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Phantom savings in the budget for the year 2024

Nearly a month after the legal deadline, the Government has submitted the budget proposal to the Parliament – some of our key observations are as follows (originally published in an article for the daily newspaper Vijesti).

 

Phantom Savings

Savings or rationalizations are absent in both the budget rebalances for the year 2023 and the budget proposal for 2024. It is important not to trust statements but to look at the figures, and they indicate that there is no reduction in “non-productive expenses” either by 200 or 35 million. In reality, there will be an increase in the current budget by 7% or 83 million, which includes an increase in all traditionally criticized positions.

A 5% reduction in official trips or representation, totaling around 300 thousand, is not beneficial when, for service contracts alone, we are giving almost a quarter more than the plan for this year, or 4 million more in total (a sum of 21 million).

Reducing “non-productive spending” should result from in-depth analyses of budget lines and precise cuts accompanied by changes in laws and established practices, not be subject to political maneuvering and superficial statements. The budget proposal does not indicate that such efforts have been made so far.

Never More Numerous, Never Better Paid Administration

The gross salaries of employees in the administration have increased by 40 million compared to the current year and will amount to 675 million in 2024. This increase comes in an already record-breaking current year, where we are paying 100 million more for salaries in public administration than the previous year. Even this planned amount will not be sufficient, as unions protest that the budget does not incorporate everything negotiated in collective agreements. Moreover, there are announcements of new parliamentary amendments to the Law on the Salaries of Public Sector Employees, selectively increasing coefficients for certain professions.

This represents a staggering increase in this budget item, caused by the growth in the number of employees, salary increases negotiated in new collective agreements, and the parliamentary finalization of the already porous Law on the Salaries of Public Sector Employees.

There has never been a greater number of employees, and they have never cost us more, it has been a long time since there was less talk about the need for optimization. Optimization cannot be the individual responsibility of each minister, nor does the role of the Minister of Finance in this area end with reducing the number of staff positions in their ministry. The Prime Minister and the Ministry of Finance must decisively halt irrational hiring, not only in the central administration but also indirectly, through the legal framework and in state-owned enterprises, public institutions, and, through special measures, in municipalities. The new law on the salaries of public sector employees must be a priority for the new government and the Ministry of Finance to regulate the currently poorly controlled chaos.

Capital Budget

There seems to be a discrepancy in the figures regarding the capital budget. The Prime Minister stated that, through the traffic light system, they decided to retain only projects that are mature in the new budget. However, the Minister of Finance recently stated that out of 374 projects in this year’s budget, 215 are entirely “dead,” and not a single cent has been spent on them this year due to the impracticality of these project ideas. How did we then end up with 330 projects after the triage was done? Some “dead” projects have been retained.

The second problematic figure is the “new” projects, which are 80, even though the working group of the same ministry selected only 18 from all the ideas for new projects a month ago, acknowledging that this selection might be excessive due to the immaturity of the ideas. Where did these new 60 projects suddenly come from, and what are their assessments? That is what the Government needs to share with the public, along with the rest of the information.

Employee salaries have increased more than the capital budget – next year, we will have an approximately 10% larger capital budget, with almost the same number of projects, except for one (highway) worth 90 million – meaning that only 190 million will be left for the remaining 329 projects.

It’s good that there is consideration for reforming the capital budget, and it’s positive that a new directorate has been formed in the Ministry for this purpose. However, it’s worth reminding that, by criticizing the current situation, Prime Minister Spajic essentially criticized the work of Finance Minister Spajic, particularly his actions in 2021 when, through the program “Montenegro Now,” he introduced hundreds of immature projects into the budget, accepting almost everything that came from municipalities or lawmakers as an idea.

The Case of RTCG

It is unclear why, among all the consumers whose budgets are determined by law, only RTCG is proposed for a change in funding in the laws accompanying the budget. At least ten other entities in our system have their budgets determined by a percentage.

The fiscal strategy from the end of 2021, which everyone seems to have forgotten (including the Fiscal Council, which we still do not have), prescribed the elimination of all percentage budget allocations.

The existing solution linking RTCG funding to a percentage of GDP (?!) has been awkward from the start and needs clarification. However, a bad solution cannot be replaced by an even worse and vaguer one, especially by proposed laws that have not undergone public discussion, are not accompanied by an impact analysis, and no one inside or outside the administration has heard of them until they appeared on the government’s website.

