Open Budget Survey – Montenegro ranks 64th in the world

The Open Budget Survey, which has been conducted since 2006, included Montenegro for the first time this year, ranking it among 125 countries in terms of budget openness.

On the transparency index, Montenegro scored 48 out of a possible 100 points, indicating significant shortcomings in access to budget data. With this result, Montenegro ranks 64th out of 125 countries. In the region, only North Macedonia (35 points) and Bosnia and Herzegovina (27 points) scored worse than us – all other countries in the region are ahead of Montenegro in this regard.

This part of the Index measures the public availability of information on how the executive branch collects and spends public resources. The survey assesses the availability, timeliness, and comprehensiveness of eight key budget documents, using 109 indicators to measure budget transparency and assign each country a score on a scale from 0 to 100. A transparency score of 61 or higher indicates that a country publishes enough material to inform the public and prepare for public budget discussions.

In other dimensions of the survey, Montenegro achieved mixed results. Public participation in budgeting was particularly poorly rated, with 13 out of 100 points, while budget oversight was rated as adequate (74 out of 100 points), although the role of the Parliament in this regard was rated significantly lower than that of the State Audit Institution.

Creating a citizens’ budget, providing a mid-year budget execution report to Parliament, publishing non-financial data on budget performance, achieving goals and indicators of the program budget, and mechanisms for involving citizens in the budget process are just some of the recommendations that need to be fulfilled for Montenegro to improve its score.

Institute Alternative is the local partner that conducted this research for Montenegro, under the auspices of the International Budget Partnership from Washington.

Visit www.internationalbudget.org/open-budget-survey for more information, including the full survey methodology, the 2023 Global Report, findings, and data for Montenegro and all surveyed countries.

Monitoring Report: Performance of Five Parliamentary Committees

The observed period of work of the Parliament of Montenegro was marked by numerous political crises that also affected the activities of the working bodies. Despite the dissolution of the Parliament and a no-confidence motion against the Government, the practice of debating legislative proposals that do not meet basic public criteria has continued.

In the period from the dissolution of the Assembly to the formation of the new, 28th convocation, as many as 27 legislative proposals were submitted to the parliamentary procedure, 18 of which were proposed by the Government, while 9 were submitted by members of parliament. The dynamic period that affected the work of the Parliament of Montenegro also affected its working bodies, so the committees mostly worked without adopted work plans, which made it difficult to assess the realisation of their activities.

In this analysis, we provide a cross-section of the work of five parliamentary committees: Committee for Political System, Justice, and Administration, Committee for Security and Defense, Committee for Human Rights and Freedoms, Committee for Anti-Corruption, and Committee for Economy, Finance and Budget, in the period from October 2022. until October 2023.

Numerous problems that were observed in the earlier periods of the committee's work continued in this one as well, such as the holding of hearings that are not accompanied by appropriate reports with conclusions and recommendations, the failure to adopt reports on the work of institutions without recommendations for their improvement and the adoption of legal amendments without discussion...

Government Commission Instead of the Administration for Inspection Affairs

The Draft Law on Amendments to the Law on Inspection Supervision was submitted to the Parliament on May 8 through an urgent procedure, without conducting a public debate.

Institut alternativa has provided suggestions to the Legislative Committee and the Committee on Political System, Judiciary, and Administration, urging members to propose amendments to improve the Draft Law on Amendments to the Law on Inspection Supervision.

We reached out to the members of Parliament because the Government submitted the Draft Law for parliamentary procedure on May 8 through an urgent procedure, without conducting a public debate. No roundtable was held on the proposal, so we were unable to provide suggestions and recommendations on the text of this law, which has been under revision since 2017, when the last public debate was held.

