Risks of corruption exist in all phases of the procurement procedure and in all areas; therefore, regardless of certain improvements that were brought with the latest amendments to the law, it is necessary to further strengthen anti-corruption mechanisms, as contracting authorities have said.
Institute Alternative has conducted a research about the attitudes of the contracting authorities, within the project “Civil Society and Citizens against Corruption in Public Procurement” supported by the Embassy of the Kingdom of the Netherlands. The research was conducted based on the questionnaire which was distributed to all public procurement officials on the national and local level as well as the meeting held with them at the end of February.
Most proposals for improvement of the legal framework were related to the need to shorten the duration of the procedure, to the deadlines for the filing of complaints and the time for deciding on appeals. Public procurement official suggested, among other things, that at least half the members of the commission for opening and evaluating tenders should have passed the exam for working in public procurement. There are also proposals on the need for financial incentives for officers as well for the members of the Committee for opening and evaluation of bids because of the amount of the responsibility that this work carries with it.
Public procurement officials interprete differently the negligible number of criminal charges for corruption in public procurement, from the attitudes that it is due disinterest for processing the filed reports or the inability to prove the guilt as well as the fear of the possible consequences of such an act. There are also views that there is no corruption, or that such (non) treatment exists due to the fact that the legal mechanisms prevent the corruption.
All phases of the procurement procedure and all purchases of high value are subjected to corruption, and corruption is more dependent on the susceptibility of the parties, and not of the public procurement field, as officials believe. The areas that are particularly subjected for corruption, officials state the construction, healthcare, defense and security.
Although additional changes to the conditions of the basic contract create enormous scope for corruption and must be controlled and approved by the Public Procurement Office, this is not adequately regulated by the Law, since officials were not able to give us accurate answers to the question of whether the annexes are published or not, nor to question who keep records on misdemeanor liability.
The Government of Montenegro is obliged to ensure conditions for development of media pluralism, or quality informing of Montenegrin citizens on all matters of public interest. Blocking the account of independent TV Vijesti due to tax debts is the consequence of inconsistent application of legal regulations in the area of media.
Laws must be respected and taxes paid, which the management of TV Vijesti does not deny. However, the laws must apply to all, not in a selective manner. In that sense, the authorities had to react in order to prevent years-long present unfair competition in a humble marketing media market in Montenegro. The independent TV “Vijesti” is competing with televisions that produce almost their entire programme in Serbia, and broadcast in Montenegro, as well as with RTCG which is financed with tax payers money, even when it produces enormous losses. Televisions whose headquarters are in Serbia claim the majority of funds from marketing, and neglect the expenses in Montenegro because they hire small number of people and do not suffer production costs, unlike other televisions. In addition, televisions with headquarters in Serbia have not met the minimum of quotas, prescribed by laws and bylaws, for years when it comes to their own production, and have not been warned by anyone as well, or prohibited their work according to law. Publicly available data are only from May 2012, which indicate that certain televisions do not meet the minimum of standards, but still operate, based on which it can only be assumed that those are the ones favoured by the Agency for electronic media, which is also dominantly influenced by ruling political parties. Finally, there is no reason not to apply the same method of payment of debt of TV Vijesti and approve a reasonable deadline within which it would be paid off, like it is regularly done in cases of numerous other subjects from public and private sector.
TV Vijesti also faces these difficulties because the Government of Montenegrohas been refusing for years to determine the criteria for financing the media on different basis, while the available information point to fact that certain media are being privileged. Thus, in 2013, out of 251 public sector bodies, based on the data that Centre for Civic Education (CCE) obtained for 169 bodies, 2.144.429,00 EUR was invested in media from Budget of Montenegro, out of which TV Vijesti, as most trusted television, received only 36.397,00 EUR.
In addition, the state had a large ownership stake in print paper “Pobjeda” of 84,7% until recently, based on which it directly violated the existing Media Law for more than a decade, for which none ever took any consequences. During the abovementioned period, total state aid to “Pobjeda” amounted 5.748.170,00 EUR, according to data of Commission for the control of state aid.Total debts of “Pobjeda” amounted 10.500.000,00 EUR on the day it was sold, whereby the largest part of debt it owed state, or 7.600.000,00 EUR. When added the information that Ministry of finances, in September 2014, paid 5.6 million EUR for loans that “Pobjeda” had at Societe General and Erste bank, and 1.7 million EUR, during 2011 and 2012, in activated guarantees by Societe General Montenegro bank, as well as that Government, during 2013, assumed 2.8 million EUR of company debt for taxes and contributions to employees, we come up with a figure that exceeds tens of millions of EUR.
