Local Government Finance Reforms Serbia Phase II
The project supports subnational public financial management (PFM) reforms in specific thematic areas. Based on the good results achieved so far, the second phase envisages a scaling-up of activities to a larger number of municipalities.
Economic and financial policy
- Foreign Consultants
Better public financial management (PFM) is an important element of Serbia?s reform agenda. The budgets of many local governments are unsustainable, with a majority of public enterprises showing poor performance. In addition, local government spend too much on subsidies and too little on public investments. Overall, poor financial management at local level results in poor public services. SECO has been supporting subnational PFM reforms since 2016. The scaling-up of activities to a larger number of municipalities under the second phase will allow to have a more systemic impact.
The overall objective is to strengthen PFM at the subnational level for increased oversight, fiscal risk management and more strategic allocation of public resources. More specifically, the project will work in three thematic areas: (i) introduction of financial management and control (FMC) systems, (ii) introduction of internal audit functions, and (iii) introduction of effective oversight systems on public enterprises. The project will work with a mix of implementation modalities and a specific change management approach to achieve sustainable results. Furthermore, it will continue to strengthen policy dialogue between the local and the central level and peer-learning amongst municipalities.
Improved risk management and decision making at municipal level
Better risk control enables proper use of funds and more efficient and effective budget execution
Better fiscal risk management through improved oversight on public enterprises
Efficient policy dialogue between local and central level established
Well-working peer-learning mechanism between municipalities is established
Introduction of financial management and control (FMC) systems
Introduction and strengthening of internal audit function
Piloting of two models of joint internal audit function
Development and implementation of fiscal risk oversight system for public enterprises
Establishment of policy dialogue discussion groups on FMC, internal audit and fiscal risk oversight
Elaboration of peer-learning knowledge products on FMC, internal audit and fiscal risk oversight
Results from previous phases:
FMC systems introduced in all six municipalities and in four public enterprises.
Oversight over public enterprises has been improved through the introduction of a risk-based reporting format. Furthermore, partner municipalities have become aware of their ownership of public enterprises and their financial responsibilities.
Planning and budgeting processes were improved enabling partner municipalities to develop realistic budgets and execute them as intended.
Transparency of local budget information has been enhanced through the introduction of a budget execution format which covers all revenues and expenditures on a monthly basis.
Internal audit functions were introduced and strengthened in two municipalities.
Nine knowledge products were produced as part of the peer-learning activities.
Improvements in the collection of local tax revenues have been made in three municipalities through the integration of local tax administration databases with other databases.
|Directorate/federal office responsible||
|Budget||Current phase Swiss budget CHF 3’000’000 Swiss disbursement to date CHF 0 Budget inclusive project partner CHF 3’000’000|
|Project phases||Phase 2 01.01.2019 - 31.12.2022 (Current phase)|