Project: Supporting Reform of Municipal Financing in Montenegro through Experience Exchange

Supported by the Slovak-UNDP Trust Fund administered by the UNDP BRC for Europe and the CIS

The project "Supporting Reform of Municipal Financing in Montenegro through Experience Exchange” was implemented by NISPAcee and covers the period from July 25, 2012 to April 30, 2013. The project is supported by the Slovak-UNDP Trust Fund, administered by the UNDP BRC for Europe and the CIS.

The aim of this project is to provide Slovak aid contribution to Montenegrin municipalities in the field of municipal finances (tax collection and generation of income) and inter-municipal co-operation, in order to improve thefiscal capacities of municipalities in Montenegro, increase the efficiency of tax administration, creating an enabling environment for the development of businesses, and to generate income, raise revenues and reduce expenses through inter-municipal cooperation/partnerships.

Experience from municipalities in Slovakia with regard to their practices of increasing the collection of taxes and increasing revenues represent a valuable asset for municipalities in Montenegro. In addition, case studies on municipal experience in creating a favourable climate for business growth and direct investments should be presented.

Within the project, a preparatory working meeting was held on August 27, 2012 with NISPAcee management staff and Slovak experts. Participants in the meeting agreed on the structure, content, dates and deadlines for the following outputs:

1. Report on best practices on municipal finances.

2. Two two-day roll out trainings for municipalities in Montenegro.

3. Review of Slovakia’s experience in inter-municipal cooperation.

4. Working visit of municipal representatives to Slovakia.

5. Conference on inter-municipal co-operation.

At present, two basic documents (municipal finances and inter-municipal cooperation) have been finalised in the Slovak language and translated into the Montenegrin language.

The report on best practices on municipal finances deals with selected issues of local public financial management. The structure is as follows:

• Brief introduction of the principles and processes of fiscal decentralisation in Slovakia.
• Evaluation of the possibilities for maximisation of municipal revenues (with focus on the Slovak conditions).
• Selected tools for improving the efficiency of municipal expenditures (with focus on the Slovak conditions, contracting and outsourcing in more detail).
• Three cases studies describing selected features of financial management in selected municipalities – Martin, Moldava nad Bodvou and Jesenske (budgetary process, budget structure, programme budgeting, revenue sources, efficiency improvements, etc).

The review of Slovakia’s experience in inter-municipal cooperation deals with the issues of inter-municipal cooperation and its focus is joint municipal offices. The structure is as follows:

• Brief introduction of the principles of the municipal self-government in Slovakia.
• Legal and organisational basis for joint municipal offices in Slovakia.
• Three case studies introducing the functioning of joint municipal offices in Moldava nad Bodvou, Turcianske Teplice and Jesenske.
• Brief information about other forms of inter-municipal co-operation in selected municipalities (micro-regions and public/private partnerships).

Simultaneously, a programme of two two-day roll out trainings for municipalities in Montenegro has been prepared. Trainings will be held on November 5-6, 2012 (Kolasin) and on November 7-8, 2012 (Milocer).