Also, in the RTCG 2013 Financial report, the amount of 11.938.329 EUR was stated as the total budget, out of which 7.468.449 EUR was allocated from the Budget of Montenegro. Along with the aforementioned amount, RTCG accounted 2.400.000 EUR as an out-of-ordinary income. This amount relates to obligations that RTCG assumed, in accordance with Law on budget of Montenegro for 2013 and Agreement, which RTCG concluded with Ministry of culture and Ministry of Finances, on the assuming of debt.Thus, total allocations from Budget of Montenegro for the purpose of financing the public service, on several grounds, amount 9.848.449 EUR and make 82,5% of overall incomes. Detailed structure of assumed obligations of RTCG by the state can be seen in the Report of State Audit Institution on the revision of Proposal of law on final budget account of Montenegro for 2013. According to the aforementioned Report, the Government assumed payment of debts of RTCG in accordance with Article 11 of Law on budget of Montenegro for 2013 and conclusions of Government of Montenegroin the amount of 2.396.724,05 EUR, based on which it assumed the obligations related to EUROPEN Broadcasting Union in the amount of 1.100.000,00 EUR, tax debt in the amount of 900.000,00 EUR and debt related to EPCG Nikšić in the amount of 400.000,00 EUR.
For years there has not been any effort to finally put into operation resources aimed to stimulate media pluralism. Based on Law on electronic media and Law on games of chance, very small amount of resources from games of chance are allocated to smaller number of electronic media. Recently, a Fund for support to radio stations has been established within the Agency for electronic media, financed based on tax that is being paid when vehicles are registered. In that manner, TV stations are being discriminated compared to radio stations. Funds that would be reserved for TV stations need to be ensured.
Had the Government and regulators previously applied laws equally, a great number of media would not function today, and those that are significant for the informing of citizens on matters of public interest would be in a better financial situation than they are today. Due to the inaction of state institutions and non-application of law in an equal manner, those institutions from which the state could benefit were affected.
Ana Novaković, executive director of Centre for Development of NGOs (CDNGO)
Daliborka Uljarević, executive director of Centre for Civic Education (CCE)
Ljupka Kovačević, coordinator, ANIMA
Maja Raičević, executive director of Women’s Rights Centre
Marina Vujačić, executive director of Association of youth with disabilities of Montenegro (AYDM)
Stevo Muk, president of the Managing Board of Institute Alternative
Vanja Ćalović, executive director of Network for the affirmation of the NGO sector (MANS)
Zlatko Vujović, president of the Managing Board of Centre for Monitoring and Research (CeMI)
“Pobjeda” was sold on October 14.2004, and based on the Media Law, final deadline for transformation of “Pobjeda” was 23 November 2003
Parliamentary (political) control of the budget relies on the work of the State Audit Institutions (SAI) in regard to the oversight of the directing and spending of the budgetary funds. SAI is the key partner of the Parliament because it allows the MPs to find out what exactly is happening with the budget. At the moment, while the SAI does its part of the job – produces important, updated and objective reports, the MPs are lagging behind it and not using the reports to the full extent. Although our research show that the certain level of improvement was reached, the practice until shows worrying tendency of maintaining the superficial attitude towards the finding of the SAI and missing the opportunity to exert the parliamentary pressure on the budgetary and extra-budgetary units on the basis of the objective and solid evidences of their work.
In that context, herewith we recommend the series of changes in the way of cooperation between the Parliament and the State Audit Institution.
Committee or subcommittee on Budget
One of the proposals is to establish the subcommittee on budget and audit, within the Committee on Economy, Budget and Finances, which would be the permanent body which would deal with the oversight of the budget as well as to analyze in details the increasing number of the audit reports published by the SAI.
It is important that from broad scope of work within the competence of the Committee on Economy, Budget and Finance, the audit activity and political control over the budget, with its planning and execution, concentrate in a special subcommittee.
However…
The Parliament of Montenegro does not have much experience with the subcommittees. The regulations are poorly stipulated in the Rules of procedure, while this area of the parliamentary work is undeveloped in the practice. It is necessary to establish the parliamentary structure which would permanently deal with the budget and audit. However, the Rules of Procedure stipulate establishing the subcommittees with specific task and the deadline for its accomplishment; therefore, they are meant to be ad hoc, temporary parliamentary structures.
