At the first session of the newly formed Public Administration Reform Council, we offered recommendations for improving the draft of the Programme for Public Finance Management Reform for the period 2022-2026, especially highlighting the need for the public enterprises to be included in this important strategic document.
Since the draft Programme does not address the problem of the public enterprises, while Montenegro Works, which was shut down in August this year, is still presented as a solution to the problem of managing fiscal risks associated to these enterprises, we pointed out that it is necessary to include concrete measures in this area. An additional argument for this lies in the fact that the state-owned enterprises are completely excluded from the Strategy for Public Administration Reform, at the insistence of the then-representatives of the Ministry of Finance and Social Welfare.
We also recalled the fact that the company law is not an adequate legal framework for regulating the work of public enterprises and that the regulation of this area should also be prioritised through public finance management reform.
The programme of the public finance management reform should also clearly answer the question of whether the Registry of Property has been created, because according to the Programme draft, it still needs to be, and according to the Director of the Administration for Cadastre and State Property, it was already completed at the beginning of this year.
The current practice of publishing databases of transactions from the treasury on a monthly basis should be envisioned as an activity that will be improved through the implementation of the Programme, guaranteeing some kind of duty in the absence of a legal obligation.
It is necessary to reconsider the intention of implementing programmatic budgeting at a local level, along with medium-term budgeting, at a moment when these mechanisms, especially programmatic budgeting, do not function even at the central level, and the local level has issues even with the existing, linear system of budgetary classification. We think that there are more urgent problems worth solving. They relate to the tax discipline of municipalities, collection of own revenues, debt management, transparency and rationalisation of expenditures.
The financing of this strategic document is largely donor-dependent, which makes this programme over-relying on the dynamics and procedures of contracting and project implementation. It would be necessary to finance the key segments of the plan, those that relate to the most urgent matters, from domestic funds.
At the Council’s session, we also emphasised the lack of political determination to implement the public sector optimisation, and the need to establish limitations on the frequent reorganisations of ministries—which already represent a large expenditure—through the Law on Government, which is currently a subject of public debate.
Milena Muk
Institute Alternative
