09.11.2020

FOR THE LAST DECADE, WITHOUT PURE POSITIVE OPINION FOR FBIH MUNICIPALITIES AND CITIES

Centers for Civil Initiatives (CCI) presented today at a press conference the findings of the Analysis of Audit Reports of Local Self-Government Units in the Federation of Bosnia and Herzegovina.

In the last 10 years, the Audit Office of the FBiH Institutions has audited 64 out of a total of 80 local self-government units, while the remaining 16 units have not been subject to financial control. In the observed period, no local self-government received a purely positive opinion from the Audit Office, and it is especially worrying that they received 27 times negative opinion for the financial statements and compliance with the law. On this occasion, the CCI points to the need to conduct a financial audit of each local government unit at least once in a four-year term.

The most common irregularities were observed in non-compliance with the Law on Budgets in the FBiH because the institutions did not apply legal provisions in the preparation, drafting and adoption of the budget, as well as in budget reporting. Also, frequent abuse of the Law on Public Procurement is stated - by the institutions not applying the appropriate public procurement procedures, nor did they respect the provisions of the concluded contracts.

The findings of the Analysis also indicate the need for a more active approach of the competent institutions in prosecuting and sanctioning responsible persons who do not act in accordance with the law. This should especially apply to the heads of institutions that repeat violations from year to year. CCI warned that although audit reports indicate a number of irregularities, in some local units on the candidate lists for the upcoming elections will be cities / mayors during whose mandate the institutions received a negative opinion or opinion with a reservation for financial operations and compliance with the law.

In its reports, the Audit Office sent 1647 recommendations for the elimination of observed irregularities, but less than 45% of the recommendations were fully implemented. In order to take a more serious approach to this problem and increase the level of implementation of audit recommendations and eliminate the observed irregularities, it is necessary to introduce a mechanism to control the implementation of audit recommendations. In addition, the analysis indicates that a significant number of institutions did not act in accordance with the legal obligation and did not submit an action plan to overcome the weaknesses, irregularities and violations identified in the audit reports.

Of concern is the fact that a number of local parliaments in the FBiH do not consider audit reports at all, nor do they approach the audit process in a serious and appropriate manner. The reason for that is the fact that the legal framework does not enable the sanctioning of institutions that do not submit a plan for eliminating the observed irregularities. On this occasion, the CCI points to the need to include measures to sanction local units in the framework of existing laws. There is also an urgent need for a more effective approach to the implementation of audit recommendations, and greater accountability of local parliaments and their more active role in reviewing findings and implementing audit recommendations.

In order for the entire audit process to affect a more transparent, responsible and correct spending of public funds, it is necessary to initiate more intensive cooperation of all actors in the public audit process. Greater responsibility of local units to implement recommendations and eliminate irregularities would ultimately significantly contribute to the quality of life of citizens in local communities.

Project “More Efficient Public Audit for Less Corruption in Bosnia and Herzegovina” is implemented by the Centres for Civic Initiatives (CCI) financed by Sweden. The Project aims to contribute to a more responsible spending of budget funds and reduction of corruption in public institutions in BiH