Transparency of local transfers: How Does My Town Spend My Money?

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Having in mind that local governments are not proactive in publishing data on their expenditure and more detailed analytics in their financial accounts, this research focuses on transparency of two types of expenditure – transfers for social welfare and transfers for institutions, individuals, NGOs and the public sector.

Short-term social or monetary aid is a form of social protection, but in the financial reports of local governments they are not classified as “42 – transfers for social protection” but as “43 – transfers to institutions, individuals, non-governmental and public sector”. Such budgetary classification is not in line with the provisions of the Law on Social and Child Protection, which defines short-term financial aid as aid in the field of social protection, intended for the vulnerable population.

Short-term social aid is also provided to individuals who are not in a difficult financial situation, where some local governments have allocated these funds for the purpose of sponsorships, maintaining and participating in cultural events, sports competitions. Therefore, in the first half of 2016, the Old Royal Capital Cetinje spent € 1,443 unrightfully.  In the municipality of Nikšić there is no regulation of the social aid system, and while the help is given to those in difficult living circumstances, it is also given for the purposes of opening the paintings exhibition, printing books, renovating offices in local communities, etc. For such expenditures, the municipality spent € 1,685 in the first half of 2016. For sponsorships, which are documented within short-term social aid, € 9,751 has been spent in the same period. In the period from 2013 to 2015, the municipality of Bijelo Polje spent the most money on social welfare transfers, 397.987,57 €.

Analytical cards of some local governments do not include data on the purpose of payments, so it is not clear for what cause has the Capital City Podgorica spent 254,993 € in 2015, from the position “4316 – short- term social aid”. The mere word “help“ within the scope of the payment does not make this expenditure transparent.  Content and forms of analytic cards are not controlled by any institution, while all municipal regulations on the allocation of short-term social aid provide the discretionary right of the president of the municipality to decide on their allocation.

Transparency and control of local transfers should be improved through municipal proactive financial reporting through the course of the year, not just prior to the elections; via harmonization of the provisions on short-term social assistance between existing acts, in order for this expenditure to be considered as social protection. In this manner, a real picture of social policy in Montenegro can be created, and discretionary decision-making on social aid can be controlled.

Publication is currently available only in Montenegrin. Translation coming soon!

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