As part of the State Audit Institution’s public consultation for civil society, academia, and professional associations, Institute Alternative proposed topics for the Annual Audit Plan for the next year.
For the 2026 Annual Audit Plan, we suggested that state auditors focus on the following:
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How is the inspection oversight information system being used, and by whom?
Completeness of the use of the information system for inspection oversight – The key reason for proposing this topic lies in the fact that the Unified Information System for Inspection Oversight (JIIS) is used by only part of the inspections that have been established. This results in unequal working conditions for inspectors across different inspections and deprives the state of consistent monitoring of inspection work.
The expected results of the audit are to demonstrate the effectiveness of the unified inspection information system, particularly in terms of efficiency, simplifying procedures, and providing inspectors with tools for their work, compared to inspections that do not have access to the system. We believe that the audit will highlight the necessity of full use of the system by all inspections, as it provides benefits in terms of unified monitoring, improved planning of inspections, classification of high-risk entities, and more effective implementation of inspection oversight across the board.
- How are confidential procurements conducted?
We proposed an audit of expenditures related to procurement in the field of defense and security (as defined in Articles 174–177 of the Public Procurement Law), with a focus on special security procurements. The reason for this proposal is that, due to their specific nature, these procurements cannot be subject to public or media oversight. In addition, some procurements are carried out according to internal documents of contracting authorities, which are not publicly available. The State Audit Institution is one of the rare actors with access to confidential procurement documentation in the security sector, and therefore one of the few “witnesses” of possible irregularities in their implementation. However, SAI has not conducted a specific audit dedicated to security-sector procurements; instead, these are addressed periodically through individual audits of consumer units in the defense and security sector.
An additional reason for this audit lies in the Draft Law on the National Security Agency, currently in parliamentary procedure, which unjustifiably proposes a blanket exemption from public procurement rules for all procurements of the Agency.
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What is happening with the Capital Budget?
Compliance of the planning, amendment, and implementation of the Capital Budget with the Budget Law, the Law on Fiscal Responsibility, and public investment criteria
The Capital Budget of Montenegro is a key instrument for implementing development policies and public investments. Successive governments have failed to improve the already weak system of proposing, selecting, implementing, and monitoring capital projects. Instead, they have further undermined it by introducing numerous immature projects. A new Directorate for Public Investment Management has been established within the new Government, and capital budget reform has been included in the Public Investment Management Reform Program.
The audit would help identify the key causes of unrealistic planning and delays in project implementation, and provide concrete recommendations for improving the efficiency of public investments. It would strengthen transparency and accountability in the planning and implementation of the capital budget, and encourage the introduction of stricter criteria for project selection. In this way, SAI’s recommendations would directly contribute to reducing fiscal risks and ensuring better use of public funds in line with international PIMA standards.
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Who pays for the accumulation of municipal tax debts?
Debt rescheduling as an instrument for improving the fiscal discipline of local governments
As of 31 July 2025, the total debt of all municipalities, including public institutions and local enterprises founded by municipalities, amounts to €73,343,243. Of this, municipalities themselves account for €27.88 million (principal €14.96 million; interest €12.92 million). Local enterprises owe €39.15 million (principal €26.66 million; interest €12.49 million), while public institutions owe €6.32 million (principal €3.49 million; interest €2.83 million). The most indebted municipalities are Cetinje, Berane, Bijelo Polje, and Ulcinj, while several municipalities such as Podgorica, Tivat, Andrijevica, Gusinje, and Tuzi currently have no debt.
Many municipalities have signed debt rescheduling agreements which, in addition to the obligation to repay tax arrears, impose restrictions on the functioning of local administrations, particularly regarding new hiring. Publicly available data shows that the number of employees continues to grow, while municipalities, their public institutions, and enterprises often fail to meet rescheduled obligations or neglect ongoing tax liabilities.
We believe that a thematic audit could help decision-makers strengthen oversight of local governments, improve models for tax debt collection, and enhance the visibility and transparency of these debts, which are currently treated as tax secrecy by the Tax Administration.
IA team