PIFC Development in Montenegro – Civil Society Standpoint

The process of the PIFC introduction in the public finance system of Montenegro is in a critical juncture. The period of rounding up the legal framework has been completed and the key primary and secondary legislation has been adopted. We still cannot address the results of PIFC system, because the implementation of the adopted legal framework delays or takes place very slowly. The key reasons rest in the fact that this is an extremely complex and demanding reform process, representing, to the greatest extent, a new concept for the national administration. Furthermore, this is a huge undertaking in terms of required funds, human resources and necessary knowledge and expertise.

The Ministry of Finance for 2012, has ranked the PIFC function and capacity strengthening in the five top priorities, recognizing that the investment in internal control system, in times of the economic and financial crisis, may generate beneficial effects triggering the sound functioning of public finance, simultaneously providing a significant cost rationalization, or savings in the long run.

What lies ahead in the future is to confront with serious challenges such as the full implementation, human resource training, filling systematized vacancies with qualified personnel, strengthening the CHU capacities, etc. Above all, however, it is necessary to carry out the substantial reforms of both the public administration and the public finance management system, which will lead to a greater degree of managerial responsibility, confidence in the operation of internal controls and generally create a comprehensive understanding of the benefits that an effective PIFC system can bring.

2007 PIFC Strategy will cease to effect during this year. Having in mind the fact that the new Strategy will be developed, the objective of this research paper of the Institute Alternative is to provide a contribution from the civil society perspective, as well as to pursue in providing an objective review of the current status of play of PIFC introduction, with the recommendations for the future development directions and specific problems that need to be addressed.

Press release: Institutions Must Show Respect for the Parliament

Statements of the Supreme State Prosecutor’s Office and Directorate against money laundering and terrorist financing explicitly declares that the Law on Parliamentary Inquiry and the Law on Parliamentary Oversight in the Security and Defense Area are not binding for these authorities.

These laws stipulate that public authorities are obliged to provide access to all requested documents which “could be important for performing the entrusted task,” to act “as soon as possible” and to provide “truthful documents, data and information. ” In this regard, there is no legal basis for “filtering” the information which will be off the communication. Any such action is a law violation.

Therefore, it’s not on these institutions, as it was said in a statement, to “show respect and trust to the Committee members” but to act according to the Constitution of Montenegro, to the Law on Parliamentary Oversight In the Security and Defense Area, and to the Law on Parliamentary inquiry and other legal acts which define relations between the Executive and the Parliament and its working groups during the implementation of parliamentary control mechanisms. Announced “filtering” of information is not only illegal, but will also stultify the implementation of control functions. That’s why MPs should be unique in condemnation of such illegal behavior and statements of the key institutions whose work they should control. It is unacceptable that the MPs of the ruling majority, accept and approve the statement that the Parliament will receive data partially and that the public interest will be assessed before submitting the confidential information to persons who are authorized under the Law on Data Secrecy to have acess to it.

Even if the final court decision would prove that one of the MPs is responsible for delivering the information to the media, the legal system should not be abolished because of the one individual criminal act. In fact, the authorities are not authorized to “punish” the working body of the Parliament. That would mean collectivizing responsibility and ignoring laws that oblige them to submit complete information.

It is disturbing and unprofessional for the authorities in charge of investigating the Law violation to insinuate, without any evidence, that members of the Inquiry Committee or the Committee on Security and Defence are responsible for the “leak” of confidential information.

The former course of the parliamentary inquiry confirmed the potential of this important control mechanism in the Parliamnet’s oversight over the Executive. Parliamentary inquiry was able to bring into focus of the public the six-years long investigation of the state prosecutor’s office, which did not have any concrete results. However, the determination of political responsibilities of specific persons for Telecom Affair, requires more serious work of the Inquiry Committee.

Parliamentary inquiry needs permanent developmentin the future, and events that have marked the last days should not have any impact on the relations between the Executive and MPs and the Parliament, or on the relations between the MPs of the ruling coalition and the mission and mandate of the Inquiry Committee.

Stevo Muk
President of the Managing Board

Corruption and public procurement in Montenegro

Analysis “Corruption and public procurement in Montenegro” was developed in the period from February 2011 to June 2012, representing the continuation of ongoing research activities of the Institute “Alternative” in the public procurement area. The idea of the authors was to pinpoint the reasons for classifying public procurement into six special risk areas of corruption in Montenegro, and to underline why the anti – corruption mechanisms strengthening is the top priority for improving the fight against corruption in this area. Bearing in mind the scope of the research, the analysis is focusing on elements of the legal and institutional establishment of the public procurement system, with the objective of reviewing the corruption risks in all stages of the procedure, supported by the recommendations for overcoming the risks.

The analysis starts with the explanation of the specifics of the term “corruption in public procurement”, with a brief overview of the principles which should represent the anchor of a modern public procurement system. The introductory description of the corruption risks and principles is general, not addressing to any specific country, being accompanied by the review of public procurement system of Montenegro, providing as well the overview of statistical data explaining the trends in the key categories of the public procurement procedures in Montenegro, as of 2007 to date (GDP share, percent of applying certain procedures, largest contracting authorities, etc).

The new Law on Public Procurement (PPL), which entered into force in January 2012, has brought numerous new legal solutions. Therefore, the central part of this publication is devoted to the analysis of these solutions with the specific intention of clarifying the direction in which they are reforming this area, and identifying persisting or remaining weaknesses affecting the corruption risks. The risks overview is given against the stages of the procedure: planning, implementation of the public procurement procedure, as well as the stage after the decision adoption and contract award.

Opinions of direct actors in the procedure have helped us in considering the extent to which these new solutions represent the improvement in comparison to the previous legal framework. In the light of the above, during the research stage, conducted were a numerous interviews with the participants in the process (representatives of institutions in charge of public procurement procedures control, tenderers, public procurement officers, representatives of ministries coordinating activities in the fight against corruption …). Furthermore, requests for free access to information were submitted to the Administration, Administrative Court, Supreme Court, Commercial Courts in Podgorica and Bijelo Polje, Commission, Police Administration, etc., that have significantly enabled us in providing the overview of administrative capacities of authorities in charge of public procurement system management, as well as the activities of other state institutions in charge of combating corruption in public procurement.

In the period from 11 to 18 April 2012, the Institute Alternative in cooperation with the Ipsos Strategic Marketing, conducted a public opinion survey in Montenegro on the perception of corruption in the public procurement procedures. Collection of data was made on a sample (840 respondents) representative for the population of adult citizens of Montenegro (474 655). Three-stage stratified probability sample was applied in the following stages: territory of the polling station; households selected through random step method, starting from the given addresses (SRSWoR); household members selected without replacement – at same probability (SRSWoR) – Kish tables.

The analysis encompasses public opinion survey results in comparison to the opinion of citizens in reference to the implementation method of the public procurement procedures in Montenegro, to what extent they are satisfied with the control of the procedure, and in which areas the control should be strengthened, etc.

The presentation of the best practice in the fight against corruption in public procurement in the EU member states and the countries in the region is aimed at indicating the direction in which is possible to improve the anti – corruption mechanisms, and to which extent their implementation is possible within the Montenegrin context and the current legal solutions.