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Through effective control of public procurement against corruption

The Law on Public Procurement does not adequately regulate monitoring of the implementation of the agreement, which facilitates corruption, was the conclusion of the yesterday’s panel discussion “How to fight against corruption in public procurement?” organised by the Institute alternative (IA) and supported by the Embassy of the Kingdom of Netherlands.

On the panel discussion held in Municipality of Kolašin, Jovana Marović, research coordinator in IA, featured the lack of accountability for violating the Law on Public Procurement as another key problem in the public procurement procedures, identified in the previous faze of the research. Namely, there is no record on the contracting authorities which have been violating the law during one year, nor the type of violation that was committed. As an example, she stated the fact that the contracting authorities which have violated the percentage of use of direct agreement are being listed in the Public Procurement Administration’s Report, but the IA’s research shows that that number is correct only at the level of the sample, because the number of violations is much bigger. Also, there is no information whether these contracting authorities were sanctioned for such conduct.

According to Farisa Kurpejović from the Public Procurement Administration, the role of this institution in the fight against corruption is primarily preventive, so in that sense, transparency of the process has been recognized as a key factor. However, when it comes to disclosure of information about public procurement procedures of the enforcers of the Law annually, she added that it is not within the jurisdiction of the Administration to examine the data, but only to publish the data submitted by the contracting authorities, since the Inspection Directorate is responsible for exercising control.

Tomo Miljić, member of the Commission for the Control of Public Procurement Procedures, noted that the new amendments to the Law on Public Procurement provides great responsibility for public procurement officials, and that it is essential that they are well acquainted with the legal provisions and bylaws regulating the public procurement process. As another important problem he stated a large part of unused funds on an annual basis, due to the large number of cases brought before the Commission, and being reversed in their entirety, because of determined irregularities in the implementation process.

As the “weakest link” in the system of public procurement, Boris Marić from the Centre for Civic Education recognised the fact that only conclusion of the contract and its realization is subject to inspection supervision. “It is additionally problematic that the scope of work is too large for only two inspectors for public procurement in comparison to the total number of enforcers of the Law – 621”, Marić added.

The public procurement officers which have participated in panel discussion as particularly problematic highlighted the unclear procedures when it comes to the application of direct agreement and stressed the need for making a rulebook that would help them apply this method in public procurement procedures. They also think that it is necessary to further work on the regulations for the preparation of the annual public procurement plan, as this would reduce the number of its changes during the year. Another problem stressed by the public procurement officers, which IA has also recognised in its research is the need to strengthen human resource capacity and administrative services for procurement and tender commissions, in order to achieve more effective implementation of public procurement procedures.

Panel discussion “How to fight against corruption in public procurement?” was organised within the project Civil Society and Citizens against Corruption in Public procurement, which is implemented by the Institute alternative with the support of the Embassy of the Kingdom of Netherlands. The project activities are aimed at strengthening cooperation between state and non-state actors in recognising irregularities in public procurement procedures and formulation of recommendations for improvement.

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Reaction: State auditor cannot be appointed as a member of the Council of the Agency for the prevention of corruption

The Parliament is about to violate the Law on State Audit Institution (SAI) and therefore, endanger the appointment of the Council of the Agency for the prevention of corruption.

The Anti-corruption Committee has supported yesterday by a majority vote candidates for the Council of the Agency for prevention of corruption. The Committee has thus repeated the mistake made by the Commission for the proposal of candidates by supporting candidates whose appointment would directly violate the Law on State Audit Institution.

Namely, the Commission and the Committee have supported the candidacy of Mr Radule Žarić, long-standing state auditor in the SAI. The provisions of the Law on State Audit Institution clearly prohibits the membership of state auditors in the managing bodies of any legal entities (Article 41 and 45). It is the prohibition that applies to the members of the Senate of SAI, and according to that, it aplies to state auditors.

The Council the managing body of the Agency for the prevention of corruption, which adopts the Statute and the Act on internal organization and job classification of the Agency, adopts the draft budget and final account of the Agency, adopts rules on the work of the Agency, announces the call for the selection of the Director, appoints and dismisses Director of the Agency, etc.

The only way that the Parliament of Montenegro supports the proposed composition of the Council of the Agency is if Mr. Žurić meanwhile resigns from his position at SAI. Otherwise, the Parliament will directly violate the Law on SAI and therefore compromise the process of constituting the managing body of the Agency for prevention of corruption.

Stevo MUK
President of the Managing Board

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It’s a long way from a law to USKOK

Dug je put od zakona do USKOK-aIn Montenegro, the corruption flourishes. As a state and as a society, we are least successful in rooting out the high-level corruption, although we don’t have adequate remedy for the one at the lower levels. A successful fight against this phenomenon primarily involves increased number of criminal charges, legally binding indictments and verdicts, which completely shifts the focus from the hitherto legal improvements to the activities of the police, the judiciary and the Prosecutor’s Office. And in this triangle of institutions not many components work properly. Cooperation between the police and the Prosecutor’s Office, including the exchange of data, is extremely weak. Court delays are very common which can be seen from the fact that we even lack verdict in cases where investigations have been successful. The Prosecutor’s Office is very passive, which is proven by a small number of investigations carried out at the initiative of this institution, failure to act on the basis of allegations of abuse which can be found in reports of state institutions and the media, decreased number of binding indictments for criminal acts of corruption, as well as the transfer of a number of cases from one year to next one. In addition, the selectivity in the fight against high-level corruption is present, or in other words, exclusive acting of the competent authorities in cases where political support is obvious.

