Materials for Council’s sessions to be published in advance

Agency for Prevention of Corruption does not publish materials for the Council’s sessions in advance, thus further disabling interested public to participate in this body’s work. The Agency did not publish the Third Quarterly Performance Report for 2018 nor the Proposal of the Rulebook on internal organisation and systematisation, which are to be discussed at the next session of the Council.

Third Quarterly Performance Report for 2018 and the Proposal of the Rulebook on internal organisation and systematisation of workplaces in the Agency are on the Agenda of the Council’s session scheduled for Tuesday, 30 October. Both documents could be interesting for the expert public to participate at the session and discuss these documents with the Council’s members.

First document is important because the dissatisfaction with the Agency’s work and lack of its concrete results has reached Brussels and lead to very poor evaluation of this institution’s work in the latest European Commission’s country (EC) report for Montenegro from April 2018. Also, EC will soon issue its third non-paper on Chapters 23 and 24 which will also include the Agency and its work as one of the topics. This is why the Agency’s Quarterly Performance Report requires wider and open debate on its content.

Members of the Agency’s Council, who claim to be independent members of the independent body, should be open to hear independent experts’ opinion on the Agency’s work and their recommendations for improvements, before adopting this document.

Second document which the Council will have on its table on Tuesday also requires open and wider debate. Primarily, because the implementation of the Plan for optimisation of the number of employees in the public sector is ongoing, while the moratorium on public employment is in force until 1 July 2019. Additionally, in the Optimisation Plan, the Government has promised to let go about 3200 employees from the public service.

For all these reasons, the Proposal of the Rulebook on internal organisation and systematisation of work places in the Agency should be publicly available and a subject of the broader debate before the Council formally adopts it. Whether the proposed Rulebook is in line with the principles and objectives of the optimisation process could and should be particularly discussed.

Director of the Agency proposes the Rulebook on internal organisation and systematisation of workplaces, and the Council adopts it.

Work of the Agency’s Council is exceptionally non-transparent. Amendments to the Rules of Procedure of the Council, adopted in May 2016, practically closed the door for the NGO representatives to monitor Council’s sessions. The Council’s rationale was that NGO representatives are not contributing to the Council’s work by solely monitoring the sessions. Thus, the Council decided that NGO representatives can participate in the sessions, but only if prior to the session they submit in writing what they want to discuss at the session and upon that, the Council’s members will decide whether to allow participation or not.

However, even such already limited and controlled participation is completely disabled by the Council’s practice not to publish materials for the sessions in advance, but only after adoption when it is no longer possible in any way to influence their content.

For all these reasons, the Agency’s Council should publish these and all the other materials for all its future sessions and thus allow the interested public to participate in the Council’s work and provide their expertise on the documents discussed and adopted by the Council.

Ana Đurnić
Public Policy Researcher







Accountability of police officers: spiders pass, and small flies get caught?

The goal of internal mechanisms for determining accountability is to make difference between those police officers who obey the law and the rules of the service and those who do not obey, or obey to a lesser extent, said Dina Bajramspahic, Public Policy Researcher at Institute Alternative.

She highlighted the importance of a consistent and non-selective processing of the police officers at a panel discussion organized by the IA, called ”Internal Mechanisms for Determining the Accountability of Police Officers”.

Bajramspahic also states that the accountability is timely established for those officers who feel asleep during the third shift, while there is no criminal responsibility and investigation of more serious cases, such as enormous enrichment of some police officers.

The conclusions and recommendations of this panel discussion, which gathered the interlocutors from the Internal Control Unit, Disciplinary Commission and Ethics Committee, refer to the improvement of the work of these bodies, strengthening their competencies and capacities, as well as the employment of the highest quality personnel.

”It is hard to hire personnel because our jobs are not popular, just the opposite, they are very repellent. Also, our highest quality personnel are taken by Police Administration. When it comes to salaries, we are practically equal to the police officers, and since our employees can have inconveniences with their colleagues (other police officers) during their work, these circumstances do not motivate officers to choose Internal Police Control”, said Marina Radonjic, Chief Police Adviser at Internal Police Unit.

