Internal Control for Efficient and Effective Public Procurement in Serbia

Jul 25, 2017

Serbia's Finance Minister Vujović opens our workshop for local authorities from across Serbia

Effective internal controls in public procurement is the focus of a two-day workshop organised by UNDP in Serbia for representatives of local government, national agencies and development partners. 

This is a topic not frequently discussed due to the tendency towards specialisation in professional practice. What is often missing is a “birds-eye” view, the broader picture and a holistic approach to public management, especially in the field of public finances, which combines the perspectives of policy makers, lawyers, accountants, procurements specialists, and others involved in the process.

The topics that will be discussed today and tomorrow bring together two streams of public finance management reform, which are governed by EU accession requirements, namely under Chapters 5 – Public Procurement and under chapter 32 – Financial Control. Moreover, these topics are key to the attainment of Sustainable Development Goals as we join forces to build effective, accountable and inclusive institutions at all levels.

The workshop brings together distinguished national partners, the Ministry of Finance, the State Audit Institution and the Public Procurement Office, as well as international development partners, the Swiss Agency for Development and Cooperation and the Swedish International Development Cooperation Office.  

This partnership provided for outstanding cooperation in implementing  Public Administration and Public Financial Management Reform over the years, both at central and at local levels.

"By working together, we pool our resources to support Serbia on its path to EU membership", stresed Karla Hershey, UNDP's Resident Representative in Serbia in her address to some 80 participants in the workshop.   

She went on to highlight some of the clear and measurable indicators of the progress achieved by this partnership, including the adoption by the Government of Serbia, in May of this year, of the Strategy of Public Internal Financial Control Development in the Republic of Serbia for the Period of 2017 – 2020 .

The project contributed to the development of this strategy and will continue to support its implementation together with the EU twinning project and other development initiatives.

The number of certified internal auditors in the public sector has grown to 348 this year.

Comparative statistics indicate a gradual and stable increase in the number of the public funds beneficiaries which have introduced financial management and control and internal audit in the reporting period 

According to preliminary aggregated data, the Ministry of Finance received 1096 reports in total from public funds beneficiaries for 2016, in March 2017 (which is 96 more than for previous year), out of which 724 were on Financial Management Control and 372 on Internal Audit. 

The State Audit Institution (SAI) and especially its Department for Audit of Local Self Governments started the awareness raising activities to open a channel of communication between Internal Auditors and State Auditors at the municipal level to increase audit effectiveness and to contribute to the further enhancement of financial accountability at the local level in 2015.

The State Audit Institution has organised a number of workshops with the support of the UNDP for managers of local self-governments to facilitate and reinforce the introduction and professionalization of their internal audit functions.

The SAI has simultaneously continued to invest efforts in strengthening their own internal capacities to increase the quality and frequency of external audit of municipalities and related local budget beneficiaries and to broaden the scope from financial to performance audits for improved control over public finances. This has increased the frequency and quality of audit reports and efficiency of audit teams.

There were 184 audit reports completed by the SAI Department for Audit of Local Self Governments in 2016 compared to 173 during 2015.

Successes in public procurement reform in Serbia include a significant decrease of non-competitive procedures which are at the EU average, and the subtle increase of the number of bids per tender.

Other examples of the progress achieved in strengthening competitiveness, transparency and efficiency in public procurement include the following:

The record-high share of open procedures in 2016 reached 93%, compared to 89% in 2015 and 85% in 2014 (substantially more than previous 66% in 2013)

The share of non-competitive procedures reached 3% in 2016, compared to 4% in 2015 and 5% in 2014 (the share of this procedure was 17% in 2013)

The implementation of the open procedure has been shortened from 77 days in 2014 to 61 days in 2015 and 2016; the implementation of a small-value procurement has been shortened from 37 days to 29 days

The average number of bids per contract increased from 2.6 in 2014 to 2.9 in 2015 and 2016

The overall assistance currently provided to the Public Procurement Office is aligned with the priorities of the Republic of Serbia set in the Strategy for Developing the Public Procurement for the period 2014 – 2018. The focus has been shifted from compliance, which has been the main topic in the previous period, to performance.

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For further information, please contact Stevan Vujasinovic at +381 11 4155 310 or by email at communications.rs@undp.rs