Introducing SIGMA's Principles of Public Administration, Belgrade, 14 December 2016

© OECD
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Workshop for Civil Society in
Serbia on the Principles of
Public Administration
Erika Bozzay, Brian Finn, Klas Klaas, Primoz Vehar
SIGMA
Belgrade, 14-15 December 2016

What is SIGMA?
• Support for Improvement in Governance and
Management - a joint initiative of the EU and
OECD
• Experts from EU public administrations
• Working with countries to strengthen public
governance systems and public administration
capacities for over 20 years to support socio-
economic development through public
administration reform (PAR)
2

Principles for two groups of
countries
• Principles designed for the EU
Enlargement countries
• Principles tailored for the European
Neighbourhood Partners
3

Cross-sectoral framework
The Principles apply to everything that
government does. They:
• Apply to all sectors and policies (health,
education, security, finance…)
• Describe what is needed for effective
implementation of policies
• Provide the building blocks for good
public administration from policies and
institutions to government outputs
4

Use of the Principles so far
in the EU Enlargement countries
Evaluation of current state and progress over
time
• Baseline measurement and assessments for
Albania, BiH, Kosovo*, Macedonia,
Montenegro, Serbia and Turkey
* This designation is without prejudice to positions on status, and is in line with UNSCR 1244/99 and the ICJ Opinion on
the Kosovo declaration of independence
5

Design and implementation of reforms
• Guidance for public administration reform (PAR)
strategies in Albania, Kosovo*, Montenegro,
Serbia
• Input to public financial management (PFM)
reform strategies in Kosovo*, Macedonia,
Montenegro, Serbia
• Guidelines for strengthening legal frameworks,
e.g. civil service laws
* This designation is without prejudice to positions on status, and is in line with UNSCR 1244/99 and the ICJ Opinion
on the Kosovo declaration of independence
6

Dialogue with EU and other partners, e.g.
• Input to PAR Special Group meetings
• Formulation of sector budget support
indicators
7

Six core areas of a
comprehensive framework
8
Policy
development
and
co-ordination
Public service
and human
resource
management Accountability
Service
delivery
Public
financial
management
Strategic framework of public administration reform

The Six Core Areas are about..
• An administration focused on constantly
improving its own functioning
• Helping governments to make good decisions
• People with the skills and knowledge to get
things done
• An administration that allows citizens to get
things done, for their benefit
• Good, accessible public services for citizens
• Public administration using money wisely
9

Accountability
An administration that allows citizens to get
things done, for their benefit
10

Service delivery
Good, accessible public services for citizens
11

Structure of the Principles
• Six core areas as defined by the EC
• Key requirements
• Principles
• Subprinciples
• Methodological Annex:
• Quantitative indicators
• Qualitative indicators
• Information sources
12

Purpose of the Methodological
Annex to the Principles
• Without knowing the starting point it is hard to
decide what needs to be changed
• Without analysing progress over time it is
impossible to say what has been achieved
• Therefore, the purpose is to provide a
methodological tool which allows countries to
evaluate their current state of affairs and
progress over time
13

© OECD
PAR strategic framework
&
Policy development and
co-ordination
Klas Klaas
14 December 2016, Belgrade

15
Policy
development
and
co-ordination
Public service
and human
resource
management
Accountability
Service
delivery
Public
financial
management
Strategic framework of
public administration reform

PAR reform planning
Principle 1: The government has developed and
enacted an effective public administration reform
agenda which addresses key challenges.
• Relevance
• Credibility
16

Implementation, monitoring and
reporting
Principle 2: Public administration reform is
purposefully implemented; reform outcome
targets are set and regularly monitored.
• Ability to track progress
• Knowing when and how to revise plans
17

Affordability of reforms
Principle 3: The financial sustainability of public
administration reform is ensured.
• Is it implementable?
• What about the long term cost?
18

Accountability and co-ordination
Principle 4: Public administration reform has robust
and functioning management and co-ordination
structures at both the political and administrative
levels to steer the reform design and
implementation process.
• Accountability at all levels
• Capacity to co-ordinate content
19

