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E-Government Development: Weak Systems Despite Years of Investment

Software for State Asset Management was paid for a decade ago but was not developed according to specifications. Hackers allegedly “locked” the Open Data portal, prompting the Ministry of Public Administration to create a third version. The government is also developing a new electronic document management system because the old one does not support upgrades. LARIS, the Local Revenue Administration System, is still not used by all municipalities.

Registry Paid for, Then Abandoned

After nearly 15 years of ignoring regulations, in May last year, an inventory of land and buildings owned by Montenegro was completed, and an electronic database, the State Property Registry, was established. The software for this registry was paid for in 2014, costing nearly 200,000 euros, but the registry is still not functional as originally intended.

The inventory of state property does not yet include information about its value.

The State Property Registry has been a legal obligation established by the State Property Law since 2009. One of the requirements was the acquisition of an integrated information system for unified records of state property, with the goal of having an accurate overview of the status of all assets at any given time, both overall and by individual bodies, and to enable fast and efficient management of accurate and complete data.

For this task, the private company “Atos” from Belgrade, as the only bidder, was engaged following a tender issued in late October 2014. The Belgrade company was paid 199,800 euros for this job, and the deadline for fulfilling the contractual obligations was September 2015.

Koča Đurišić, who was the Director of the Cadastre and State Property Administration, said to “Vijesti” in March last year that upon taking over the Administration, he found nothing that the law required regarding the registry and that the software from 2014 “never became operational.”

Reports from the State Audit Institution (DRI) show that the system was not established as stipulated in the contract and that the Ministry of Finance did not sign any annexes to the contract after the deadline for fulfilling contractual obligations expired. In the final report on the audit of the management of the State Property Registry from 2023, the DRI noted that “the integrated information system SAP FI-AA module, by the completion of the audit process or June 2023, had not been established as defined in the project description and specification, which are part of the contract, and it was not possible for the Cadastre and State Property Administration and state bodies to operationally use it to the intended extent.”

Activities to improve the functionality of the IT solution for managing state property and the quality of data are planned as part of the Public Finance Management Reform Programme for 2022-2026. For this purpose, 500,000 euros from the Budget are allocated.

Open Data “on Pause” for Nearly Two Years

Over 33,000 euros have been invested since 2017 in the creation and maintenance of the Open Data Portal (data.gov.me), but no new data sets have been published since May 2022.

For various tasks—development, maintenance, and vulnerability analysis of the portal—three contracts were signed, the last one in 2021. However, since May 2022, nothing has happened on the data.gov.me website.

The Ministry of Public Administration has meanwhile announced the development of a new portal and stated that the ministry has expert assistance from Canadian experts hired by the National Democratic Institute (NDI) for this project. While no concrete decision has been made, the ministry mentioned in its response on February 22 that the project is in its initial phase.

“There is no concrete decision regarding the development of the portal because the need for the Open Data Portal arises from a large number of strategic documents that are part of the official policies of the Ministry of Public Administration,” said the Ministry.

The deadline for completing the new portal, they added, is by the end of the fourth quarter of this year.

The first contract, for the establishment of the Open Data Portal, was signed in 2017 with the company “Smart Tech” from Podgorica. The data.gov.me portal was presented in July of the following year.

The contract, valued at 14,042 euros (with VAT), was signed by the Secretary of the Ministry of Public Administration (MJU), Vesna Ćalović.

Two years later, the same firm was hired for the enhancement and maintenance of the portal for 14,497 euros (with VAT). The new contract was signed by the then-minister Suzana Pribilović.

In the documentation provided to the editorial team following a Freedom of Information (FOI) request, there is also a third contract signed in 2021 by the then-Minister of Public Administration, Digital Society, Culture, and Media, Tamara Srzentić, with the firm “Codingo.” The contract, as stated in the documentation, involved vulnerability analysis services for the Open Data Portal, including security improvements and addressing identified vulnerabilities. For this task, the firm “Codingo” was paid 4,501.20 euros (with VAT).