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We hope that the MPs will manage to thoroughly examine the budget in the short time they have before the start of the year and, above all, that they will not make it even worse. In other words, the ruling majority will refrain from conditioning the adoption of the budget with amendments to an already problematic capital budget.

Marko Sošić

What the budget for the year 2024 brings, how the state will spend money, how it will collect it, and what it all looks like in a ten-year review of budgetary data can be found on our portal “Moj novac” 

 

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About inspections from the anti-corruption perspective

A summary of the challenges in the work of inspection bodies, and their cooperation with the judiciary, independent institutions and civil society from the perspective of a more effective fight against corruption was in the focus of the first meeting organised within the project Inspect to Protect: Turning Inspectorates Into Anti-Corruption Allies.

On December 8th, IA organised a meeting attended by representatives of the Administration for Inspection Affairs, representatives of inspectorates within ministries, representatives of the criminal justice system, non-governmental organisations, and representatives of independent institutions with a role in the fight against corruption.

During the meeting, discussions focused on the challenges in the work of the Administration for Inspection Affairs and inspectorates within ministries (Administrative Inspectorate, Budgetary Inspectorate, Directorate for Inspection Supervision of State Property, Urban Planning and Construction Inspectorate), as well as their collaboration with criminal justice authorities and independent institutions involved in the fight against corruption, such as the Agency for the Prevention of Corruption and the State Audit Institution.

The goal of the meeting was to encourage better communication and collaboration between inspection bodies and other institutions responsible for preventing and combating corruption.

The meeting was organised within the framework of the project Inspect to Protect: Turning Inspectorates Into Anti-Corruption Allies supported by the Embassy of the United States in Montenegro, the State Department’s Bureau for International Narcotics and Law Enforcement Affairs (INL).

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IA took part in the Round Table ‘Law on Government – Open Issues’

On December 12, IA participated in the Round Table ‘Law on Government – Open Issues,’ organized by the Ministry of Public Administration in cooperation with the Association of Lawyers of Montenegro.

In addition to our participation in the Working Group for drafting the Draft Law on Government, during this Round Table, we once again presented some of our suggestions on what else needs to be further improved in this important act.

The revised version of the Draft Law on Government, compared to the previous one that more precisely defined the number and names of ministries, only prescribes the upper limit for the number of ministries (15). Despite this, it includes 7 mandatory ministries (justice, defense, interior, finance, foreign affairs, health, and public administration). However, additional explanations about the criteria that were crucial in determining these mandatory ministries are still missing.

IA advocates for a more permanent organization of the Government, providing necessary flexibility in implementing the exposé and government work program through ministries without portfolios.

We also welcome the decision to adopt our proposal to impose a ban on new appointments for a Government whose mandate has expired, since the previous version distinguished between the two types of appointments (“postavljenja” and “imenovanja” in Montenegrin). The current ban encompasses all public officials, which has been the IA’s recommendation from the very beginning.

We have consolidated these and other recommendations in our publication ‘For a Better Law on the Government,’ where we emphasized, among other things, the need to improve the transparency of permanent and ad-hoc government bodies, introduce mandatory elements of the Government’s opinion on draft laws initiated by MPs, verify the integrity of government members and their advisors, and how the handover of duties should be conducted.

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Open sessions and/or open government?

In the debate over the decision of the 44th Government to stop the practice of broadcasting its sessions, introduced by the previous 43rd Government, the focus often shifts away from fundamentally important issues related to the transparency of the government’s work.

