Press release: The New Law Should Eliminate Previous Failures

The Draft of Law on Budget and Fiscal Accountability does not contribute sufficiently to the improvement of the budget transparency, to the participation of the Parliament in the budget cycle, to the regulation of misdemeanor accountability, and some of its provisions are directly opposite to the Government’s strategic goals.

During the public discussion on the Draft Law, Institute Alternative prepared its Commentary and sent it to the Ministry of Finance. Our main objections to the Draft of Law are related to the participation of the Parliament in the budget cycle, to the need of strengthening the financial independence of the control institutions, to the tendency of overlapping of the systems of internal control of public finances with the regulation of misdemeanor accountability.

The draft of law does not provide consultation and participation of the Parliament while drafting the Strategy of debt management as well as in the preparation of the capital budget. In order to change this situation, the Government should submit a draft of the strategy and capital budget to the Parliamentary Committee for Economy, Finance and Budget to review it and give opinion.

The dynamics of the submission of key budget documents to the Parliament also remains problematic and prevents the possibility of a thorough analysis of the budget proposal and its implementation by the MPs. MPs do not have enough time to review and approve these documents, since their submission is not prompt. We propose that the deadline for the submission of each of these acts move so that MPs have a minimum of three months to review the budget proposal and to discuss the final account of the budget at the beginning of the third quarter of the year.

Adoption of the new budget is the opportunity to finally establish a system of reporting of the Parliament on the execution of the budget during the fiscal year. Accordingly, the Ministry of Finance should submit each six months a report to the Parliament on the Budget. In that manner, Montenegro would cease to be the only country in the region where there is no practice of semi-annual reporting to the Parliament on budget execution.

Our comments are focused on strengthening the financial independence of the SAI, the Ombudsman and the Agency for the Protection of Personal Data, which is directly threatened by the authority of the Ministry of Finance to carry out the correction of the proposals of the annual budgets of these institutions. Therefore, the new law should empower the Parliament to have a final word in determining these proposals, without the intervention of the Ministry.

Introducing the Inspection, provided by the draft, is in contrary to the efforts of the Government to develop a system of internal financial control in the public sector. Instead of establishing new bodies, it would be more effective to show the Government’s determination to strengthen its internal control system in which the legal and institutional framework has already been established.

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

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