IAs’ three recommendations for more efficient oversight of public procurement

The Institute alternative has been monitoring the work of parliamentary committees for years, with a special focus on the work of five committees – for economy, finance and budget, human rights and freedoms, anti-corruption, political system, justice and administration, and security and defence.

We summarised our proposals through certain initiatives to improve the work of the committees, such as holding joint thematic sessions, planning control and consultative hearings and appeals for consideration of key reports. Once again, we paid special attention to the Committee for Economy, Finance and Budget and the need for this Committee to exercise more effective oversight over spending on public procurement. In this regard, we also made three specific recommendations:

  1. Consultative hearing on consideration of the annual report of the Ministry of Finance on public procurement
  2. Consultative hearing on consideration of the recommendations of the State Audit Institution for the improvement of the public procurement system
  3. Control hearing of the ministries with the highest annual expenditure on direct contract procurement

Public procurement area is recognised as at high-risk for corruption in Montenegro. Over 2 billion euros are spent on public procurement during the four years (the duration of the mandate of the parliamentary convocation), while their participation in the total GDP of Montenegro amounts to an average of 10% to 15%. These data point to the need for increased parliamentary control of the public procurement system, which, however, is lacking.

The role of the Parliament of Montenegro in the control of public procurement is limited. This practice is largely conditioned by normative decisions that did not recognise the importance of parliamentary consideration of the reports of key institutions that are responsible for the management and control of public procurement procedures, except for the consideration of the reports of the Commission for the Control of Public Procurement Procedures. The Annual Report on Public Procurement of the Ministry of Finance is considered and adopted by the Government, and the same goes for the report on inspection supervision of public procurement. However, although the competencies currently available to the Assembly are limited to a certain extent, the Parliament could exercise better control over public procurement based on them, as well as the control mechanisms defined by the Constitution and the Rules of Procedure of the Assembly.

The Institute alternative, through active monitoring of public procurement, revealed a significant increase in consumption through direct contract, i.e. direct selection of bidders for procurements worth up to 5,000 euros. These procurements are not carried out through the Montenegrin electronic public procurement system (CEJN) and do not enable competition among bidders, which is why they are particularly risky for corruption. During 2021, some ministries and municipalities spent up to 95% of the procurement budget in this way, which requires special attention from the Assembly. With one of the amendments to the Law on Public Procurement adopted by this Committee in December of the previous year, the threshold for this type of procurement was increased from 5,000 to 8,000 euros. On the other hand, the amendment intended to limit the percentage of this type of consumption was not adopted, thus giving the freedom to have more money at their disposal than before. That is why this topic deserves a consultative hearing by representatives of the Ministry of Finance and institutions that use this mechanism the most. In 2021, among the ministries, and according to the findings of the IA, were the Ministry of Foreign Affairs, the Ministry of Capital Investments, the Ministry of Ecology, Spatial Planning and Urbanism, the Ministry of Health and the Ministry of Economic Development. In this way, these ministries procured, among other things, honey, porcelain coffee set, glasses case, shirts, gold cufflinks, belts, suits, etc., but also goods and services that are typically procured on an annual basis through the open procedure – insurance, airline tickets, software maintenance, washing and maintenance of official vehicles and procurement of auto parts and the alike. IA will continue to analyse this part of spending in 2022 as soon as the information about it is available (from March 1st, 2023) and submit it to the EFB Committee for review as material for the hearing.

The State Audit Institution has been controlling the public procurement of institutions for years and points out problems, both individual and systemic, that require a broader consensus on potential solutions. Therefore, their recommendations are a good guide for detecting problems and determining the direction of further regulation of this area, so we consider it important that the Committee organise a special consultative hearing with a focus on considering the SAI’s recommendations related to public procurement, and the degree of implementation of the given recommendations.

The Committee for Economy, Finance and Budget represents the central place for directing activities in this field, therefore we suggest that this Committee organise individual consultative and control hearings on the mentioned topics.

We strive to improve parliamentary oversight of spending on public procurement through the project “Public procurement under the spotlight – Making Watchdogs Work! “, which aims to empower and motivate watchdogs to combat corruption and undue influence in public procurement. The project specifically aims to enhance dialogue on corruption in public procurement and to encourage institutional response to corruption, as well as to influence the debate on public procurement policy and legislation. The project is implemented with the financial support of the Embassy of the Kingdom of the Netherlands in Serbia and Montenegro within the MATRA Rule of Law program.

Leave a Reply

Your email address will not be published. Required fields are marked *