Transparency in NGO Project Finance (HR0030)

TRANSPARENCY IN FINANCING PROGRAMMES AND PROJECTS IMPLEMENTED BY NGOs
The measure is being implemented from October 2017 to 31 August 2020
Leader of the measure GOVERNMENT OFFICE FOR COOPERATION WITH NGOS
Description of the measure
Which public issue does the measure address? In Croatia, a system has been established for financing programmes
and projects implemented by NGOs from public sources, and this
system has been being improved for years in the sense of greater
transparency and the standardisation of criteria, standards and
procedures for distributing funds. However, there is still a wider public
perception that funds are distributed and spent non-transparently, and
it is therefore necessary to invest more efforts to increase
transparency and make the relevant information available to the
public.
What does the measure include? The measure includes the establishment of a new IT system to
monitor and valorise awards of financial resources to NGOs which
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carry out programmes and/or projects of interest to the public good,
update and build up the public database on projects and programmes
implemented by NGOs financed from public resources, and deliver a
training programme on the criteria, standards and procedures for
financing and contracting programmes and projects of interest to the
public good implemented by NGOs, all with the aim of achieving
greater transparency in financing NGO programmes and projects and
greater public access to information about them.
How does the measure contribute to resolving the public
issue?
The establishment of the new IT system to monitor and valorise
awards of financial resources to NGOs which carry out programmes
and/or projects of interest to the public good will guarantee a better
platform for all bodies which award funding to NGOs, with the aim of
monitoring and valorising their programmes and projects, and
preventing duplication in financing the same programmes and
projects. By updating and building up the public database on NGO
projects and programmes financed from public resources, public
access will be guaranteed to information about such programmes and
projects, while the implementation of a training programme on the
criteria, standards and procedures for financing and contracting NGO
programmes and projects of interest to the public good will assure
standardisation of the application of the Regulation on criteria,
standards and procedures for financing and contracting programmes
and projects of interest to the public good implemented by NGOs, at
the level of all bodies which finance NGO programmes and projects,
and will guarantee the transparency of the entire process, that is the
use of the IT system and public database which will be set up,
updated and built up through the implementation of this measure.
Why is this measure relevant to the values of the Open
Government Partnership?
The measure is relevant to transparency since it guarantees the
transparency of the procedure of awarding funds to NGOs, and
access to information on the programmes and projects financed. In
addition, it is relevant to public accountability, since guaranteeing
transparency and access to information in this area will also influence
the accountability of civil servants and officials who render decisions
and implement activities in the area of distributing funds to NGOs.
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Additional information The amount of HRK 2,000,000 is planned for launching the setting up
of the IT system in 2019.
The measure is in accordance with the following documents:
- National Strategy for the Creation of a Stimulating
Environment for Civil Society Development for 2012 to 2016
- Action Plan for 2017 and 2018 accompanying the AntiCorruption Strategy 2015-2020
- Anti-Corruption Strategy 2015-2020
- Operational Programme 'Efficient Human Resources' 2014-
2020

5. Transparency in Public Funding of CSO Projects

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

"Measure 5. Transparency in Financing Programmes and Projects Implemented by NGOs" ^[35]

"By updating and building up the public database on NGO projects and programmes financed from public resources, public access will be guaranteed to information about such programmes and projects, while the implementation of a training programme on the criteria, standards and procedures for financing and contracting NGO programmes and projects of interest to the public good will assure standardisation of the application of the Regulation on criteria, standards and procedures for financing and contracting programmes and projects of interest to the public good implemented by NGOs, at the level of all bodies which finance NGO programmes and projects, and will guarantee the transparency of the entire process, that is the use of the IT system and public database which will be set up, updated and built up through the implementation of this measure. (…) The amount of HRK 2,000,000 is planned for launching the setting up of the IT system in 2019."

