Since 2021, Montenegro has made some progress in reforms in the areas of the strategy for continuous improvement of public administration, policy development and coordination, and public financial management. These are also areas in which Montenegro, compared to its Western Balkan neighbors, exceeds the regional average. In other areas, reforms have stalled and are at or below the regional average. This applies in particular to civil service and human resource management (HRM), as well as service delivery and digitalization.
These are the key assessments stated in the SIGMA report on the reform and state of public administration in Montenegro for 2024. This document, as stated therein, was produced with the financial support of the European Union (EU) and should not be considered an official position of the EU.
SIGMA is a support program for improving the governance and management of EU public administration.
It was noted that the adoption of the Public Administration Reform Strategy (PAR) in December 2021 and the Public Finance Reform Program in December 2022 marked clear progress in terms of clarity of direction for reforms in Montenegro. With EU support, structures for the implementation and monitoring of these reforms have been established, thus fulfilling the prerequisites for their successful implementation.
“The implementation of the Public Administration Reform Strategy is at a low level. Human resource management capacities are weak, and the top management structure is unstable, with significant shortcomings in merit-based recruitment. The typology of the organization established by law is not respected, and accountability based on clear objectives and performance management of agencies are absent. The quality and digital accessibility of services remain at a low level. Montenegro lags behind regional partners that have made significant progress. The implementation of the recommendations of oversight institutions is relatively low, with a lack of parliamentary support for these institutions. The practical implementation of existing legal obligations in public financial management lags in several areas. The solid institutional set-up for policy development and coordination shows weaknesses in implementation,” the report states, adding that several legislative activities related to the law on civil servants and employees, free access to information and local self-government could not be included in the report.
Most obligations from the EU process have not been fulfilled
Positive developments have been recorded in public finance management - stronger fiscal policy guidelines have been adopted, the legal framework for capital investment budgeting has been improved, the legal basis for the Fiscal Council has been created, and the electronic public procurement system is being further developed.
"Compared to the Western Balkans average, Montenegro shows a relatively good state of affairs in policy planning and coordination, as well as in the implementation of regulatory impact assessments (RIA). When it comes to public financial management, this refers to budget reporting, as well as the legal and institutional system for public procurement. On the other hand, in the area of public service and human resource management, there is significant room for improvement, such as in recruitment, the salary system and working conditions, professional development and work efficiency of civil servants. The provision of high-quality services, as well as meeting the requirements of digital governance, are below the regional average," the report concluded, stating that by-laws are often not adopted on time, which prevents the immediate implementation of new legislation.
Although European integration is high on the agenda of the current Government, the existing structures for coordinating European integration have not been fully functional in previous years, and the Montenegro EU Accession Programme, the report noted, does not contain adequate cost estimates for planned activities.
"This is just one example of the general problem of poor quality cost estimates in planning documentation. As a result, most of the obligations from the EU accession process have not been met," the Report emphasized.
Parliamentary oversight ineffective
SIGMA notes that parliamentary oversight, although well regulated by law, is not consistently effective, and that this is also contributed to by unreliable legislative planning by the Government, which makes it difficult to plan the work of parliament.
"However, the parliament itself often deviates from standard procedures for adopting laws, resorting to urgent procedures. Laws initiated and drafted by MPs generally do not undergo public consultations and do not contain RIA reports or fiscal impact assessments, which creates specific budgetary risks," the Report points out.
The civil service and human resource management face significant challenges and most of the shortcomings identified in 2021 remain unchanged.
"The Law on Civil Servants and State Employees still does not provide for merit-based employment, nor objective criteria for dismissal or demotion due to reorganization. Public institutions with executive functions, such as regulatory agencies, continue to operate under special laws that are not aligned with the principles of public service. These principles are not applied in practice when it comes to top public management (TPM), as confirmed by the extremely high turnover rate in these positions - 74% in 2021 after the parliamentary elections in August 2020, and still 61% in 2023. Access to TPM positions based on merit is further jeopardized by the large number of acting positions (a third of all positions), including appointments of persons outside the civil service without a transparent procedure," SIGMA states.
The report states that on the positive side, it should be noted that women occupy 42% of TPM positions, which is slightly above the OECD average.
Unfair salary schedule
It was further assessed that the capacities for human resources management within the public administration are limited, and the HRM (human resources management) information system is underdeveloped.