IA’s president of the Managing Board, Stevo Muk, took part in discussion and said that the law should give more authority to the Internal Police Unit in order to deal with key problems of accountability of police officers, such as corruption, enrichment of police officers and falsification of diplomas.

”A clue of possible corruption and crime is left in the property itself that the officials are earning. We know that there is not a small number of cases in which when you compare incomes and assets of police officers, you can notice a major incompatibility. Why Internal Control did not deal with this problem, when the Law gave authority to this body to do so?” asked Velizar Kaludjerovic, from Democratic Montenegro.

Radonjic pointed out that police is not a criminal organization, so one can not expect some astonishing statistics regarding the processing of police officers, while decline in the number of complaints on police officers from 2014 should be considered as a positive result of the long-lasting work of Internal Control Unit, and not as ineffectiveness of this body. As proof of the increase in the capacity of this body, she mentioned equipping this body to perform measures of secret surveillance, both in technical and personnel terms.

President of Ethics Committee, Radomir Radunovic, spoke about the basic tasks and goals, as well as the results and weaknesses of this body. He stated that in 2017 a total of 721 proceedings were initiated in the Ethics Committee. Since the establishment, the Committee worked in three cycles, and the Ministry of Interior appointed new board last week.

When asked by Dina Bajramspahic what happened with cases in the period from the expiration of the last mandate until the appointment of the new board (from February to October 2018), Radunovic responded that the Committee received a certain number of reports in that period, and that right after the session of the Committee they will start working on it.

A member of the Disciplinary Commission, Azra Cama, said that in the first half of the 2018, 31 cases were initiated against 42 officials, and that they are mostly related to violations of behavior of police officers (in and out of work), as well as non-executing the tasks the were given. According to her, the proceedings are being much faster terminated now, because the law prescribed the possibility of termination of proceeding in the absence of police officer, while before they avoided attending the proceedings, which led to the postponement of proceeding termination.

Bajramspahic believes that it is important to point put the problem of ”fake medical certificates”, which is being used by police officers to justify their absence and prolong disciplinary proceedings. She stated that such abuses could significantly harm the legitimacy of the Disciplinary Commission. Djekic, from the Police Administration, proposed involvement of a medical expert to examine those certificates, adding that this is a criminal offense of a doctor who gives fake certificate, not an officers fault.

Citing the French novelist Balzac, Dina Bajramspahic, IA, gave a conclusion that ”Law is a spider-web through which spiders pass, and the small flies get caught”, pointing out the need of a consistent approach to the prosecution of both lower-ranking police officers, and those who are at higher rankings of the police hierarchy.

Clarifications – Money Watch Call for Proposals

Below you can find clarifications and answers to the question we have received so far regarding our Call for Proposals for Small Grants Facility within the project Money Watch – Civil Society Guarding the Budget.

Clarifications include answers to all the questions raised during the info sessions held in Bijelo Polje, Budva and Podgorica, as well as to all the questions sent via e-mail, until 23 October 2018.

You can send your additional question until 5 November at latest, via e-mail

Clarifications and answers can be downloaded here (only in Montenegrin).

Project “Money Watch – Civil Society Guarding the Budget” is being implemented by Institute Alternative, in partnership with Institute of Public Finance from Zagreb and NGO New Horizon from Ulcinj. The project is financially supported by European Union.





The first successes of party soldiers in the Senate of the State Audit Institution

The story of financial management at the Pension and Disability Insurance Fund regarding the transfer of money to the Union of Pensioners’ Associations, which Vijesti recently initiated, inter alia, pointed to the major mistakes of the State Audit Institution during the oversight of the Fund.

The institution, whose primary task is to take care that our money is spent effectively, expressed an unqualified opinion to the Pension and Disability Insurance Fund twice in 2016, despite the fact that Fund provided no evidence to substantiate expenditure for over 1,5 million euro, which was directly or indirectly managed by the Union of Pensioners’ Associations.

