ministry of Labour and Social Welfare, which should have overall authority for granting this type of assistance, in the previous years had significantly less money budgeted for these purposes than, say, the Ministry of Education, the Pension and Disability Insurance (PIO) Fund and the Ministry of Interior. Thus, in 2015 and 2016, the Ministry of Education had more than €1 million available for these purposes, while the Ministry of Labour in the same period had only €345.000.

The Ministry of Education and the Ministry of Labour did not submit data, pursuant to the Law on free access to information, on how they spent this money. This secrecy is contrary to the proclaimed strategic commitment of the Government to greater transparency in public finance management. It is plausible that these cases are the reason why 57% of citizens believe that public money is generally or not at all spent for proper purposes, according to a research conducted last year for the Institute Alternative.

The Human Rights Action (HRA), which contributed to this research, appealed earlier to help children in social need, weary and ill people who live on the street, or in inhumane poverty conditions. According to UNICEF, more than 15.000 children in Montenegro live in poverty. According to MONSTAT data, about 60.000 people in Montenegro live below the poverty line, which is €186 per month per person. The PIO Fund records that 29.5 thousand pensioners receive less than €180 and more than 3.500 less than €100. Montenegro has about 22.000 beneficiaries of social assistance and more than 50.000 unemployed persons. Data from the Tax Administration show that 12.000 employees are insured for a minimum pay of €193.

The HRA reminds that minimum amount of social assistance is not enough to survive: “Family financial support – MOP, basic social assistance benefit for a family of five or more members from 2010 to present has only increased by less than €7 and amounts to €120.7, while, according to the latest MONSTAT data, the minimum consumer basket has exceeded €800 in 2015, since when it is no longer calculated.” Martina Markolović, a HRA social worker, warns that the 2014 UN Committee’s recommendation to increase social benefit contributions, in order to provide adequate standard of living for the socially vulnerable, has not been implemented which will certainly be noted this year when the Committee will once again consider Montenegro.

Ivana Bogojević, from the Institute Alternative, explains that one-off social assistance is not allocated from social assistance funds, but from funds intended for individuals, in accordance with the Rulebook on Uniform Classification of the Accounts of the State and Municipal Budgets of Montenegro. She considers such budgetary classification to be contrary to the provisions of the Law on social and child protection, which defines following forms of material assistance: financial support, personal disability allowance, care and support allowance, funeral costs, health protection and one-off financial assistance. Bogojević points out that the situation at the local level is similar, meaning that granting of assistance is subject to weak control and will of individuals.

“All municipal rulebooks regulating allocation of one-off social assistance, in emergency situations guarantee discretionary right of municipality president to grant these funds,” she explains.

Bogojević concludes that such records, at both national and local level result in false financial reporting, covering of actual spending on social assistance and unrealistic perception of the needs of socially vulnerable categories of population.

Foto: Vijesti

Former Minister of Labour and Social Welfare in the Government of Electoral Trust, Boris Marić, assessed for CIN-CG that the practice of granting one-off social assistance could be characterized as legally problematic, ineffective and with an improper level of discretion, creating a space for manipulation. He points out that the Law on social and child protection provides for centralization of this assistance within the state administration.

“This means that the funds allocated for this purpose should only exist in the part of the line ministry’s budget, which would adopt a by-law and regulate more precisely criteria for granting one-off financial assistance. Complete distribution should go only through qualified subjects, meaning centres for social work,” explains Marić.

He claims that at one time he found the Ministry of Labour and Social Welfare in a rather chaotic state and tried to do all that was possible for one-off financial assistance system not to be a covert form of financing political parties.

“The question arises whether this collision only eluded careless decision-makers, or has the system been set with ambiguity intentionally for the benefit of executive authorities in power for decades. As we had the opportunity to get acquainted with the way in which the funds in the form of one-off social assistance have been allocated, and for which needs, for me, there is no dilemma that it serves as a mechanism to feed clientelistic network and thus earn political points, or better said, votes,” said the former Minister of Labour.

