At the initiative of Institute Alternative (IA), the Public Procurement Inspection found seven irregularities in procurement procedures through direct agreements in three municipalities and one ministry during 2021, but misdemeanour proceedings cannot be initiated due to the statute of limitations.
The Public Procurement Inspection, while conducting supervision based on the initiative and invoices provided by Institute Alternative, identified irregularities in the procedures for direct public procurement, specifically in procurements through direct agreements worth up to €5,000, conducted in 2021. According to data from the Directorate for Public Procurement Policy, almost €40 million, or about 11% of the public procurement budget, was spent through direct agreements in 2021.
The initiative for inspection oversight followed after Institute Alternative analysed spending through direct agreements, i.e., simplified procurements up to €5,000, for 2021, using a sample of ministries and municipalities. Direct procurements of goods, services, and works with an estimated annual value of up to €5,000 are conducted through the direct selection of a procurement item from a specific supplier, accepting an invoice, fiscal receipt, or contract, depending on the type of procurement. The data obtained by Institute Alternative, consolidated in the analysis ‘Direct Procurements Under Spotlight,’ showed, among other things, that some procurers deviated from the rule that a single invoice cannot exceed €5,000.
Earlier this year, IA revealed that ministries and municipalities had procured items such as local brandy, suits, brooches, gold cufflinks, porcelain coffee sets, and more in this way.
Based on the data and invoices provided to the Public Procurement Inspection, irregularities were found in the Municipality of Mojkovac (four violations), the Municipality of Andrijevica (one violation), the Municipality of Ulcinj (one violation), and the Ministry of Ecology, Spatial Planning, and Urbanism (one violation). The IA initiative also covered invoices from the Ministry of Economy and the Ministry of Foreign Affairs, but the Public Procurement Administration did not find violations in these cases, as these ministries had signed contracts for the procurements for which the invoices were provided.
However, despite the identified irregularities, the municipalities and ministries will not be held accountable for these violations. According to the Inspection’s Notice of Inspection Supervision based on the initiative (UPIN 0207-724/23-13726), the Public Procurement Inspection stated that misdemeanour proceedings could not be initiated due to the statute of limitations. Since these procurements were conducted in 2021, under the Misdemeanors Law, misdemeanor proceedings cannot be initiated or conducted if more than one year has passed since the violation occurred (Article 59, paragraph 1). According to the Law on Public Procurement, these are serious violations for which fines ranging from €5,000 to €20,000 for legal entities are prescribed.
Institute Alternative will continue to monitor the use of direct agreements, considering that according to the Public Procurement Report for 2022, 12.4% of all public procurements, worth over €63 million, were contracted through direct agreements.
We analyse the public procurement system within the Project “Procurement under spotlight – Making Watchdogs Work!”, with the support of the Embassy of the Kingdom of the Netherlands in Serbia and Montenegro within the MATRA Rule of Law program. Project aims to empower and motivate watchdogs to combat corruption and undue influence in public procurement.