For the time being, there is only one Subcommittee, within the Anti-Corruption Committee and the Committee Political System, Judiciary and Administration, established in 2013 and without a single session held since then, to our knowledge.
We see the Subcommittee on budget as the interim solution toward to establishment of the special committee on budget and audit, which would have fewer members and which would be, as primarily control body, be chaired by the representative of the opposition, who would be focused and committed to address the issues of control over the budget, in all the complexity of the field. This solution has the basis in comparative practice and is particularly common in EU countries.
What would this Committee do?
Among other things, such committee would have in its jurisdiction to examine in details all the individual audit reports, audit reports of Final budget account of Montenegro, the annual report on the work of SAI, as well as all of the key budget documents that the Ministry of Finance submits to the Parliament for approval. This body would coordinate the discussion on the proposed budget lead in the committees. It would be responsible for monitoring the implementation of SAI recommendations which are adopted in the form of parliamentary conclusions and to assess the degree of realization. It would also be responsible to annually prepare a non-binding proposal of list of auditees for the next annual audit plan of SAI. Through such body its advisory role would come to the fore and it would be in charge, if necessary, to initiate amendments to the legislative framework based on the findings and recommendations of SAI. Important areas would be the internal audit which is currently completely neglected, as well as issues related to local budgets and local government finance system.
Important role of the Parliamentary Service
One of the most important things that needs to be changed in the Parliament is the structure of it expert service – the core of experts on the budget must be formed, which would be on equally footing with experts from the SAI and the Ministry of Finance and able to deal with public finances and provide support to all the committees and all the MPs. Many parliaments in the world have so called “budget office”, formed by a group of experts who, unrelated to the changes in the composition of Parliament, help during the process of adopting the budget, monitoring its execution and audit and control activities in a professional, effective and in depth approach.
The Committee on Economy, Finance and Budget currently has six servants who work on all points of the agenda, starting from technical-administrative issues up to preparation of materials and analysis for the needs of Committee which are numerous due to broad range of competencies not allowing their further specialization.
All committees should follow the work of the SAI
In the whole story about the cooperation of the SAI and the Parliament, is not only important what would be the parliamentary structure that will monitor the work of the SAI. It is also very important that the reports produced by the SAI are being followed by all committees, for their sectors. Some progress has been made in this regard in the Committee for Security and Defense, but not in the other working bodies.
Previously, we have appealed to the Committee on Education, Science, Culture and Sport to consider the audit report about the Institute for textbook publishing and teaching aids, which received a negative opinion with a handful of shameful score on how they managed the budgetary funds. Unfortunately, our appeals were in vain and the Committee did not deal with aforementioned audit report.
Experience in 2014
Last year, the Committee on Economy, Finance and Budget took a step forward in terms of dealing with the state audit and held control hearings of auditees who have received a negative opinion. However, despite good intentions, due to poor preparedness of some members of the Committee, the session did not contribute to increase of the pressure and nor did it determine the responsibility for the irregularities and illegalities observed.
On both sequels of the session the quorum was hardly obtained, and the majority of the MPs who attended the session met with the content of the audit report only at the session. Almost the whole session was devoted to recounting the report by the SAI and explaining the actions taken by the representatives of audited entities – which are all actions that had to be worked in the preparation of the session in order to use the session to examine the auditees only about the unfulfilled recommendations, the causes of irregularities and allegations that had to be submitted to the MPs during the preparation of the session.
Specific plans for solving this issue
The Committee on Economy, Finance and Budget has stated in its work plan for 2015 to establish a subcommittee for the budget that will deal with the control of public spending.
The SAI itself has planned in its Strategic Development Plan the improvement of relations with the Parliament through the stipulation of new procedures of cooperation.
In order to help this change to come true, Institute alternative will organize a meeting between members of the Senate and MPs who are members of the Committee on Economy, Finance and Budget, in order to define the future direction of cooperation and specific mechanisms for improving relations.
To this end, we will prepare a comparative analysis of the best practices of parliaments and state audit institutions, with a proposal of specific measures that can be applied in the context of Montenegro.
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Risks of corruption exist in all phases of the procurement procedure and in all areas; therefore, regardless of certain improvements that were brought with the latest amendments to the law, it is necessary to further strengthen anti-corruption mechanisms, as contracting authorities have said.