Also, lawyer Sergej Sekulović told CIN-CG that solutions from the Law on social and child protection point out to the centralization of the non-recurring social assistance system.

Foto:Vijesti

“Article 37, paragraph 2 clearly stipulates that this right (on a one-off social assistance) is realized in accordance with criteria and procedure prescribed by the competent state administration body; while in paragraph 3 it is stated that the amount of assistance is determined by the social work centre depending on the needs of an individual or a family and material resources of the state,” explains the lawyer.

This should mean that the Ministry of Labour sets the criteria and the procedure with a bylaw (rulebook), and the centres for social work determine the facts, make a decision and determine the amount of assistance.

Earlier, HRA also urged for review of the public interest in existence of parallel funds that enable certain citizens to improve their material situation, health and print books.

This non-governmental organization in January last year appealed to the Prime Minister Duško Marković and Supreme State Prosecutor Ivica Stanković to review legality of spending €4.25 million on “one-off social assistance” paid out by the Government and other budget users as assistance for health treatment, education or improving material situation in the period from January 2014 to present.

These requests were not met.

Social assistance for church, travels, exhibitions…

 

Two state institutions, the Fund for Minorities and the National Museum of Montenegro, during 2015 and 2016, gave employees more than €70,000 in the form of one-off social assistance, for improving financial situation, shopping in markets, 8. March, New Year’s Eve, home canning, adaptation of living space…

This can be seen from data obtained by CIN-CG in cooperation with HRA based on the request for free access to information.

The Fund for Minorities, in 2015 and 2016, allocated all employees one-off social assistance for the purpose of improving their financial situation, with the exception of Fund Director Safet Kurtagić who was excluded from the decision in 2016. For home canning, they provided one-off assistance in the amount of €1.500 for eight employees, while only €3.000 was given in two cases for health treatment of employees’ close family members.

The National Museum, apart from adapting housing, transport, home canning, shopping in  markets and holidays for employees, also provided one-off social assistance to the Montenegrin Orthodox Church, individuals for travels, exhibition costs, etc.

Further to HRA’s request, none of these two institutions has submitted internal acts on the basis of which they allocate one-off social assistance, and both of them, in the disputed decisions, refer to, inter alia, their statutes.

From the provisions of their statutes, only thing visible is discretionary right of the director to allocate money based on his or her own assessment or the assessment of the Board of Directors (Council) of the institution.

Further to CIN-CG request, Fund for Minorities has not clarified which basis were used for providing one-off social assistance to all employees for improving their financial situation.

Director of the National Museum, Pavle Pejović, claims for CIN-CG that disputed payments for one-off social assistance were made from the Museum’s own funds, and not from the budget money.

“Those €100.000 that we make over the budgeted amount, by the Council decisions we allocate in a way to help someone from the collective,” said Pejović.

In spite of this logic, that all costs are covered by public purse, while potential earnings are a surplus that can be spent as they please, the data obtained by CIN-CG based on the Law on free access to information, show that Pejović’s explanation does not stand. Money paid out, for example, to church, for transportation, exhibitions, 8. March, sports clubs etc, according to these decisions is paid out of the budget in the form of one-off social assistance.

Pejović confirmed to CIN-CG that they do not have a special rulebook. Also, he informed that it is only since last year that they are obliged by a collective agreement to pay the money only to their employees, whereas earlier they could give it to anyone they deemed necessary.

Budget reserve under the cloak of secrecy

 

According to the State Audit Institution report, in the period from October 2016 to October 2017, by the decisions of the inner Government Cabinet and the Commission for Allocation of Funds from the Budgetary Reserve, some €4 million worth of assistance have been paid out from the budgetary reserve for improving financial situation, health treatment, education and other forms of assistance.

