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.

Press release: New law on social and child care – a road to real changes?

Driven by the ongoing reform of social and child protection, IA has submitted to the Ministry on Labor and Social Welfare the comments on the Draft of Law on Social and Child protection aimed at improving the quality of protection of beneficiaries of social rights. Certain provisions need to be changed and better defined in order to establish clear legislative framework protecting the interests of every (potential) beneficiary of rights in the system of social and child protection.

Commitment to the reduction of the so called “poverty trap” and to the development of workfare programs for beneficiaries capable of integrating into the labor market represents a step ahead of the current legislation. This poverty reduction is achievable through the development of workfare programs and suitable reform of employment policy. However, the Draft Law on Social and Child Protection does not oblige centers for social work to make an individual plan of activation for every (completely or partially capable for work) beneficiary of financial aid, but leaves this to the centers’s discretione. IA considers that that is not a proper way for permanent solution of the social situation of beneficiaries. Individual plan of activation must be binding for all beneficiaries capable for work in order to reduce potential abuses and rationalize the budget expenditure by directing the aid only to those who have to be provided with the state support due to the objective reasons. . The Law on Social and Child protection should sanction breaching the individual plan of activation, by, for example, temporarily terminating the financial aid.

The chapter which regulates provision of social services represents a certain progress, if compared with the current law. This chapter leaves significant space to civil society organizations and private sector to provide social services. Establishment of the license system and program accreditation will ensure standards of social services quality. However, IA considers that shelter as one of the accommodation services should be clearly defined by indicating the purpose and potential target groups of this service, or indicating the special bylaw regulating the terms of use of this service.

Regarding the deinstitutionalization, decentralization and development of local social services, as the basis of the social reform process, it is necessary to establish the normative framework and clearly define the role of local government in social and child protection.

Strengthening the capacity of social work centers by introducing the new methods of work, professional trainings, supervision, projects’ management compatible to the people’s needs and improving the principle of good governance are the priorities to be defined in the Law on Social and Child Protection. According to the 2009 Report of the State Audit Institution on the social work centers, the managing board of those centers had held only one meeting per year on the average. Given the responsibility of these bodies, IA considers this alarming.

Dragana Radović

Policy Analyst

Press release: A critique of the proposed Law on Social and Child Protection prepared

The Government of Montenegro adopted the Bill of Law on Social and Child Protection on July 26. The large number of remarks submitted by the representatives of the CSOs haven’t been approved.

Remarks indicating the necessity of clear division of jurisdictions and responsibilities of local governments in the exercising rights procedure and provision of social services haven’t been adopted.

The Bill of Law still leaves the possibility for local government to provide better conditions for exercising rights in social and child protection but it is not obliged to do so. In this way the principle of decentralization in the Bill of Law on Social and Child Protection has not been confirmed as the basis of the social and child protection reform.

Commitment to the employment of the beneficiaries of financial aid capable for work is not convincing having in mind that the individual action plan is still non-binding but depends on the evaluation of professionals in the social work centers.

Instead of limiting the right on financial aid, IA considers that it is more effective if the individual plan of activation is obligatory and if more attention is dedicated to the development of workfare programs and closer cooperation between relevant institutions. The Bill of Law provides exclusion from the limitation of this right only to the parents of children with disability.

Child allowance is not defined as the universal right for every child regardless of the number of children in family. Compared with the law in force the advantage provided by the Bill of Law is that the right on child allowance is transferred to another child in family after the termination of use of this right by the older child. In that way right on child allowance can be exercised by three children in family. The Ministry on Labor and Social Welfare has selectively defined social services. Thus it is still not clarified what these services assume and which target groups they are intended to (for example : social therapy, shelter etc.).

Thereby, there is a still a risk from the small number of licensed applicants during the procurement of these services because of the unclear formulations about service itself.

This is very important having in mind that organizations of civil society, profit sector, individuals and legal entities also can be providers of social services in accordance with the law provisions regulating the public procurement procedure and public-private partnerships. IA considers that the great step forward has been made in the process of deinstitutionalization because of the provision which forbids the accommodation of child younger than three years in the children’s facility, Instead in 2017, as planned this provision will enter into force in January 2013. Although the growth of children in a healthy family environment suits to the best interest of a child, this provision should be taken with reserve because the foster care and adoption as the alternative forms of social and child protection still have to develop.

Dragana Radović
Public Policy Researcher