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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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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.

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IA meetings with prosecutors on corruption in public procurement

Institute Alternative (IA) held a series of closed meetings with representatives of the prosecution, where we discussed the issues and actions of the prosecution in cases related to corruption in public procurement.

Over the past months, we met with representatives of the Special State Prosecutor’s Office, and the basic state prosecutor’s offices in Podgorica and Herceg Novi, who have dealt with cases related to public procurement in their work.

In the closed meetings, we discussed the results achieved so far by the prosecution regarding criminal offenses related to public procurement, the current capacities for conducting investigations and training in this area, the process of conducting investigations, and cooperation with the police and other state bodies.

As a result, IA will prepare an overview of the results achieved so far by the prosecution in the fight against corruption in public procurement.

Meetings were organised as part of the project “Public Procurement Under Spotlight – Making Watchdogs Work!”, which we are implementing with the support of the Embassy of the Kingdom of the Netherlands in Serbia and Montenegro through the MATRA support program. The project aims to empower and motivate budget guardians to fight against corruption and inappropriate influences in public procurement.

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Establishing cooperation: IA meeting with Budget Inspection representatives

On January 26th, Institute Alternative held a meeting with representatives of the Budget Inspection in order to establish cooperation and gain a better understanding of their everyday work.

During the meeting, we discussed our findings regarding the work of the Budget Inspection, the process of planning supervision, and the development of the annual work programme.

We also discussed initiatives we addressed to the Budget inspection, the staffing capacity of the inspection for conducting supervision, as well as legal mechanisms available to inspectors in the fight against corruption.

The meeting was held within the Project “Procurement under spotlight – Making Watchdogs Work!”, which Institute Alternative conducts 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.