For improving financial situation, the Commission awarded €2.089.000, and the inner Cabinet €621,850. With decisions of the inner Cabinet, €463.817 were paid out for health treatment assistance to physical persons, and additional €43.100 were paid out by the Commission. Further, the Cabinet approved €45.250 for education assistance, and the Commission €22.200.

In the category “other forms of assistance”, pursuant to the Cabinet’s decisions €490.800 was paid out for compensation of natural disaster damages and €212.692 for  housing needs, book publications and similar. The Commission for Allocation of Funds from the Budgetary Reserve  allocated €19.800 in this category.

In most cases, it is not known to whom and where the money went. In response to the Institute Alternative request to obtain this documentation, the General Secretariat of the Government stated that it “contains information considered protected that may be disclosed only for the purpose prescribed by law or with the prior consent of the person whose personal information is requested.” The inner Cabinet, by rule, is made up of Prime Minister, Vice-Presidents and, if necessary, minister from the department on which a decision is being made. Also, all three Vice Presidents of the Government, Rafet Husović (President of the Commission), Milutin Simović and Zoran Pažin, Interior and Health Ministers Mevludin Nuhodžić and Kenan Hrapović, Minister without Portfolio Marija Vučinović and Deputy Secretary General of the Government, Nikola Dedeić are members of the Commission for Allocation of Funds from the Budgetary Reserve.

Prosecution investigates only the Ministry of Education

 

For the time being, spending of funds intended for one-off social assistance is not under the focus of the State Prosecutor’s Office. The Basic State Prosecutor’s Office in Podgorica, pursuant to CIN-CG inquiry, confirmed that only one proceeding is ongoing with the goal of determining whether officials of the Ministry of Education approved unlawful payments in the course of 2014.

“In this case, preliminary investigation is under way so we cannot provide further data,” the prosecution said.

In January last year, the New Serb Democracy, published documents showing that the Ministry of Education led by Slavoljub Stijepović in 2014 granted individuals from €300 to €1.000, with the justification that it was a one-off assistance due to difficult material situation.
In this way, among others, the former chief economist of the Central Bank, Nikola Fabris, obtained one-off financial assistance. He stated that the money was intended for book printing, and that it was not social assistance.
Stijepović said that it was “a technical mistake, as there were several decisions in which rationale was not aligned with the purpose and application of the assistance, because they were not drafted by lawyers.” Recently, examples of abuses of  local social work centers’ funds have also been published. According to the data of the coalition “Zdravo Berane”, Milijana Vučeljić, spouse of the former President of the Municipality of Berane, Vuk Golubović, in 2012 received from the Social Work Center €350 as food assistance, although her monthly earnings were €1.071.

Social card does not include one-off assistance

 

Social card is an information system of social care, which, by connecting nine state registers with social work centers, was supposed to relieve citizens of the obligation to collect a pile of certificates for realizing their social rights, but also to ensure that assistance was provided for those who really need it.

However, the Institute Alternative, during presentation of the social card analysis last year, warned that this information system does not cover allocation of one-off social assistance. This means that there is no integrated record of recipients of this assistance in the social card either, so the introduction of the system does not prevent abuses in the least transparent area of social benefits, as concluded by the Institute Alternative. The former Minister of Labor and Social Welfare in the Government of Electoral Trust, Boris Marić, also warned about this, concluding that the complete system of one-off social assistance must be under the umbrella of information system at the Ministry of Labor and Social Welfare.

According to information from the beggining of November, about 350.000 decisions were issued through the social card.

Authors: Maja Boričić, Ana Komatina

The article was produced as part of the project “Civil society for Good Governance: To Act and Account!”, implemented by Institute Alternative, Bonum, Natura, Novi horizon and Centre for Research Journalism, and financed by the European Union within the Civil Society Facility, and the Balkan Trust for Democracy project, the German Marshall Fund USA (GMF) project. The contents of the article are the sole responsibility of the author and can in no way be taken to reflect the views of the donors.
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