Slovak Ministry of Finance helps Montenegro to boost reforms in public finance management

Slovak Ministry of Finance has become one of the key development partners in supporting the Government of Montenegro in boosting its PFM reforms. An agreement between the Ministry and the Center for Excellence in Finance (CEF) on the implementation of the Public Accountants Certification Training (PACT) program was signed on September 4, 2018 in Ljubljana. 

The CEF will be the implementing lead partner of the training program. This training is the third generation of PACT trainings, and it is expected that up to 40 students will complete their training between autumn 2018 and spring 2020 to become certificated public accountants.

The next generation of the PACT program will help reinforce the technical assistance that Slovakia is providing to support Montenegro’s transition to accrual accounting. The lessons that have been learned from PFM reforms in Slovakia and other countries can help the accrual accounting transition process, increasing accountability of decision-makers, and enhancing their understanding of the main reform challenges and possible solutions. 

Important partner

As the main aid beneficiary, the Ministry of Finance of Montenegro considers continued public accountant training is an important step toward adopting and implementing international accounting standards. The Slovak Ministry has been an important development partner for Montenegro’s transition to accrual accounting.

The PACT program utilized by the first generation of Montenegrin public accountants was successfully delivered in close cooperation with the Public Finance for Development (PFD) program, operated by UNDP Europe and the CIS – Slovak partnership team.

PACT explained

PACT is a professional qualification training program that aims at building capacities of the public accounting function, in line with international public accounting standards and best practices in the public sector of the respective country. It also helps in preparing conditions for making the training sustainable and locally institutionalized.

In 2015, the Government of Montenegro adopted the Strategy for the Transition of the Public Sector to Accrual Accounting (Strategy). It aims at developing national legislative framework to align with International Public Sector Accounting Standards (IPSAS) using efficient public financial management (PFM).

The move to accrual accounting in Montenegro is driven by a number of factors, including growing awareness of the limitations of pure cash accounting. The financial statements prepared using accrual-basis accounting offer a number of benefits over traditional cash accounting from the point of view of government transparency, accountability, and financial management.

The legislative framework necessary for a transition to accrual accounting is currently being revised. By building capacities, the PACT program also addresses one of the key priorities of the Public Administration Reform (PAR) 2018-2022 that refers to enabling professional and competent administrative capacities of officers, and accountable and transparent work of institutions and managers.