Transparency of Funds Awarded to CSOs (RS0058)

Brief description of the Commitment

By implementing this commitment, the aim is to improve the overall transparency of the funding of CSOs from budget funds in all segments of this process. Such a result can be achieved primarily by conducting an adequate review of the existing situation and analysis of the needs for improvement, taking into account the views and suggestions of all the relevant stakeholders and target groups, followed by appropriate interventions in the normative framework governing this area.

Problem Definition

1. What problem does the commitment aim to address? The legal basis for funding associations and other CSOs from budget funds is contained in Article 38 of the Law on Associations ("Official Gazette of the RS", No. 51/2009 and 99/2011 – other laws), while the detailed criteria, conditions, scope, method, award procedure, as well as the method and procedure of refunding funds for incentive programmes or a missing part of funding for programmes of public interest are elaborated in more detail by the Regulation on Funds to Incent Programmes or a Missing Part of Funding for Programmes of Public Interest implemented by Associations ("Official Gazette of the RS", No. 2016/18). With the adoption of the new Regulation in 2018, significant steps were taken in the direction of improving the normative framework in this area, and the basis was laid for raising the level of transparency concerning the allocation of budget funds to associations in practice. Although certain segments of this process have obviously been improved, during the five-year period of application of the Regulation (2018-2023) it was observed that there is a need to review the effects of existing normative solutions, bearing in mind that practice shows inconsistency in the behaviour of providers of funds, as well as inconsistency in the application of existing legal norms. This is supported by the experiences and attitudes of public administration bodies which allocate funds to associations following the prescribed legal procedure, as well as by CSOs which are financed from budget funds or which monitor their allocation processes. In this sense, the key segments of the budget funds allocation process where there is room for further improvement, and which need to be considered in detail within the implementation of the commitment, are: more detailed regulation of individual stages of the competition process; prioritization of areas of public interest against community needs; specification of the criteria on the basis of which the programmes/projects to be supported are selected and their adaptation to sectoral policies; more detailed regulation of the working methods and composition of the competition commission, as well as the selection of representatives of the academic community in these commissions; additional regulation of the process of monitoring and reviewing the results of implemented programmes/projects, as well as the evaluation of the competition cycle itself; additional editing of the content of the Public Call in the direction of mandatory elements which must be specified in the tender documentation; improvement of competition documentation, forms for reporting on implemented programmes, methods of conducting monitoring visits and publishing the results of projects and programmes, as well as of the entire competition, which would facilitate the procedure of applying to competitions, and later, reviewing the achieved results.

2. What are the causes of the problem? The main cause of inconsistent practice in the implementation of competitive funding of associations from budget funds can be linked to the fact that the coverage of the obligees of the Regulation is extremely broad; more precisely, the Regulation is applied at all levels of the government, whereby the providers of funds do not have equally developed capacities for the adequate implementation of all segments of planning, allocation and monitoring of the implementation of supported projects/programmes of public interest. Also, it is evident that certain legal provisions are not precise enough, and leave room for different interpretations, which results in the already mentioned inconsistent practice. Finally, practice has shown an unequivocal need to further regulate certain aspects in order to prevent fund providers from regulating certain segments of the process themselves in different ways.

Commitment Description

1. What has been done so far to solve the problem? Over the past ten years, significant steps have been taken in regulating and standardizing the allocation of budget funds to CSOs. In this sense, the first Regulation on Funds to Incent Programmes or a Missing Part of Funding for Programmes of Public Interest implemented by Associations, which was adopted in 2012, had made major steps in this area, primarily through the introduction of the mandatory allocation of funds through a public tender. After five years of its application, work began on drafting the new Regulation, which was adopted in 2018, and which brought about an additional improvement of the legal framework in the subject area. Among other things, the said Regulation had raised the level of transparency of the process at all stages of the funding allocation procedure – from the planning stage, through the allocation of funds, to monitoring and reporting on the allocated support. The authorities were given the opportunity to, in accordance with available resources, evaluate the success of implemented programmes/projects, making the information about which associations were green-lighted for fund allocation and for which purposes available to the public. A particularly significant step forward was made with regard to the inclusion of civil society in the procedure itself, by providing an opportunity of engaging the academic community in the preparation of an analysis of success, quality and achievement of the programme's goals, as well as the possibility of appointing representatives of the academic community as members of the programme/project selection committee. The Regulation had also introduced the obligation to plan public tenders through the preparation of the Annual Plan for the announcement of public tenders, according to which the competent authorities are obliged to publish their Annual Plan on their official website by no later than 31 January and submit it to the Ministry of Human and Minority Rights and Social Dialogue, which prepares and publishes the annual calendar of all planned public competitions on its website. In this way, the degree of transparency of association funding from budget funds was improved from the earliest stage of the process. However, despite the aforementioned developments in the normative framework, the practice, as described earlier in the commitment, remained largely inconsistent, as well as the application of certain provisions. In light of the aforementioned, it is evident that the five-year implementation of the current Regulation did not result in achieving the desired progress when it comes to the practice of providing financial support to civil society programmes/projects from budget funds, and that it is still insufficiently transparent. Certain, concrete challenges and needs for improvement of various segments of the procedure of allocation of funds during the previous years were indicated both by providers of funds (public administration bodies) and beneficiaries (CSOs).

