Parliament to request the Report on Budget Execution

We appeal to the Ministry of Finance to prepare the report on what was happening with the state budget in the first six months of 2015 and to submit it to the Parliament. It is necessary that the MPs have the data how was the state budget spent based on organisational and functional classification in relation to the plan, before they start amending it.

For the last year, the Parliament has adopted the conclusion by which it has obliged the Government to prepare the report, which was (with the delay of almost a month) prepared and submitted to the MPs. That was the first time that the MPs had this kind of information during the fiscal year. However, MPs didn’t adopt that conclusion for this year. Since the Law does not prescribe this obligation, if the MPs don’t request the report, it will not be submitted.

Since the moment the budget is adopted, Parliament and the Budget committee don’t have any information on its execution during the fiscal year, until the discussion on the final budget account, which is delivered in the September the following year.

The reports prepared and published by the Ministry of Finance throughout the year are not being submitted to the Parliament; neither they contain the data on expenditures by organisational or functional classification, but only aggregated data by economic classification. That means that we do not have accurate information on the budget execution at the level of consumer units or state functions.

International standard in terms of budget transparency is that the Ministry of Finance, apart from the final budget account, prepares and submits various reports on monthly and semi-annual level during the budget execution.

Despite our efforts during the drafting the Law on Budget and Fiscal Responsibility, this competence was not included for the Ministry of Finance. In this respect, Montenegro is an exception in the region because all the neighboring states have regulated mechanisms of submitting semi-annual reports on budget execution to the Parliament.

The need for improving the quality and timeliness of budget reports during the year was noted by the World Bank in its report “Public expenditure and financial accountability“ from 2013, in which this aspect of budget transparency is criticized and evaluated with the worst mark (D).

Two proposals for amending the national budget are currently in the parliamentary procedure. (2) Prior to any amendments of the annual budget, it is necessary that the MPs have an overview of how the budget was spent in the last six months.

Marko Sošić

Public Policy Researcher

(1) OECD Best Practices for Budget Transparency

(2) Proposal of SNP – Socialistic People’s Party (Aleksandar Damjanović), proposal of SDP – Social Democratic Party (Banović, Bralić, Vuksanović, Šabović)

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