Milestones:

5.1. Creating a new IT system to monitor and valorise the distribution of funds for programmes and/or projects of interest to the public good implemented by associations (Article 56 of the Regulation on the criteria, standards and procedures for financing and contracting programmes and projects of interest to the public good implemented by associations) – Phase One

• New IT system set up
• Report on implemented financing of civil society association programmes published
• Number of state administration bodies using the system

5.2. Implementing a training programme on the criteria, standards and procedures for financing and constructing programmes and projects of interest to the public good implemented by associations

• Four training seminars conducted at the state level and four at the level of units of local and regional self-government
• Number of seminar participants

5.3. Updating and building up the public database on projects and programmes implemented by associations and financed from public funds

• Public database of information on financing projects by NGOs updated and built up in open form

Start date: October 2017

End date: 31 August 2020

Context and Objectives

Public financing of CSO programs in Croatia is regulated by the Law on Associations [36] and the Regulation on the Criteria, Standards and Procedures for Financing and Contracting Programs and Projects of Public Benefit Interest Implemented by Associations from 5 March 2015 (Official Gazette 26/2015). [37] The criteria and procedures for financing CSOs have improved in the last few years. However, there remains a perceived opacity concerning the funding of associations.

This commitment consists of three milestones: creating a new IT system for monitoring and evaluating the allocation of funds for CSO programs and projects of public interest (5.1); training state and local employees and authorities on proper funding guidelines (5.2); and updating the existing public database of publicly funded CSO programs and projects (5.3).

The commitment is in line with the National Strategy for the Creation of an Enabling Environment for Civil Society Development 2012-2016; [38] the anti-corruption strategy action plan for 2017 and 2018; [39] and the Operational Programme for Efficient Human Resources 2014-2020 (OPEHR). [40] The Government Office for Cooperation with NGOs produced a manual in 2017 detailing criteria, standards, and procedures for financing CSO programs and projects. [41] An annual report [42] on financed CSO projects and programs lists how money from public sources is spent. Reports include detailed information on all the state authorities that allocate funds as well as those amounts, financing areas, beneficiaries, and geographic distribution.

The milestones are specific and measurable and are clearly relevant to access to information and the use of technology and innovation in increasing transparency of the public sector. According to government representatives, [43] the Government Office for Cooperation with NGOs started implementing Milestone 5.1, along with Agency for Support of Information Systems and Information Technologies Ltd. (APIS IT), [44] with EU funding. This will ensure an improved platform for public bodies to monitor and evaluate publicly financed CSO programs to avoid "dual" funding. The need for training on this issue (Measure 5.2) was confirmed by the 2018 State Audit Office’s report [45] on all 21 counties and on 24 cities; the report found that the necessary level of knowledge on the issue had not been reached yet. Thus, the commitment will standardize use of financing criteria.

The commitment’s potential impact is minor, as it is a continuation of existing initiatives. However, the monitoring and evaluation system, and the improved database on CSO programs, will provide authorities and the public data for overall and comparative knowledge of public funding of CSOs. The projects and the education of national, regional, and local public authorities will ensure that each public authority adheres to the regulation. A CSO representative [46] agreed that this is a strong commitment as it will set up standards for increasing transparency of funding and decrease opportunities for misuse of public funds (e.g., avoiding dual funding, favoritism), even though certain additions they asked for were rejected.

Next steps

The Government Office for Cooperation with NGOs could consider exercising more comprehensive control over all government and self-government bodies’ ad hoc spending on CSO programs and ensure that each has a policy in place directing the allocation of public funds to such causes:

• An annual report that analyzes public funding of CSO programs, recommending reforms in grant procedures to ensure plurality and diversity in grant allocations, and the allocations support public needs at local, regional, or national levels.

5. Transparency in Public Funding of CSO Projects

Completion: Limited

The Government Office for Cooperation with Non-Governmental Organizations is still in the planning phase for the new IT system with the managing authority (Ministry of Labor, Pension System, Family and Social Policy). ^[43] This is also the reason why the existing public database on CSO programs and publicly funded projects ^[44] is updated sporadically. The Office fully implemented nine training programs for 186 employees of state, regional, and local authorities. ^[45] The Office plans to continue the activities not implemented in this action plan in the next national OGP cycle, including replacing the database and a new government IT system. ^[46]