20
Policy
development
and
co-ordination
Public
service and
HRM
Accounta-
bility
Service
delivery
Public
financial
management
Strategic framework of public administration reform

12 Principles structured under two
wider topics
1. Policy planning and co-ordination
• Operational Centre-of-Government
• Government-wide policy planning
• Government decision-making
2. Policy development
• Policy development and drafting of legislation is
evidence based and inclusive
• Easy access and understanding of legislation
21

What is the Centre-of-Government?
• In the narrow definition it is the General Secretariat or the Prime-
Minister’s Office or equivalent.
• For the Principles of Public Administration it includes all
the key Government policy co-ordination and quality
control functions.
• In Serbia:
 General Secretariat of the Government
 Public Policy Secretariat
 Ministry of Finance
 Serbia European Integration Office
22

Centre-of-Government
Principle 1: Centre-of-government institutions
fulfil all functions critical to a well-organised,
consistent and competent policy-making system.
• 9 core functions expected
• but one single machinery of the
Government
23

Co-ordination of EU affairs
Principle 2: Clear horizontal procedures for
governing the national European integration
process are established and enforced under the
co-ordination of the responsible body.
• Ability to steer both the process and
content
• Being integrated to normal Government
apparatus
24

Government-wide planning
Principle 3: Harmonised medium-term policy
planning is in place, with clear government
objectives, and is aligned with the financial
circumstances of the government; sector policies
meet the government objectives and are consistent
with the medium-term budget.
• Alignment between the agendas of
politicians and administration
• Breaking the silos between ministries
25

Planning for EU accession
Principle 4: A harmonised medium-term planning
system is in place for all processes relevant to
European integration and is integrated into
domestic policy planning.
• Do we know what are the priorities?
• Is EU accession planning feasible and in
line with other national plans?
26

Monitoring and analysing progress
Principle 5: Regular monitoring of the
government’s performance enables public scrutiny
and ensures that the government is able to
achieve its objectives.
• Central monitoring and analysis of
content of Government policy
• Accountability shift to performance
27

Government decision-making
Principle 6: Government decisions are prepared in
a transparent manner and based on the
administration’s professional judgement; legal
conformity of the decisions is ensured.
• Can state institutions fulfil their roles?
• Transparency once again – public nature
of Government decisions and
communication
28

Parliament as an institution
Principle 7: The parliament scrutinises
government policy making.
• Parliament’s role in overseeing and
deciding on legislation
• Co-operation between the Parliament
and the Government
29

Ministries are focussed on policies
Principle 8: The organisational structure,
procedures and staff allocation of the ministries
ensure that developed policies and legislation are
implementable and meet government objectives.
• How much ministry staff are actual policy
experts?
• Co-ordination and responsibility inside
ministries
30

European integration is not
different from policy making
Principle 9: The European integration procedures
and institutional set-up form an integral part of
the policy-development process and ensure
systematic and timely transposition of the acquis.
• Fine balance between smooth co-
ordination and dedicated EI structures
• Acquis transposition is an integral part of
Government’s policy making
31

Thinking when preparing new
policies
Principle 10: The policy-making and legal-drafting
process is evidence-based, and impact assessment
is consistently used across ministries.
• Is it always clear which problems are
addressed with a change in a law?
• What does it cost for the state or for the
citizen?
• Gatekeeping function crucial
32

Informing and consulting in
advance
Principle 11: Policies and legislation are designed
in an inclusive manner that enables the active
participation of society and allows for
co-ordinating perspectives within the
government.
• Is inter-ministerial consultation adding
value?
• Stakeholder engagement and
opportunity to give input both important33

Legislation is well drafted and
accessible
Principle 12: Legislation is consistent in structure,
style and language; legal drafting requirements
are applied consistently across ministries;
legislation is made publicly available.
• Are complete packages of legislative
amendments prepared together?
• Are consolidated texts easily available?
34

Please ask questions!
35

© OECD
SIGMA
The Principles of Public
Administration
Serbia
(Public Service & HRM,
Accountability, Service Delivery)
Primož Vehar