Namely, regarding the expenditure of this amount, the Pension and Disability Insurance Fund stated “that the documentation on the funds expenditure is in the possession of Pensioners’ Association”, which the auditors would have taken as sufficient evidence indicating that everything was all right. For this reason, they have expressed an unqualified opinion on both financial and regularity audit. Therefore, state auditors have not noticed anything problematic in transfers to the Union of Pensioners’ Associations.

In the case of expenditures of 500 000 euro for the construction of housing units that were transferred to the Pensioners’ Associations, SAI, while conducting audit, accepted explanation “that the financial documentation on expenditure of transferred funds is in the possession of association”.

Apart from half a million for housing needs, Pension and Disability Insurance Fund transferred additional 465 173 euro to the Union in 2016: transfers to individuals (135 173€) and NGO (30 000€), as well as one-off assistance (300 000€). Additional 454 600 € subsidies should be counted as well, which the Fund gives to its own company, DOO PIO Ulcinj. The company is also indirectly managed by the Union of Pensioners’ Associations, which decides on the distribution and users of company’s services. Taken into account this information, only in 2016, the Union of Pensioners’ Associations had the opportunity to manage approximately 1,5 million euro.

The audit report reveals that state auditors did not have insight into any kind of evidence on how Union of Pensioners’ Association managed these funds and whether they had been used for the intended purpose.
SAI’s recommendations focused on issues such as IT strategy and the effectiveness of information security measures for the physical protection of buildings and premises – but not on the method, criteria and oversight of expenditure of more than 1,5 million euro by a non-governmental organization.

The SAI had not reviewed the model of money transfer to the Pension and Disability Insurance Fund, nor it highlighted the lack of control and of possession of documents justifying payments made by the Union of Pensioners’ Associations by the Health Insurance Fund. It has not even questioned the justification of delegating this scope of authority to a non-governmental organization whose work is out any kind of oversight.

This is the evidence of our claim that the appointment of party soldiers to the Senate of SAI will lead to a quality decline of SAI’s work, but also inevitably, to the fall of public trust in the work of this institution.

Loss-making enterprises do not reduce salaries while state tolerates violations of laws

Despite the fact that work of public enterprises is among key elements for development of Montenegrin economy, due to their sheer number of employees and property – the state has been doing nothing to establish an adequate control over their work, for years.

This particularly applies to the control of salary policy in enterprises that need de-politicisation and employment of professional management in order to work successfully.

The most recent measure of the Government, that is, of the Ministry of Finance, whose aim was transparency and fair public spending, obliged public enterprises making losses in current year to reduce salaries by 10 percent in the following year and by additional 5 percent in the year after.

This provision of the Law on salaries of public sector employees came into force in March 2016. The data obtained by “Vijesti”, however, demonstrate that most companies did not comply with it.

In addition, the Ministry of Finance acknowledged for “Vijesti” that it had no information about reduction of salaries because it had not been controlling the companies in that aspect.

The list of loss-making enterprises includes 14 public companies that recorded a loss in 2016, 2017, or in both years. In accordance with the law, these companies had to reduce salaries in 2017 and in 2018, and some would have to do so in the next year as well. The list includes Railway Transport of
Montenegro, Railway Infrastructure of Montenegro, Maintenance of railway rolling stock, Elektroprivreda (EPCG), Montenegro airlines, Black metallurgy Institute, Crnogorska plovidba, National Parks, Barska plovidba, Montepranzo Bokaprodukt, New Tobacco Combine, Castello Montenegro, Project Consulting.

The list of enterprises that operated with loss in 2016 and in 2017. (Foto: Ministry of Finance)

“Vijesti” analysed financial reports available at the website of Tax Administration, after which we traced whether those enterprises, which operated with loss, had complied with the Article of the Law on Salaries of Public Sector Employees, which defines the policy of salary reductions.

Most of them refused to respond to our questions. Some companies do not even have a website with basic information, such as Montepranzo Bokaprodukt from Tivat.

