Five state institutions - the Ministry of Economic Development and Tourism, the Ministry of Agriculture, Forestry and Water Management, the Ministry of Ecology, Spatial Planning and Urbanism, the Revenue and Customs Administration and the Environmental Protection Agency, from January 2020 to September 2022, spent 4,5 millions of euros for the payments of engaged natural persons outside the prescribed procedures and without clear criteria.
This was stated in the report published yesterday by the State Audit Institution (DRI) "Successful engagement of natural persons without establishing an employment relationship in state bodies", with the assessment that the engagement of natural persons without establishing an employment relationship in state bodies, in the period covered by the audit, was not carried out successfully.
These five institutions were chosen by random sampling for this research. If similar practices exist in the other hundred or so various state institutions, we could be talking about several tens of millions of euros annually spent on the hiring of "workers" without the need for or beyond the prescribed procedures.
The period includes the administration of three governments
The research period of two years and nine months covers the work of these institutions in three governments - the last year of the Duško Marković (DPS) government, the entire period of Zdravko Krivokapić's cabinet, and the first five months of the administration under the Dritan Abazović government.
This audit was carried out by a collegium consisting of Dr. Branislav Radulović and Zoran Jelić.
The aim of the audit was to examine whether state administration bodies (ministries and administrative bodies) manage the engagement of natural persons to perform tasks without establishing an employment relationship in an efficient manner, as well as whether their engagement achieves the expected results.
Radulović and Jelić assessed that the hiring of workers under contracts for temporary and casual jobs and work contracts is managed unsuccessfully, with violations of procedures, without clear criteria on the need for hiring and the amount of compensation... Due to these omissions and violations of procedures, the SAI made several recommendations for their correction.
These five institutions are required to submit to the SAI an Action Plan for the implementation of the recommendations by October 5 of this year and a report on the actions taken based on the submitted recommendations by March 5 of the following year. Given that the election of a new Government is expected, and thus new managers in these five institutions, this also means that some new ministers and directors will correct irregularities in the work of the previous three administrations.
They plan a few thousand and spend millions
Among the failures is poor planning of these expenses, that is, at the end of the year, much more money was spent for such payments compared to the planned sums. Thus, in 2020, when Milutin Simović was the minister, the Ministry of Agriculture spent 340 million on consulting contracts instead of the originally planned 5,5 thousand, and 15 thousand were paid for work contracts instead of 165 thousand.
There were slightly smaller differences in the following two years and two government administrations. In 2021, the Ministry of Economic Development of Jakov Milatović spent 789 million on consulting contracts instead of the planned 1,9 thousand, and the Ministry of Agriculture of Aleksandar Stijović spent 3,3 million instead of the planned 2,1 million. The then Minister of Urbanism, Ratko Mitrović, had a different result because instead of the planned 2,2 million, he spent 624 euros on consulting services, while 248 euros were spent on construction contracts instead of the planned 374. The Environmental Protection Agency spent 391 million instead of 1,69 thousand for consulting services that year.
In 2022, the biggest difference in planned and spent money for consulting services was at the Ministry of Ecology and Spatial Planning, when Mitrović and Ana Novaković Đurović were the ministers of this department for about five months, because 1,6 was planned and 4,2 was spent million. In that year, the Revenue and Customs Administration planned 9.677 euros for consultants and spent 1,6 million, while 210 was spent on work contracts instead of 916.
This also shows that, regardless of the three changes of government in the observed period, poor planning of these budget items and spending beyond the predicted amounts continued.
The hiring of natural persons without establishing an employment relationship was paid through forms of contracts - on work, on temporary and occasional jobs, on consulting services and "other fees".
They "hired" without a plan or reason
State institutions, if they need to engage natural persons for these temporary and extraordinary jobs, must have a document about it - an engagement plan, where, among other things, the reasons and needs for such engagements would be stated.
"The Ministry of Economic Development and Tourism, the Ministry of Agriculture, Forestry and Water Management and the Directorate of Revenue and Customs did not adopt engagement plans that would define the jobs for which it is necessary to conclude contracts with natural persons without establishing an employment relationship. The plans of the Ministry of Ecology, Spatial Planning and Urbanism and the Environmental Protection Agency contain very limited information about the need to hire natural persons, i.e. primarily they contain data in which organizational unit it is necessary to hire a natural person and for which tasks", the SAI report stated.
