Kosova Democratic Institute (KDI) and the implementing partners YAHR, ISDY, Syri i Vizionit and Ekovizioni, in partnership with USAID through Transparent, Effective and Accountable Municipalities Activity, through a media conference, highlighted the main findings of the “Public Financial Management through the eyes of the Auditor General”. This analytical report reflects the recommendations of the Auditor General regarding the management of public money. The report also analyses the implementation of recommendations by the following six municipalities: Prizren, Suharekë/Suva Reka, Ferizaj/Uroševac, Lipjan/Ljipljan, Podujeva/Podujevo and Istog/Istok for 2017.
Diana Metushi Krasniqi from KDI, emphasized that partner NGOs have studied auditor’s reports from the perspective of public finance management, with a focus on issues identified by the auditor pertaining public procurement. She stated that “even though not all the Auditor’s findings are eligible for investigation by the prosecution, it is necessary to install mechanisms that ensure the implementation of recommendations, whether punitive measures, sanctions or even administrative measures. Furthermore, she added that “There are findings that make a recurring appearance in the reports of the National Audit Office. Auditor’s reports raise concerns about budget planning and execution, subsidy management, accounts receivable management, and procurement and billing procedures, or payments for goods and services and Capital Investments”.
Bekim Krasniqi from organization YAHR said that “According to the Auditor’s reports for 2015-2017, there are several governance weaknesses at the Municipality of Ferizaj/Uroševac, particularly with regard to accountability, risk management, and management reporting quality.” Furthermore, he emphasized that the Municipality consistently faces recurring systematic issues raised by auditors of the NAO, such as a low level of implementation of recommendations from previous years, weaknesses in management controls and risk management, failure to settle liabilities (rent) by users of municipal property, failure to settle liabilities (fees) from businesses, failure to use the e-Assets system, and lack of a warehouse”. While, pertaining to the Municipality of Lipjan/Ljipljan, Mr. Krasniqi said that “the systematic problems in this Municipality are poor verification of registered properties, miscalculation of revenues, irregularities in property tax management, entering into contractual obligations without a commitment of funds, contract management weaknesses, and problems with outstanding liabilities”.
Erolina Morina from organization ISDY emphasized that “the Auditor’s reports for the municipality of Prizren for the period 2015-2017, reflect systematic weaknesses in managing capital investment contracts, concluding public contracts outside the annual procurement plan in violation of the Public Procurement Law, and as a result of incorrect project planning incurring additional costs and introducing budget challenges for the Municipality, and implementing out-of-plan projects that could jeopardize the execution of planned projects and the achievement of defined objectives. In addition to regular liabilities, the Municipality also faces contingent liabilities, which at the end of 2017 amounted to €1,225,000.” As for the Municipality of Suhareka/Suva Reka, Ms. Morina said that “the systematic problems faced by the Municipality
are irregularities in the calculation of revenues for property tax and other revenues; improper asset management; and low budget execution for Capital Investments, and outstanding liabilities to suppliers”.
Abedin Imami from organization Syri i Vizionit said that According to Auditor’s reports, the problems that systematically recur year after year in the Municipality of Istog/Istok relate to asset management, procurement procedures, and provision of quality control and accountability mechanisms.” Furthermore, he added “the statement of outstanding liabilities to suppliers at the end of 2017 was €122,635. These liabilities were carried forward to be paid in 2018. The assumption of liabilities incurred mainly due to poor controls in terms of liability reporting and payment.”
Shpend Sopa from organization Ekovizioni emphasized that “there are several deficiencies regarding governance within the Municipality of Podujeva/Podujevo, especially in relation to the incomplete implementation of recommendations from the previous year, budget execution and the execution of the signed contracts due to lack of budget, the allocation of tenders and use of minimal value procedures, as well as modest initiative for the collection of revenues”.
The Coalition of the abovementioned organizations, in order to improve management of public finances, called on the relevant institutions to focus on improving public finance management. The key coalition recommendations are:
1. Mayors (Chief Administrative Officers) of municipalities should implement the Law on Public Financial Management and Accountabilities, specifically to undertake measures ranging from disciplinary action, to dismissal, of responsible officials for the systematic failures determined by the Auditor General, in conformity with the applicable laws.
2. Mayors of municipalities should strengthen the role of the Internal Audit Units, and demand accountability from the managers of departments, against the recommendations issued by IAU in preparing timely action plans and adhering to the timelines for action plan implementation.
3. In the area of quality control and quality assurance, in areas identified as problematic, increase the involvement of the Internal Audit Unit with the purpose to identify and prevent potential violations, and to escalate follow-up inspections and address recommendations at a faster pace.
4. The Ministry of Local Government Administration should decide on the allocation of municipal grants based on the financial performance and management determined in the Auditor’s Report.
5. The Public Procurement Regulatory Commission should initiate procedures for identifying the causes and legal amendments to address and accommodate an improvement in the current procurement system and initiate the amendment of current legislation to address the systematic procurement-related problems, minimal value procurements, and contract management.
6. The Ministry of Finance should review current policies with the aim of preventing assumption of liabilities without a commitment of funds by the Budget Organizations, and current policies for purposes of improving the situation with unsupported payments and loss of public funds as a result of delays in the settlement of liabilities and enforcement through enforcement procedures.
The full report can be found here:
“Public Financial Management through the eyes of the Auditor General ” was developed by KDI, ISDY, YAHR, Syri i Vizionit and Ekovizioni through grant funding from USAID Transparent, Effective and Accountable Municipalities.
About USAID Transparent, Effective and Accountable Municipalities
USAID has established the five-year Transparent, Effective and Accountable Municipalities activity in Kosovo to support the Government of Kosovo (GoK) to implement anti-corruption reforms and improve the transparency and accountability of the municipal procurement process in all 38 Kosovo municipalities. The project is supporting eligible CSOs to create, implement and promote innovative ideas, mechanisms and solutions that will contribute to increasing the role of citizens and civil society organizations to reduce municipal governments’ vulnerability to corruption, promoting a fair and transparent procurement system, and implementing monitoring activities that improve government service delivery.
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