The Ministry, led by Maraš Dukaj in both the current and previous government, stated that this contract was concluded after “CEED Consulting” Ltd. from Podgorica conducted research for the ministry to identify the key deficiencies in the portal’s operation.

“As well as the missing sets of frequently used open data, clearly distinguishing between open data and data and information obtained in accordance with the Freedom of Information Act. Since it was not possible to redesign the portal, a new one was developed within the project, and the new portal was published on May 26, 2022, and configured on the MJU’s production server. It operated until the cyber-attack in late August 2022,” they explained.

However, the last data sets on data.gov.me were published three months before the cyber-attack. The Ministry of Public Administration did not explain what happened during those three months—why there were no new entries from May to August 2022.

According to data shared by the MJU after the cyber-attack, until that critical event, 20 institutions had published 197 data sets in 15 areas on data.gov.me. Although still publicly accessible, the Open Data Portal is non-functional and even offers a user registration option. When asked what this registration is for and how many users have registered, the Ministry of Public Administration briefly replied: “We do not have that information.”

Documents in Paper Still in Effect

For licenses and maintenance of the Electronic Document Management System (eDMS), according to contracts on the public procurement portal (cejn.gov.me), over 678,500 euros have been paid from 2017 through 2022.

These contracts were awarded to firms such as SRC System Integrations from Belgrade, as well as S&T Montenegro, Digit Montenegro, and Čikom from Podgorica.

A new contract was signed with Čikom in October last year, valued at 429,550 euros (including VAT). This contract was for the development and maintenance of the eDMS system, as well as for managing the process of electronic government sessions in Montenegro.

The Electronic Document Exchange System, as mentioned in annual reports from the Ministry of Public Administration and in the Montenegro Digital Transformation Strategy 2022-2026 from December 2021, is one of the key government services aimed at improving business processes by gradually transitioning from paper to electronic document management.

The goal of implementing this system was faster information exchange, reduced paperwork, and increased security in document storage.

The project was initiated by the then Ministry of Information Society and Telecommunications, led by Vujica Lazović, in October 2009, and the eDMS system was established in 2011.

According to the Information on eDMS approved by the Government in December 2023, the system has been implemented in 23 institutions.

The same document also states that the eDMS and the systems for managing electronic government sessions and digital document signing “operate on outdated platforms for which support has expired and which cannot be upgraded.”

“For this reason, new systems will be established, based on the most advanced technologies and in accordance with the best global practices and international standards governing this field and information security,” the document states.

The Government also mentioned in the same report that the establishment of the new system is planned for the first quarter of 2024.

LARIS Useful but Not Mandatory

In 2019, the Association of Municipalities and UNDP began working on the “Efficient and Transparent Local Self-Government” project, which developed LARIS, an integrated local revenue administration system.

UNDP issued a public call for the software development in May 2020, and the job, worth 148,725 euros, was awarded to the company “E Smart” from Serbia.

The Association of Municipalities stated that they engaged in the project “primarily because the State Audit Institution (DRI) had repeatedly pointed out the shortcomings of the municipalities’ software.”

When asked about the number of municipalities using LARIS, they did not provide precise data but stated that most municipalities use the software in full, some use it partially, and a few do not use it at all.

“This is because some municipalities had developed their own software previously. A unified software is not yet a mandatory requirement, but rather a matter of decision for each municipality and adherence to DRI’s recommendations,” they noted in their responses.

The DRI’s 2021 report on the thematic audit “Collection and Recording of Own Revenues in Local Self-Governments” indicated that special software used by some municipalities does not allow for the recording and separation of local public revenues by year and that in some municipalities, the software does not exist at all, with revenues recorded in Word or Excel.

“After reviewing the functionalities of LARIS, the DRI recommended all municipalities to use LARIS to simplify and improve the tax procedure, facilitate communication, and reduce taxpayer costs,” the DRI report states.

The Association of Municipalities said that this recommendation was accepted by some municipalities that had not used LARIS before. For instance, during 2023, the Municipality of Ulcinj became a user, while the Municipality of Bar showed interest in using the most modules.

