Financial Independence of the SAI and Implementation of its Recommendations

Questions of the reporter from the daily newspaper Dan:

1. Is there any possibility for an increase of the SAI’s budget?
2. Why the adoption of the changes to the Law on SAI has been postponed?
3. In your opinion, in which way the implementation of the SAI’s recommendations can be improved?

Answers of IA’s associate, Marko Sošić:

The smooth development and strengthening of the SAI is indirectly caused by the ensuring this institution’s independence, and by the change of the legal framework, which defines the way the SAI’s budget is formulated and adopted and other issues with respect to the independence in fund management and independence in human resource management.

The current legal solution allows the Ministry of Finance to randomly change the budget proposal filed by the SAI’s Senate and previously approved by the parliamentary Committee for Economy, Finance and Budget. It thus directly endangers the further development of the SAI.

For example, the budget which the Ministry of Finance approved for SAI’s work in 2012 is 20 percent lower than the budget proposed by the SAI and endorsed by the Committee for Economy, Finance and Budget.

Deliberation about this year’s budget made clear that the Ministry does not pay enough respect to the significance of the SAI, which would be demonstrated if the budget the SAI had asked for was approved. Besides the negligence of the SAI’s position, it appears that such attitude of the Ministry reflects the lack of political will for strengthening the independence and work of the SAI.

We remind that, apart from many other competences, the amendments to the Law on Party Financing assigned the SAI competences and duty to revise the financial reports of political parties. This expansion of competences was not followed by the increase of the budget. As a result, the SAI has to accomplish more while having the same amount of money or less money than in the previous years.

Adoption of the draft amendments to the Law on the SAI is a key prerequisite for the significant increase of the SAI’s budget in the upcoming period.

The draft amendments to the Law on the SAI entered parliamentary procedure in September 2011. The key novelties, brought by the draft amendments, aim at increasing the SAI’s organizational, functional and financial independence from the executive power. Their adoption, however, is hampered after the Committee for Constitutional and Legal Affairs issued negative opinion about the constitutionality of provisions, treating the SAI’s financial independence.

Additional effort is needed for the suitable solution to be found, which would be in line with the Constitution, while simultaneously offering higher level of the SAI’s financial independence from the executive power.

Institute Alternative launched an initiative in front of the Committee for Economy, Finance and Budget and Committee for Constitutional and Legal Affairs for holding consultative hearing on the issue of constitutional and legal framework of the SAI’s financial independence. By bringing to the table experts and representatives of relevant institutions, The initiative tries to build a consensus about the key solutions and create conditions for final adoption of the amendments to the Law on SAI.

The fact is that the draft amendments have been filed by the MPs themselves – members of the Committee for Economy, Finance and Budget. Therefore, they should employ all the mechanisms envisaged by the Parliament’s Rules of Procedure in order to find a solution to the current problem.

The audit subjects should take over the responsibility for the implementation of the SAI’s recommendations. Also, the Ministry of Finance, under the watchful eye of the Parliament, should take the responsibility for horizontal implementation of the SAI’s recommendations in the public sector.

The Committee for Economy, Finance and Budget, in cooperation with the SAI, should organize a thematic session or a consultative hearing to familiarize the audit subjects with the current degree of the implementation of the SAI’s recommendations, which are subsequently adopted as the parliamentary conclusions. This hearing, however, has been frequently delayed since the first half of the 2011.

The law should oblige the audit subjects to report about the activities they undertook in implementing the SAI’s recommendations. Yet, such provision still exists only in the draft amendments to the Law on the SAI, whose adoption is still pending.

The Brief Comment on Strategic Plan of the SAI’s Development

Institute Alternative presented the research report “The State Audit in Montenegro – Proposals for Strengthening the Impact” in 2010. We are pleased that The Strategic Plan of the SAI’s Development for the period between 2012 – 2017 incorporated significant number of our proposals. We also welcome the thorough approach of the SAI during the preparation of this strategic document. Self-assessment and external evaluation were significant efforts which resulted in a good text – the live document, systematizing measures aimed at removing the current deficiencies and problems, spotted by the SAI and its external subjects.

Representatives of other institutions, such as Parliament, Government, and civil society organizations should have also been included in the process of the SAI’s strategic planning, especially because the plan itself includes number of measures whose implementation is dependent precisely on the attitude of the afore mentioned institutions and organizations. In other words, for the SAI’s strategic plan to be implemented, Constitution, the Law on the SAI, the Law on Civil Servants need to be changed. Also the cooperation mechanisms with the Parliament, repression institutions, NGOs, academic institutions etc, need revision. We think that the wider consultations would results in a more concrete Strategy, more sustainable and realistic solutions, and possibly the new energy and innovative approach towards the certain development goals.

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