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Press release: Government to urgently take a position on the SAI report

From this year’s audit report on the financial account of the Budget, it is clear that the work of the SAI is not taken seriously into account neither by the Government and Ministry of Finance, nor by the individual audit entities and the Parliament.

Institute Alternative has been dealing with the problem of the impact of the SAI for a long time. IA has bee warning for years about the conditions in which the SAI works: it works with half -systematized capacity; Ministry of Finance has consistently refused to approve the major budget for the SAI treatening its financial independence; the Parliament hasn’t appointed the fifth member of the SAI’s Senate and is not willing to meet the SAI recommendations; misdemeanor responsibility hasn’t been defined in the Law on Budget nor reports on auditing entities which has been made compliant with the SAI recommendations. The role of the SAI is thus almost meaningless.

As an emergency measure, we demand that the Prime Minister at the next meeting of the Ministers requires information on the allegations in the report and the SAI to take a position of responsibility for irregularities in the work of its officials. We demand that the Government inform the public about the reasons why it does not consistently follow the recommendations of the SAI as well as whether the Government was behind the illegal activities of its officers and civil servants.

We believe that the Minister of Finance should participate in the work of the competent parliamentary committee when the audit report on the annual financial account of the budget is on the Agenda, which was not the case last year. Minister in this occasion must explain the reasons for non-compliance of SAI recommendations and Parliament’s conclusions.

If we want to prevent that situation in the next year and prevent complaints about the failure of the SAI recommendations, in addition to these activities, we need to work to achieve the following five principles:

A Government that listens the SAI – The Ministry of Finance shall establish a system for monitoring the compliance with the SAI recommendations, check what is being done to meet the recommendations.

The Parliament, which keeps to itself – Parliament must examine what the Government is doing to comply with its conclusions on the review of the budget and final accounts and to hold accountable those entities which show disrespect to those conclusions. We should not forget that by disrespecting the SAI recommendations, the Government actually expresses contempt for the Parliament of Montenegro, since the recommendations were adopted last year as Parliament’s conclusions.

Penalties for offenders – Introduce misdemeanor responsibility in a Law on Budget in order to sanction offenders and punish responsible persons in the institutions where budgetary irregularities could occur. Supreme State Prosecutor must use the SAI reports, check a hint of the existence of the criminal act.

Strong SAI – Amend the Law on SAI – which will determine its financial independence and edit transparent reporting of audit entities about what they have done to comply with the recommendations and remove irregularities.

Awake public – public is the strongest weapon in the state audit – NGOs and media should work intensively on monitoring of SAI’s work, read audit reports and claim accountability of audited entities.

Marko Sošić
Public Policy Researcher

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Statement: No Follow-up to SAI’s recommendations

Questions from “Dan”:

Can you comment the final report of the SAI on the Government accounts for 2011 year and the fact that the Ministers were shared 775 thousand euros, hired 697 civil servants and diverted funds from one budget item to another and between the consumer unit?

How do you comment the fact that the Government failed to meet 13 of 18 recommendations made by the SAI last year?

Marko Sošić, Public Policy Researcher in the Institute Alternative replies:

Institute Alternative has been warning for a long time about the unacceptable attitude of the Ministry of Finance, which has repeatedly refused to approve the significantly major budget for the SAI, endangering its financial independence. Now we see the logical consequence of such position, and that is the fact that the Ministry of Finance does not care much for the work or the SAI and is not paying attention to the recommendations and rectifying of irregularities.

This is a practice that has worried the people in the SAI, but especially in the Parliament: We should not forget that by ignoring the SAI recommendations, the Government actually expresses contempt for the Parliament of Montenegro, which has adopted SAI recommendations last year as its conclusions.

The European Commission, in the last Progress Report noted that progress has been made in accepting the recommendations of the audited entities. The question is, on what basis is deserved this positive score if the SAI data show a very different trend and set a variety of cases in which the recommendations are not followed.

SAI itself has, in the final audit report of the Budget, clearly pointed out the problem of the lack of attention paid to the verification of implementation of recommendations of the audited entities.
It seems that, after seven years of work, it is about time for the SAI recommendations to go beyond ordering to respect laws in force. Here we mean that persistent “offenders” must be punished. For this to occur, however, it is necessary to regulate the levels of accountability in public finances, especially when it comes to the misdemeanor and criminal liability.

The problem that prevents the determination of responsibility for the irregularities and wrongdoing is that systemic Budget Law contains no penalties for budget users and executives in the event of improper conduct in planning, execution and reporting of the budget process. Montenegro is the only country in the region where sanctions in the area of public financial management is not adequately regulated by the law nor applied in practice. This issue we have highlighted in 2010 in our study on the impact of state audit.