Questions about whether they use LARIS were sent to all local self-governments. Responses were provided by the municipalities of Bijelo Polje, Cetinje, Rožaje, and Tivat.

Based on the responses, municipalities that use it are satisfied with the software, although they use it in different ways. They also mention that the software allows for networking with other public registries, which is important for calculating local revenues.

Tivat Offers Online Tax Payments

Among the municipalities using LARIS that provided a response, only Tivat offers citizens the option to pay services online.

“It is possible to pay property tax, tourist tax, and road fees online, but this does not rely on the LARIS programme. We will attempt to improve the online payment system in cooperation with LARIS in the future,” said the Municipality of Tivat.

The Municipality of Bijelo Polje stated that there is no interest from citizens for online payments.

“As for online payments, we do not practice them yet due to the lack of interest from citizens, as they prefer to make payments at our cash desk or with field workers responsible for collections,” said the Bijelo Polje Municipality.

The Municipality of Cetinje mentioned that online payment would be desirable and that it would be beneficial to connect the system with the electronic personal ID card (eLK) issued by the Ministry of the Interior for the past three years.

The Capital City did not respond to questions about the use of the LARIS system. A review of the platform, after login, shows that the online payment button exists but is not functional.

In the Information on the status of the project “eServices and Digital Infrastructure as a Response to COVID-19,” which was adopted by the Government on December 21 last year, it is mentioned that online property tax payment with the Capital City has been halted “until certain challenges arising from organisational changes at both local and central levels are overcome.”

Additionally, through the LARIS system of the Capital City, although the option exists for property tax, an electronic version of the solution cannot be obtained.

An electronic version of the solution can be obtained upon request via email.

For various activities carried out under the project “eServices and Digital Infrastructure as a Response to COVID-19,” the United Nations Development Programme (UNDP) in Montenegro, with the support of the European Union, allocated about 824,000 dollars over three years.

The project started in January 2021 and will end at the end of this year. By the end of last year, 622,880 dollars had been spent.

According to data from the UNDP Montenegro website, 92,875 euros were paid in 2021 for consulting services from CEED, which conducted the analysis of the Open Data Portal.

This investigative article was produced within the Project “Procurement under spotlight – Making Watchdogs Work!”, with the support of the Embassy of the Kingdom of the Netherlands in Serbia and Montenegro within the MATRA Rule of Law program. Project aims to empower and motivate watchdogs to combat corruption and undue influence in public procurement.

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IA proposals for the improvement of the Work Plan of the Anti-Corruption Committee

After the meeting with the President of the Anti-Corruption Committee, today we have submitted written proposals for the improvement of the Work Plan of this Committee for 2024.

-We emphasised the importance of utilising the mechanism for reviewing quarterly reports of Agency for Prevention of Corruption, as well as periodic review of the results of the Supreme State Prosecutor’s Office and the Special State Prosecutor’s Office in the fight against corruption.
-It is necessary for the Parliament to institutionalise the consideration of citizen’s petitions, as well as enhance its legislative function by independently or jointl reviewing draft laws that are significant for the overall fight against corruption.
-Since 2014, Montenegro has lacked a strategic document in the field of anti-corruption, and action plans for Chapters 23 and 24 were formulated over a decade ago. Therefore, is it particularly important for the Committe to take a more active role in the long-awaited development of the Anti-Corruption Strategy.
-The Committee should consider the final report and recommendations based on the evaluation of the implementation of the United Nations Convention against Corruption (UNCAC), especially considering that is the only legally binding international anti-corruption multilateral treaty.
-The Committee should organise a consultative hearing to discuss the previous results of the work of the Anti-Corruption Department within the Ministry of the Interior, established in 2022. Among the responsibilities of this unit is, among other, monitoring the work within the ministry, including monitoring the assets, income, and lifestyle of police officers.
-Considering the underestimated role of inspections in preventing corruption and fighting against it, there is room for a more active role of the Committee in relation to processes in this area.

IA Team

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Public Enterprises: A Task for Budgetary Inspection

On July 21, 2023, Institute Alternative submitted an initiative for the inspection of companies owned by the state and local government units regarding the violation of the Law on Salaries of Employees in the Public Sector.