2. What solution are you proposing? Starting from the described problem, experiences from the practice of providers and beneficiaries of budget funds in this area, as well as the previous efforts which have been undertaken, the solution would first of all entail the implementation of an appropriate analysis of the effects of the current application of the Regulation on Funds to Incent Programmes or a Missing Part of Funding for Programmes of Public Interest implemented by Associations ("Official Gazette of the RS", No. 2016/18), in order to adequately assess all the shortcomings of the normative framework and its practical application. This ex-post analysis of effects would be carried out in a broad consultative process with all stakeholders and target groups (public administration bodies and CSOs) and would include, in addition to the analysis of the Regulation itself and domestic practice, an overview of relevant comparative practice in the region and benchmarks of EU Guidelines in the part related to the financing of CSOs from budget funds. The core of the analysis would concern the issues which have been identified within the previously described problem that the commitment deals with. Based on the findings of the conducted analysis and given recommendations, further steps would be taken in the direction of amendments or the adoption of a new Regulation. Accordingly, the directions of interventions in the existing normative framework, as well as the process of work and adoption of new legal solutions in the subject area, would be defined and specified within the process of mandatory revision of this Action Plan, which is scheduled for 2025.

3. What results do we want to achieve by implementing this commitment? By implementing this commitment, the aim is to improve the overall transparency of the funding of CSOs from budget funds in all segments of this process. Such a result can be achieved primarily by conducting an adequate review of the existing situation and analysis of the needs for improvement, taking into account the views and suggestions of all the relevant stakeholders and target groups, followed by appropriate interventions in the normative framework governing this area. Following the adoption of new legal solutions, it is crucial to work on strengthening the capacities of both providers and beneficiaries of budget funds in this area, as well as on raising the awareness of the importance and essence of financial support to civil society in the prescribed manner.

Commitment Analysis

1. How will the commitment promote transparency? The commitment primarily contributes to the improvement of the fiscal transparency of administrative bodies, by improving the transparency of the process of allocation of budget funds in a specific area, allowing the interested public a better insight into the way in which budget funds are allocated and spent. In other words, a transparent procedure for allocating funds and accurate reporting on the volume of allocated funds, supported associations and their programmes/projects enables citizens’ insight into the scope and purpose of allocating taxpayers' funds, which strengthens citizens' trust in the work of public administration, but also in the work of associations and other CSOs.

2. How will the commitment help foster accountability? The commitment also contributes to the strengthening of the system of fiscal accountability of public administration bodies, bearing in mind that improving the transparency of the process brings greater and better public insight into the way budget funds are allocated, which entails a greater degree of accountability of public administration bodies for their actions in the specific area. Additionally, by better informing of the general public about the expediency of spending public funds, the integrity and accountability in the work of state authorities is further encouraged and developed.

3. How will the commitment improve citizen participation in defining, implementing, and monitoring solutions? Reviewing and possibly redefining the existing role of CSOs in the process of allocating funds would contribute to their more significant participation in decision-making, both in terms of funding priorities and in terms of their role in the selection of programmes/projects to be supported. Additionally, adequate reporting on allocated funds, their expenditure and the results achieved in this way represents the basis for encouraging and improving the cooperation between the public and civil sectors in the implementation of public policies and monitoring of the development of participation of the civil society sector in the implementation of set public policies.

Commitment Planning (Milestones | Expected Outputs | Expected Completion Date)

1. Conducting an ex- post analysis of the effects of the previous implementation of the Regulation on Funds to Incent Programmes or a Missing Part of Funding for Programmes of Public Interest implemented by Associations, in accordance with the provisions of the Law on the Planning System of the Republic of Serbia | Conducted ex-post analysis of the effects of the Regulation on Funds to Incent Programmes or a Missing Part of Funding for Programmes of Public Interest implemented by Associations, which contains clear recommendations on further directions for improving the process of allocating budget funds to CSOs | II quarter of 2025

2. Acting in accordance with the findings and recommendations of the ex-post analysis – the process of amending/creating a new Regulation on Funds to Incent Programmes or a Missing Part of Funding for Programmes of Public Interest implemented by Associations, and the adoption of a new one | Amended/New Regulation on Funds to Incent Programmes or a Missing Part of Funding for Programmes of Public Interest implemented by Associations and published in the Official Gazette | II quarter of 2026