If we want the SAI’s work to be meaningful, it is not enough to produce based, comprehensive reports and good references. All the other actors, especially the Ministry of Finance and the Government must evaluate its work and work to implement the recommendations of the SAI. From the last SAI report we can see that this is not the case and that other actors do not care much for the work of the SAI when it is necessary to implement the SAI’s recommendations. To make things worse, a legal framework for ensuring that those responsible for the irregularities and law breaches will be sanctioned has not even been established.

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Statement: Passive MPs and new Convocation

Questions from newspapers “Dan”:

– Among the MPs of the previous convocation were those who did not show up for any discussion, comments, or haven’t submitted a single amendment to any of the hundreds of reviewed laws. How do you expect those MPs to behave at the new convocation?
– Are there any mechanisms to force passive MPs to get involved in the discussion?

Marko Sošić, Public Policy Researcher in Institute Alternative replies:

First, we hope that such MPs (recorders of passivity in the 24th Parliament convocation) will not be a part of a new, 25th convocation – it seems that their time has passed and that they will be replaced by people with appropriate and advanced understanding of the position of the Parliament and of their role of the MPs.

It is early to talk about what will be the characteristics of the new convocation, before the November 6 and the constitutive session of the Parliament. However, even though we do not dare to predict, we express the hope that the new convocation will bring a new quality to importance and position of the Parliament. We hope, too, that the MPs of the new convocation will more often, more effectively and more readily than their predecessors in the 24th convocation, use a variety of control mechanisms that are available to them in order to oversight the work of the Executive.

There are no mechanisms by which passive MPs would be forced to change their way of working, to enhance their motivation for substantial contribution to the work of Parliament – but in the end, it depends on the MPs, but also on the club of Mps and the party to which MPs belong. Increased attention and public scrutiny seems to be the only way to make it clear to MPs that they are expected to do their best in order to reach the constitutional authority of the Parliament.

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Statement: Expectations from the new Government

Questions from Dan newspaper:

– What are your expectations from the new -old Government?
– Is it realistic to expect a decrease in unemployment, an increase in average wage and general economic growth?

Mark SOŠIĆ, Public Policy Researcher in Institute Alternative replies:

The new Government is primarily expected to intensify efforts in the fight against corruption and efforts to increase transparency and accountability in public finance. As a concrete step in this direction, we consider strengthening and making more effective control mechanisms of public finances, work on the integrity of public finances and efforts to make public spending more transparent and cost effective.

Here we highlight strengthening the financial independence of the State Audit Institution and the strengthening of its total capacity, and also the need for implementation of the SAI recommendations from the Government and the Ministry of Finance.
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We expect that the new Government will finally be exposed to the effects of public internal financial control (especially of internal revision that should be run in all consumer units and make concrete improvements (and savings) in their work.

After three changes of the Law on Public Procurement, it is about time for paying special attention to the implementation of the public procurement, especially in the area of reduction of abuse and corruption in public procurement processes – from planning to the execution of the contract.

Development opportunity for our economy we see in the use of the concept of public-private partnerships or concessions, but only if the contracts are based on the principles of accountability, transparency and efficiency.

This is a list of things that are mostly related to achieving greater transparency and accountability in public finance, and therefore in the fight against corruption as well. Work on them is the precondition of better financial situation and economic growth. We do not dare before the constitution of the new government to evaluate its readiness and political will to tackle these problems. However, it seems that if the ruling coalition wants to retain or improve its score in the next elections, decisive progress in these areas is needed more than ever.

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Election Aftermath

Stevo MukThe biggest loser of this election is the idea of the election boycott. It was the idea, advocated by the significant number of political and para-political actors during the first half of this year. Or, better to say, until the election was called. It is worth reminding that none of the parties and coalitions by any means conditioned their decision to run in the election.

High turnout of more than seventy percent demonstrated that people of Montenegro are still interested in politics and active in electing a desirable political option. It was demonstrated that people and political actors believe that elections are the best way for advancing democracy. The number of invalid ballots is similar to the one from the previous election. The number of dispersed votes is almost four times smaller and amounts for only three mandates, which have been split between the Democratic Party of Socialists (DPS) (2) and the Democratic Front (DF) (1), a recently formed political alliance which is mainly composed of two opposition parties – New Serbian Democracy, NOVA and Movement for Changes (PzP) along with the faction of the Socialist People’s Party (SNP).