In order to respond to these challenges, the Government has started creating a new institutional framework, which envisages the establishment of the Agency for prevention of the corruption and Special State Prosecution, with all its hopes lied in them. Therefore, the mere existence of those institutions should undoubtedly convince us in the firm commitment to the fight which will make the corruption vanish from our society as swept with the magic wand.Hence, these days, all eyes are on the appointment of the Special Prosecutor, who will be at the forefront of the Special Prosecutor’s Office, and directly responsible to the Chief State Prosecutor. Three candidates: prosecutor, judge and lawyer. One experienced at “the top position” for the fight against corruption and organized crime, but with no results that would recommend her for a new appointment. The second one is Chief State Prosecutor’s favourite, who fought with his fists to have a say in the appointment, which is why we have to give a slight advantage to this candidate. Third, as speculated these days in the media, is supported by the DPS, which could again be a “trap” in order to think that the candidate was elected without the direct support of the ruling party. Such a conclusion was imposed in the choice of regulations for the appointment of the Special Prosecutor, as the sharp controversy between the Chief State Prosecutor and the then Minister of Justice seemed more like a “camouflage” of what DPS actually wants, and that is a bit more of discretion for the election, whosever side it was, and a little less focus on the professional qualifications of candidates.

Either way, with the appointment of the Chief Special Prosecutor and ten Special Prosecutors which is expected to happen by the end of a month, together with the Law on the Special Prosecutor’s Office adopted at the beginning of year, institutional and legal preconditions for a stronger and more compact organizational structure of the Prosecution for the fight against high-level corruption and organized crime will be achieved. However, as can be seen from the examples of countries that are more ahead in the process of democratization than us, it is clear that this is only a small step and that in practice problems from the beginning of the process will recur. A deflection from such practices is the key to success. There is an unpopular phrase in a political discourse that is the cure for all these ills, but let’s avoids it and use the vocabulary of results.

What should be done then? I was asked recently by a student from the York University to answer several questions related to the integration and democratization of the countries of the Western Balkans. One of the questions was: “What makes Croatia different example in the EU integration process? Mentality? Are the Croats more Europeans than other nations of the Western Balkans?”Maybe. But here’s what this mentality looks like this on the example of Croatian special prosecutor’s office. The Bureau for Combating Corruption and Organized Crime, known as USKOK, has reached the level of conviction in 95% of cases by 2012 and has prosecuted the former prime minister, former Vice president, former generals and other senior officials. The emphasis is on their titles, but also on the part “former”. Political support for the work of this body has been provided at the slow pace. The original solutions which have envisaged the competence of USKOK have been modified twice in order to ensure good cooperation with the police and the courts.

Key developments in the Croatian fight against corruption are telling us that we are still going to face an exhaustive struggle with the mentality, clientelism, decades-long control of all state structures by a political party. There is a long way from the adoption of a law to USKOK. In other words, the institutions should be protected, not public officials.

Dr. Jovana MAROVIĆ
Research coordinator at Institute Alternative and the member of the working group for the Chapter 23

Text originally published in the ,,Forum” of Daily Vijesti

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Apply to work in IA: Young Professional Development Program TTF

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Young professionals who have recently finished their Masters or Ph.D. studies in the field of social sciences are welcome to apply for a six-month-long fellowship at Institute Alternative.

During their work, young professionals will have an opportunity to engage in policy-relevant research under the mentorship of our research coordinator.

The final product of the research process will be a policy paper or a policy brief formulated within the framework of one of IA’s research areas.

With this initiative, Think Tank Fund (TTF) aims at supporting up to 15 ‘returnees’ who have recently finished their Masters or Ph.D. studies in one of the OECD countries to assume posts in think tanks interested in attracting young staff.

Candidates need to fulfill all of the below-mentioned criteria:

  • Have graduated in the past three years with a Ph.D., LL.M or M.A. degree in social sciences and humanities from universities in the OECD countries;
  • Be between 23 and 35 years of age at the time of application;
  • Be a citizen or a permanent resident of Montenegro;
  • Be fluent in written and spoken English alike, as well as the working language of the host organization.

Application process:

  1. If you are interested in working at Institute Alternative and you fulfill all the necessary criteria, please send your CV and motivational letter to Jovana Marović, research coordinator at jovana@institut-alternativa.org.
  2. After having been selected by the host organization (Institute Alternative), the candidate will apply to the Think Tank Fund directly.

Candidates should apply to IA by August 20, 2015.

Find out more about the application process on this link.

More details on the TTF Program can be found here.

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Press Release: Publicly About Internal Control

Ministry of Finance has finally published the PIFC Report, waiting for the Parliament, SAI and the public

We welcome the decision of the Ministry of Finance to publish a Consolidated report on the system of public internal financial control (PIFC) for 2014. Reports for the previous years have been classified with the designation RESTRICTED, as opposed to good practices, the recommendations of the European Commission and the decision of the Administrative Court.