A key change in the systemic framework is the proposal to establish a Coordinating Body for Harmonisation and Monitoring of Inspection Supervision, as a permanent working body of the government that, among other things, “coordinates the work of all inspection bodies.” The powers of the Coordinating Body for Harmonisation and Monitoring of Inspection Supervision, as outlined in the draft law, significantly exceed the nature and objectives of the powers of permanent working bodies stipulated by the Regulation on the Work of the Government. Permanent working bodies of the government include: the Commission for Political System, Internal and Foreign Policy; the Commission for Economic Policy and Financial System; the Commission for Personnel and Administrative Matters; and the Commission for the Distribution of Part of the Budget Reserve Funds.

Suggestions for improving the legal text result from IA’s monitoring of the work of inspections. Analysis “How Do Inspections Operate? – Overview of the Work of Seven Inspections in Areas at Risk of Corruption” is available on the IA website. Monitoring, which covered seven different inspections, showed that the role of inspections in the fight against corruption is underdeveloped, particularly evident in the lack of a unified strategic approach and a well-developed legal framework. The proposed legal amendments do not address the identified shortcomings, such as inconsistent supervision planning, risk assessment based on standardised methodology, and handling of initiatives.

We pointed out to the members of Parliament that it is necessary to clarify methodology and procedure for harmonising the annual work plans of different inspections and that the annual work plan should include a detailed plan for joint/coordinated inspections. Additionally, the procedure for harmonising plans needs to be specified.

Furthermore, we noted that the article relating to risk assessment does not specify whether a standardised methodology is involved, and it is unclear whether each inspection body independently develops its methodology or if it is adopted solely at the ministry level. The possibility of establishing an obligation to prepare and adopt standardised guidelines for developing the methodology (for risk assessment and ranking) should also be considered.

We believe it is necessary to stipulate that an inspection body, or a legal entity, is required to develop an internal procedure for handling initiatives, defining deadlines and procedures, and making it available to the public, i.e., proactively publishing it on the website. If an inspection is not responsible for handling a received initiative, it must promptly, or within a specified timeframe, forward the initiative to the competent inspectorate.

We also suggested making the preparation of checklists mandatory, as the current draft leaves them as an option rather than a requirement, and that the Coordinating Body should prepare guidelines for creating a general form of inspection supervision reports.

We reminded the members of Parliament that, in addition to this Draft Law, the Government also submitted a Draft Law on Amendments to the Laws Regulating Inspection Supervision, that proposes changes to as many as 82 laws. We criticised the Government for rushing the change in the inspection supervision model without prior analysis of the situation, contrary to the public administration framework, which the Institut alternativa has repeatedly pointed out.

We have repeatedly reacted to the fact that the Government initiated a serious reform based on the conclusions from the 2021 Analysis of the Efficiency of the Inspectorate Administration, neglecting the fact that the work of inspections within ministries was not evaluated at that time.

Institut alternativa will continue to closely monitor the ongoing reform process of inspection supervision in Montenegro, respond promptly, provide constructive suggestions for such a serious reform, and inform the public in a timely manner.

IA team

How Do Inspections Work? Overview of the work of seven inspections in the areas of high corruption risks

An overview of the work of seven inspections in areas of high corruption risks represents the first attempt to systematically assess the effectiveness of the inspection oversight conducted by seven different inspections. Some of these inspections are organised within the Administration for Inspection Affairs, while others are part of sectoral ministries. However, all operate in areas with a high risk of corruption — urban planning, healthcare, employment in the public sector, allocation of budgetary funds in the public sector, and protection of state property.

The focus is on the planning of inspection oversight, its execution, and also raises important questions regarding effects, such as filed criminal reports and raised indictments, depending on publicly available information.

In the analysis we propose specific recommendations for improving the effectiveness of inspections in areas at risk for corruption, including necessary legislative changes, enhanced staffing planning, more proactive reporting, and training aligned with the practical needs of inspections.

Publication is produced 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). The content of the publication is the sole responsibility of the Institut alternativa and does not necessarily reflect the views of the United States Government.

Suppression of the control function of the Parliament: Two-thirds of control hearings rejected or pending

The parliamentary majority is questioning the right that the opposition has had since 2010, which guarantees a certain number of control hearings, which the majority representatives cannot hold back and outvote.

