Since 2021, Montenegro has made strides in reforms focusing on the continuous enhancement of public administration, policy development and coordination, and public financial management. In these areas, Montenegro outperforms its Western Balkan counterparts, exceeding the regional average. However, other sectors have seen stagnation, particularly in civil service and human resource management (HRM), service delivery, and digitalization.

These insights are highlighted in the SIGMA report on the public administration reform status in Montenegro for 2024. The document, produced with financial assistance from the European Union (EU), does not embody an official EU stance.

SIGMA serves as a support program aimed at advancing the governance and management of EU public administration.

The report acknowledges that the adoption of the Public Administration Reform Strategy (PAR) in December 2021 and the Public Finance Reform Program in December 2022 signify marked progress in setting a clear reform direction for Montenegro. With EU backing, structures for the implementation and monitoring of these reforms have been successfully established, creating a foundation for effective execution.

“The enactment of the Public Administration Reform Strategy is currently at a low execution level. Human resource management capabilities are lacking, and the top management structure is unstable, marked by significant deficiencies in merit-based recruitment. The organizational typology set by law is often overlooked, and clear accountability tied to objectives and performance management of agencies is absent. Service quality and digital accessibility remain subpar. Montenegro trails behind regional peers that have made notable advancements. Furthermore, the implementation of recommendations from oversight institutions is relatively minimal, compounded by insufficient parliamentary support. In various domains, the practical application of legal obligations in public financial management falls short. Although the institutional framework for policy development and coordination is solid, implementation demonstrates notable weaknesses,” the report elaborates, noting that several legislative initiatives regarding civil servants, information access, and local governance were beyond the report’s scope.

Most obligations from the EU process have not been fulfilled

Recent developments in public financial management are promising – more robust fiscal policy guidelines have been established, and improvements to the legal framework for capital investment budgeting have been made, alongside the creation of a legal basis for the Fiscal Council and advancements in the electronic public procurement system.

“In relation to the average in the Western Balkans, Montenegro showcases a relatively strong position in policy planning and coordination, as well as in executing regulatory impact assessments (RIA). In contrast, significant improvements are required in public service and human resource management concerning recruitment, salary structures, working conditions, professional development, and civil servant productivity. The delivery of high-quality services and adherence to digital governance requirements trail the regional average,” the report concludes. It also points out that by-laws are frequently not promulgated on time, hindering the prompt implementation of new regulations.

While European integration remains a priority for the current government, past years have seen existing structures for coordinating this process fail to operate fully, and the Montenegro EU Accession Programme lacks adequate financial estimates for projected activities, the report notes.

“This exemplifies a broader issue of inadequate quality in cost estimations within planning documentation. Consequently, a majority of obligations stemming from the EU accession process remain unmet,” emphasizes the report.

Parliamentary oversight ineffective

SIGMA highlights that parliamentary oversight, despite being well-regulated, is inconsistently effective, hindered by unreliable legislative planning from the Government, complicating parliamentary work scheduling.

“Nonetheless, Parliament frequently deviates from standard law adoption procedures, employing urgent processes instead. Laws initiated and drafted by MPs often skip public consultations and lack RIA reports or fiscal impact assessments, presenting specific budgetary risks,” the report points out.

The civil service and human resource management still face significant challenges, with many of the 2021 shortcomings unresolved.

“The Law on Civil Servants and State Employees does not ensure merit-based hiring or clear criteria for dismissal or demotion due to reorganization. Public institutions with executive powers operate under special laws that deviate from public service principles. These principles are not enacted in practice concerning top public management (TPM), as indicated by a notably high turnover rate in these positions—74% following the August 2020 parliamentary elections, and still at 61% in 2023. Access to TPM roles based on merit is further threatened by the large number of acting positions (accounting for a third of all roles), which often includes appointments from outside the civil service without transparent processes,” asserts SIGMA.

On a positive note, the report finds that women hold 42% of TPM positions, slightly exceeding the OECD average.

Unfair salary schedule

The report further notes that human resource management capabilities within public administration are limited, with the HRM information system still in development.