Article 10 of the Law on Salaries of Employees in the Public Sector stipulates that companies owned by the state and local government units that incurred a loss in the previous year are required to reduce the total salary fund by 10% in the first year and an additional 5% in the following calendar year.

Based on publicly available data (financial reports of these enterprises available in the public records of the Revenue and Customs Administration), it is clear that some companies did not comply with this provision of the law, did not reduce the salary fund, and in some cases, significantly increased it. This applies to 21 companies at the central level and 48 companies at the local level (owned and/or founded by the local government).

Our initiative was included in the Budgetary inspection oversight plan that was adopted in January 2024 and officially published on the website of the Government of Montenegro on February 7, 2024. The work plan includes an overview of the subjects of supervision, areas of supervision, the time period of the oversight, and the schedule of the inspection for each inspector individually. In addition to planned regular oversights, Budgetary inspection will also conduct extraordinary inspections as ordered by the minister and based on reports, initiatives, complaints, and requests for inspection.

List of companies where violations of Article 10 of the Law on Salaries of Employees in the Public Sector have been registered.

Text was created within the project “Civil Society for Healthy, Effective, Sustainable, and Transparent Public Enterprises (BEST SOEs),” supported by the European Union, with co-financing from the Ministry of Public Administration. The content of the text is the sole responsibility of the Institute Alternative and does not necessarily reflect the views of the European Union and/or the Ministry of Public Administration.



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IA representatives met with the President of the Anti-Corruption Committee

Milena Muk and Bojana Pravilović, representatives of Institute Alternative, presented proposals for improving the work of the Anti-Coruption Committee to the President of this working body, Jevto Eraković, at today’s meeting.

For years, Institute Alternative has been monitoring the work of the Parliament and its committees, and on this occasion, we have pointed out some of our recommendations that we advocate regarding the Anti-Corruption Committee, such as: renewing the initiated practice of reviewing quarterly reports on the work of the Agency for Prevention of Corruption, as well as utilising the opportunity for periodic review of the results of the Supreme State Prosecutor’s Office and the Special State Prosecutor’s Office, in the fight against corruption in accordance with the amendments to the Law on the State Prosecutor’s Office from 2021.

We also emphasised the need for the Anti-Corruption Committee to take a more active role in relation to the long-awaited development of the Anti-Corruption Strategy, as well as the consideration of reports and recommendations based on the evaluation of the implementation of the United Nations Convention against Corruption (UNCAC).

Considering the importance of the anti-corruption role of inspections, we announced that Institute Alternative will soon publish the results of our research on the effects of inspection services in high-risk corruption areas, which could be a stimulus for more effective parliamentary oversight in that area. We also reminded that the Anti-Corruption Unit has been active within the Ministry of the Interior for over a year, the results of which both the Parliament and the Committee can and should more proactively engage in considering.

Additionally, based on our recommendations, as well as the criticisms stated in the European Commission’s progress reports for Montenegro, we highlighted the need for the Parliament to institutionalise the consideration of petitions within Committees. Citizens have access to a form for submitting petitions, but there is a lack of definition of procedures and deadlines within which committees must consider them and provide a response.

IA Team

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Without an HR plan, There is no Precise Data on the Police Directorate’s Personnel

It has been a month since the 2024 budget was adopted, so the Ministry of the Interior and other state bodies should already have prepared HR plans for the current year. The HR plan is an important document as it provides an overview of the number of employees in the ministry, including the Police Directorate, planned hiring, and projections on the number of those retiring.

There has been much public discussion about the large number of police officers who will retire under favourable conditions, and how Montenegro will face a shortage of police personnel. However, precise data is not available in public documents, and the personnel plan, which should offer insight into such data, has not been prepared for three years. At the beginning of December, Institute Alternative called on the Ministry of the Interior to start preparing this document on time and fulfill its legal obligation.

On the other hand, we do not have precise data on the number of employees. The number of employees is not included in the Ministry’s annual reports, nor is it found in key strategic documents, such as the “Human Resources Management Strategy in the Police Directorate 2019-2024” and the “Police Directorate Development Strategy 2023-2026.”

