The Montenegrins gathered experience from Slovak municipalities

A study visit of municipal representatives from Montenegro and the Ministry of Finance of Montenegro (MF MNE) took place in Slovakia from 7-8 October 2019. As part of a joint project of the Ministry of Finance of the Slovak Republic (MFSR) and the UNDP “Strengthening Transparent and Accountable Public Finance Management in Montenegro,” several activities have been carried out since last year.

These activities center around the system of financing and management of municipalities improvement, and create conditions for their further development. Other achievements of this cooperation include the Law on Local Self-Government Financing preparation and adoption, as well as initiating a system for co-financing external donor projects. The assistance also included software solutions for the MF MNE for the purpose of grant calculation to municipalities from the Equalization Fund and pre-financing of donor projects from the Support Fund.

To start, financial experts from 11 Montenegrin municipalities along with MF MNE and Union of Montenegrin municipalities met with MFSR representatives. MFSR Budget Policy Officers Jozef Mikš and Milan Lipnický discussed their experience with fiscal decentralization and provided details about the system of financing local governments in Slovakia.

Focus on cooperation between municipalities

The Montenegrin guests’ focus was not only on legislative fundamentals,but also on specific forms of cooperation between municipalities in Slovakia. According to Milan Muška, Executive Vice-Chair-Association of Towns and Municipalities of Slovakia (ZMOS), cooperation between the municipalities is enshrined in the Act on Municipalities as of 1990. At present, they register about 230 joint authorities at the level of municipalities. By jointly carrying out tasks, they significantly reduce the costs of exercising the legal competences. In this context, ZMOS represents the interests of self-governments vis-à-vis the state, particularly regarding the obligatory competences financial coverage. In addition to active participation in the legislative process, ZMOS is an Economic and Social Council of the Slovak Republic member.

Together towards complete electronization

Most Slovak municipalities lack funding for costly projects, such as those connected with the necessity of informatization regarding local self-government processes. Adrián Belánik, Executive Director of the DataCentre of Electronization of Territorial Self-Government of Slovakia, presented a unique example of cooperation between municipalities in this area. The DataCentre was jointly established by ZMOS and MF SR in order to ensure conditions for the electronic execution of local and regional authorities´ powers,and to ensure IT development activities for small and medium-size municipalities. For example, this centralized support includes budget data collection of local government entities for the following purposes: monitoring and management of the general government budget (RIS.SAM), as well as technical support to municipalities for the provision of electronic services for citizens (DCOM-Data Center of Municipalities). Up to 2,100 municipal authorities financially contribute to this project with 1 euro per citizen. From 1 January 2020, the DataCentre plans to launch a mobile application for citizens’ access to eServices of municipalities.

“I think that only here the representatives of our local authorities have understood the benefits of cooperation between municipalities and cities, and now these best practices need to be put into practice. The DCOM project is something from which we are still a long way ahead in Montenegro,” said Head of the Local Government and State Companies Directorate of the MF MNE Snežana Mugoša.

Municipalities take part in the micro-region development

During the visit to the village of Cífer, which is in many ways ranked among model municipalities in Slovakia, many practical topics resonated: financing sources, local development plans of the municipality, and the aforementioned cooperation between municipalities. According to Cífer´s Mayor Maroš Sagan, the municipality is a member of 4 inter-municipal associations. This is primarily a state-entrusted competences joint execution, such as the Building Authority agenda. However, the joint activities also aim to support micro-regions development. An example is the Regional Education Center, which provides education to local government employees or an association to support tourism and investment opportunities in the region.

Unique model of governing Petržalka municipality

On the second day of the study visit, the guests were welcomed at the Local Office in Petržalka, which is Bratislava’s largest municipality. Peter Šinály, Office head, introduced an advanced financial management model of Petržalka, which represents a high degree of budgeting integration, accounting and internal control systems. In 2018 Petržalka received the National Quality Award in the public sector category. Montenegro’s experts were particularly interested in modern forms of communication with citizens: an interactive budget published on the Petržalka website or a pilot project for electronic signing.

Financial Management Department Head, Julián Lukáček, answered questions related to program budgeting effectiveness at the municipal level, emphasizing the advantage of transparency and accountability in achieving the objectives in relation to the public. Petržalka also shared practical experience with their own budget organizations and business companies management, such as libraries, cultural houses and swimming arenas.

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Montenegrin municipalities representatives highlighted the importance of gaining practical experience from Slovak municipalities with implementing program budgeting rules, and the transition to accrual accounting. The pre-condition for these processes is the transition to international accounting standards, which takes place at both the central and local levels in Montenegro. Despite the recent approval of the Local Self-Government Financing Law, it is necessary to further harmonize legislative processes to remove local development barriers and engage the private sector in the community cooperation.

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