Companies, which answered and claimed they had reduced the salaries, usually did not specify whether the reduction has occurred in the period since the beginning of the implementation of the Law. In addition, their responses confirm the lack of control by the Ministry of Finance.

No budget inspector

The Ministry of Finance stated to “Vijesti” that it did not obtain any acts on reduction of wages from loss-making enterprises with the purpose of issuing official opinions regarding these acts.

“Consequently, the Ministry does not have any information on whether the earnings in these companies are reduced in accordance with the law,” they pointed out in the Ministry headed by Minister Darko Radunović.

They clarify that the oversight of the implementation of the Law on salaries of public sector employees is under the competence of the budget inspector but since this work place remained vacant, they did not control the reduction of earnings in public enterprises.

“Previously, a call for the budget inspector has been announced several times, but no candidates applied. On 26 July 2017, the Human Resources Management Authority announced an internal call within the state authority to fill that workplace for a period of seven years, to which no candidates applied. An internal call among the state authorities for that workplace was announced on 8 September 2017 and no candidates applied, after which a public call was announced on 19 October 2017. No candidates applied again. In order to overcome the situation, the Ministry’s new internal act on organization and systematization, which is being prepared, will define the position and role of the budget inspector and it will pave the way for resolution of this issue from human resource management perspective.”

The absence of an inspector should not be an excuse

Milena Muk, Public Policy Researcher at NGO Institute Alternative, said that poor formulation of legal provision and, in the first place, the lack of oversight of implementation contributes to the failure to comply with the policy of salary reduction. She pointed out that the budget inspectorate has not been functional for three years, but this should not be an excuse for the absence of any control over the implementation of the law.

“The Law defines the obligation of the Ministry of Finance to keep central records of public sector employees’ earnings, based on data that all taxpayers are obliged to submit on a monthly basis. Hence, clumsy formulations and failure to fill in workplace in the budget inspectorate are not obstacles to the more proactive attitude of the Ministry in exercising its competences, which is necessary in order for this and any other solution to be implemented in practice. ”

This NGO reminded that the Law has been prepared for two years, but since it came into force in March 2016 – everyone has forgotten about it. They add that the Law has been changed even six times, which additionally hampers monitoring of its implementation.

“At public debates, the IA advocated an equitable system of public sector salaries, which was the initial intention of the Ministry of Finance. Eventually, the biggest debate was about earnings in agencies and public companies that defended their independence with autonomy to regulate their own salary policies. The final solution in the Law is thus a bad compromise. It is defined at the level of vague principle and it introduces legal obligations for the category of enterprises and organizations, which lack precise definition in our legal system. The precondition for successful implementation is the compilation and regular update of the list of loss-making enterprises and organizations with public authority. There is a lack of the most basic information about public enterprises as well, which is why, concerning the financial transparency, this is one of the most endangered fields”, Muk said.

Aleksandar Damjanović, Independent MP and former President of the Parliamentary Committee on Economy, said for “Vijesti” that the strict provisions of the Law on public sector salaries testify to the continuation of the long-standing practice of treating public enterprises as political prey for recruitment of political loyalists or for making “deals” with politically loyal enterprises in exchange for “winning” tenders with, very often, exaggerated invoices.

“A superficial, comparative analysis of the overall expenditures of most of these enterprises demonstrate permanent increase of operational and other costs, which affects the reduction of real profits or loss in several cases. Average salary of managerial staff in most state-owned enterprises is above the country’s average. Therefore, this category of staff should be sanctioned first by reduction of salaries with an aim of a more rational and accountable management. Obviously, neither this measure nor any other can be realized in politically subordinated enterprises. The damage is tremendous, because instead of transferring the part of profit to the state budget, the produced losses are “socialized” and covered through accounting techniques, including the reduction of state capital/ assets, or through various subsidies, guarantees and other types of state support, which originates from people’s money or enterprises striving to make profit.”