The main winner of the election is Positive Montenegro. It attracted tired and disappointed supporters of Montenegrin independence in the 2006 referendum with an offer, which, politically and in terms of values, placed itself into the realm of the referendum majority (irreversibility of Montenegro’s independence and stability of its state symbols, support for NATO and the EU). Positive Montenegro didn’t openly confront with the ruling coalition. It didn’t sharpen its rhetoric against Djukanovic and his business associates, corruption and organized crime, as the traditional opposition has been doing for years now. After the electoral celebration, the leadership of Positive Montenegro will need either to respond to the calls of two big political groupings or to insist on the idea of minority government of this party, which is theoretically possible but practically hardly feasible and politically irresponsible. In the following period, the answers to the question about which kind of politics Positive Montenegro is really pushing for will be sought. If the party fails to answer those questions, orange balloon (a colour for which the party is recognisable for), depleted from political content and political personalities, could quickly fly away from the political scene.

The SNP

The SNP paid a price of its “anemic politics” and refusal to join the DF under the conditions set by the two smaller opposition parties (the PzP and NOVA). The party’s leadership has gone through a media lynch and departure of several important figures. It led the campaign on unclear basis and with the damaged infrastructure. Essentially, the SNP paid a price for distancing itself from the usual opposition’s rhetoric and old political allies. On the other hand, its leadership didn’t find other attractive strategy, especially when it comes to the expansion of its voters’ base into the space of other identities. Instead, in the campaign, it slipped into the national rhetoric from which it tried to move away over the past years. The SNP thus remained somewhere between the old and new voters. Yet, given the challenges it endured during the year, it demonstrated considerable resilience.

The DF

The SNP, NOVA and the PzP altogether had 29 MPs in the previous parliament. In the next one, given the structure of the DF, more or less the same parties will have 30 seats. This means that the DF expanded at the expense of the SNP’s fall. The internal distribution of 30 mandates of the traditional opposition points to the limitations of political strategy of the three opposition parties. For its result, the DF can thank to Miodrag Lekic, Predrag Bulatovic and to the SNP.

Government, which would be composed of the DF and parties not belonging to the DPS-SDP coalition is theoretically possible. The one who managed to make such government, however, would deserve a prize for political skilfulness. Such idea is primarily dependent on Positive Montenegro and on the SNP, and then, on several minority parties, traditional partners of the DPS.

Apart from tasks stemming from the formation of the new government, the DF has to face challenge of forming the new Montenegro’s parliament. In the case of parliamentary transformation of the DF into two (NOVA and the PzP) or more parliamentary groups (group of Miodrag Lekic and group of Predrag Bulatovic), the SNP will remain the strongest opposition party. That is a situation which the DF and its constituents would be happy to avoid, but larger number of parliamentary groups instead of a single one for the entire DF, opens up many other opportunities for parliamentary behaviour, preservation of parties’ identities and for their financing.

The DPS

The most significant trends are observed through the decrease of support for the ruling coalition comprised of the DPS and its minor coalition partner – Social Democratic Party (SDP), which is, for the first time over the last ten years, forced to look for the partners in order to form the new government. Still, it should be noted that, in the 2009 election, the coalition, headed by Djukanovic, collected 168,290 votes, while in this election, it received 163,112 votes. What more, Bosniak Party, member of Djukanovic’s coalition in the 2009 election, now collected more than 15,000 votes. The Croatian Civic Initiative (HGI) also previous member of the same coalition, had over 1,500 votes. These figures make the “victorious” mathematics of the opposition a somewhat more relative category.

On the other hand, the decrease of public trust in the DPS at the local levels, especially in Niksic but also in Podgorica, bears important political and symbolic meaning. It indicates that the electorate reacts to the poor results of the government and of its overall governance.

Djukanovic’s Return

In the story about Djukanovic’s return to some of the executive posts, the funniest are voices assuring that the government of the DF will be formed under the leadership of Djukanovic. The public interest into the name of the new prime minister is understandable, especially in the country where the first leader of the strongest party and the election winner is not the head of the government for almost two years. Yet, quarter-century long rule of one party or coalition is still more acceptable than the option of equally lengthy one-man rule. The confidence in Luksic in comparison to his older party colleagues is thus relatively high in international circles.

Presidential Election

Ahead of the presidential election, both the old government and the old opposition will need to decide on its candidates relatively quickly: the DPS, between Djukanovic and Vujanovic, and the DF, SNP and Positive Montenegro on the joint candidate, capable of gaining support of minority parties.

Stevo Muk

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Civic Control of the Police in 2011

Council for the Civic Control of the Police published a report about its work in 2011. The authors of the report are Aleksandar Sasa Zekovic and Zorana Bacovic.

The report consists of three parts. The introductory part offers the general information about the mandate and competences of the Council. The second part offers a brief overview of the specific actions and their outcomes, and it is followed by the statistics and individual cases of the police enforcing its authority. The third, final part discussed the relations of the Council with the executive and legislative power, police and civil society.

The report also lists certain activities, undertook by Institute Alternative in 2011, which deal with democratic and civic control of the security and defence sector, and with the cooperation with the Council for the Civic Control of the Police.