Press release: Misdemeanor Accountability To Be Clearly Established

The public debate on the Draft of Law on Budget and Fiscal Accountability is completed and the Law will, if adopted, replace the systematic Budget Law which is currently in force. According to the Draft of Law, misdemeanor accountability is arranged so that numerous actions remained without prescribed penalty. The authority in charge of misdemeanor proceedings has not been established, given deadlines will make that the misdemeanors will be obsolete and will not be processed and certain penalties are too low and will not deter anyone from abusing the public funds.

The novelty of this Draft of Law in the Budget Law in Montenegro is misdemeanor accountability. In that manner Montenegro will cease to be an exception in the region, the only country which in the systematic Budget Law hasn’t defined misdemeanor accountability. The text of the Draft Law uses every possible legal vacuum, in order to prevent determination of misdemeanor accountability for abuse of public funds in practice.

The Draft Law provides penalties for only 8 misdemeanors, while many other actions remain beyond sanctions. The same law in Croatia envisages even 124 misdemeanor actions. Some of the more obvious omissions are related to non- prediction of penalties for breaching the terms of budget preparation and reporting, management of public funds, cash management, loans and guarantees to local governments and enterprises, and so on.

From the penalty provisions it is not clear who will be supervise the implementation of this Act and of misdemeanor proceedings. Such a legal loophole definitely leads to the situation that we remember from the example of the Law on Public Procurement: when the question of jurisdiction for misdemeanor proceedings remains unsolved until the misdemeanor became obsolete.

The Draft Law does not prescribe a maximum period in which the misdemeanor becomes obsolete. This failure to effectively prevent the misdemeanor procedure continues because the most misdemeanors can be learnt only from the final annual account of the budget, and almost a year after the execution of the budget. If the maximum period in which the starting of the misdemeanor proceedings becomes obsolete is not defined, all proceedings will be discarded due to obsolescence.

Even if by some miracle, misdemeanor proceeding occurs only (amazingly low) financial penalties are provided. The proponent has decided to set minimum fines between 200 and 800 Euros, although the Law on Misdemeanors prescribes penalties of up to 4000 Euros for breach in the field of taxation. In addition to cash, it would be effective to predict the so-called measures of safety for particularly serious breaches of important provisions of the law. This would mean that the perpetrators are punished by permanent or temporary suspension from performance in public finances.

In short, the way the misdemeanor accountability is regulated in the Draft of Budget Law will surely prevent that anyone of being liable for systemic breaches of the norms of this systematic legal act. Therefore, it is necessary for proponent to amend the proposed text of the law, or, finally, for the MPs not to allow these solutions to be adopted.

Here you can download IA’s Commentary on the Draft Of Law on Budget and Fiscal Accountability. (only in Montenegrin)

Policy Analyst

Leave a Reply

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