Montenegro became the programme beneficiary country in February 2010 with the aim to get support, among others, in the area of public sector accounting and reporting. The project aims to provide assistance to the Ministry of Finance (MF) of Montenegro in improving the public sector accounting and reporting system and contribute to capacity development of the government institutions in this area. The first phase of the project resulted in assessment of the current accounting and reporting systems and drafting the medium-term strategy for transition to accrual accounting. Reports on lessons learned from the reform of accounting and reporting in the public sector of Slovakia (including adoption of the European System of Accounts methodology) were shared with MF Montenegro. The second phase of the project started after reiteration of commitment of the new leadership of the MF Montenegro to continue with accounting reforms with support of the SlovakAid project. The project design and implementation will be linked to the relevant national strategies and priorities of the Government of Montenegro.
Projects’ Beneficiaries: Ministry of Finance of Montenegro
Donor: Ministry of Finance of the Slovak Republic
Implementator: UNDP for Europe and CIS
Projects in Montenegro:
- I. Strengthening capacities for macroeconomic and fiscal analysis and forecasting (2010-2012 / 2014-2015)
The project aimed to provide assistance to the Ministry of Finance of Montenegro in strengthening capacities for macroeconomic and fiscal analysis and forecasting. The project activities were organized around two thematic blocks: 1) Possible institutional reform proposal to improve macroeconomic and fiscal analytical and forecasting capacity and 2) Macroeconomic data infrastructure review. The objective of the assistance was to increase transparency and credibility of analytical and forecasting activities of the Ministry of Finance of Montenegro. Phase 2 of the project aimed to assist the Sector for Economic Policy and Develpment of the Ministry of Finance of Montenegro to establish itself as a credible and institutionally sound government provider of macro-economic and fiscal forecasts and economic analysis.
- II. Adoption of the European System of Accounts Methodology ESA’ 95 (2010-11)
The purpose of the project was to provide assistance to the Ministry of Finance of Montenegro in improving the public sector reporting system in Montenegro through implementation of the European System of Accounts methodology. The objective of the assistance was to support the MF ME in meeting the Eurostat requirements for statistical reporting of key public finance and economic indicators.
III. Improving public sector accounting and reporting systems in Montenegro (since 2010)
The purpose of the project is to provide assistance to the Ministry of Finance of Montenegro in improving the public sector accounting and reporting systems in Montenegro with the aim to adopt the accrual accounting principles. Part of the assistance is to develop a medium-term accounting reform strategy.
- IV. Strengthening capacities for public debt management in Montenegro (2010-11)
The purpose of the project was to provide assistance to the Ministry of Finance of Montenegro in improving the current system of debt management, especially development of a risk management system, IT support and improving processes and procedures at relevant units of the Sector for Treasury at the Ministry of Finance of Montenegro.
Project activities implemented in Montenegro in 2010-16: The organizational structure of the Directorate for Economic Policy and Development has been changed to mirror the structure of FPI. Models for macro-economic and fiscal forecasting were prepared for SEPD. The quality of reports produced by the Sector’s specialists has improved. Cooperation with the Treasury Directorate of MF MN in the first phase resulted in preparation of a road map for adoption of the ESA 95 methodology and designing the medium-term strategy for transition to accrual accounting. Support to MF Montenegro with gradual transition to accrual accounting and reporting in accordance with International Public Sector Accounting Standards (IPSAS) and European System of Accounts (ESA) standards was provided. In the area of debt management, a clear action plan for capacity building in the medium-term was prepared and agreed with the MF Montenegro. Study visits to Slovakia were organized in the area of cash and debt management and macro-economic and fiscal forecasting to share the experience with the public finance professionals at FPI and the Debt and Liquidity Management Agency.
V. Partnership with Center of Excellence in Finance (CEF) to enhance capacity building in the field of public accounting (since 2015)
The partnership initiative between UNDP, MF SR and Center of Excellence in Finance (CEF) significantly contributes to strengthening capacities of government, civil society and professional community in public accounting practices in Montenegro. The internationally recognized, professional qualification program Public Accountants Certification Training (PACT) in Montenegro, implemented by the Center of Excellence in Finance (CEF) in cooperation with CIPFA and supported by Slovak republic-UNDP “partnership project” is part of the Montenegrin government’s efforts to build and strengthen professional qualifications for public sector accountants.
Project activities implemented in 2015-16: The localization process through the pre-assessment study was launched. Preparatory activities in terms of application of students/candidates for the training were covered. The training materials developed by Chartered Institute for Public Finance and Accountancy (CIPFA) were developed and translated to local language. The material of the National module – focused on local legislation and taxation was developed. A group of 11 local tutors was equipped with necessary knowledge and ready to be contracted for performing in‑class trainings for the first generation of Montenegrin students. Evaluation of current legislative status of public accountants, and establishment of public sector working group was prepared (it will support localization of the training program and its sustainability in Montenegro in 2016). In the second phase in 2016 CEF started with the delivery of training program for up to 40 public sector accountants. Training of students was conducted in 3 modules: two international modules (on financial accounting and management accounting – developed by the Chartered Institute for Public Finance and Accountancy: CIPFA) and the third national module (on local legislation and taxation – developed by experts from MF Montenegro). After the successful completion of trainings and passed exams: Graduation ceremony followed in December 2016.
UNDP-CEF / NGO partnership: PACT MNE 1 (Preparatory phase) (Final Report 2015);
Public Finance for Development programme (Annual report 2015);
UNDP-CEF / MVO partnerstvo: PACT MNE1 (Delivery phase) (Final Report 2016);
Montenegrin Internal Auditors and Accountants Awarded with International Certificates, 2016;