Public service and HRM
1. The scope of PS is adequate, clearly
defined and applied in practice
- Clear legal basis with horizontal and vertical
scope!
- All general provisions included and applied in
practice?
- Serbia: Fragmented application of CSL still
exist (recruitment), lack of practical
distinction between political and senior CS
posts
37

2. The policy and legal framework for
professional civil service established and applied
in practice; consistent and effective HRM
practices across the public service
- Defined policies and strategies for PS
development, primary and secondary
legislation in line with key principles? A central
coordination unit in place? HRMIS? HRM
services? Oversight?
- Serbia: Implementation challenges as: HRMS
lacks the authority, HRMIS not updated and
interlinked. Weak role of the Administrative
inspection
38

3. Recruitment of public servants is based on merit
and equal treatment in all its phases; the criteria for
demotion and termination of public servants are
explicit
- Recruitment based on merit, equal opportunities
and open competition, clear criteria in legislation,
key are selection committees, appeal right
- criteria for demotion and termination in the law,
appeal right, practical application
- Serbia: Legislation not enough to safeguard the
merit principle, certain parts own recruitment rules,
discretion of the Head to select candidates from the
closed list, temporary personnel around 10% !
39

4. Direct or indirect political influence on senior
management positions in the PS is prevented.
- Key positions in every public service. Criteria clear
and disclosed. Selection based on merit, equal
opportunities and open competition.
- Termination procedures clearly provided in the law.
Practical application?
- Serbia: Political influence not prevented in practice.
High number of recruitment competitions did not
resulted in high number of appointments. Many
acting seniors officials. Termination for senior
officials jeopardised by the legal provision of
“serious disturbance” – without formal definition.
To be monitored!
40

5. The remuneration system based on job
classification; it is fair and transparent.
- Legal framework plus practical application
needed. Key relation between fixed and
variable salary. Allowances and benefits
established by law and applied in practice.
- Managerial discretion is limited to ensure
fairness, transparency and consistency.
- Serbia: Issue with discretionary performance
payment up to 20%, banned in 2015.
Transparent salary structure based on a job
classification system.
41

6. The professional development of public servants is
ensured through regular trainings, fair performance
appraisal and mobility and promotion based on objective
and transparent criteria and merit.
- Professional training is a right and duty in law and in
practice. TNA and training plans conducted, coordinated
and supported, resources are allocated
- Performance appraisal established in law and performed
in practice regularly. Right to appeal.
- Mobility is encouraged, as well as promotion, based on
merit, and transparent and clear criteria.
- Serbia: Good training methodology by HRMS, but
insufficient funding. Training not part of the appraisal
system. Performance appraisal exists as a paper exercise.
42

7. Measures for promoting integrity, and
preventing corruption and ensuring discipline in
the public sector are in place.
- Legal framework to prevent corruption is in
place and applied.
- Disciplinary procedures regulated in the
legislation and applied. Appeals procedure
established.
- Serbia: Ethnical codex in place, ACA implements
monitoring, but no force to implement sanctions.
Pretty high corruption perception index of
Transparency International.
43

• The policy and legal framework are defined and in line with most
administrative law principles
• Main challenges re implementation
 the scope of the public service is narrow;
 The boundaries between senior public servants and political
appointees does not safeguard the principle of merit;
 the central co-ordination unit is not accountable to the minister
responsible for public administration and has limited authority to
ensure the implementation of the legislation in a coherent manner
across the public service;
 the central Civil Service Registry is not fully operational to support the
strategic workforce planning, management and monitoring of HRM
practices in the public service.
44

45

• The salary structure for public servants is transparent, fair (with
minor inconsistencies) and based on a job classification system
• The ethical legal framework is largely in place and disciplinary
procedures are adequately regulated, without major problems
of implementation
• Main challenges
 Despite new procedures to end the ongoing use of acting officials as a
form of politicisation, recruitment regulations weaken the
commitment to merit-based recruitment and selection of public
servants in practice
 the salary system, which is based on a job classification structure, is
transparent but lacks some fairness;
 training strategies and plans exist but training does not reach all public
servants;
 performance appraisal needs to realise its potential by converting a
formal exercise into a real process that is implemented in accordance
with good practice standards;
 Despite many anti-corruption measures being in place, the perception
of corruption is still high in the country
46

