Local Government Finance Reforms Serbia, Phase III

Serbia’s steady progress in public financial management reforms notwithstanding, the full operationalisation of the regular annual work cycle of the public sector in Serbia is still an ongoing process. The actual implementation of policy planning and management reforms remains a challenge. The framework regulating managerial and professional autonomy should be counterbalanced with a sound framework of performance management, ministerial steering, oversight or accountability for results. Capacities of administrative bodies should be improved in terms of financial and service performance reporting and oversight of fiscal risks.

The overall objective of the project is for the public sector in Serbia to become more effective and accountable, to manage public finances more efficiently, and to use resources more strategically, thereby creating a better economic framework conditions for the population and the private sector.

Outcome 1 - The concept of managerial accountability is introduced in selected Local Governments (LGs) and capacities of local actors to operationalize and improve accountability and transparency are strengthened.

Outcome 2 - The concept of performance management is introduced in selected LGs and capacities of local actors to operationalize and improve it is strengthened.

Outcome 3 - Oversight of fiscal risks at the local level is improved.

Outcome 4 - Increased effectiveness of public finance management at the local level through better Internal Audit and Financial Management and Control systems.

Principaux résultats attendus:  

The concepts of managerial accountability is introduced in selected Local Governments (LGs).

Capacities of local actors to operationalize and improve accountability and transparency at the local level are strengthened.

The concept of performance management is introduced in selected LGs.

Capacities of local actors to operationalize and improve performance management at the local level are strengthened.

Fiscal risk oversight is strengthened in selected LGs.

Establish and improve lines of accountability between LGs and their municipal enterprises.

Financial Management and Control (FMC) and Internal Audit (IA) are strengthened in selected LGs.

Local actors have increased capacities to use FMC systems and I

Policy dialogue is strengthened in all of the above sectors.

Principaux résultats antérieurs:  

40 LGs introduced FMC systems, while 14 LGs improved/introduced IA functions in accordance with the European Union’s Negotiating Chapter 32 PIFC requirements.

Subnational PEFA assessments conducted in the second phase show significant progress in the areas covered since the program start in 2016.

The Model of EE Improvement in Households, developed by RELOF, exceeded CHF 47.5 million investments in energy efficiency in the first year of its implementation.

The framework of planning and reporting of public enterprises has been strengthened through the development of a Software management tool for managing risk oversight of municipal enterprises’ (MEs) operations. The new MoE bylaw recognises the RELOF2-sponsored software tool as the official platform for oversight of over 549 public enterprises that employ over 130,000 people and cover over 23% of the capital of the Serbian economy.