To make an overview of employees over the past six years, we had to consult five different sources. According to available data, the number of employees in the Police Directorate has varied from year to year, with the highest number of employees recorded in 2021. However, it is not known which positions experienced an increase, and whether it involved police personnel or an increase in administration. The list of employees provided to Institute Alternative does not cover the total number of employees in certain organisational units of the MUP, as these are classified, meaning the actual number of employees is higher than stated in the table.

According to the internal organisation and systematisation regulations of the Ministry of the Interior and the Police Directorate, which are publicly available, the number of positions has increased year by year. However, even these regulations do not provide complete data, as information for certain organisational units of the Police Directorate is classified.

Data sources: Plan for increasing the number of police officers for 2018, personnel plans of the Ministry of the Interior and the Police Directorate for 2019 and 2020, European Commission’s Report for 2021, list of employees for 2022 and 2023 obtained through the right to free access to information, and the Government’s Information on the overview of the situation in the Ministry as of October 2023.

Organisational units for which the number of systematised positions is unknown: Department for Special Investigative Methods, Department for Witness Protection, Department for Criminal Intelligence, Group for Combating Arms and Explosives Smuggling and Crimes Against Other Goods Protected by International Law, Financial Intelligence Sector, and part of the Counterterrorism Unit.

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Flights of ministries below the radar: Direct procurement of airline tickets

Some ministries evade the obligation to initiate a public procurement procedure for airline tickets for official travels, even though they spend more than 5,000 euros annually on them. As a result, they directly and non-transparently transfer the money to travel agencies through direct agreements.

In 2022, the Ministry of Science and Technological Development allocated more than 11,000 euros for airline tickets without signing a contract, as required by the Law on Public Procurement. A similar situation was noted the previous year at the Ministry of Ecology, Spatial Planning, and Urbanism, which, without a procurement contract, paid the same agency 7,516 euros for airline tickets and accommodation based on four invoices in just one month.

The Law on Public Procurement allows for the possibility of a direct agreement or direct procurement, which can be concluded for amounts up to 5,000 euros, excluding VAT. As of January 2023, the amended law stipulates that this method can be implemented if the annual procurement value for the same purpose is up to 8,000 euros. Simple procurement of goods, services, and works through the direct selection of a specific supplier, with the acceptance of a proforma invoice/invoice, fiscal receipt, or contract, is not mandatory to conduct through the Montenegrin Electronic Public Procurement System (CEJN).

Invoices provided upon request for free access to information to the Institute Alternative indicate that some ministries have violated the Law on Public Procurement, and also divided the subject of public procurement of airline tickets, disregarding the annual procurement value estimation.

Although millions of euros are allocated annually for airfare costs at the level of the government, those procurement are not often the focus of special inspection controls by the Public Procurement Inspection and the State Audit Institution (SAI).

Procurement without tenders justifying with cyber attacks

In 2022, the Ministry of Science and Technological Development allocated more than 11,000 euros for airline tickets for official travel through direct negotiations with agencies, which later invoiced the expenses.

During October, November, and December 2022, the Ministry paid 6,759.76 euros to a tourist agency based on invoices, although it was obliged to conduct the procedure through the electronic system of public procurement. In response to the draft of the research, this Ministry explained that in the last quarter of that year, they continued the realisation of official trips in the same manner as in the June-September period. They also claim to have carried out only necessary trips, in a highly rational and economical manner.

The Ministry admits that they did not have a signed contract for the procurement of organising official trips in 2022. They claim that the reasons for not signing the contract are multiple – a cyber attack on the information infrastructure of the state administration in August of the previous year, budget rebalancing dates, as well as the fact that they were established only in May 2022, with a “very small amount allocated for official travel”.

In this Ministry, they claim to have individually requested bids for airline tickets and accommodation from several travel agencies for each trip, asserting that they selected the most cost-effective offers. However, they are not obligated to document this process, so we must take their word for it. Despite the Ministry’s claims, the report on direct simple procurement for this year indicates that only one bid was received for these procurement.