Numerous documents from the government’s sessions and its working bodies should be disclosed, which is a genuine guarantee of openness, significantly more than just opening the session flow to the public. Above all, it is necessary to amend the Decision on the Publication of Materials from Government Sessions, a decade-old and ripe for an update, to include the following:

  • First and foremost, the agenda of government sessions must be published in its entirety, including the names of materials marked with a level of confidentiality. Citizens should know what the government discussed and decided, even in the case of confidential materials, at least through the document titles. In the previous work during the terms of the 42nd and 43rd Governments, around 5% of all agenda items were entirely hidden – the names of these items were not disclosed, parts were deleted from the minutes, and the public part of the session ended before the government members discussed those items. Unfortunately, the 44th Government has already started this practice.
  • It is also important that documents are published regardless of the session format (electronic session, “session without holding a session”). This is particularly crucial because, during the term of the 42nd government, there were twice as many electronic sessions as regular ones (148 electronic, 67 standard), and documentation from electronic sessions was rarely published.
  • The public needs to have basic information about the work of the four permanent working bodies of the government, which are currently entirely closed. Our struggle to find out how the commission of Duško Marković’s government distributed the budget reserve ended with the revelation that all documentation was destroyed and the then GSV did not allow us access even to basic information.

Furthermore, the openness of the government is crucially influenced by the Government Secretariat, which handles requests for access to information. This government center has long been one of the least transparent institutions, and it was only in the term of the previous government that it finally began to respond to requests and launched its website. It would be important for this practice to continue.

When these conditions are met, it will be less important whether government sessions are open to the public or not. The ability for journalists to ask questions and seek further explanations after the session is also a useful tool for openness. Public government sessions can sometimes turn into a show for the public and be contrary to substantive openness.

We appealed to the need to work on these issues during the term of the 42nd Government to the then Government Secretariat and were rejected. During the term of the 43rd Government, we began work on introducing certain provisions into the draft Law on the Government, and we will continue this work.

 

Marko Sošić 

Part of the text was originally published in the daily newspaper “Vijesti”

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The Ministry of the Interior should prepare a human resource plan for the next year

The Ministry of the Interior of Montenegro has not fulfilled the legal obligation to submit the Human Resource Plan in the past three years, as, despite several government conclusions instructing the authorities that have not done so to submit drafts of human resource plans, it has not prepared plans for the years 2021, 2022, and 2023.

Due to the absence of a Human resource plan, positions in the category of high-level management within the Ministry of the Interior and the Police Administration have been filled by appointing acting officials, whose mandates have been repeatedly extended.

During this period, the Ministry of the Interior conducted internal competitions and public advertisements with the consent of the Ministry of Finance to fill positions that were not envisaged in the human resource plan, even though the prerequisite for invoking this exception is that the human resource plan has been prepared.

Since it is a legal obligation to adopt the human resource plan within 30 days from the day of adopting the Budget Law, we call on the Ministry of the Interior of Montenegro to timely prepare this document, which provides information on the current number of employees on a fixed-term and indefinite-term basis, new hirings of officials and employees, as well as the number of officials who will meet the conditions for retirement.

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Results: Call for Proposals ‘SOEs under CSO watch’

IA will support five civil society organisations to implement projects and initiatives aimed at contributing to the improvement of the environment for monitoring public enterprises.

As part of the project “Civil Society for Better, Effective, Sustainable and Transparent State-Owned Enterprises (BEST SOEs)”, IA aims to contribute to the fight against corruption through efficient oversight of public enterprises in Montenegro.

In achieving our goal of increasing the level of effective civil society oversight of public enterprises, we will be assisted by five organisations whose projects have been evaluated as the best.

The Evaluation Commission has rated the following projects as the best:

  1. “For Greater Transparency of the Work of Public Media Enterprises (Services),” NGO Pro Nen;
  2. “Transparent and Accountable Power System in Montenegro,” BIRN Montenegro;
  3. “For the Good of Ulcinj,” NGO Punta Institute;
  4. “Public Enterprises for Non-Public Use,” Center for Civil Liberties CEGAS;
  5. “Partnership for Sustainability and Increased Accountability of Public Enterprises,” Center for Economic and European Studies CEES.

Thanks to the support of the EU Delegation in Montenegro, these organisations will be granted funds in a total amount of 24,923.52 euros.

We express our gratitude to all the organisations that applied for the Call for proposals and commend the submitted project ideas. Due to budget constraints, we were unable to support all the deserving proposals this time.

Support for civil society organisations (CSOs) projects in Montenegro is carried out within the framework of the project “Civil Society for Better, Effective, Sustainable and Transparent State-Owned Enterprises (BEST SOEs)”. This project is financially supported by the European Union, co-financed by the Ministry of Public Administration. For more information, you can visit https://javnapreduzeca.mojnovac.me.