Strengthening municipal finance mechanisms

Overview


Photo: UNDP in Montenegro

The overarching aim of the “Strengthening Mechanisms for Public Finance at the Local Level in Montenegro” project is to help the socio-economic development of municipalities by strengthening local level public finance mechanisms and improving the accountability and transparency of their work.

What is the project about?

The specific purpose of the project is to support development of capacities of the municipal and central-level stakeholders to introduce transparent, accountable, results oriented budgeting reflecting capital investments, local and national strategic priorities. The main objectives are:

Goal 1: Establishing a transparent and accountable public finance mechanism at the local level

Goal 2: Strengthening the municipal bonds market in Montenegro through improving the understanding the benefits and opportunities among municipalities

Goal 3: Further improving the fiscal equalization mechanisms in MontenegroThe specific purpose of the project is to support development of capacities of the municipal and central-level stakeholders to introduce transparent, accountable, results oriented budgeting reflecting capital investments, local and national strategic priorities.

What have we accomplished so far?



As part of the UNDP’s efforts to help develop capacities of the municipal finance officers, Assessment of capacities and priority needs was conducted. This served as a basis for the identification of the priority topics that were later addressed in a number of workshops, trainings, on-the-job trainings and mentoring, exchange of experiences through peer to peer support and study tours. The following areas have already been covered: municipal budget planning and implementation, improvement of functioning of municipal treasury departments, programme budgeting at the local level, tax management, preparation and execution of the capital budget.                                                                  

This closer cooperation between the local and central level, facilitated by UNDP resulted with a number of initiatives, such as: Request for the legal opinion related to the implementation of the Law on General Administrative Procedure and Law on Tax Administration; Initiative to the Ministry of Finance to amend the laws and to clarify certain provisions as follow up to the seminars on planning and implementation of municipal budgets in Montenegro; Plan of action for the enhancement of the system of determining, control and collection of local revenues 2012-2013;

UNDP assisted Montenegrin municipalities and central government with a set of interventions, to name just a few:

  • Conducted trainings and mentoring for drafting Amendments to the Municipal Treasury Directions; Municipal treasury system implementation; Internal control and internal audit; Increasing transparency and accountability towards citizens; Procedures for collection of real estate tax in cash;
  • Helped in drafting conclusions and recommendations regarding the system of internal financial control on the local level in Montenegro, prepared by the Ministry of Finance and disseminated to all municipalities;
  • Established a Forum (hosted by the Union of Municipalities of Montenegro) with an aim to provide an efficient and easily accessible way for the municipalities to exchange experiences in the field of local public finances;
  • In cooperation with the Ministry of Economy, UNDP provided technical and expert support to the working groups in charge of drafting Strategic Development Plans for municipalities of Kolašin and Žabljak. We also supported the Ministry of Economy in organizing the Third International Conference on Overcoming Regional Disparities: “How to Reduce the Impact of the Economic Crisis on Regional Challenges in Europe”;
  • Helped the Union of Municipalities develop websites for the municipalities of Plav, Plužine and Šavnik.
  • Prepared an assessment for establishment of a functional municipal bonds market in Montenegro and issued the Manual for issuing municipal bonds in Montenegro. We have also trained municipal finance officers for issuing municipal bonds.
  • Organized trainings for the members of the Commission for monitoring of development of municipalities’ fiscal equalization system and municipal finance officers; A study tour to Belgium in order to learn about their best practices in the area of equalization; Training for municipal councilors on monitoring of municipal budget execution.

Who finances it?

Donor name

Amount contributed

Kingdom of the Netherlands

USD 1,080,900

Delivery in previous fiscal years

December 2012

USD 305,035

December 2011

USD 341,118

Project Overview
Status:
Active
Project Start Date:
January 2011
Estimated End Date:
October 2013
Geographic Coverage:
Nationwide/Montenegro
Focus Area:
Democratic Governance
Project Officer:
Ms. Jelena Mrdak
jelena.mrdak@undp.org
Tel: +382 20 447 462;
Partners:
Ministry of Finance, Ministry of the Interior, Union of Municipalities, Ministry of Economy, Municipalities in Montenegro
Related Documents
Project document