Since the beginning of the work of the 28th convocation of the Parliament of Montenegro, 14 initiatives were sent for control hearings, of which only 4 were held. To this number, one hearing should be added, which was already defined by the Work Plan of the Committee for Human Rights and Freedoms for 2023. Out of 4 held control hearings, two were initiatives of representatives of the parliamentary majority, and two were of the opposition.

That the suppression of the control function of the Assembly is at work is also shown by the fact that out of 7 “minority” initiatives of the opposition, only one was accepted and maintained, while the others were rejected, reformulated, or meaningless due to late scheduling.

For example, on March 15, a group of 5 opposition MPs submitted an initiative for a control hearing to the Committee for Security and Defense, which was supported by the Committee on the same day, and then the session was subsequently scheduled for June 26, over 3 months later. Such a practice renders the control function meaningless, both because of the actuality of the topic that needs to be discussed at the Committee, but also because the decision on the date of the hearing came only a month after the initiative was voted on.

Two minority initiatives addressed to the Committee for Economy, Finance, and Budget have been “on hold” since the beginning of March because the Collegium was requested to interpret the Rules of Procedure, while the minority initiative addressed to the Committee for European Integration remained without a quorum, as the parliamentary majority MPs did not attend the session at which it was discussed.

Despite the appeal of the president of the Committee for International Relations and Emigrants to schedule a control hearing based on the submitted minority initiative, the representatives of the parliamentary majority insisted on voting, which again suppressed this type of control mechanism.

What is a minority initiative?

Since 2010, the Law on Parliamentary Oversight in the Field of Security and Defense has recognised a “minority initiative”, i.e. the possibility that once during the regular session of the Assembly, the Committee holds a session at the request of one-third of the members, with one topic on the agenda. Initially, this right applied only to the Security and Defense Committee.

With the amendments to the Rules of Procedure of the Assembly from 2012, this possibility was given to all committees, specifically regarding the use of the supervisory mechanism of the control hearing. Article 75 of the Rules of Procedure then defined that once during the regular session of the Assembly, the committee decides on a control hearing, at the request of one-third of the committee members.

With the amendments to the Rules of Procedure from 2020, the minority initiative has been strengthened, so that instead of once, deputies can use it twice during the regular session.

Initiative for a joint hearing on public procurement in healthcare system

Institute Alternative (IA) sent the Initiative for a joint hearing on the topic of public procurement in healthcare to the Committee for Economy, Finance and Budget, and the Committee for Health, Labour and Social Welfare of the Parliament of Montenegro.

At today’s session of the Committee for Economy, Finance, and Budget, the President of the Committee, Mirsad Nurković, introduced the members of the Committee to this initiative. Member of this Committee and President of the Committee for Health, Labor and Social Welfare Dražen Petrić pointed out that in communication with Nurković, they will agree on the details of the organisation of this hearing.

The goal of the hearing is to obtain more information from all relevant actors, especially in light of allegations about the senselessness of the procedure for public procurement of medicines due to the limited number of bidders in Montenegro.

The immediate reason for this hearing is, among other things, that according to media reports, there are 906 branded medicines on the basic, supplemental, and special regime list of medicines, which are paid for by the Health Insurance Fund, and it is alleged that even 92 percent of the mentioned medicines representative or authorised distributor “Glosarij”, with subsidiary companies “Glosarij CD” and “Medica”.

In its latest report for Montenegro, the International Monetary Fund (IMF) pointed out some of the problems in this area, namely that it is necessary to improve the efficiency of spending in the health sector, and that it is important to limit pharmaceutical expenditures, which reached 2.5% of GDP in 2022.

We remind the public that more than a decade ago, a joint consultative hearing of these committees was held, but unfortunately, there was no conclusion, that is, a joint report with recommendations for solving the problem.

We urge that this hearing be organised with quality preparation that will allow clear recommendations to be articulated for changing policies, regulations, and practices in this area. Institute Alternative is at the disposal of MPs and the services of the Parliament in terms of data on budget spending and concluded procurement contracts.