The SAI also states that these institutions have increased payments based on these contracts several times over the years through the redirection or rebalancing of the budget, and that the Ministry of Finance approved these increases even though these requests "clearly show that it is a matter of redirecting funds for the purposes of realization contracts on work concluded for the performance of tasks from the basic competence of these state bodies". In this case, it was not specified whether such practice applied to all three government administrations in the observed period.
The SAI asked these five institutions to submit the records they keep for the concluded contracts with natural persons in the period from January 2020 to September 2022.
"They generally did not keep records of concluded contracts with natural persons, and if any records were kept, it refers to concluded contracts for work, while there are no records for other contracts with natural persons. The records submitted by them were a limiting factor in the implementation of the subject audit because they provide a very small number of data on concluded contracts, e.g. name and surname, amount of funds in net amount, etc. This means that the state authorities do not have integrated data on contracted jobs, engaged persons, performed jobs, value of contracted and performed jobs, both for completed contracts and for contracts whose realization is in progress", says DRI.
Fee amounts determined without criteria
State institutions are obliged to define with internal rules the procedure for hiring natural persons without establishing an employment relationship, however, the Ministry of Agriculture and the Revenue and Customs Administration do not have such rules, while the Ministry of Economic Development has them, but they do not sufficiently define the supervision and control of hired persons and their performance.
In the proceedings before the SAI, these five institutions could not prove how they arrived at the agreed amount of compensation with natural persons who were engaged, especially when it comes to the conclusion of the contract for the work.
"This is because they do not have defined criteria for determining the amount of compensation and the procedure for determining them is not documented. Also, the agreed amounts of compensation, in the case of concluded work contracts, were changed without defining the criteria and reasons for changing the contracted amount... By reviewing the work contracts at the Ministry of Economic Development and Tourism, the Ministry of Agriculture, Forestry and Water Management and the Ministry of Ecology, Spatial Planning and Urbanism and the Administration of Revenue and Customs, it was determined that they, through the concluded Annexes, changed the agreed amount of compensation for the same scope of work, without specifying the criteria for changing the agreed amount and did not document the reasons for changing the agreed amount," the report stated. .
There was no monitoring whether the work was actually done
The SAI also discovered that in the contracts concluded with natural persons, the tasks that are the subject of the contract are not sufficiently clearly and precisely defined, as well as that supervision over the work of engaged persons and reporting on the work done, in order to monitor the implementation of the contract, is not foreseen.
"The subjects of the audit were asked to submit, on a sample basis, a certain number of contracts concluded with natural persons. Upon inspection of them, it was determined that no article defines the way in which state authorities plan to control the implementation of the contract in question, as well as the way of supervision, in terms of quality, timeliness and fulfillment of contractual obligations", the report stated.
The SAI also believes that from the documentation on the engagement of persons through work contracts and on expert-consulting services, supplementary work,... it can be concluded that "the performed work often does not represent additional value for the client".
There are no procedures for choosing who will be hired
For all five observed institutions, it is not clear how they choose the people they will hire.
"The hiring of natural persons without establishing an employment relationship (especially when it comes to work contracts) was carried out in a non-transparent manner, considering that the audit subjects did not regulate the way in which the nomination and selection of persons to be hired is carried out with internal regulations and procedures. It is not known how the authorities choose the persons with whom they conclude contracts for the performance of work without establishing an employment relationship, except when it comes to contracts concluded under
conducted procedure of public procurement or public call (advertisement) for candidate application", it was stated in the report of the SAI.
Contract on work and for systematized workplaces
According to the SAI, the majority of persons engaged through labor contracts and contracts for expert-consulting services, which were concluded without a public procurement procedure or a public call for candidate applications (advertisements), performed jobs for which jobs have already been systematized and which represent jobs basic activities of the body or are directly related to them.
"To what extent state authorities used work contracts as a way of hiring people to perform systematized work, we can see from the example of the Ministry of Agriculture, Forestry and Water Management, which concluded work contracts for a period of two years", stated the DRI, specifying that work contracts do not belong to labor legislation and to be applied for temporary or extraordinary services.
"Persons engaged through employment contracts do not have equal responsibility for their work compared to permanently employed persons, nor did they have other rights as workers in a permanent employment relationship (PIO, annual vacation, etc.). The fact that these persons had access to numerous data that cannot and should not be accessed by anyone who is not a civil servant or state employee is worrying, as can be seen from the Report on the work of persons engaged in this way", says DRI.
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