EU Exchange 6 Programme

Enhancing credibility of planning, programme-based budgeting and control in execution of public expenditures at local level in Serbia 

The EU Exchange 6 Programme is financed by the European Union in the scope of IPA 2019 national allocation, and is being implemented in the direct management regime, implying that the EU Delegation in Serbia entails principal management powers. Key competent line institutions at the national level are the Ministry of Finance and the Public Policy Secretariat, along with the Ministry of Public Administration and Local Self-Government and the Ministry of European Integration. As in previous phases of the Exchange Programme, the Standing Conference of Towns and Municipalities (SCTM) has the role of implementing partner and direct responsibility for the implementation of planned Programme activities.

Programme total budget amounts 2 million EUR (EU contribution entirely), while projected duration is three years, from September 2021 to September 2024. Target groups of the Programme include local self-governments (LSGs) in Serbia, local administration, but also local communities, citizens, civil society and economic operators to be positively affected by improved planning, budgeting and financial management by local governments.

The Programme consists of three components, whereby combination of support modalities is encompassed, by ensuring capacity building through accredited trainings, networking and continuous advisory support intended to all LSGs in Serbia on the one hand, and provision of municipal support packages (MSPs) and other forms of direct assistance to selected LSGs as per respective Programme competitions, on the other hand.

• Component 1 - Fostering LSGs in preparation and implementation of Development Plans and Mid-term Plans in line with their programme budgets: For drafting/revision of LSG Development Plans and LSG Mid-term Plans direct expert assistance is being provided through the modality of support packages, for 20 LSGs respectively, selected upon two public calls.
• Within this component, through horizontal support activities intended for all LSGs, emphasis is likewise on further improvement of programme budgeting at the local level, primarily in the light of harmonization with Mid-term plans, pursuant to requirements of the planning system legislative package.
• Component 2 - Upgrading capacities of LSGs to adequately apply capital projects’ cycle and transparently operate the budget: With the view of introducing functional multi-annual capital budgeting, direct expert assistance through the modality of support packages is being provided for 20 LSGs selected upon two public calls. Assistance pursues the logic of the Decree on Capital Projects’ Management and copes with requirements of the Budget System Law, while it is adjusted for operating with capital projects (proposals) regardless of their estimated budget (cost), i.e., also with the so-called small value projects. Beneficiary LSGs thus work on introducing procedures for internal coordination, for processing proposals of capital project ideas, their prioritization and selection, and incorporation in the budget.

In order to improve good practices and apply the principles of good governance in financial management at the local level, in the scope of this component advisory support and guidance to all LSGs is intensified concerning increasing budget transparency and participation, improving quality of public debates on budget, gender budgeting implementation, etc.

Additionally, in the scope of EU Exchange 6 support is being provided for introducing public budget portals (PBP) in 20 LSGs among the ones selected as beneficiaries per Programme competitions (primarily upon the competition for capital projects). This is a software-based application that enables advanced electronic reporting system concerning financial documentation, financial management and coordination within LSGs, as well as for communication with interested external public. (PBPs have already been introduced in some LSGs in previous years with the support of Swedish Development Cooperation).

• Component 3 - Better incorporation of Public Internal Financial Control (PIFC) features in LSGs’ operations and linking with local planning and budgeting frameworks

Within this component, 10 LSGs have been selected upon the public call for provision of direct technical support for introducing/improving financial management and control (FMC) and internal audit (IA). With the view of ensuring better coverage of LSGs in Serbia with support in this respect, assistance in the scope of EU Exchange 6 Programme is being consolidated with other development projects/programmes/sources dealing with PIFC at the local level.  

Provision of support to LSGs is directly coordinated with the Ministry of Finance/Central Harmonization Unit also within this component, and attention is being awarded to recommendations and necessary improvements as spelled out for LSGs with annual consolidated Reports on PIFC. Exchange of experiences and coordination with competent institutions is enabled to all towns and municipalities concerning introduction and functioning of FMC and IA, and is being pursued through working arrangements of SCTM Networks for IA and local finances, through organization of regional seminars and workshops, while awareness rising on aspects of managerial responsibility takes place through the functioning of the competent SCTM Committees and the Presidency.

Within EU Exchange 6 Programme, support to all LSGs in the Republic of Serbia is being provided also in the modality of accredited trainings, for: Mid-term planning in LSGs; Elaboration and implementation of LSG Development Plan; Capital budgeting in LSGs; and for Programme Budgeting in LSGs. Annual cycles of regional seminars are being implemented, intended for improving the quality of the budget process and harmonization of LSGs’ budget with planning documents, for improving budget transparency, advancing citizens’ participation in budget processes and gender responsive budgeting. Overviews and analytics within the EU Exchange 6 on implementation of programme budgeting and compliance with mid-term plans by LSGs, mapping of LSG Development plans, etc., are being used to report upon implementation of policies/planning documents accompanying the Public Administration Reform Strategy – i.e., Programmes on reforming (until 2025) LSG system, financial management and public policy management.

Contact person: Miloš Obradović, Communication Coordinator (milos.obradovic@skgo.org).

EU Exchange 6 – Video info brief on Programme implementation (mid-way)