“Salary fairness—both internal and external—is lacking, resulting in considerable dissatisfaction among civil servants regarding the salary policy. The Human Resources Administration aims to enhance professional development through centralized training and performance appraisal supervision. However, individual appraisal outcomes predominantly fall within the excellent category, diminishing their overall efficacy,” the report states.

Although the legal framework governing public administration is comprehensive regarding the organizational structure, its practical application still causes accountability issues.

“Several institutions lack adequate accountability to their respective line ministries, adversely influencing these ministries’ capacities to lead their policy areas. Public administration management is still more focused on adhering to formal requirements than on achieving results. While robust formal guarantees for access to public information exist, financial incentives for lawyers can lead to abuses, complicating the appeals system. Consequently, the backlog of cases in the Administrative Court has surged over the last two years, with the average wait for a first-instance judgment approaching four years. The rate of implementing recommendations from oversight bodies remains low, and Parliament has not provided sufficient backing to the Protector of Human Rights and Freedoms and the State Audit Institution (SRI) in tackling these challenges,” the report underscores.

Addressing anti-corruption policy, persistent issues remain, particularly regarding asset and income declarations. It is noted that while the law on administrative procedures promotes good administrative practices, these principles are inconsistently applied across the legal system and its practical implementation.

Paper before digital services

“A strategic framework for enhancing service delivery is established, but both the quality and digital accessibility of services remain inadequate. Despite the overall stagnation in public service delivery quality, significant advancement has been made in defining Montenegro’s strategic plans for service improvement in line with existing legislation. Nonetheless, practice continues to lag in critical areas: limited digital access to services, insufficient customer focus, poor utilization of customer feedback, inadequate communication of service standards, and ineffective reporting on performance. Considerable potential exists for integrating services around life events and for proactive service delivery using data from official records rather than requiring users to hunt for information,” the report explains.

SIGMA concludes that while the Government is expanding digital services, many offerings are still predominantly traditional and reliant on paper forms.

“Primary challenges include the consolidation of e-services on a singular portal and enhancing interoperability among institutions, with coordination and governance mechanisms remaining undeveloped, thus delaying crucial tasks. Further development of the legislative framework is necessary, including fortifying cybersecurity and data management. In terms of utilizing digital tools within public administration processes, a commendable level of digitalization is evident, especially regarding public sector transparency. However, several areas require additional digital enhancements,” the report states.

Considering the existing shortcomings in public administration and the potential for reform, SIGMA identifies the following priority areas for support:

“The government must ensure the realization of its policy goals, as delineated in horizontal and sector-specific reform strategies, through timely execution of plans and thorough evaluation and guidance when needed. The government should secure competitive recruitment for competent candidates for management positions and stabilize the top management structure within public administration. Additionally, the government should expedite reforms to enhance the quality, simplification, and accessibility of administrative services via online platforms to align with advancements made by regional counterparts,” the report recommends.

Parliament does not care about the SAI report

The constitutional and legal independence of the State Audit Institution (SAI) is well defined, with guaranteed organizational and managerial independence. “However, the independence and organization of the SAI have been adversely impacted by Parliament’s failure to appoint the President and the fifth member of the SAI since July 2022. The SAI continues to fulfill its mandate successfully, adhering to international standards and striving to enhance its internal quality management system and engagement with external stakeholders. Nonetheless, Parliament does not sufficiently leverage audit reports to hold the Government accountable,” the report assesses.

Excess employees in municipalities

SIGMA remarks that the legislative and institutional framework governing municipalities and their financing aligns well with the European Charter of Local Self-Government.

“In practice, however, municipal powers remain constrained, with inter-municipal cooperation and consultations before government decisions occurring sporadically. Numerous municipalities contend with surplus employees, and recruitment along with human resource management lacks transparency. External oversight and internal control mechanisms are insufficiently effective. The Ministry of Public Administration has acknowledged the need for reforms. Following a comprehensive analysis of local government functionality conducted in 2023, the ministry is preparing new legislative frameworks,” the report informs.

It further asserts that local government finances do not adequately cover all competencies assumed by municipalities.

“The current economic balancing system is ineffective, resulting in a level of inequality among municipalities significantly higher than in most EU nations. Additionally, insufficient revenue collection coupled with a lack of financial discipline exacerbates the debt issues faced by numerous local government units,” the report concludes.

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