Accountability
1. Overall organisation of the central government is
rational, follows adequate policies and regulations
and provides for appropriate internal, political,
judicial, social and independent accountability.
- Clear rules governing the organisation of the
executive, clear rules regarding rationality, scrutiny,
managerial accountability.
- Agencies are steered and controlled, and
responsible to executive.
- Serbia: Legal framework in place, but proliferation
of agencies – problem with coherent HRM.
Rationalisation needed. Too much reporting to the
parliament besides those reporting to government
and ministries.
47

Accountability
2. The right to access public information is
enacted in legislation and applied in practice.
- The right for public info is enshrined in the law
- Public info defined broadly, exemptions set
precisely, normally without or low charge. No
reasons for their request.
- Supervisory authority to control
implementation and can impose sanctions.
- Serbia: Legal framework in place, but too broad
scope for exemptions. No responses from many
institutions remains a challenge. Insufficient
capacities of the Commissioner
48

Accountability
3. Functioning mechanisms are in place to protect the rights of
the individuals to good administration and the public interest.
- State institutions are subject of scrutiny by oversight
institutions (as Ombudsman, SAI,..), courts, public,.. all based
on legislation
- The powers and independence of this institutions are regulated
- Parliament exercises scrutiny role over the Government,
Constitution has a clear rule also regarding Ombudsman
- Ombudsman is regulated by law, meets international standards
and administration implements its recommendations
- Serbia: Ombudsman has wide remit and authority by law.
Majority of implementations are implemented. But, surveys
show that awareness about Ombudsman is low and its
independency threatened.
49

Accountability
4. Fair treatment in administrative disputes is guaranteed by
internal administrative appeals and judicial review.
- Administrative appeal regulated in law together with the
procedure
- Specialised judges which workload is systematically analysed
- Costs of court proceeding does not prevent access
- Serbia: One instance administrative court with 4 branches,
mostly annulments of the administrative acts not the final
judgements. Clearance rate around 92%, backlogs slowly
reducing. Lack of training and insufficient legal aid. Only 16% of
court cases reversed or annulled by a Supreme Court.
50

Accountability
5. The public authorities assume liability in cases of
wrongdoing and guarantee redress and /or adequate
compensation
- Legislation in place for individuals to redress or
compensate the wrongdoing of the state
- Regulation of public liability is coherent and accesiblle
- Rules regarding time limits and burden of proof do not
jeopardise effective exercise
- Serbia: The legal framework is in place in several laws.
Adm Court and Civil Court competency. Costly and long
procedure. Limited/no information on the number of
cases.
51

Accountability
• Organisation of public administration is regulated by law but the proliferation of
agencies (many reporting directly to the Government or the Parliament) makes the
system difficult to manage
• Legal framework for provision of public information is in place but, in practice,
Commissioner unable to monitor implementation
• Administrative courts slowly reducing their backlog but, often, a “ping-pong” process
goes on between them and the public administration.
• There is an institution of the Ombudsman, the majority of whose recommendations
are implemented, but it encounters problems functioning in practice and challenges to
its merit.
• A system of public liability is in place but, in practice, owing to a lack of data, it is
impossible to comment on its effectiveness.
52

Service Delivery
1. Policy for citizen-oriented state administration is
in place and applied
- Strategies and their implementation, simplification
- Regulation of public liability is coherent and accessible
- Legal framework, applied in practice plus institutional
set up
- Cost of public services kept under transparent review
- Serbia: A policy on improving public services included in
Strategies. Activities on reducing administrative
burdens for business and citizens are present, especially
in the last period.
53

