The count of service contracts in Montenegrin institutions and administrative bodies funded by the state budget has seen an 11.5 percent decline over the past six months, as reported by Branko Krvavac, Chief of Staff to the Prime Minister.

In February, the government established a Commission for Analyzing and Monitoring Service Contracts as well as Contracts for Temporary and Occasional Jobs within Consumer Units financed by the state budget, with Krvavac at the helm.

According to Krvavac’s statements to the MINA agency, the Commission’s efforts are already yielding positive outcomes. From December of last year, which served as the reference month, to May this year, the number of work contracts has dropped by 11.5 percent.

Consumers can submit requests to the Commission for authorization to engage on the basis of a service contract. Krvavac explained that the Commission evaluates the justification for each request based on various criteria.

Krvavac noted that the spending units of the President and the Parliament of Montenegro are not subject to this oversight since they do not fall under the executive branch, while all other bodies are monitored.

During the Commission’s inaugural session, procedural rules, methodologies, and criteria for assessing request validity were established.

“Several criteria guide the evaluation of requests—these include whether it’s a new engagement or a continuation, if the position aligns with the budget user’s structure, job description, duration, compensation amount, and crucially, whether the Ministry of Finance has confirmed that funds are available,” Krvavac elaborated.

He mentioned that last year, the category of expenditures based on contracts amounted to over 20 million EUR.

Krvavac highlighted that, despite the Rules of Procedure stipulating monthly meetings, the Commission has convened 12 times so far, stressing that none of the members receive compensation for their roles on the Commission.

“Out of 150 requests evaluated, 2,320 contracts were submitted for approval, with 1,862 contracts granted authorization. Of these, 1,629 were existing contracts, and approval was denied for 452,” Krvavac stated.

Krvavac added that the Ministry of Internal Affairs (MUP), the Administration for Criminal Sanctions Execution, the State Property Administration, the Real Estate Administration, and the Tax Administration have the highest number of service contracts.

As Krvavac observed, certain branches of the Ministry of the Interior or Tax Administration are engaging more individuals on part-time contracts than they have employees.

He cited the State Property Administration as an example, where 340 individuals are employed via service contracts, some of which have been extended for as long as 15 years due to a lack of formalized job positions, despite the needs of the state administration.

Krvavac clarified that a service contract is not an employment contract; rather, it is used for roles not formalized under the budget user’s regulations.

“In many instances, we observe a reliance on these contracts, which we must curb. We aim to resolve this issue without compromising the effectiveness of public service delivery,” Krvavac stated.

The objective is to systematically organize certain roles and decrease the number of temporary contract workers.

“Dismissing all piece-rate contracts immediately would jeopardize operational efficiency. Therefore, we must approach this issue in a structured manner, followed by a broader review of piece-rate contracts,” Krvavac explained.

He emphasized that the Commission’s function is not merely to approve or deny part-time contracts but to foster solutions and recommend legislative amendments to prevent long-term abuse of these temporary agreements.

If a request lacks adequate justification, it is returned for further clarification.

“We encounter situations where a request pertains to a role that already has systematized positions under another budget user. In such cases, we reject those requests,” Krvavac detailed.

The Commission addresses contracts for services that are recurrent monthly and may not constitute true service contracts, rather than those that are for short durations.

“The fundamental purpose of a service contract is to engage individuals in roles that are not formally recognized,” Krvavac added.

The Commission aims to decrease temporary employment contracts by at least 20 percent by year-end, a goal Krvavac believes is achievable.

“I am confident that we will meet the 20 percent reduction target without compromising public service efficiency and will also address some long-standing issues,” Krvavac remarked.

Responding to opposition claims regarding a slowdown in the Montenegrin economy, Krvavac asserted that such claims lack substance and seem politically motivated.

He clarified that Montenegro’s economy, aside from the energy sector, primarily relies on tourism, a significant contributor to the gross domestic product (GDP).

“We should analyze certain data and circumstances post-third quarter, after the tourist season concludes. The first quarter does not significantly influence GDP, yet we recorded a 2.5 percent increase in economic activity during that period,” Krvavac noted.

He indicated that GDP has doubled over four years, with a 20 percent wage increase in the first quarter of this year, and unemployment falling below ten percent for the first time.

“A budget surplus was realized in April, tax revenues are rising compared to last year, and labor tax burdens have been reduced by over 50 percent alongside the Europe Now 2 initiative,” Krvavac added.

He concluded by stating that despite a challenging geopolitical environment, the Government has not only safeguarded but has also enhanced citizens’ living standards through increased salaries and pensions.

“Thus, we maintain a stable economy with growing macroeconomic indicators, and claims of a slowdown are unfounded,” Krvavac concluded.

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