Belgrade, 30 October 2019 - Progress that Serbia achieved during the past four years in enhancing the efficiency of public finance management and control at local level, as well as involvement of civil society organisations and the public in budget planning and execution, was presented at the Conference on Public Finance Management at Local Level in Belgrade, organised with the support of the Government of Switzerland.

The Conference was opened by Sasha Miller, head of the Swiss Embassy management department, Duško Pejović, President of the State Audit Institution, Spomenka Vircburger, acting assistant minister of finance – the Central Harmonisation Unit, and Anas Qarman, Deputy Resident Representative of the United Nations Development Programme (UNDP).

„The Swiss supported project implemented through UNDP exceeded the set objectives and established internal audit capacities in designated partner local governments. Regular internal and external audit of local governments will bring more trust by citizens and institutions, and will ultimately contribute to a more predictable and sustainable financing at the local level, including through central government transfers“, said Miller.

UNDP Deputy Resident Representative Anas Qarman stated that thanks to working with internal auditors in municipalities their reports have become of better quality and more reliable and that cooperation has been improved between auditors in local governments and the state auditors:

„Through the online software for internal audit reports and financial management and control, and the digital platform intended for professional development of internal auditors, the Swiss Government and UNDP, in partnership with the Central Harmonisation Unit of the Ministry of Finance, have increased the efficiency and transparency of public finance and have ensured ongoing training of auditors at local level“, stated Qarman.

The President of the State Audit Institution (SAI), dr Duško Pejović, presented the Analysis of key problems in managing public finance at local level based on the experience of the SAI:

„Compared to the beginning of the project, when none of the units of local government were given positive assessments, now there are 11 positive audit opinions on audit of financial statements at local level. In this respect, progress has been noted with respect to financial statements and results of operations, where the financial results are now presented more objectively. The conducted audits have also resulted in certain initiatives which led to changes in the Law on Accounting and the Law on Audit, and more attention will be paid to training, certification and the issue of accountability, both managerial accountability and accountability of persons compiling financial reports”, noted dr Pejović.

UNDP experts presented the results of public involvement in managing public finance, and results of the survey on how internal auditors and those in charge of managing budgets in local governments perceive their cooperation. 

The survey conducted in 14 units of local governments indicated that there is a gradual change in the perception of internal auditors in local governments. After a number of years of working together, during which they have realised the advantages of the existence of internal auditors, and during which seminars have been conducted raising awareness of their role, employees in local governments now mostly assess this cooperation as excellent.

However, the survey also determined that public internal financial control and management in most municipalities is in the early stages and that further development requires additional efforts and greater engagement of all stakeholders, particularly the management. The survey also indicates that the number of auditors is not yet sufficient.

In addition to working with internal and state auditors, UNDP has also provided support to greater involvement of citizens and civil society organisations (CSO) in public finance management in cities and municipalities. The training which was provided enabled the CSO’s to acquire more detailed knowledge of the budget process, and local governments gained understanding why it is important to make budget information clear, transparent, and accessible to the public.

The public is involved in the budget process through different activities. This resulted in financing projects from local budgets which the citizens had proposed, for example in Užice, Ruma, and Niš, development of public guides through the budgets (Užice, Niš), thematic public debates in sub-municipal units (Loznica), and publication of decisions on the budget in machine readable format (Niš).

These results were presented during the final Conference within the project „Enhancement of Municipal Audit for Accountability and Efficiency in Public Finance Management“, which was implemented with the support of the Swiss Government, in cooperation with the Ministry of Finance – the Central Harmonisation Unit, by the UNDP since 2015. 

The project was initiated when the Republic of Serbia opened negotiations on Chapter 32 (Financial Control) within the accession negotiations with the EU.