Service Delivery
2. Good administration is a key policy objective underpinning
the delivery of public service, enacted in legislation and
applied in practice
- Legal framework exists (LGAP), implemented in practice, good
administration is among the governmental priorities
- Key principles included in LGAP, included the right of hearing
- Reasons for the decisions are stated and rights of appeal
guaranteed
- Consultations with Civil society when general impact
- Serbia: A new LGAP adopted in 2016. Key principles included.
Currently too many specialised procedures. High level of
complaints. Silence of the administration one of the issues.
54

Service Delivery
3. Mechanism for ensuring the quality of public
service are in place
- Service delivery promotes one or several quality
assurance tools, regular monitoring in place,
service modernisation efforts on going, trained
officials…
- Standards of service delivery by PA are set out
- Serbia: PAR Action Plan contains activities aiming
at improving the quality of public service.
Improvements for citizens and business are in
place and are currently in progress (examples:
passport, ID, new-borns, …)
55

Service Delivery
4. The accessibility of public services is ensured
- Equal access to services in whole territory
- One stop shops available for wide range of services
- Electronic communication possible for many services
- Official websites and leaflets provide information on access to
services as well as rights and obligations
- Groups of special needs taken into account
- Serbia: Efforts in progress. E-services are increasing, its number
as well as number of users. The possibility to conduct
transactions via e-service remains limited. Standards for
accessibility of disabled persons have been set and monitored.
56

Service Delivery
• No coherent policy has been implemented in relation to service
quality (which is also reflected by the lack of data for indicators), but
some actions have been taken to increase the accessibility of public
services.
 Activities aimed at reducing administrative burdens are oriented mainly
towards businesses, with some success
 A high number of citizen complaints about administrative procedures but
new Law in motion
 User satisfaction of public services not measured though some activities
to improve service delivery included in PAR Action Plan
 A policy on service delivery, including e-services, exists; the Government
is developing e-services, and citizens and companies are using them
though there are some legal barriers preventing public administration
from offering more services with transactions online. 57

© OECD
Administration
Serbia
(PFM)
Brian Finn

PFM Principles in Public
Administration
• The PFM Principles are about the financial
framework within which public services are
delivered
 Cannot have what cannot be afforded
 Weighing benefits against the likely costs
 Ensuring sufficient funds are available for
activity
 Prioritising activities
59

PFM Principles in Public
Administration
• The PFM Principles aim to promote:
 macro-economic and fiscal stability though the
MTBF and other budgetary provisions in the
Principles
 Budget transparency by requiring publicly
available budget information
 Stronger links between sector strategies and
resource planning
60

Partners for PFM Principles
• In the countries
 Ministries of finance
 Treasury administrations
 Public procurement administrations
 Public procurement review bodies
 Supreme audit institutions
 Parliamentary budget and finance committees
• SIGMA also has worked with PEFA to ensure
consistency
61

Differences with PEFA
• No contradictions but some differences
• Compared to PEFA the SIGMA Principles do not cover:
 Tax administration
• Public revenue estimations and planning are included
 Detailed attention to local government finances
• Local government finances are included as part of general
government monitoring and transparency
• SIGMA PFM Principles place more emphasis on
 EU matters (Chapter 32, IPA funded programmes, acquis)
 Procurement is more detailed
• SIGMA PFM Principles linked to other PAR areas
62

Key areas within PFM
Principles (16) Indicators (55)
Budget planning
and execution
5 14
Public Internal
Financial Control
4 9
Public procurement 5 23
External audit 2 9
63

PFM Principle 1
1. The Government publishes a medium-term budgetary framework on a
general government basis that is founded on credible forecasts and covers
a minimum time horizon of three years; all budget organisations operate
within it.
• Credible forecasting underpins expenditure framework within which
Budget is formulated to ensure public finances are on sustainable path
• For Serbia
 there is a medium-term budgetary framework, but with such variations in
expenditure forecasts, there is no evidence to suggest that all budget organisations
operate within the framework.
 An examination of projections in the most recent Fiscal Strategies supports
concerns that the current Fiscal Strategy, which sets ambitious targets for fiscal
stabilisation, is founded on overly optimistic assumptions.
64

