REPUBLIC OF MONTENEGRO MINISTRY OF FINANCE

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REPUBLIC OF MONTENEGROMINISTRY OF FINANCE

• MINISTRY OF FINANCE ROLE IN THE BUDGET PROCESS
• STANKO JEKNIC
• REPUBLIC OF MONTENEGRO MINISTRY OF FINANCE
• FEB, 2006

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MINISTRY OF FINANCE AUTHORITIES

• GENERAL AUTHORITIES
• Develops instructions and guidelines for
  implementation of the Organic Budget Law
• Monitoring budget execution
• Development of the technical standards (IT)
• Supervise legal compliance of the Tax
  administration, Real Estate Administration,
  Custom Administration, Agency for Money
  Laundering Prevention and Agency for
  Anti-corruption.

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MINISTRY OF FINANCE AUTHORITIES

• BUDGET FORMULATION
• Report on the results of the macroeconomic and
  fiscal policy in the current year
• Propose fiscal policy goals and guidelines for
  coming years
• Develops annual instructions for spending units
  budget preparation
• Propose the outflows of the spending units
• Propose budget deficit financing
• Creates the draft on the Annual Budget Law

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ROLE OF THE SPENDING UNITS

• SPENDING UNITS INCLUDE ALL
• Ministries,
• Other State and administrative bodies,
• Local administration bodies

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ROLE OF THE SPENDING UNITS

• BUDGET PLANNING
• Submit requests for allocation of budget funds to
  the Ministry of Finance and
• Justify their proposal for the allocation

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ROLE OF THE SPENDING UNITS -cont-

• Justification of the spending units requests
  include
• Is the proposal compatible to the economic policy
  of the Government
• Will the expenditures contribute to GDP growth
• Identification of operating or capital
  expenditures, and
• Financing the budget deficit.

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ROLE OF THE SPENDING UNITS -cont-

• A spending units request contains
• Operating budget,
• Capital budget,
• Review of the planned programs and subprograms,
• Expenditure forecast and explanation,
• Multi-year contracted obligations and
• Funding sources.

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MINISTRY OF FINANCE AUTHORITIES

• BUDGET EXECUTION
• Montenegro has a Treasury Single Account
  enabling
• Centralization of the financial operations
• Strengthening financing control,
• Better information relevant to the management
  decision making process,
• Communications with the payment system, and
• Direct control of the budgetary funds.

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INTERNAL AUDIT

• Internal Audit Sector
• Plans, organizes and performs audits
• Implements Institute for Internal Auditors IIA
  standards
• Includes budget beneficiaries, off-budget funds
  and municipalities ALL GOVERNMENT OPERATIONS

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GOAL OF THE AUDITING

• Fiscal-Legal compliance,
• Performance efficiency and effectiveness

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AUDITING REPORT

• Contains
• Auditors findings and recommendations
• Budget beneficiaries comments
• Schedule for resolving the findings within 90
  days

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BUDGET REFOM IN MONTENEGRO

• Implementation of the Program Budget,
• Implementation of Capital Budget process
  (beginning 2007)
• Medium Term Expenditure Forecast MTEF
  (beginning 2007),
• Debt Management Strategy (adopted 2005),
• Web based budget preparation system (2005).