The report was adopted yesterday by the Government and published seven years after the adoption of the Law which provides the establishment of the system of internal controls, bringing a handful of interesting data about how they actually work.

There are currently 60 internal auditors employed in the public sector, who have conducted 114 internal audits and have issued 454 recommendations during the 2014. Internal auditors have been auditing public procurement, budgeting process, invoice payments, payroll files, business travels. Of the total number of issued recommendations, less than half of them have been implemented, and almost 18% of them have been implemented partially. It should be noted that these statistics are self-reported by internal auditors, without additional reviews, so they should not be taken as completely reliable.

Only two ministries have the number of internal auditors who are allocated as stipulated by the Law. Therefore we have the current state where enormous budgeting units, such as Ministry of Interior, Ministry of Agriculture and Rural Development, Ministry of Economy and others have only one auditor each, while some ministries don’t even have that one, such as Ministry of Justice (with the budget of 9.4 millions).

There is a particular problem in the reporting of budget users to the Ministry of Finance. Only 69% of the budget users have delivered a Report on the Financial Management and Controls, and those that have provided it, failed to submit complete data in all cases. Due to these problems, we have proposed penal provisions for failure to report during the last Law amendments, but neither proposer of the law nor the MPs have taken our proposal into consideration.

There are problems in the implementation of the conclusions given within the last year report, out of which only one has been implemented completely, and the remaining five only partially. Majority of local self-governments have failed to implement those conclusions.

One of the conclusions of the Report is that all public sector entities should establish a system for reporting and identifying irregularities and abuse, despite the existence of the budget inspection of the Ministry of Finance.

Now that the data on internal audits are public, other actors should put pressure on budget users to meet their legal obligations and to establish a functional system that will prevent abuse and inefficient use of public funds.

We appeal to media to monitor the implementation of Government’s conclusions and keep constant pressure on the budget users. We invite the State Audit Institution to pay attention to the statistics which the internal auditors report on the implementation of recommendations and to check their veracity. We invite the Parliamentary Committee for Economy, Finance and Budget to organize a special session for reviewing this report and to adopt its own conclusions, whose implementation will follow in the forthcoming period. Also, the special attention should be dedicated to the reports of those budgetary spending units which are not a part of the consolidated report as they are reporting directly to the Parliament (such as the Ombudsman, the National Security Agency, the Agency for protection of personal data and the free access to information, etc.).

Marko Sošić
Public Policy Resercher

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Depoliticisation of public administration: How to break a vicious circle?

The “embrace” of the ruling party and the state, present in Montenegro for more than two decades, has a negative effect on depoliticisation of Montenegrin public administration, said Milena Milošević, researcher at Institute alternative at the conference organised by German Aspen Institute and the Ministry of Foreign Affairs of the Republic of Serbia.

The conference „Democratic Governance and Public Administration Reform in the Western Balkans“ was held in Belgrade on June 15 – 18, 2015.A representative of the Institute alternative (IA) was a speaker at the panel discussion, within she presented the paper “Impediments to Depoliticization in the Western Balkans: Case of Montenegro”.Milena Milošević has reminded that the need for depoliticisation of the public administration in Western Balkans is a “vicious circle”, bearing in mind that the politicians are expected to effectively implement the requirements of the European Union, who are increasingly political rather than technical and economic, and could have painful consequences for those who are expected to follow.

Even though all countries in the region share similar post-communist legacy, our researcher recalled that the specificity of Montenegro is a party system with a predominant party, characterised by the blurred boundary between the state and the party.

Also, she pointed out that the public sector in the country is still bloated and counts over 50 000 people, which represents more than a third of total employment in the country with about half a million voters.

In Montenegro, the argument that there are too few positions in the public sector and too many voters, therefore, is not applicable,” she added.

Our representative also reminded of the IA research results in the field of public administration, employment in state and local authorities and the professionalisation of a senior civil service.

„Limiting discretion in employment is a key for establishing a merit system in public administration. However, our findings show that the new legislation failed to significantly limit the arbitrariness in employment in state bodies”.

In order to ensure a sustainable impact on the changes in the country, we need strong institutions, an it could hardly be institutions whose leading positions are not filled on the basis of merit and objective criteria, reminded Milosević.

“Although the position of senior managers and heads of authorities are, in theory, professionalised, maybe even more than in some EU countries, according to our findings, about 90 managers are simultaneously members of management and advisory bodies of political parties currently in power. Additionally, there is no special competency framework for these positions, and even though Human Resources Management Authority has adopted a special pilot training program for their professional training, senior managers are still not attending them end have no awareness of the need for further professional development. “

The main agents of change, considering the previous limitations, may not be the institutions themselves, but they must have the support of the civil society organisations which are already playing an important role in monitoring the implementation of reforms, forming coalitions across the region and advocating depoliticisation, which is essentially a long – term cultural change, Milošević concluded.

The conference of the German Institute, organised for the first time at the capital of Serbia, had involved a number of senior representatives and renowned experts from the region and the EU.