PFM Principle 2
2. The Budget is formulated in line with the national legal framework,
with comprehensive spending appropriations that are consistent with the
medium-term budgetary framework and are observed.
• Appropriate formulation of a transparent Budget necessary to ensure
public finances are on a sustainable path
• For Serbia
 The wide differences between Budget forecasts and actual revenues and
expenditures is not based on accurate, realistic projections.
 There is no rigorous analysis of the users’ Budget requests, and it contains minimal
explanatory detail.
 Failure to respect the deadline for submitting the Budget to the Parliament
suggests that the Parliament’s role is not strong.
65

PFM Principles 1 and 2
• Budget formulated within a multi-annual framework and in
accordance with legal provisions
• Main issues:
 Not based on realistic assumptions, with revenue undershooting target and
expenditures varying from original projections
 No clearly defined monitoring and enforcement procedures
 Large deficits, rising debt ratio although corrective action is being taken
 Parliament role not strong
 Weak linkage between ministerial strategies and MTBF
66

PFM Principle 3
3. The Ministry of Finance, or authorised central treasury authority,
centrally controls disbursement of funds from the treasury single account
and ensures cash liquidity.
• Cash management is central to the successful monitoring and control
of expenditure during the year. Without this, it would be difficult to
ensure that cash flow is aligned with the spending allocations and to
allow for timely remedial action where necessary.
• For Serbia
 Cash liquidity is ensured through the Treasury Administration using the treasury
single account. However, cash planning is on a month-to-month basis.
 Until the announcement of the IMF Stand-By Arrangement, there was no
systematic monitoring of accumulated arrears and, although the MoF publishes
details of outstanding payments on its website, an accumulated figure is not
published.
67

PFM Principle 4
4. There is a clear debt management strategy in place and implemented
so that the country’s overall debt target is respected and debt servicing
costs are kept under control.
The country’s debt ratio has got to be kept on a sustainable path or else
investors will lose confidence in the country’s ability to repay loans and
sharp remedial action affecting public services will have to be taken
• For Serbia
 Until recently, the debt target was not respected and although the Government has
announced steps to stabilise the debt, it is too early to judge how effective this will
be.
 There is a debt management strategy, and debt is monitored and reported
monthly, but the debt ratio had risen quickly up to 2015.
 Debt servicing is now costing the equivalent of 2.9% of GDP and is exposed to
exchange-rate movements and interest-rate rises.
68

PFM Principle 5
5. Budget transparency and scrutiny are ensured.
Information on public finances should be published on a regular basis so
that the Parliament and citizens can see clearly the progress of spending
and revenue collection during the course of the budget year
For Serbia
 The Budget System Law provides for transparency and scrutiny, and at the most
basic level the requirements of the Law are implemented.
 Profiles against which Budget execution can be analysed are not published,
however.
 Furthermore, the annual financial statement provides only the most basic details.
69

PFM Principles 3, 4 and 5
• Both cash and debt are managed centrally in Serbia, in line with legal
provisions and Budget system law provides transparency and scrutiny
• Main issues:
 Monthly profile data are not published, so transparency and scrutiny
an issue
 Cash planning on a month-to-month basis (15th of preceding month)
 Significant variations between projections and actual spending
 Spending below profile Jan-Oct but way above profile Nov-Dec
 Unable to provide data of accumulated arrears but at least they are
acknowledged
 Public Debt Law, Budget System Law do not prevent SOEs from
borrowing
 Annual financial statement presents most basic information
(transparency)
70

6. The operational framework for financial management and control
defines responsibilities and powers, and its application by the budget
organisations is consistent with the legislation governing public financial
management and public administration in general.
7. Each public organisation implements financial management and
control in line with the overall financial management and control policy
documents.
• Well established arrangements for the financial management and
internal control of public resources are essential to ensure that those
resources are utilised to deliver services efficiently, effectively and
economically. Those arrangements should facilitate the delegation of
authority to different levels of management with appropriate
accountability reporting
71

