Improved Anticorruption Policies (ME0062)

Improved anticorruption policies
Commencement and completion dates: January 2019 – December 2019
Responsible institution The Union of Municipalities MoF The Tax Administration The Chamber of Economy
Commitment
The issue at stake Given the lack of transparency, citizens have problems in understanding budgeting processes at the local and the national levels. This is further aggravated by the fact that for the time being only annual budgets and final accounts are being published, having a negative bearing on three pillars of budget accountability: transparency, oversight and public participation. Citizens are not familiar with budget policies and the ways how central and local level budgets are planned and spent. The lack of information concerning whistle-blowers, the legal theory and practices in their protection and potential misuses indicate the need for further awareness-raising activities to make the institutions, staff, interested parties and citizens better informed on the matter.
Commitment In line with the OGP principles, budget transparency may prove to be a significant step forward in overall openness of institutions and open new scope for interactions with citizens.
Opening of budgets poses a particular challenge in the context of public participation in policy development, implementation and monitoring. In reference to his, this measure is expected to address in quite a simple manner the need of citizens and target groups to have a more direct insight into financial performance of municipalities and country at large. This will enable continuous broader assessments and analyses of public finance management efficiency and cost-effectiveness. A functional portal with easily searchable databases and sets of data providing insights into specific sections of the budget is an appealing and efficient channel for familiarisation with the decisions on revenue collection and allocation. Development of budget brochures for citizens and of brochures on whistle-blowers fall under public education and information activities to raise awareness of transparency and accountability among individuals, institutions and society at large.
How will it help address the issue
The delivery on this commitment will make budgets more credible. The “Open Budget” portal will provide overviews of local and central budgets, in line with transparent financial management rules, providing graphic presentations of financial statements, presenting debts and liabilities by type, etc., together with the possibility for giving comments. Thus, members of the public and entities interested in public finance will have an easily accessible and understandable database using infographics and generating various types of data for different sections of the budget, and information on budget outlays. Moreover, the data will be provided in such a manner to allow further processing. Promotion and awareness raising of the importance of whistle-blowers in a society, together with a comparative overview of legal provisions and practices of more developed democracies will be one step towards addressing the issue stated above.
Its relevance to OGP values
The delivery on this commitment is relevant for fiscal responsibility, transparency, availability of information, citizen participation in monitoring local public spending in a systematic and functionally sustainable manner and overseeing the work of institutions in line with the principles of ethics and accountability.
Additional information Compatibility with SDGs Reference to SDG 16: ‘Pease, Justice and Strong Institutions 16.6 – Develop effective, accountable and transparent institutions at all levels
BUDGET €19,500
Actions with verifiable results and implementation dates
6.1. Visual presentations of state and local budgets – €10,000 - Annually update visual presentation of the country budget http://budzet.sntcg.com/ - post visual presentations of local budgets at their respective webpages similarly to the presentation at http://www.mojgrad.me
6.2. Budget for Citizens brochure – €5,000 - Based on the template to be developed by the Union of Municipalities, local selfgovernments will prepare brochures presenting local budgets suited to citizen needs to be used during public consultations and posted on their respective webpages
6.3. Comparative review/study on whistle-blower protection – Whistleblower Cases – €4,500
- the study in place with recommendations for further improvement of the legal framework for governing reports made by whistle-blowers, procedures as per reports, procedures as per requests for whistle-blower protection, etc.
Points of Contact
Responsible person in the implementing entity Igor Pavićević, the Institute of Chartered Accountants, Mitar Bajčeta, the Chamber of Economy
e-mail / phone [email protected]

6. Improved anticorruption policies

Language of the commitment as it appears in the action plan:

“In line with the OGP principles, budget transparency may prove to be a significant step forward in overall openness of institutions and open new scope for interactions with citizens.

Opening of budgets poses a particular challenge in the context of public participation in policy development, implementation and monitoring. In reference to his, this measure is expected to address in quite a simple manner the need of citizens and target groups to have a more direct insight into financial performance of municipalities and country at large. This will enable continuous broader assessments and analyses of public finance management efficiency and cost-effectiveness.

A functional portal with easily searchable databases and sets of data providing insights into specific sections of the budget is an appealing and efficient channel for familiarisation with the decisions on revenue collection and allocation.

Development of budget brochures for citizens and of brochures on whistle-blowers fall under public education and information activities to raise awareness of transparency and accountability among individuals, institutions and society at large.”

Milestones:

6.1. Visual presentations of state and local budgets

6.2. Budget for Citizens brochure

6.3. Comparative review/study on whistle-blower protection Whistle- blower Cases

Start Date: November 2018                                                            

End Date: December 2019

Context and Objectives

This commitment addresses budget transparency and whistleblower protection. It calls for visual presentations of the state and local budgets and publishing citizen brochures. It also proposes a comparative study on whistleblower protection to provide recommendations for the legal framework.

A framework to implement program budgeting has been in place in Montenegro since the 2018 Public Financial Management action plan. [19] However, its implementation remains behind schedule because line institutions do not proactively publish budget information and there is no mechanism to ensure quality checks of published data. [20] Furthermore, Montenegro does not participate in the International Budget Partnership’s Open Budget Index survey, making it difficult to establish a baseline of what budget areas need improvement. [21]

Montenegro’s 2014 Law on Prevention of Corruption includes provisions to protect whistleblowers in the public and private sectors. [22] However, the European Commission has noted that results remain limited, with a continued decrease in requests for protection of individuals reporting threats to the public interest. [23] Several high-profile whistleblower cases attracted media attention in recent years, which caused public authorities to engage in a variety of citizen awareness-raising campaigns. [24]

The commitment is verifiable, as most of its milestones provide specific activities and a timeline for implementation (such as an annually updated visual presentation of the national and local budgets and the development of a citizens brochure). However, Milestone 6.3 (comparative study on whistleblower protection) could be more specific, as it is not clear how this study will inform the current legal framework.

