Budget Transparency at the Local Level (ME0076)

What public problem does the measure address? This measure responds to the problem of inconsistent practice and differences in the progress of local self-governments in relation to budget transparency, proactive publication of data on the spending of budget funds at the level of local self-governments and communication with citizens about the execution of local budgets. Pursuant to the Law on Local Self-Government Financing, municipalities are obliged to submit monthly reports to the Ministry of Finance on revenue generation, expenditure execution, unmeasured liabilities and debt. According to the same Law, municipalities are obliged to publish on their websites the Decision on the budget, the Decision on amending and supplementing the Decision on the budget and the Final Account of the municipal budget. According to the IRM report on the implementation of a similar obligation in the last Action Plan, the Municipal Finance Database is available on the website of the Community of Municipalities. It shows the total budget with revenues, expenditures and debts of all municipalities (in web format), and contains this information for each municipality individually. The data is presented in web format and there is no possibility to download it for further analysis. Also, the original template for the "Budget for Citizens" brochures is not available. Although several municipalities use a similar template for their citizen budgets, such as Bar, Mojkovac, Pljevlja and Podgorica, not all municipalities have citizen budgets or use the same template. For example, Budva's website contains only PDF formats of financial reports adopted by the authorities, but not a brochure with user-friendly information about the budget. The website https://lokalnefinansije.me was also created, which presents information on how much municipalities spend and earn, but not on what and how the money is spent - which is why citizens and NGOs still do not use that page enough.

What does this measure entail? The measure includes activities that should strengthen citizens' trust in the transparency of the work of local self-governments, create a basis for monitoring budget execution by the public, and increase the responsibility of public institutions in spending public funds.

In what way does the measure contribute to the solution of the identified public problem? It is expected that through the development and promotion of guidelines for the publication of data on the spending/distribution of local budget funds (including data on tax debt and municipal reprogramming), the implementation of education on how to publish municipal budgets in open data with a visual presentation of the budget structure (budgets for citizens), and the awarding of annual awards for fiscal transparency of municipalities, to strengthen the capacities of local self-governments for the application of more advanced standards of fiscal transparency.

Why is this measure relevant in relation to the values promoted through the OGP initiative? This measure is directly relevant to the values of transparency and openness of local self-government, as well as strengthening the responsibility of institutions in the implementation of anti-corruption measures.

Additional information This measure is complementary to the objectives and activities of the Public Administration Reform Strategy of Montenegro 2022-2026. especially in relation to activity 4.2.11 Creating high-quality fiscal transparency for authorities. The implementation of this measure contributes to the realization of sustainable development goals, especially goal 16: 'Peace, justice and strong institutions', and tasks 16.10. Provide public access to information and protection of basic freedoms, in accordance with national legislation and international agreements, 16.6 - Develop efficient, responsible and transparent institutions at all levels.

Budget 13.000 EUR

Activities 14.1. Create guidelines for the publication of data on spending/distribution of local budget funds (including data on tax debt and municipal reprogramming) Holder: Community of Municipalities (Committee for Financing Local Self- Government ZO), all municipalities, Ministry of Finance, Ministry of Public Administration Indicator for the implementation of activities: - prepared Guidelines and content of items and data from the budget that should be published - published guidelines on the websites of all LS Required financial resources: EUR 3,000 Source of funding: Budget of Montenegro, donor funds April 2023 - December 2023

14.2. Conduct training on how to publish municipal budgets in open data with a visual presentation of the budget structure (budgets for citizens) Holders: Ministry of Public Administration Ministry of Public Administration, Directorate for Innovation and Openness of Public Administration, Ministry of Finance and Human Resources Directorate in cooperation with LGUs Indicator for the implementation of activities: - training design completed in 2023 - conducted training in 2023 - number of training participants Required financial resources: EUR 5,000 February 2023 - December 2023

14.3. Organize awards for good and innovative solutions and practices related to fiscal transparency in municipalities Holder: Union of Municipalities Indicator for the implementation of activities: - established a team for awarding the prize and preparing the criteria, with the participation of NGOs - an award ceremony was held - a discussion was held on examples of good practice - the annual award for fiscal transparency was included in the Best Practices in Local Self-Government program - awarded the annual award for 2023 and 2024 Required financial resources: EUR 5,000 Source of funding: Budget of Montenegro, donor funds September 2023 - September 2024

Action Plan Review

Commitment 14. Improve the transparency of data on budget execution of local self-government units

● Verifiable: Yes

● Does it have an open government lens? Yes

● This commitment has been clustered as: Budget transparency (Commitments 10 and 14 of the action plan)

● Potential for results (cluster): Modest

Commitments 10 and 14 will improve budget transparency at the national and local levels. Commitment 10 will publish a “citizens’ budget" of the national budget: an easy-to-understand visualization on its content and execution. Although the action plan only mentions the fiscal years of 2023 and 2024, the Ministry of Finance confirmed that this will become a permanent obligation. [110] The Ministry of Finance publishes information on budget transactions on its website, but according to Institut Alternativa, this information is difficult to find and is not machine readable. [111] The Ministry of Finance believes this commitment could help the public better understand the contents of the budget, where there is often misinformation of government activities. [112] NDI noted that the MPA is interested in amending this commitment, as they are still negotiating with potential donors to support the work. [113]

The IRM recommends the Ministry of Finance provide information on every item of spending, in machine-readable format, and on a regular basis. Institut Alternativa recommends developing gender-responsive budget programs. [114] The Ministry of Finance could learn from North Macedonia’s database on budgetary expenditure, launched during its 2018-2020 action plan. [115] The database is updated every 15 days and contains information on the spending of state-funded institutions administered through the Treasury and national and local-level data from 2010 onwards. [116]

Commitment 14 focuses on budget transparency at the local level. It involves creating guidelines and conducting training for publishing data on local budgets in open format and as simple visual presentations (citizens’ budgets). There is a database on the website of the Union of Municipalities of Montenegro showing the total budget, revenues, expenditures, and debts of all LSGUs. However, the data is only available in web format and in aggregate (not by individual LSGU). [117] The impact of this commitment will depend on the increase in the number of municipalities that publish their budget information as open data and publish citizens’ budgets. The IRM recommends supporting LSGUs in adopting a unified format for citizens’ budgets, possibly by using the guidelines from this commitment.