• Legal framework exists for functional financial management and
control system (FMC), including managerial accountability.
 But objectives and benefits of a fully operational FMC system are
poorly understood throughout the administration
 No data available for two of three quantitative
 Wastefulness of government spending, Serbia ranked 132 out of
144 countries.
 CHU annual survey suggests poor implementation of FMC
• Needs to be greater awareness at a managerial level of the
importance of FMC
72

8. The operational framework for internal audit reflects international
standards and its application by the budget organisations is consistent
with the legislation governing public administration and public financial
management in general.
9. Each public organisation implements internal audit in line with the
overall internal audit policy documents as appropriate to the
organisation.
• Internal audit is the means by which the top manager and
management team of an entity receive assurance from an internal
source that internal controls are appropriately designed and operate
effectively to ensure the organisation achieves its objectives.
73

• Legal framework and all key functions for IA are established and annual MoF
report shows further progress in the development of internal audit
• MoF provides training in IA
• MoF does not compile data about annual IA plans conforming to national
legal requirements
• MoF does not provide guidelines for applying the requirements for IA
independence
• Only 57% of public institutions have established the IA function
• Only 72% of IA staff had national certificates for IA in 2013 (63% in 2012)
• Quality of IA reports cannot be assessed owing to insufficient data but in
examples seen IA units are providing useful recommendations to help
management improve its control systems
• There is a risk of overlap and duplication in the work of IA and of budget
inspection although MoF wants to address this
74

15. The independence, mandate and organisation of the Supreme Audit
Institution are established and protected by the constitutional and legal
framework and are respected in practice.
16. The Supreme Audit Institution applies standards in a neutral and
objective manner to ensure high quality audits, which positively impact on
the functioning of the public sector.
• A public financial accountability system requires independent and
professional scrutiny of the Government’s management of public
funds in accordance with international standards. This is the role of
the Supreme Audit Institution, which should carry out its mandate
autonomously and report its findings annually to the Parliament.
75

• The independence, mandate and organisation of the SAI are
established and protected by the constitution and legislation
• The SAI cannot audit all institutions within its mandate every year but
SAI management mitigates the impact by applying a risk-based
approach for the audit planning decisions taken each year
• Of the recommendations in its 2013 reports, only 63% out of 1,044
had been implemented by end the following year
• The time that the SAI takes to initiate “offence procedures” reduces
the time available to undertake financial and performance audits.
76

Thank you for your attention!
More information can be found at:
www.sigmaweb.org
77

Principles for public procurement
(including concessions and PPPs)
• Part of PFM area
• Provide a guide for countries in their reform
process: How a well-functioning public
procurement system should look like?
• Framework:
 3 key requirements for the general characteristics of a
well-functioning public procurement system
 5 principles (Principles 10 – 14) grouped under the key
requirements
 Sub-principles under the principles
79

Compatibility with other frameworks
• Legal instruments developed within the framework
of the European Union:
 EU Directives on public procurement
 European Commission’s communications
 Court of Justice of the EU case law
• the OECD Recommendation of the Council on Public
Procurement (2015)
• WTO/Government Procurement Agreement (GPA)
• UNCITRAL model law
• Multilateral development bank rules

Common core principles
• Transparency:
 Publication of contract opportunities and contract awards
 Rules clear in advance
• Economy:
 Competitive procedures – also need for competitive supply
market!
• Efficiency:
 Variety of procedures, proportionate to the situation
• Non-discrimination:
 Rules on qualification and evaluation criteria, specifications
• Accountability:
 Review and remedies,
 internal control,
 external audit
• Sustainability:
 Most economically advantageous tender
81

Public Procurement:
Key Requirements (3)
1. Public procurement is regulated by duly enforced policies and
procedures that reflect the principles of the treaty on the
functioning of the EU and the EU acquis, and are supported by
suitably competent and adequately resourced institutions.
(Principle 10 and 11)
2. In case of alleged breaches of procurement rules, aggrieved
parties have access to justice through an independent,
transparent, effective and efficient remedies system.
(Principle 12)
3. Contracting authorities are adequately staffed and resourced
and carry out their work in accordance with applicable
regulations and recognised good practice, interacting with an
open and competitive supply market. (Principle 13 and 14)
82