The commitment is relevant to access to information and public accountability. The visual presentation of the national and local budgets can inform citizens about the budgetary cycle. Furthermore, the citizens brochures for local governments (Milestone 6.2) can help citizens better understand local budgets. It should be noted, however, that Montenegrin regulations and practices only allow citizens to participate in public budgeting at the local level and not at the national level.

Regarding whistleblower protection, it is not clear what changes are expected after the preparation of the comparative study under Milestone 6.3. Notably, however, this is the only activity in the action plan that will be implemented by an NGO (Institute of Certified Accountants). [25] According to a representative of the Institute of Certified Accountants, Montenegro aims to adopt the provisions of the EU’s 2019 Directive on Whistle-blower Protection, which will cover all legal entities (state owned and private) with more than 50 employees. [26]

Together, the activities under his commitment could have a moderate potential impact, particularly on budget transparency at the local level.

Next steps

Moving forward, the IRM recommends continuing to focus on budget transparency and whistleblower protection, but as two separate commitments. The government could consider the anticorruption proposals from Operations Team members [27] such as expanding opportunities for parliament and the public to scrutinize the budget, and improving participatory budgeting. Also, the European Commission notes that line institutions still do not proactively publish budget information, and that mechanisms could be put into place to ensure their publication. ^[28] The IRM recommends publishing information on every item of spending, in readable format, and on a regular basis.

On whistleblower protection, the IRM recommends drafting a standalone whistleblower protection law (separate from the 2014 Law on Corruption Prevention) with enforcement mechanisms.

[19] European Commission, “Commission Staff Working Document, Montenegro 2019 Report” (29 May 2019), https://bit.ly/2s0h3KB.

[20] Id.   

[21] International Budget Partnership, The Open Budget Survey, (2017), https://www.internationalbudget.org/open-budget-survey/open-budget-index-rankings/.

[22] Mark Worth, Whistleblower Protection in Southeast Europe (Regional Anti-corruption Initiative, 2015), https://rm.coe.int/16806fffb0.

[23] European Commission, “Commission Staff Working Document, Montenegro 2019 Report.”

[24] Tina Popović and Mila Radulović Podgorica, “Montenegro, how not to protect whistleblowers” (Daily Newspaper, 15 Dec. 2017), https://www.balcanicaucaso.org/eng/Areas/Montenegro/Montenegro-how-not-to-protect-whistleblowers-184622.

[25] Representative of the Operational Team member, NGO Institute of Certified Accountants, interview by IRM researcher, 12 Sept. 2019.

[26] Information provided to the IRM by Igor Pavicevic, Institute of Certified Accountants, during the pre-publication period of this report, 19 March 2020.

[27] “Pregled Komentara, Prijedloga I Sugestija Članova Operativnog Tima Za Sadržaja Nacionalnog Akcionog Plana Partnerstva Za Otorenu Upravu Za 2019” (2018), https://www.otvorenauprava.me/wp-content/uploads/2018/10/Predlozi-OT.pdf.

[28] European Commission, “Commission Staff Working Document, Montenegro 2019 Report.”

Commitment 6. Improved anti-corruption policies

Limited

This commitment called for visual presentations of the state and local budgets (6.1) and publishing citizen budget brochures (6.2). It also proposed a comparative study on whistleblower protection to provide recommendations for Montenegro’s legal framework (6.3).

This activity entailed creating a similar tool to one that the NGO ‘Institut Alternativa’ had already created in 2017. [38] The self-assessment notes that the visual presentations of the state budget by institutions was not implemented, and the portal http://budzet.sntcg.com/ is not functional (6.1). [39] A database on municipal finances is available on the website of the Union of Municipalities. [40] It provides a total budget with revenues, expenditures, and debts of all municipalities but does not contain this information for each municipality separately. The data is presented in web format and there is no option to download it for further analysis. [41] 

The IRM was unable to find the original template for citizen budget brochures developed by the Union of Municipalities (6.2). Several municipalities use a similar template for their citizen budgets, such as Bar, [42] Mojkovac, [43] Pljevlja, [44] and Podgorica. [45] However, not all municipalities have citizen budgets or use the same template. For example, the Budva website contains only PDFs of financial reports that the authorities adopt, but not the actual brochure with user-friendly information on the budget. [46]

The website https://lokalnefinansije.me was also developed. This website presents information on how much municipalities spend and earn, but not on what and how the money is spent. As such, interviewed civil society told the IRM they do not use it.

The Agency for the Prevention of Corruption invited the Institute for Certified Accountants to join a working group on the comparative study for whistleblower protection (6.3). The group met several times and decided to collaborate with special units in public institutions. Their aim was for Montenegro to implement the 2019 EU Directive on whistleblower protection. [47] However, this work was halted due to a change of leadership in the Agency for the Prevention of Corruption in 2020. According to a representative of the Institute for Certified Accounts, they wish to carry forward the study into Montenegro’s next action plan. [48] The representative also believes that whistleblower protection should not only cover the public administration and state enterprises but also companies with more than 50 employees, per the EU Directive.