PIFC Development in Montenegro – Civil Society Standpoint

The process of the PIFC introduction in the public finance system of Montenegro is in a critical juncture. The period of rounding up the legal framework has been completed and the key primary and secondary legislation has been adopted. We still cannot address the results of PIFC system, because the implementation of the adopted legal framework delays or takes place very slowly. The key reasons rest in the fact that this is an extremely complex and demanding reform process, representing, to the greatest extent, a new concept for the national administration. Furthermore, this is a huge undertaking in terms of required funds, human resources and necessary knowledge and expertise.

The Ministry of Finance for 2012, has ranked the PIFC function and capacity strengthening in the five top priorities, recognizing that the investment in internal control system, in times of the economic and financial crisis, may generate beneficial effects triggering the sound functioning of public finance, simultaneously providing a significant cost rationalization, or savings in the long run.

What lies ahead in the future is to confront with serious challenges such as the full implementation, human resource training, filling systematized vacancies with qualified personnel, strengthening the CHU capacities, etc. Above all, however, it is necessary to carry out the substantial reforms of both the public administration and the public finance management system, which will lead to a greater degree of managerial responsibility, confidence in the operation of internal controls and generally create a comprehensive understanding of the benefits that an effective PIFC system can bring.

2007 PIFC Strategy will cease to effect during this year. Having in mind the fact that the new Strategy will be developed, the objective of this research paper of the Institute Alternative is to provide a contribution from the civil society perspective, as well as to pursue in providing an objective review of the current status of play of PIFC introduction, with the recommendations for the future development directions and specific problems that need to be addressed.

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