Public Procurement Principle 1
Policy, legal and regulatory framework
Principle 10:
• Public procurement regulations (including PPPs and concessions) are
aligned with the acquis, include additional areas not covered by the
acquis, are harmonised with corresponding regulations in other fields,
and are duly enforced. (+8 sub-principles)
Serbia BM 2015:
• The legal framework for public procurement (including defence procurement)
 is largely harmonised with the EU acquis.
 ensures proper conditions for increasing transparency in public
procurement and for tackling corruption.
However, the system suffers from very detailed and prescriptive regulations,
which place a heavy administrative burden on the contracting authorities.
Links to the civil society:
• legislation is prepared in consultation with the whole procurement
community… 83

Institutional framework and administrative capacity
Principle 11:
• There is central institutional and administrative capacity to develop,
implement and monitor procurement policy effectively and efficiently.
(+10 sub-principles)
Serbia BM 2015:
• The institutional framework provides the necessary elements for a
functional system, but the excessive number of functions allocated to
central institutions (especially to the PPO) negatively influences
performance. In 2014, the PPO had to prioritise its tasks and focussed
mainly on the preparation of the missing implementing tools and thus
put less effort into its monitoring and oversight functions.
• An oversight and monitoring system … is in place, … access to data on
public procurement operations… 84

Remedies system
Principle 12:
• The remedies system is aligned with the acquis standards of
independence, probity and transparency and provides for rapid
and competent handling of complaints and sanctions. (+7 sub-
principles)
Serbia BM 2015:
• Proper regulatory framework and institutional set-up for
handling complaints is in place and access to review system not
restricted by excessive costs. PRB is facing a constantly growing
number of complaints.
• …comprehensive publication of judgements…
• …data on the functioning of the remedies system is published without
delay…
85

Procurement operations
Principle 13:
• Public procurement operations comply with basic principles of equal
treatment, non-discrimination, proportionality and transparency,
while ensuring the most efficient use of public funds and making best
use of modern procurement techniques and methods. (+13 sub-
principles)
Serbia BM 2015:
• Most contracts are awarded through open procedure, framework
agreements widely used, but degree of e-procurement penetration
still low as only notices are published on the Internet. In 2014, the
share of negotiated procedures without publication decreased
significantly.
• A risk indicator system signals potential integrity problems in the
procurement process. 86

Market functionality + professionalisation in public procurement
Principle 14:
• Contracting authorities and entities have the appropriate capacities
and practical guidelines and tools to ensure professional management
of the full procurement cycle. (+ 7 sub-principles)
Serbia BM 2015:
• Key materials for helping contracting entities comply with procedural
regulations are available. Both the contracting authority and the
bidder tend to lack professional skills, in particular with regard to
introducing new working methods, such as greater centralised
procurement, framework agreements, dynamic purchasing systems
and e-auctions.
• … monitoring public procurement…
87

2015 Baseline measurement report – main
findings (overview)
• Legal framework for public procurement largely harmonised
with EU acquis but implementation hindered by excessive
duties on the PPO and contracting authorities.
 In 2014, PPO had to prioritise tasks and focus mainly on preparation of
the missing implementing tools at expense of its monitoring and
oversight functions.
• Proper regulatory framework and institutional set-up for
handling complaints is in place and access to review system not
restricted by excessive costs.
• Most contracts are awarded through open procedure,
framework agreements widely used, but degree of e-
procurement penetration still low as only notices are published
on the Internet.
• Key materials for helping contracting entities to comply with
procedural regulations are available but both contracting
authorities and the bidders can lack professional skills.
• PPO needs to monitor more re spending exempt from PPL and
re training for public procurement officials.

Public procurement
(including concessions and PPPs)

Thank you for your attention!
More information can be found at:
www.sigmaweb.org
91

Introducing SIGMA's Principles of Public Administration, Belgrade, 14 December 2016

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