Public procurement, consulting services, capital reduction are among the problems as well…

Damjanović believes that the failure to respect the Law is the key reason for the lack of accountability of top management (to date, there are no resignations due to poor working results) and of board directors, which are namely comprised from representatives of Government or state and should be accountable to the Government.

Aleksandar Damjanović, Foto: Boris Pejović

“The ministry in charge of monitoring this Law neither wants nor intends to establish mechanisms for comprehensive and continuous monitoring of operations in small number of public enterprises. Why this mechanism cannot be established in public sector, where approximately 50 thousand people are employed – this is an issue for, by all criteria, the most unsuccessful Government in the last two decades. People heading the Government and competent institutions should explain what is happening with the internal audit system; where is budget inspectorate; why State Audit Institution, which has completely fallen under the control of the executive power over the past two years, does not perform its legal duties in auditing these enterprises. With persistent tolerance of devastation of important public enterprises, it is illusory to expect political shifts, resignations, political accountability or criminal liability, and especially respect of the law and of policy of salary reduction. Moreover, salaries are not the only problem of the losers, in the view of the fact that capital is being relentlessly spent through procurement, consulting and other services, often with an aim of compensating for “reduced earnings.”

Damjanović brought to mind that the Parliament, with a minimum of staff, managed to rationalize earnings in regulatory agencies and transfer some of their profits to the budget.

On 27 May 2013 the Government adopted Conclusions that, inter alia, obliged Government-owned enterprises to reduce salaries of executive directors to the amount of maximum two average salaries in the country. Salaries of the assistant directors, sector directors and advisors should have been reduced to the amount of one and a half average in the country.

Conclusions also planned alignment of coefficient for calculating the salary of non-managerial staff in public enterprises with pay levels of their counterparts in state administration. Ministry of Finance was supposed to inform Government and Parliament on the realization of these Conclusions by 15 July 2013, but to date it has not done so.

Government’s Conclusions followed the Ministry’s analysis of wage policy and expenditure in 30 enterprises. The analysis showed that enterprises failed to comply with the previously introduced obligation (as of 25 April 2012) – that the highest level of salaries for managers should not exceed the amount of three average salaries in the country, while salaries of rest of employees should approximate the amount of two and a half of the average salary in the country.

No comment from Barska plovida

Tihomir Mirković, acting executive director of Barska plovidba, said to “Vijesti” that he would not comment on whether something should have been done last year due to the loss made in 2016, as this refers to the period when he did not occupy the position of executive director, to which he has been appointed in December 2017.

He said that the number of employees in 2018 was lower than in 2017.

“As Barska plovidba operated with profit in 2017 and it has regularly met its obligations, the exemption rights provided by Article 41 of the Law have been exercised. The average salary is above the Montenegrin average. I believe that certain positions in the enterprise deserve higher income due to the workload and the level of responsibility that employees in those positions have.”

Article 41 specifies that the provisions of the Law do not apply to enterprises that operate with profit and regularly meet their obligations. This exception is not time-bound, and enterprises that operate with loss in one year, and positively in the second year, tend to choose those solutions that are more favorable for them. This is illustrated by the example of Barska plovidba.

Ratko Nikolić, director of the Black metallurgy Institute JSC Nikšić, said that the Ministry did not control that enterprise in terms of salary reduction.

He explained that the average salary before the reduction was 538,28 euro, and after the reduction it has been 469,01 euro, which is a 15 percent decrease. He added that they had 56 employees, which is one less compared to the beginning of 2017.

They claim that Railway reduced salaries a few years ago

Two state-owned railway enterprises Railway Transport (ŽPCG) and Railway Infrastructure (ŽI), described salary reduction in the recent years, instead of providing precise responses to “Vijesti” on whether they reduced salaries due to the losses made in 2016 and in 2017.

Safet Kalač, President of the Board of Directors of Railway Infrastructure, said that, since the beginning of 2013, total cost of salaries has been decreased by 14 percent, from 7,943 million at the end of 2012 to 6,802 million at the end of 2017.