“Internal and external fairness of salaries is not ensured, leading to high dissatisfaction among civil servants with the salary policy. The Human Resources Administration strives to improve professional development through centralized training and oversight of performance appraisals. However, the results of individual appraisals are predominantly in the excellent category, which significantly reduces their usefulness,” the report states.
Although the legal framework regulating the organization of public administration comprehensively covers the organizational structure of the central public administration, its practical application, as noted, still leads to problems with accountability.
“Several institutions lack adequate accountability to their line ministries, which negatively affects the capacity of these ministries to lead their policy areas. Public administration management is still not focused on results, but on fulfilling formal requirements. While there are strong formal guarantees for access to information of public importance, financial incentives for lawyers encourage abuses, which disrupts the appeals system. As a result, the backlog of cases in the Administrative Court has increased rapidly in the last two years, and the average waiting time for a first-instance judgment is almost four years. The level of implementation of the recommendations of oversight bodies remains low, and the Parliament has not adequately supported the institution of the Protector of Human Rights and Freedoms and the State Audit Institution (SRI) in addressing these challenges,” the report states.
When it comes to anti-corruption policy, problems persist, especially in the system of declaring assets and income. It is added that the law on administrative procedure promotes the principles of good administrative behavior, but these principles are not consistently applied in the legal system and practice.
Paper before digital services
“A strategic framework for improving service delivery is in place, but the quality and digital accessibility of services remain low. While the overall quality of public service delivery has not improved in recent years, significant progress has been made in finalizing and clarifying Montenegro’s strategic plans for improving public service delivery in line with the existing legislative framework. However, current practice still lags behind in several areas: limited digital access to services, insufficient customer orientation, poor collection and use of customer feedback, poor communication of service standards and inadequate reporting on their effectiveness. There is significant untapped potential for integrating services around life events and for proactive service delivery based on data from official records, rather than requiring users to search for them,” the report states.
SIGMA states that although the Government continues to expand the scope of digital services, the services analyzed are still predominantly traditional and based on paper forms.
"The main challenges remain the consolidation of e-services on a single portal and the improvement of interoperability between institutions, with the lack of coordination and governance mechanisms delaying key activities. The legislative framework also requires further development, including strengthening cybersecurity and data management. When it comes to the use of digital tools in the functioning of public administration itself, there is a good level of digitalization, especially in terms of public sector transparency. However, there are areas that require additional digital improvements," the report says.
Taking into account the existing weaknesses in the functioning of public administration and understanding the potential of the Montenegrin administration to implement reforms, the following directions, as stated by SIGMA, deserve the highest level of attention and support:
“The government should ensure the achievement of its policy objectives, as defined in horizontal and sector reform strategies, through timely implementation of plans and thorough review and guidance if necessary. The government should ensure competitive recruitment of highly competent candidates for management positions and stabilize the top management structure in public administration. The government should accelerate reforms aimed at improving the quality, simplification and accessibility of administrative services via the Internet, in order to catch up with the progress made by other countries in the region,” the report concluded.
Parliament does not care about the SAI report
The constitutional and legal independence of the State Audit Institution (SAI) is well established, with organizational and managerial independence ensured. “However, the independence and organization of the SAI have been negatively affected by the failure of the Parliament to appoint the President and the fifth member of the SAI as of July 2022. The SAI continues to successfully carry out its mandate, is aligned with international standards and is working to improve its internal quality management system and engagement with external stakeholders. However, the Parliament does not sufficiently use audit reports as an instrument to hold the Government to account,” the report assessed.
Excess employees in municipalities
SIGMA states that the legislative and institutional framework for municipalities and their financing is well established and in line with the European Charter of Local Self-Government.
“However, in practice, the powers of municipalities remain limited, and inter-municipal cooperation and consultations with municipalities before making decisions at the government level are unsystematic. Many municipalities have excess employees, and recruitment and human resource management are not sufficiently transparent. External oversight and internal control systems are not sufficiently effective. The Ministry of Public Administration has recognized the need for improvements. Following a comprehensive analysis of the functioning of the local government system conducted in 2023, the ministry is preparing a new legal framework,” the report says.
It was also assessed that local government finances do not cover all the competencies that municipalities have taken over.
"The existing system of economic balance is inefficient, leading to a level of inequality among municipalities that is significantly higher than in most EU countries. In addition, insufficient revenue collection and a lack of financial discipline contribute to the indebtedness and over-indebtedness of many local government units," the report says.
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