Similarly, the Ministry of Ecology, Spatial Planning, and Urbanism did not have a procurement contract for airline tickets in 2021. Through direct negotiation, this ministry spent 41,700 euros without VAT on airline tickets and hotel accommodation in 2021. In December 2021 alone, they paid 7,516 euros to one travel agency for airline tickets and accommodation, based on four invoices. By doing so, they violated the Law on Public Procurement, as they were required to conduct the procurement through the Montenegrin Electronic Public Procurement System (CEJN) before traveling. The inspection found that the Ministry of Ecology, Spatial Planning, and Urbanism committed a serious violation by dividing the subject of the public procurement, but no violation proceedings were initiated due to the passage of time.

“Upon reviewing the documentation and the Montenegrin Electronic Public Procurement System (CEJN), it was determined that for the mentioned services in 2021, no procurement procedure was conducted, and no contract was concluded. Instead, the services were realised through the direct acceptance of invoices, contrary to Article 27, paragraph 2 and Article 27, paragraph 3, and a violation of Article 211… However, due to the passage of time, no violation proceedings will be initiated,” stated the public procurement inspection resolution, initiated upon the initiative of the Institute Alternative.

According to the Law on Public Procurement, fines for this violation for legal entities range from 5,000 to 20,000 euros.

The Ministry of Ecology, Spatial Planning, and Urbanism confirmed that in 2021, during Minister Ratko Mitrović’s tenure, they did not have any contracts concluded based on which they invoiced the costs of airline tickets.

Through direct agreements, 90,000 euros were spent

Most ministries purchased airline tickets for official travel using the mechanism of direct agreements. Out of the 12 analysed ministries, eight procured airline tickets using this method instead of conducting the service through a simple procurement or framework agreement. Both procedures involve publishing calls on the CEJN website, allowing all eligible agencies to participate as bidders through a transparent procedure, and providing avenues for complaints if dissatisfied with the outcome.

During 2022, eight ministries spent over 90,000 euros through direct agreements on airline tickets.

The Ministry of Economic Development procured airline tickets from eight different agencies in the past year, totaling 43,000 euros, which is more than half of the total amount (85,147.45 euros) allocated for simple procurement below 5,000 euros.

The Ministry of Ecology, Spatial Planning, and Urbanism spent 15,000 euros on airline tickets, while the Ministry of Science and Technological Development spent close to 11,000 euros with three agencies. According to invoices, the Ministry of Labor and Social Welfare spent 10,000 euros, while the Ministry of Human and Minority Rights spent over 7,000 euros, and the Ministry of Foreign Affairs spent 5,000 euros.

 

 

Fines for dividing procurement subjects

During 2022, the Inspection for Public Procurement determined that in 11 cases, the subject of public procurement was divided to avoid the application of the Public Procurement Law and the issuance of an open procedure.

According to responses from the Administration for Inspection Affairs (AIA), 366 simple public procurement were inspected, including the division of the procurement subject to bypass transparent procedures. Twenty-three irregularities were found, nearly half of which involved the division of the procurement subject. As a result of these irregularities, the inspection imposed 18 fines totaling 25,050 euros and filed nine requests to initiate misdemeanor proceedings.

In the previous year, 361 simple procurement were inspected, and 36 irregularities were identified, 12 of which related to the division of the procurement subject. AIA stated that they imposed 32 fines by issuing misdemeanor orders totaling 52,800 euros.

This inspection also monitored the procurement of airline tickets, primarily focusing on the fact that contracting authorities do not keep records according to procurement subject descriptions due to the large number of procurement subjects and variations. It was observed that some government bodies procure airline tickets and hotel accommodation, while others only purchase airline tickets, and some seek services from travel agencies for official trips, and so on.

This investigative article was produced within the Project “Procurement under spotlight – Making Watchdogs Work!”, with the support of the Embassy of the Kingdom of the Netherlands in Serbia and Montenegro within the MATRA Rule of Law program. Project aims to empower and motivate watchdogs to combat corruption and undue influence in public procurement.