He said that the average net salary was approximately 405 euros last year and it is lower than the average in the country by 20,56 percent, as well as that they currently have 781 employees, three less than last year.

“In ŽPCG we reduced our salaries by 20 percent in 2011 due to the economic crisis (Ministry has asked for 20 percent reduction.) Alignment of existing earnings with the Law on salaries of public sector employees is still ongoing due to the complexity of different laws applying to certain segments of the railway system. We have the lowest salaries compared to other railway enterprises.”

They increased the number of employees from 359 at the end of last year to 367 at the end of August this year.

At the Maintenance of Railway rolling stocks, the number of employees has been decreasing continuously since 2011. They used to have 211 employees in 2011, and 175 in 2018. They claim that in the past two years they have reduced their salaries by 40 percent. Last year, the fund for salaries amounted to about 1,7 million. In 2018, it amounts to approx. 830.000 euro. They claim that the salaries fund was reduced by 18 percent in 2017, and by almost 20 percent this year.

Castello Montenegro also did not specify whether they complied with the Law. Dušan Milović, director, said that during this year the salaries paid off in the first six months are going to be reduced by 11% compared to the same period last year. He added that they have nine employees and three members of the board of directors. He explained that they were operating with loss due to the high amortization rate of capital assets in which they invested 30.000 euro last year, because the enterprise’s headquarters are 35 years old.

Elektroprivreda says the law does not apply to them

Although Elektroprivreda (EPCG) operated with loss in 2016 and 2017, they claimed that they did not have to reduce their salaries.

EPCG operates as a group comprised of EPCG, CEDIS, ZETA Energy and EPCG Belgrade, while the officially presented 2017 group’s consolidated financial statement, adopted by the company’s shareholders, was positive and it amounted to 1,51 million.”

As they pointed out, management and trade union have good cooperation in ensuring regular payment of salaries, and the new 2017 Collective Agreement corrected the pay calculation coefficient.

“It was downgraded by 5,8 percent, therefore there was a decrease in earnings. This act is still in force so the calculation of salaries in 2018 is done along the same lines”, reads the statement of company, which has maintained the same number of employees as in 2017 – 944.

However, EPCG’s response implies that earnings have not been reduced by 10 percent, in accordance with the Law on salaries of public sector employees. In addition, the Law does not prescribe exemptions for loss-making enterprises operating within the group, so EPCG should not be excluded from the obligation to reduce earnings.

Authors: Danijela Lasica, Marija Mirjačić

This report was prepared within the project “Money Watch: Civil Society, Guarding the Budget”, implemented by the Institute Alternative in cooperation with NGO New Horizon and the Institute for Public Finances, with the support of the European Union. The content of this report is the sole responsibility of the author and in no way reflects the views of the European Union.

What are the first results of the Public Administration Optimisation Plan?

Stevo Muk, President of the Managing Board at Institute Alternative, commented on the first Report on the realisation of the Public Administration Optimisation Plan, and pointed out the shortcomings in the Report and in the Plan itself, in the TV Show “Reflektor” aired on TV Vijesti.

He pointed out that the Government does not have data on the outflow of employees from public administration  at the two-month period before the start of the implementation of the Optimisation plan, and therefore can not speak about positive results of its implementation if there is nothing to compare them with.

He also explained that the Optimisation Plan does not include state-owned enterprises, in which a large number of public administration employees are concentrated, and therefore this plan is not comprehensive, and its implementation will not produce the desired effect.

In the Reflektor, the following issues were also raised:

  • How many employees on central and local level will remain unemployed in public administration by the end of the year?
  • What does the Ministry of Public Administration mean by “limiting employment until 1 March 2019?
  • Will the Government really make public administration more efficient by these measures and transform it into a genuine service for citizens?

Besides Stevo, guests in the studio were Goran Jovetić, State Secretary at Ministry of Public Administration, Refik Bojadžić Secretary General of the Union of Municipalities and Saša Šimun, Union of Public Administration and Justice.

Full video of the show find below: