Financing to Political Parties in 2011

Financing toPolitical Parties

in 2011

Podgorica, November 2012

The present Publication is a part of the “Money and Politics Montenegro and region” Project,funded by:

22

Financing to Political Parties in 2011

2

IMPRESSUM

Citing and using the material and information contained therein for notforprofit publicationsor in public media, while for the purpose of informing the citizens, as well as the use thereof forother noncommercial purposes, shall be allowed upon a mandatory stating the source thereofand the copyright owner.

The use of the material for any other purpose shall not be allowed without a previous approvalby the copyright owner (Center for Democratic Transition).

CDT shall not be held liable for any subsequent interpretation of the information published herein.

PUBLICATIONFinancing to Political Parties in 2011

PUBLISHERCenter for Democratic Transition (CDT)

VII Omladinske bb81 000 Podgorica, MontenegroTel: +382 20 207 070, 207 071

Tel/Fax: +382 20 207 072Email: cdtmn@tcom.me

www.cdtmn.org

FOR THE PUBLISHERDragan Koprivica

PROJECT AUTHORSDragan Koprivica and Milica Kovačević

PROJECT COORDINATORMilana Čabarkapa

RESEARCHERSTatjana Koprivica, Bojan Božović and Milivoje Krivokapić

TRANSLATORAna Knežević

PREPRESS AND GRAPHIC DESIGNBlažo Crvenica

PRINTINGAP Print, Podgorica

CIRCULATION300

Table of contents

333

CIP Каталогизација у публикацијиЦентрална народна библиотека Црне Горе, Цетиње

ISBN 9789940583064COBISS.CGID 21433872

TABLE OF CONTENTS

1. Introduction ............................................................................................................4

2. Financing to Parties from the Private Funds ............................................6

3. Montenegro ............................................................................................................9

4. Andrijevica Municipality ................................................................................10

5. Bar Municipality ................................................................................................11

6. Berane Municipality ..........................................................................................13

7. Bijelo Polje Municipality..................................................................................14

8. Budva Municipality............................................................................................16

9. Cetinje, Historical Capital................................................................................18

10. Danilovgrad Municipality ............................................................................20

11. Herceg Novi Municipality ............................................................................21

12. Kolašin Municipality ......................................................................................22

13. Kotor Municipality ..........................................................................................23

14. Mojkovac Municipality ..................................................................................25

15. Nikšić Municipality ........................................................................................26

16. Plav Municipality ............................................................................................27

17. Plužine Municipality ......................................................................................29

18. Pljevlja Municipality ......................................................................................30

19. Podgorica, Administrative Capital ............................................................31

20. Rožaje Municipality ........................................................................................33

21. Šavnik Municipality ........................................................................................34

22. Tivat Municipality............................................................................................35

23. Ulcinj Municipality ..........................................................................................36

24. Žabljak Municipality ......................................................................................38

25. Analysis of Legislative Framework ..........................................................39

26. Annexes................................................................................................................41

44


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Dear readers,

This is the publication titled Financing to Political Parties in 2011, which is the outcome of the research done within the "Money and Politics: Montenegro and the Region" Project implemented bythe CDT with the support of The Balkan Trust for Democracy (BTD). The aim of the present publication and research concerned is to give as comprehensive as possible review of both private and Budgetfunding for political parties, in coherent manner that all interested person can easily understand.

The information sources we used for the research are the laws and ordinances published in the Official Gazette of Montenegro, as well as official data that the Parliament of Montenegro and localselfgovernment authorities provided us with pursuant to the Law on the Free Access to Information,statements by political parties published on the Web Site of the State Electoral Commission (SEC)and the 2011 Report on the Audit of Annual Financial Statements of Political Parties published bythe State Audit Institution (SAI).

In addition to the Introduction, the present publication includes 25 chapters total. The second Chapter gives an overview of the private funding of political parties. The said Chapter reflects the information concerning both the reporting obligations fulfillment by and private funding of politicalparties. The subsequent 22 chapters give a review of the funding of political parties from the Budgetsources, at both national level and the level of individual municipalities. Besides the statistics onpayments made to political parties, the present publication compares the obtained data with theprovisions of governing laws. Chapter 25 gives a detailed analysis of the legislative framework, inorder to facilitate your reading and understanding of individual analyses of the funding concerned.

In the late July 2011, Montenegro got the new Law on Financing of Political Parties the text of whichwas drafted by the mixed Working Group that comprised also the CDT representative and that didtheir best to respond to challenges faced in this area and to apply the recommendations by Montenegrin NGOs and GRECO evaluation. Unfortunately, conferring the full enforcement of the Law onthe independent and capacitated State Electoral Commission failed; therefore, in December 2011,the Amendments and Supplements to the said Law conferred the audit on the State Audit institutionas on the only institution in Montenegro that has the capacity to perform a professional audit. However, the Amendments to the Law removed the part of provisions governing the supervision of theLaw enforcement, making thereby possible for competent institutions to renounce their competenceand to transfer and avoid responsibilities in relation to the Law enforcement.

The Law had been entered into force on January 1st 2012 and, as observed already in the first monthof its enforcement, numerous political parties and Montenegrin Municipalities violated the Law onFinancing of Political Parties and the enforcement of the Law by competent public administrationauthorities was at inadequate level.

Introduction1.

Introduction

555

In 2011, a large number of Municipalities continued their practice to make no disbursement for regular activities of political parties at local level. Besides, political parties persisted in their practice ofnot publishing their respective reports in line with the law. Competent public administration authorities followed their practice of not acting and of passive approaching to challenges in politicalparties funding, so there has been neither misdemeanor procedure instigated in relation to the majorportion of recorded Law infringement nor sentences pronounced for any act contravening the Law.


6

2. Financing to Partiesfrom the Private Funds

On January 30th, 2012, the State Electoral Commission (SEC) approved the Rules on the Method ofAccounting of and Reporting on NonMonetary Contributions to Political Parties.

The adopted Rules have left a large space for misuses. The Law prescribes that nonmonetary contributions shall be accounted according to the market value and that they shall be reported as revenues. The SEC has made a significant derogation from the legal norm by the said piece of secondarylegislation. According to the new solution, nonmonetary contributions shall be accounted as a difference between the prices paid for product / service and the market value thereof only if that difference exceeds 30.00%. Such solution has actually ensured political parties to have up to 30.00%discounts and to avoid reporting them as nonmonetary contributions, making thereby the situationnot considered as favoring political parties to other consumers which is unacceptable.

On March 22nd, the Ministry of Finance adopted the Rule Book on the Form of Annual Statementon Revenues, Assets and Expenditures of a Political Party. The Rule Book was entered into forceon March 28th and has brought certain improvements as compared with previous forms.

However, the Ministry of Finance had been unreasonably late with enacting the foregoing document,and brought thereby political parties to the situation that they had just several days to prepare theirrespective Statements on Revenues, Assets and Expenditures and Annual Statements of Accounts,since the deadline had been set as March 31st.

SECONDARY LEGISLATION AND REPORTING FORMS

Political parties registered in Montenegro were under an obligation to submit to the MontenegroState Audit Institution (SAI), by March 31st 2012, their respective 2011 Annual Statements of Accounts in order to ensure both their subjecting to an audit and developing the Report on the auditof such Annual Statements of Accounts.

At the same time, parties were under an obligation to table the foregoing Statements also to State ElectoralCommission (SEC), which posts them on their Web Site in order to make them available to the public.

Until publishing the present research, only 24 parties out of 37 ones total, which were consideredas registered in Montenegro in 2011, have their Annual Statements of Accounts published on theWeb Site of the State Electoral Commission. A large number of the foregoing Statements were published significantly after the legally prescribed deadline. Out of the foregoing 24 published AnnualStatements of Accounts, only 101 were developed on the prescribed Annual Statement of Accounts

ANNUAL STATEMENT OF ACCOUNTS

1 PzG (Party for Gusinje), DPS (Democratic Party of Socialists), SDP (Social democratic Party of Montenegro), Forca, NOVA(New Serb Democracy), NS (People’s Party), BDPCG (Bosniak Democratic Party of Montenegro), Perspektiva (Perspective),DSS (Democratic Serb Party) and OSS (Serbian Homeland Party).

Financing to Parties from the Private Funds

7

Form, whereas 142 parties submitted their respective Statements on the invalid Form, i.e. on theForm used by NGOs and business companies.

The 2011 Report on the Audit of Annual Financial Statements of Political Parties, which was developed by the SAI, states that DPS, SDP, HGI, PzP and DSuCG submitted their respective Annual Financial Statements to the SAI „on the prescribed Form and within the set deadline“, while affirmingthat BS, SNP, NOVA, DUA, Forca and AA submitted their respective Statements “on the prescribedForm”, but not referring to any deadline. As for the members of Albanian Coalition Perspective, theReport states that they did not submit their Statements to the SAI.

For those parties that failed to submit their respective Statements on Revenues, Assets and Expenditures or Annual Statements of Accounts by March 31st, the Law lays down they shall be subject toa fine ranging from €10,000 to €20,000. Despite the SEC and SAI’s representatives announced several times that the majority of political parties were late with submitting their respective AnnualStatements of Accounts, it is not know whether the said institutions have instigated any misdemeanor procedure against any of such political parties.

In November 2012, the SAI published the Report on the Audit of 2011 Annual Financial Statementsof Political Parties. Nevertheless, the SAI encompassed by their audit not all the registered politicalparties as said under the Law, but they subjected to their audit only 11 parliamentary political partiesand one civic list that had its MPs in the Parliament of Montenegro in 2011.

According to the Law on Financing of Political Parties, political parties registered in Montenegrowere under an obligation to submit their respective lastyear Statements on Revenues, Assets andExpenditures to the SEC by March 31st of the current year.

By the time of publishing the present research, the SEC’s Web Site made public the Statements onRevenues, Assets and Expenditures of only 26 parties3, whereas one portion thereof significantlyafter the prescribed deadline. Out of those 26, even nine4 Statements were submitted on the invalidForms. For severalmonth period so far, the SEC’s Web Site has replaced the Statement of one List ofCandidates5 only, by posting the one that the said List developed on the new Form.

In March, the Ministry of Finance adopted the Rule Book on the Form of Annual Statement on Revenues, Assets and Expenditures of a Political Party. Political parties were under an obligation to pres

2011 STATEMENTS ON REVENUES, ASSETS AND EXPENDITURES

2 DUA (Democratic Union of Albanians), PzP (Movement for Chnages), BS (Bosniak Party), SPISP (Party of Pensioners, DisabledPeople and Social Justice), DSJ (Democratic party of Unity), BDSS (Bosniak Democratic Party of Sandzak), AA (Albanian Alternative), HGI (Croatian Civic Initiative), LP (Liberal party), DSuCG (Democratic League in Montenegro), SNP (Serb People’s Party),PDP (Party of Democratic Prosperity), SPJ (Socialist Party of Yugoslavia), SL (SSN) {Serbian People’s List: Party of Serb Populists).

3 DPS (Democratic Party of Socialists), SDP (Social democratic Party of Montenegro), DSuCG (Democratic League in Montenegro) , NOVA (New Serb Democracy), NS (People’s Party), LP (Liberal party) Forca, BDPCG (Bosniak Democratic Party ofMontenegro), Perspektiva (Perspective), DSS (Democratic Serb Party), SPISP (Party of Pensioners, Disabled People andSocial Justice), OSS (Serbian Homeland Party), SL (SSN) {Serbian People’s List: Party of Serb Populists). SPJ (Socialist Partyof Yugoslavia), AA (Albanian Alternative), PDP (Party of Democratic prosperity), PzG (Party for Gusinje), DCB (DemocraticCenter of Boka), SNP (Serb People’s Party), PzP (Movement for Chnages), DUA (Democratic Union of Albanians), HGI (Croatian Civic Initiative), SRS, BDSS, DSJ, BS.

4 SNP, PzP (Movement for Chnages), DUA (Democratic Union of Albanians), HGI (Croatian Civic Initiative), BS (Bosniak Party),SRS (Serbian Radical Party), BDSS (Bosniak Democratic Party of Sandzak), DSJ (Democratic Party of Unity), DCB (DemocraticCenter of Boka)

5 Albanian Coalition Perspective.

ent their respective annual statements on the Form prescribed by the said Rule Book. Nine partiessubmitted their respective Statements on Revenues, Assets and Expenditures on the earlier validForm that had been annulled by entering the foregoing Rule Book into force.

The Form on which the parties submitted their Statements is invalid and, in technical sense, it maynot serve a valid report development. The parties that used the invalid Form did not state the structure of their revenues at all, which is unacceptable from the point of view of transparency. The newstatement includes information about both the structure of revenues and the value of real estates,and they require more precise data on revenues from both membership fees and contributions madeby legal and natural persons – which was not the case when it comes to the invalid Form. By failingto submit their statements on the valid Form, the transparency of the listed political parties fundinghas been affected considerably.

Besides, even the parties that submitted their statements on the appropriate Form did not fulfill therequirements stated thereunder, since certain pieces of information were not stated.

It is unknown whether any party that did not submit the said statement or that submitted it afterthe prescribed deadline or that submitted incorrect and incomplete statement has faced a misdemeanor procedure.


8

According to the audit findings6, the parties stated under their respective Business Books also theprivate funding amounting to €209,551.00.

The foregoing data confirm the previousyears practice of political parties, with the exception ofDPS, to gain the majority of their revenues from public sources.

Besides, by analyzing the available 2011 Annual Statements on Revenues, Assets and Expenditures,it has been concluded that parties gain negligible revenues from private contributions, which situation has almost never been recorded in comparative practice.

PRIVATE FUNDING OF POLITICAL PARTIES

PARTY REVENUES FROM PRIVATE FUNDING (IN €)DPS (Democratic Party of Socialists) 200,102.00

SDP (Social Democratic Party of Montenegro) 4,986.00SNP (Serb People’s Party) 3,107.00AA (Albanian Alternative) 500.00

PzP (Movement for Changes) 400,00HGI (Croatian Civic Initiative) 273.00

FORCA 183.00BS (Bosniak Party) 0.00

NOVA (New Serb Democracy) 0.00DSuCG (Democratic League in Montenegro) 0.00

DUA (Democratic Union of Albanians) 0.00PERSPEKTIVA (Perspective) 0.00

TOTAL 209,551.00

6 http://www.dri.co.me/1/doc/Izvjestaj%20o%20reviziji%20godisnjih%20finansijskih%20izvjestaja%20politickih%20partija%20za%202011godinu.pdf

Table 1: Parties’ revenues from private funding, data obtained fromthe 2011 Report of the Audit of Annual Financial Statements of Political Parties.

Montenegro

9

The information sources we used are the documents that CDT was provided with by the SecretaryGeneral of the Parliament of Montenegro, based on the Decision No. 0041/1224/2 dated May 14,2012, as well as the official documents published in the Official Gazette of Montenegro.

Montenegro

7 The 2011 Budget Law of Montenegro, Official Gazette of Montenegro, No. 10/09 as of December 29, 2010 8 Law amending the 2011 Montenegro Budget Law, Official Gazette of Montenegro, No. 28/11 as of 10 June 20119 Official data obtained based on the Law on the Free Access to Information.

3.

REGULAR FUNDING

The 2011 Budget Law of Montenegro projected the Budget funds amount to be €1,335,744,127.39total, out of which €631,608,828.10 the Operating Budget. The funds for the activities of the parliamentary parties were projected as €3,158,044.147, i.e. 0.50% of the Operating Budget.

Amendments and supplements to the Budget Law8 did not induce a change either in the amountsprojected for the Operating Budget or in the funds intended for parliamentary parties.

According to the data obtained from the Parliament’s Secretary General Office, while upon comparingthem with the plan stated under the 2011 Budget, we can conclude that parliamentary parties weredisbursed the funds that had been projected for their purposes. Nevertheless, the confirmationthereof can be obtained only after publishing the Annual Statement of Accounts of the 2011 Budgetof Montenegro.

Table 2: The funds disbursed for regular parliamentary parties funding in 20119

PARTY AMOUNT (IN €)Democratic Party of Socialists of Montenegro 1,202,963.16

Socialist People’s Party 573,303.72Social Democratic Party 341,323.92

New Serb Democracy 308,184.00Movement for Changes 208,764.12

Bosniak Party 142,484.16Democratic Alliance in Montenegro 76,204.20

Democratic Union of Albanians 76,204.20NGO Perspective – Ana E Malit 76,204.20

Croatian Civic Initiative 76,204.20New Democratic Force, FORCA 76,204.20

TOTAL 3,158,044.08


10

The information sources we used are the documents that CDT was provided with by the Cabinet ofAndrijevica Municipality Mayor based on the Decision No. 03191/201201 dated April 27, 2012,as well as the official documents published in the Official Gazette of Montenegro: Municipal Ordinances.

The relevant Andrijevica municipal authority allowed and enabled CDT to have access to the requiredinformation within the legally prescribed deadline, by sending the accurate data on the political parties funding in 2011.

AndrijevicaMunicipality4.

Table 3: Funds disbursed for regular political parties funding in 201112

REGULAR FUNDING

The projected 2011 Andrijevica Municipal Budget was €2,130,170.40, whereas the projected amountfor the purposes of Operating Budget was €969,469,27. The projected amount to be transferred topolitical parties, factions and associations was €9,055.0010 total, i.e. 0.93% of the 2011 OperatingBudget.

The Ordinance for the Annual Statement of Accounts of the 2011 Municipal Budget of Andrijevicastated that the transfers to political parties, factions and associations amounted to €8,300.27.11

Based on both the documents published in the Official Gazette and the Analytical Records, it can beconcluded that, fore regular financing, political parties were disbursed €8,310.06, which is €744.94less than projected for the purpose under the Municipal Budget of Andrijevica.

At the same time, discrepancy between the data stated under the Ordinance for the Annual Statement of Accounts of the 2011 Municipal Budget of Andrijevica and the data that the CDT was provided with by the relevant Andrijevica municipal authority has been found.

10 Appropriation Ordinance for the 2011 Municipal Budget of Andrijevica, Official Gazette of Montenegro: Municipal Ordinances,No. 02/11 dated January 14, 2011.

11 Ordinance for Amendments and Supplements to the Appropriation Ordinance for the 2011 Municipal Budget of Andrijevica,Official Gazette of Montenegro: Municipal Ordinances, No. 24/12 dated July 30, 2012.

12 Official data obtained based on the Law on the Free Access to Information.

PARTY AMOUNT (IN €)Democratic Party of Socialists 3,625.46

Socialist People’s Party 2,258.80Serb People’s Party 712.67

Movement for Changes 435.97Serbian Radical Party – dr. Vojislav Šešelj 435.38

Veselin Radenović, Councilor 435.38TOTAL 8,310.06

Bar Municipality

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BarMunicipality5.

The information sources we used are the documents that CDT was provided with by the Secretariatfor Economy and Finance of Bar Municipality, based on the Decision No. 03205u14226 datedApril 17, 2012, as well as the official documents published in the Official Gazette of Montenegro:Municipal Ordinances.

The relevant Bar municipal authority allowed and enabled CDT to have access to the required information within the legally prescribed deadline, by sending the accurate data on the political partiesfunding in 2011.

13 Appropriation Ordinance for the 2011 Municipal Budget of Bar, Official Gazette of Montenegro: Municipal Ordinances, No.43/10, dated December 31, 2010.

14 Ordinance for Amendments and Supplements to the Appropriation Ordinance for the 2011 Municipal Budget of Bar, OfficialGazette of Montenegro: Municipal Ordinances, No.40/11, dated December 28, 2011.

15 Ordinance for the Annual Statement of Accounts of the 2011 Municipal Budget of Bar, Official Gazette of Montenegro: MunicipalOrdinances, No. 27/12, dated August 20, 2012.

16 Official data obtained based on the Law on the Free Access to Information

REGULAR FUNDING

The projected 2011 Bar Municipal Budget was €26,060,000.0, whereas the projected amount forthe purposes of Operating Budget was €10,560,000.00. The projected amount to be transferred topolitical parties was €105,000.0013, i.e. 1.00% of the 2011 Operating Budget.

Upon the Ordinance for Amendments and Supplements to the Appropriation Ordinance for the 2011Municipal Budget of Bar, the Budget was reduced to €16,400,000.00 and the Operating Budget wasreduced to €9,160,000.00; however, the projected amount to be transferred to political parties remained the same, i.e. it equaled to €105,000.0014 or 1.14% of the revised 2011 Operating Budget.

The Ordinance for the Annual Statement of Accounts of the 2011 Municipal Budget of Kotor statedthat the transfers to political parties, factions and associations amounted to €103,874.00.15


Social Democratic Party 13,676.00Socialist People's Party 11,230.00

Serb People's Party 8,773.00Movement for Changes 6,321.50

Bosniak Party 6,321.50Democratic League 3,870,00

People's Party 3,870,00Liberal Party 3,870,00

Democratic Center 3,870,00Association of Pensioners Party 3,870,00

TOTAL 103,874.00


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Based on both the documents published in the Official Gazette and the Analytical Records we wereprovided with by the relevant Bar municipal authority, we can conclude that political parties, fortheir regular financing, were disbursed €103,874.00. The foregoing amount matches the one statedunder the Annual Statement of Accounts of the 2011 Municipal Budget of Bar.

Nevertheless, the foregoing amount is lower than the original one projected to be transferred to political parties in Bar Municipality.

Berane Municipality

13

BeraneMunicipality6.

17 Appropriation Ordinance for the 2011 Municipal Budget of Berane, Official Gazette of Montenegro: Municipal Ordinances,No. 01/11 dated January 12, .2011.

18 Ordinance for Amendments and Supplements to the Appropriation Ordinance for the 2011 Municipal Budget of Berane,Official Gazette of Montenegro: Municipal Ordinances, No. 40/11 dated December 28, 2011

19 Ordinance for the Annual Statement of Accounts of the 2011 Municipal Budget of Berane, Official Gazette of Montenegro:17

Municipal Ordinances, No. 19/12 dated June 22, 2012.20 Official data obtained based on the Law on the Free Access to Information.

The information sources we used are the documents that CDT was provided with by the Secretariatfor Finance and Economic Development of Berane Municipality, based on the Decision No. 06401201 dated April 17, 2012, as well as the official documents published in the Official Gazette of Montenegro: Municipal Ordinances.

The relevant Berane municipal authority allowed and enabled CDT to have access to the requiredinformation within the legally prescribed deadline, by sending the accurate data on the political parties funding in 2011.

REGULAR FUNDING

The projected 2011 Berane Municipal Budget was €8,497,100.00, whereas the projected amount forthe purposes of Operating Budget was €5,696,500.00. The projected amount to be transferred to political parties and associations was set as €30,000.0017, i.e. 0.50% of the 2011 Operating Budget.

Upon Amendments and Supplements to the Appropriation Ordinance for the 2011 Municipal Budgetof Berane, Berane Municipal Budget was set as €9,625,145.00, with the Operating Budget amountingto €7,322,045.00, whereas the projected amount to be transferred to political parties remained thesame, i.e. €30,000.0018 or 0.41% of the 2011 Operating Budget.

The Ordinance for the Annual Statement of Accounts of the 2011 Municipal Budget of Berane, theprojected amount to be transferred to political parties, factions and associations was set as€30,287.00.19

Upon comparing the amount stated under the documents we were provided by the relevant Berane municipal authority and the one projected under the Budget, we have concluded that political parties in thisMunicipality were disbursed € 2,700.00 less than projected. However, according to the Ordinance for theAnnual Statement of Accounts of the 2011 Municipal Budget of Berane, it can be concluded that politicalparties were disbursed more funds than projected, i.e. they were disbursed €287.00 more than projected.



Socialist People’s Party 5,500.00New Serb Democracy 5,000.00

People’s Party 5,000.00Movement for Changes 1,000.00

Municipal Committee of Democratic Serb Party 800.00TOTAL 27,300.00


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Bijelo PoljeMunicipality7.

The information sources we used are the documents that CDT was provided with by both the Municipal Mayor Office and the Secretariat for Finance of Bijelo Polje Municipality based on the LettersNos. 979/12 and 05/1585 both dated April 19, 2012, as well as the official documents publishedin the Official Gazette of Montenegro: Municipal Ordinances.

The relevant Bijelo Polje municipal authority allowed and enabled CDT to have access to the requiredinformation within the legally prescribed deadline, by sending the accurate data on the political parties funding in 2011.

REGULAR FUNDING

The projected 2011 Bijelo Polje Municipal Budget was €11,600,000.00, whereas the projectedamount for the purposes of Operating Budget was €6,436,200.00. The projected amount to be transferred to political parties was €70,000.0021, i.e. 1.08% of the 2011 Operating Budget.

Upon Amendments and Supplements to the Appropriation Ordinance for the 2011 Municipal Budgetof Bijelo Polje , the projected Budget was reduced to €9,040,499.73 and the Operating Budget wasreduced to €6,057,270.00. The projected amount to be transferred to political parties was the same,i.e. €70,000.0022 or 1.15% of the revised 2011 Operating Budget.

The Ordinance for the Annual Statement of Accounts of the 2011 Municipal Budget of Bijelo Poljestated that the transfers to political parties, factions and associations amounted to €69,107.78.23




Bosniak Democratic Party 6,571.32MoslemBosniak Alliance 6,571.32Social Democratic Party 6,000.00Movement for Chnages 3,446.63

Bosniak Party 3,105.00Liberal Party 2,850.00

Democratic Serb Party 2,300.22People’s Party 2,300.00

TOTAL 74,577.93

21 Appropriation Ordinance for the 2011 Municipal Budget of Bijelo Polje, Official Gazette of Montenegro: Municipal Ordinances, No.04/11 dated January 24, 2011.

22 Ordinance for Amendments and Supplements to the Appropriation Ordinance for the 2011 Municipal Budget Bijelo Polje, OfficialGazette of Montenegro: Municipal Ordinances, No. 02/12. dated January 17, 2012.

23 Ordinance for the Annual Statement of Accounts of the 2011 Municipal Budget of Bijelo Polje, Official Gazette of Montenegro: Municipal Ordinances, No. 23/12 dated July 25, 2012.

24 Official data obtained based on the Law on the Free Access to Information

Bijelo Polje Municipality

15

According to the data found under the Annual Statement of Accounts of the 2011 Municipal Budgetof Bijelo Polje, political parties were disbursed less funds that originally projected. However, the discrepancy between those data and the ones that the CDT was provided with According to the provided data, political parties in Bijelo Polje were disbursed even €4,577.93 more than projected, i.e.they were paid €5,470.15 more than stated under the Annual Statement of Account.


16

REGULAR FUNDING

The projected 2011 Budva Municipal Budget was €57,744,000.00, whereas the projected amountfor the purposes of Operating Budget was €39,497,000.00. The projected amount to be transferredto political parties was €110,000.0025, i.e. 0.27% of the 2011 Operating Budget, which was far awayfrom the legally prescribed minimum.

Upon Amendments and Supplements, the 2011 Budva Municipal Budget was reduced to€34,270,000.0026 and the Operating Budget was reduced to €28,575,000.00. The projected amountto be transferred to political parties was set as €25,000.00, i.e. 0.09% of the 2011 Operating Budget,which represents an additional deviation from the legally prescribed minimum.

The Decision of Budva Municipality, sent in response to the Request for Free Access to information,stated that, due to the Budget illiquidity, only one political party, namely New Serb Democracy hadbeen paid the amount equaling to €5,983.91.

25 Appropriation Ordinance for the 2011 Municipal Budget of Budva, Official Gazette of Montenegro: Municipal Ordinances, No.1/11 dated January 12, 2011

26 Ordinance for Amendments and Supplements to the Appropriation Ordinance for the 2011 Municipal Budget of Budva, OfficialGazette of Montenegro: Municipal Ordinances, No. 35/11 dated November 24, 2011

BudvaMunicipality8.

The information sources we used are the documents that CDT was provided with by the Secretariatfor Economy and Finance of Budva Municipality, based on Decision No. 04U100/1 dated May 09,2012, as well as the official documents published in the Official Gazette of Montenegro: MunicipalOrdinances.

Within the legally prescribed deadline, Budva Municipality responded to the Request for Free Accessto information.

Budva Municipality

17

The scanned Decision made by the Secretariat for Economy and Finance ofBudva Municipality as of May 9, 2012


18

Cetinje,Historical Capital9.

The information sources we used are the documents that CDT was provided with by the Secretariatfor Finance and Entrepreneurship Development of Cetinje Historical Capital, based on the DecisionsNo. 04061/123048 dated April 11, 2012, as well as the official documents published in the OfficialGazette of Montenegro: Municipal Ordinances.

The relevant Cetinje municipal authority responded to the CDT’s Request and submitted the requireddocumentation within the legally prescribed deadline.

REGULAR FUNDING

The projected 2010 of Cetinje Historical Capital Budget amounted to €6,500,000.00, whereas theprojected amount for the purposes of Operating Budget was €6,162,500.00. The projected amountto be transferred to political parties was €44,000.0027 total, i.e. 0.71% of the 2011 Operating Budget.

The documents that the CDT was provided with by the relevant Cetinje Historical Capital servicehave induced the conclusion that transfers to political parties for their regular activities took place.However, the Ordinance for the Annual Statement of Accounts of the 2011 Budget of Cetinje Historical Capital28 stated that there was no transfer to political parties, i.e. that the realization of theBudget Item No. 431221: Transfers to Political Parties equaled to 0,00€, i.e. 0%.

27 Appropriation Ordinance for the 2011 Budget of Cetinje Historical Capital, Official Gazette of Montenegro: Municipal Ordinances, No. 11/11 dated March 30, 2011.

28 Ordinance for the Annual Statement of Accounts of the 2011 Budget of Cetinje Historical Capital, Official Gazette of Montenegro: Municipal Ordinances, No. 21/12 dated July 10, 2012.

Cetinje, Historical Capital

19

The scanned Decision made by the Secretariat for Economy, Development and Finance,of Cetinje, Historical Capital as of April 11, 2012


20

The information sources we used are the documents that CDT was provided with by the Secretariat for Economy and Finance of Danilovgrad Municipality, based on the Decision No. 0303231090/3 dated April 17,2012, as well as the official documents published in the Official Gazette of Montenegro: Municipal Ordinances.

The relevant Danilovgrad municipal authority allowed and enabled CDT to have access to the required informationwithin the legally prescribed deadline, by sending the accurate data on the political parties funding in 2011.

DanilovgradMunicipality10.

REGULAR FUNDING

The projected 2011 Danilovgrad Municipal Budget was €4,900,000.00€, whereas the projected amountfor the purposes of Operating Budget was €2,932,600.00. The projected amount to be transferred to political parties was €30,900.0029, i.e. 1.05% of the 2011 Operating Budget.

Upon Amendments and Supplements to the Appropriation Ordinance for the 2011 Municipal Budget ofDanilovgrad, the projected Budget was reduced to €2,900,000.00 and the Operating Budget was reducedto €1,128,430.0030. The funds intended for regular political parties financing were allocated as€36,510.00, i.e. 3.23% of the 2011 Operating Budget.

The Annual Statement of Accounts of the 2011 Municipal Budget of Danilovgrad stated that the transfersto political parties amounted to €36,503.62.31

After comparing the amounts stated under the documents that we were provided with by the relevant Danilovgrad municipal authority to the ones stated under the 2011 Municipal Budget we have concluded that politicalparties in this Municipality were disbursed the amount that was almost equal to the one projected under theBudget. In addition, the amount stated under the provided documents matches the one stated under the AnnualStatement of Accounts of the 2011 Municipal Budget of Danilovgrad.



Socialist People’s Party 7,246.90Socialist Democratic Party 3,803.82

New Serb Democracy 3,803.82Movement for Changes 2,867.00Democratic Serb Party 1,666.17

Party of Pensioners, Disabled People and Social Justice of Danilovgrad 1,931.29Independent Councilor: Zoran Pavićević 265.04

TOTAL 36,503.62

29 Appropriation Ordinance for the 2011 Municipal Budget of Danilovgrad, Official Gazette of Montenegro: Municipal Ordinances, No. 11/11 dated March 30, 2011.

30 Ordinance for Amendments and Supplements to the Appropriation Ordinance for the 2011 Municipal Budget of Danilovgrad,Official Gazette of Montenegro: Municipal Ordinances, No. 37/11 dated December 09, 2011.

31 Annual Statement of Accounts of the 2011 Municipal Budget of Danilovgrad, Official Gazette of Montenegro: Municipal Ordinances, No. 28/12 dated September 07, 2012.


Herceg Novi Municipality

21

Upon comparing the funds projected under the Budget and the amounts stated under the Annual Statement of Accounts of the 2011 Municipal Budget of Herceg Novi as disbursed, it can be concluded that political parties were paid significantly less funds than projected. On the other hand, the data, which therelevant Herceg Novi municipal authorities provided the CDT with, have shown considerable deviationfrom what was disclosed under the Annual Statement of Accounts.

33 Appropriation Ordinance for the 2011 Municipal Budget of Herceg Novi, Official Gazette of Montenegro: Municipal Ordinances, No. 08/11 dated March 04, 2011.

34 Ordinance for Amendments and Supplements to the Appropriation Ordinance for the 2011 Municipal Budget of HercegNovi, Official Gazette of Montenegro: Municipal Ordinances, No. 37/11 dated December 09, 2011.

35 Ordinance for the Annual Statement of Accounts of the 2011 Municipal Budget of Herceg Novi, Official Gazette of Montenegro:Municipal Ordinances, No. 25/12 dated August 01, .2011.


The information sources we used are the documents that CDT was provided with by the Cabinet of HercgegNovi Municipality Mayor, based on the Letter No. 022196 dated March 22, 2012, as well as the officialdocuments published in the Official Gazette of Montenegro: Municipal Ordinances.

The relevant Herceg Novi municipal authority allowed and enabled CDT to have access to the required informationwithin the legally prescribed deadline, by sending the accurate data on the political parties funding in 2011.

Herceg NoviMunicipality11.

REGULAR FUNDING

The projected 2011 Herceg Novi Municipal Budget was €15,990,000.00, whereas the projected amount forthe purposes of Operating Budget was €11,260,000.00. The projected amount allocated to political partieswas €115,000.00, out of which €90,000.0033 stated under Item: Expenses of parties holding seats in the Municipal Council and €25,000.00 stated under Item: Expenses for Renting Offices for parties holding seats inthe Municipal Council. The total funds allocated to political parties were set as 1.02% of the Operating Budget.

Upon approving the Ordinance for Amendments and Supplements to the Appropriation Ordinance for the2011 Municipal Budget of Herceg Novi, the Budget was reduced to €10,746,000.00€ and the Operating Budgetwas reduced to €5,672,560.00. The amount intended for political parties was also reduced, to €89,000.0034.

Ordinance for the Annual Statement of Accounts of the 2011 Municipal Budget of Herceg Novi stated thatthe transfers to political parties, factions and associations €57,396.42.35


PARTY AMOUNT (IN €)Socialist People’s Party 6,000.00

Democratic Party of Socialists 2,000.00New Serb Democracy 2,000.00

Movement for Changes 1,500.00Social Democratic Party 1,000.00

Democratic Center of Boka 1,000.00Party of Serb radicals 450.00

People’s Party 300.00TOTAL 14,250.00


22

37 Appropriation Ordinance for the 2011 Municipal Budget of Kolašin, Official Gazette of Montenegro: Municipal Ordinances,No. 13/11 dated April 18, 2011.

38 Ordinance for Amendments and Supplements to the Appropriation Ordinance for the 2011 Municipal Budget of Kolašin,Official Gazette of Montenegro: Municipal Ordinances, No. 39/11 dated December 23, 2011.


KolašinMunicipality12.

The information sources we used are the data that the CDT was provided with trhough email communication by the relevant Kolašin municipal authorities, as well as the official documents publishedin the Official Gazette of Montenegro: Municipal Ordinances.

The projected 2011 Kolašin Municipal Budget was €7,408,000.00, whereas the projected amountfor the purposes of Operating Budget was €6,418,000.00. The projected amount to be transferredto political parties was €64,479.0037 total, i.e. 1.00% of the 2011 Operating Budget.

Upon Amendments and Supplements to the Appropriation Ordinance for the 2011 Municipal Budgetof Kolašin38, the total Budget amount was reduced to €4,761,782.49 and the Operating Budgetamount was reducd to €4,215,971.00. The political parties funding was reduced to €42,459.00, i.e.they equaled to 1.00% of the 2011 Operating Budget.

Based on both the Ordinance for Amendments and Supplements to the Appropriation Ordinancefor the 2011 Municipal Budget of Kolašin and the data that we were provided with by the relevantmunicipal service, it can be concluded that political parties were disbursed €45,177.89 as their regular funding, i.e. €2,718.89 more than projected for the purpose.

REGULAR FUNDING


FUNDS ALLOCATED TOPOLITICAL PARTIES AND COUNCILORS

TRANSFERS PROJECTEDUNDER THE BUDGET (IN €)

DISBURSED(IN €)

Coallition of SNP (Serb People’s Party), NOVA(New Serb Democracy), PzP (Movement for

Changes), JKPCG (Yugoslav Comunist Party ofMontenegro) and SPISP (Party of Pensioners,

Disabled People and Social Justice)

14,398.42

SNP 19,513.56

PZP 15,136.57

SNS 6,119.76

Citizen Group TOGETHER FOR KOLAŠIN 8,557.42 3,000.00SDP (Social Democratic Party of Montenegro) 3,920.47 1,108.00

DPS (Democratic Party of Socialists) 15,562,.69 300.00TOTAL 42,459.00 45,177.89

Kotor Municipality

23

The information sources we used are the documents that CDT was provided with by the Secretariatfor Local Revenues, Budget and Finance of Kotor Municipality, based on the Response to the Requestfor the Access to information No. 04014248/1 dated April 11, 2012, as well as the official documentspublished in the Official Gazette of Montenegro: Municipal Ordinances.

The relevant Kotor municipal authority allowed and enabled CDT to have access to the required information within the legally prescribed deadline, by sending the accurate data on the political partiesfunding in 2011.

KotorMunicipality13.

The projected 2011 Kotor Municipal Budget was €15,745,000.00, whereas the projected amountfor the purposes of Operating Budget was €8,824,000.00. The projected amount to be transferredto political parties, factions and associations, as stated under Item No. 43122, was €89,100.0040, i.e.1.01% of the 2011 Operating Budget.

Upon Amendments and Supplements41, the 2011 Kotor Municipal Budget was reduced to€6,766,538.00 and the Operating Budget was reduced to €5,301,596.00. The projected revisedamount to be transferred to political parties, factions and associations, as stated under Item No.43122, was set as €106,500.00, i.e. 2.01% of the Operating Budget.

The Ordinance for the Annual Statement of Accounts of the 2011 Municipal Budget of Kotor statedthat the transfers to political parties, factions and associations amounted to €91,596.52.42

REGULAR FUNDING



Socialist People’s Party 17,055.,82Democratic Serb Party 9,374.42

Liberal Party 8,361.55Movement for Changes 6,804.86Social Democratic Party 5,125.14

People’s Party 3,304.86Croatian Civic Initiative 2,304.86

Serb People’s Party 2,304.86Božović, Ljubo 1,410.14

Uskoković, Veljko 853.45TOTAL 91,596.52

40 Appropriation Ordinance for the 2011 Municipal Budget of Kotor, Official Gazette of Montenegro: Municipal Ordinances,No. 04/11 dated January 24, 2011.

41 Ordinance for Amendments and Supplements to the Appropriation Ordinance for the 2011 Municipal Budget of Kotor,Official Gazette of Montenegro: Municipal Ordinances, No. 38/11 dated December 16, 2011.

42 Ordinance for the Annual Statement of Accounts of the 2011 Municipal Budget of Kotor, Official Gazette of Montenegro:Municipal Ordinances, No. 17/12 dated June 05, 2012.



24

Based on both the documents published in the Official Gazette of Montenegro and the AnalyticalRecords, it can be concluded that the relevant Kotor municipal authorities disbursed to political parties, for their regular activities, €91,596.52. Tha foregoing amount matches the one stated underthe Ordinance for the Annual Statement of Accounts of the 2011 Municipal Budget of Kotor, withthe realization equaling to 86.01% of the projected amount.

Mojkovac Municipality

25

The projected 2011 Mojkovac Municipal Budget amounted to €2,730,235.59, whereas the projectedamount for the purposes of Operating Budget was €2,061,452.58. The projected amount to be transferred to political parties was €17,000.0044 total, i.e. 0.82% of the 2011 Operating Budget. TheBudget Item No. 43124 allocated also the funds equaling to €4,800.00 for renting offices needed bycouncilor clubs.

According to the Ordinance for Approving the Annual Statement of Accounts for the 2011 MunicipalBudget of Mojkovac, the transfers to political parties, factions and associations amounted to€10,800.0045, whereas the funds projected for renting offices needed by councilor clubs were notdisbursed.

REGULAR FUNDING



Socialist People’s Party 2,000.00Social Democratic Party 1,300.00

TOTAL 10,800.00

The information sources we used are the documents that CDT was provided with by the Secretariatfor Finance and Economic Development of Mojkovac Municipality, based on the Decision No.08346dated April 11, 2012, as well as the official documents published in the Official Gazette of Montenegro: Municipal Ordinances.

The relevant Mojkovac municipal authority allowed and enabled CDT to have access to the requiredinformation within the legally prescribed deadline, by sending the accurate data on the political parties funding in 2011.

MojkovacMunicipality14.

44 Appropriation Ordinance for the 2010 Municipal Budget of Mojkovac, Official Gazette of Montenegro: Municipal OrdinancesNo. 12/11 dated April 08, 2011.

45 Ordinance for Approving the the Annual Statement of Accounts for the 2010 Municipal Budget of Mojkovac, Official Gazetteof Montenegro Municipal Ordinances No. 23/12 dated July 25, 2012.


After considering the documents published in the Official Gazette and the Analytical Records providedby relevant Mojkovac municipal authorities, it can be concluded that the amount disbursed for regularpolitical parties funding equaled to €10,800.00€, i.e. €6,200.00 less than projected under the Budget.

However, the disbursed amount matches the one stated under the Annual Statement of Accounts ofthe 2011 Municipal Budget of Mojkovac, with the realization equaling to 63.53% of the projectedamount.


26

NikšićMunicipality15.

The information sources we used are the documents that CDT was provided with by the Secretariatfor Economy and Finance, based on the Decision No. 0640296/1 dated April 17, 2012, as well asthe official documents published in the Official Gazette of Montenegro: Municipal Ordinances.

The relevant Nikšić municipal authority allowed and enabled CDT to have access to the required information within the legally prescribed deadline, by sending the accurate data on the political partiesfinancing in 2011.

Upon considering the obtained data, we have concluded that the relevant Nikšić municipal authoritydisbursed, for the regular activities of the political parties, €14,874.18. It is difficult to say whetherthe foregoing amount was indeed projected under the Budget, since there was no precise classification thereof under both the Budget and the Annual Statement of Accounts into allocations to political parties and NGOs respectively.

REGULAR FUNDING

The projected 2011 Nikšić Municipal Budget amounted to €30,798,567.08, whereas the amount projectedfor the purposes of the Operating Budget was €23,160,802.08. The amount projected to be transferred topolitical parties, factions and associations was €276,810.0047, i.e. 1.19% of the 2011 Operating Budget.

Upon Amendments and Supplements, the 2011 Nikšić Municipal Budget was reduced to €27,063,950.62and the Operating Budget was reduced to €23,039,245.62. The amount projected to be transferred to political parties, factions and associations was €208,100.0048 total, i.e. 0,90% of the 2011 Operating Budget.

The Ordinance for the Annual Statement of Accounts of the 2011 Municipal Budget of Nikšić statedthat the transfers to political parties, factions and associations amounted to €63,093.66.49


PARTY AMOUNT (IN €)New Ser Democracy 6,338.41

Democratic Party of Socialists 4,048.24Socialist People’s Party 2,305.04

Social and Democratic Party 934.80Movement for Changes 545.62Democratic Serb Party 351.04

People’s Party 351.03DCCGLP (Democratic Center of Montenegro – Liberal Party) 0.00

TOTAL 14,874.18

47 Appropriation Ordinance for the 2011 Municipal Budget of Nikšić, Official Gazette of Montenegro: Municipal Ordinances No.br. 43/10 dated December 31, 2010.

48 Ordinance for Amendments and Supplements to the Appropriation Ordinance for the 2010 Municipal Budget of Nikšić,Official Gazette of Montenegro: Municipal Ordinances No. 40/11 dated December 28, 2011.

49 Ordinance for the Annual Statement of Accounts of the 2011 Municipal Budget of Nikšić, Official Gazette of Montenegro:Municipal Ordinances No. 25/12 dated August 01, 2012.

50 Official data obtained on the basis of the Law on the Free Access to Information.

Plav Municipality

27

REGULAR FUNDING

The projected 2011 Plav Municipal Budget amounted to €2,119,833.00. The amount projected tobe transferred to political parties was €12,000.0051, i.e. 0.56% of the 2011 Operating Budget.

The Ordinance for the Revision of the 2011 Municipal Budget of Plav, the Budget was reduced to€2,004,450.00, and the operating Budget was reduced to €1,401,950.00. At the same time, the fundsprojected to be transferred to political parties were reduced even to €1,000.00,52 i.e. to some 0.07%of the 2011 Operating Budget.

The provided documents (Analytical Records) have served us to conclude that political parties funding was disbursed as the amount equaling to €1,000.00 and credited to the account of only one political party, namely to the account of Social Democratic Party.

51 Appropriation Ordinance for the 2011 Municipal Budget of Plav, Official Gazette of Montenegro: Municipal Ordinances, No.12/11 dated April 08, 2011.

52 Ordinance for the Revision of the 2011 Municipal Budget of Plav, Official Gazette of Montenegro: Municipal Ordinances, No.03/12 dated January 24, 2012.

The information sources we used are the documents that CDT was provided with through emailcommunication by the Secretariat for Economy, Development and Finance of Plav Municipality, aswell as the official documents published in the Official Gazette of Montenegro: Municipal Ordinances.

The relevant Plav municipal authority allowed and enabled CDT to have access to the required information within the legally prescribed deadline, by sending the accurate data on the political partiesfunding in 2011.

PlavMunicipality16.


28

The scanned Decision made by the Secretariat forEconomy, Development and Finance of Plav Municipality

Plužine Municipality

29

The information sources we used are the documents that CDT was provided with by the Secretariatfor Local Government of Plužine Municipality, based on the Letter No. 04812 dated May 17, 2012;Decision No. 04649 dated April 05, 2011; Decision No. 041304 dated July 08, 2011; Decision No.042491 dated December 14, 2011; Decision No. 04610/1 dated April 12, 2012; as well as the official documents published in the Official Gazette of Montenegro: Municipal Ordinances.

The relevant Plužine municipal authority allowed and enabled CDT to have access to the requiredinformation within the legally prescribed deadline, by sending the accurate data on political partiesfunding in 2011.

PlužineMunicipality17.

The projected 2011 Plužine Municipal Budget amounted to €3,455,457.00, whereas, for the purposesof the Operating Budget, the projected amount was €1,711,650.00. The projected amount to be transferred to political parties and factions was €20,000.0053, i.e. 1.17% of the 2011 Operating Budget.

The Ordinance for Approving the Annual Statement of Accounts of the 2011 Municipal Budget ofPlužine stated that the transfers to political parties amounted to €19,116.44.54

The amount reached after addition of disbursed amounts as stated under the Analytical Recordswas €17,116.44, which matches neither the amount allocated to political parties under the Appropriation Ordinance for the 2011 Budget nor the amount stated under the Annual Statement of Accounts of the Budget.

REGULAR FUNDING


PARTY AMOUNT (IN €)Socialist People’s Party – dr Petar Žulović 8,886.36

Coalition FOR EUROPEAN PLUŽINE (DPSSDP) 3,551.64TOGETHER FOR BETTER PIVA 3,551.64

Yugoslav Communist Party of Montenegro (JKPCG) – Mirko Vuković 1,126.80TOTAL 17,116.44

53 Appropriation Ordinance for the 2011 2011 Municipal Budget Plan of Plužine Official Gazette of Montenegro: MunicipalOrdinances No. 01/11 dated January 12, 2011.

54 Ordinance for Apoproving the Annual Statement of the 2011 Municipla Budget of Plužine Official Gazette of Montenegro:Municipal Ordinances No. 23/12 dated July 25, 2012.



30

The information sources we used are the documents that CDT was provided with by the Secretariatfor Finance of Pljevlja Municipality, based on the Letter No. 0640141 dated April 17, 2012, as wellas the official documents published in the Official Gazette of Montenegro: Municipal Ordinances.

The relevant Pljevlja municipal authority allowed and enabled CDT to have access to the requiredinformation within the legally prescribed deadline, by sending the accurate data on political partiesfunding in 2011.

18. PljevljaMunicipality

The projected 2011 Pljevlja Municipal Budget was €21,130,000.00, whereas the projected amountfor the Operating Budget was €11,362,706.00. The projected amount to be transferred to politicalparties, factions and associations was €247,242.0056, 2.17% of the 2011 Operating Budget.

The Annual Statement of Accounts of the 2011 Municipal Budget of Pljevlja stated that the transfersto political parties, factions and associations amounted to €83,026.41.57

REGULAR FUNDING


Upon comparing the Analytical Records and the documents provided by relevant Pljevlja municipalauthority, we have concluded that the amount disbursed for regular political parties funding equaledto €83,026.41 in 2011, which was €164,215.59 less than projected.

However, the disbursed amount matches the one stated under the Annual Statement of Accounts ofthe 2011 Municipal Budget of Pljevlja, with the realization equaling to 33.58%.

PARTY AMOUNT (IN €)Socialist People’s Party 31,333.84

Democratic Party of Socialists 25,218.96New Serb Democracy 16,598.65

People’s Party 4,228.53Social Democratic Party 2,908.21

Serbian Radical Party 1,120.32Movement for Changes 1,000.00Democratic Serb Party 617.90

TOTAL 83,026.41

56 Appropriation Ordinance for the 2011 Municipal Budget of Pljevlja, Official Gazette of Montenegro: Municipal Ordinances,No.14/11 dated April 28, 2011.

57 The Annual Statement of Accounts of the 2011 Municipal Budget of Pljevlja Official Gazette of Montenegro: Municipal Ordinances, No. 22/12 dated July 17, 2012.


Podgorica, Administrative Capital

31

59 Appropriation Ordinance for the 2011 Municipal Budget of Podgorica Administrative Capital, Official Gazette of Montenegro:Municipal Ordinances No.42/10 dated December 30, 2010.

60 Ordinance for the Amendments and Supplements to the Appropriation Ordinance for the 2011 Municipal Budget of PodgoricaAdministrative Capital, Official Gazette of Montenegro: Municipal Ordinances No. 36/11 dated December 05, .2011.

61 The Annual Statement of Accounts of the 2011 Municipal Budget of Podgorica Administrative Capital, Official Gazette of Montenegro: Municipal Ordinances No. 18/12 dated June 12, 2012.


The information sources we used are the documents that CDT was provided with by the Secretariatfor Finance of Podgorica Administrative Capital based on the Decision No. 05402/122395/1 datedApril 17, 2012 and the Letter No: 05402/122395/2 dated April 26, 2012 as well as the official documents published in the Official Gazette of Montenegro: Municipal Ordinances.

Podgorica,Administrative Capital19.

The projected 2010 Podgorica Administrative Capital Budget was €68,316,950.00, whereas the projected amount for the Operating Budget was €35,718,590.00. The projected amount to be transferred to political parties, factions and associations was €350,000.0059, i.e. 0.98% of the 2011Operating Budget.

Upon Amendments and Supplements, the 2011 Podgorica Administrative Capital Budget was reduced to €a 53,502,800.00 and the Operating Budget was reduced to €30,029,000.00. The amountto be transferred to political parties, factions and associations was projected to be less than€300,000.0060, i.e. 1.00% of the revised Operating Budget.

The Ordinance for the Annual Statement of Accounts of the 2011 Budget of Podgorica AdministrativeCapital stated that the transfers to political parties, factions and associations amounted to€281,695.38.61

REGULAR FUNDING

Table 15: Funds disbursed for regular financing of the political parties holding seats onthe Council of Administrative Capital, JanuaryDecember 201162



Social Democratic Party 13,597.21Movement for Changes 13,597.21

Albanian Alternative 6,413.98People’s Party 4,019.58

Democratic Serb Party 4,019.58Party of Pensioners, Disable People and Social Justice 4,019.58

Liberal Party 4,019.58Democratic Center 4,019.58

Bosniak Party 4,019.58TOTAL 160,772.26


32

The overview of funds disbursed to the parties holding seats in Town District Councils of Golubovciand Tuzi respectively cane be found in tables bellow.

REGULAR FINANCING GOLUBOVCI AND TUZI


Socialist People’s Party 13,597.21NOVA – People’s Socialist Party 8,808.38

Social Democratic Party 6,413.98People’s Party 4,019.58

Movement for Changes 4,019.58TOTAL 62,428.01

Table 16: Funds disbursed for regular financing of the political parties holding seats onthe Town District Council of Golubovci, JanuaryDecember 201163

63 Official data obtained on the basis of the Law on the Free Access to Information.64 Official data obtained on the basis of the Law on the Free Access to Information.

Table 17: Funds disbursed for regular financing of the political parties holding seats onthe Town District Council of Tuzi, JanuaryDecember 201164


Democratic Union of Albanians 11,202.80Civic Initiative Tuzi 11,202.80

Bosniak Party 6,413.98Social Democratic Party 4,019.58Socialist People’s Party 4,019.58

List for Tuzi 4,019.58Democratic Alliance in Montenegro 4,019.58

TOTAL 58,495.11

After analysis of the available documents, we have concluded that the Podgorica Administrative Capital Budget disbursed to political parties €281,695.38, which was €18,304.62 less than projectedunder the Budget.

The disbursed amount matches the one stated under the Annual Statement of Accounts of the 2011Municipal Budget of Podgorica Administrative Capital, with the realization equaling to 93.90%.

33

65 Appropriation Ordinance for the 2011 Municipal Budget of Rožaje, Official Gazette of Montenegro: Municipal Ordinances No.42/10 dated December 30, 2010.

66 Ordinance for the Amendments and Supplements to the Appropriation Ordinance for the 2011 Municipal Budget of Rožaje,Official Gazette of Montenegro: Municipal Ordinances, No. 35/11 dated November 24, 2011.

67 Ordinance for Annual Statement of Accounts of the 2011 Municipla Budget of Rožaje, Official Gazette of Montenegro: MunicipalOrdinances, No. 21/12 dated July 10, 2012.


Rožaje Municipality

The information sources we used are the documents that CDT was provided with by the Secretariatfor Economy and Finance of Rožaje Municipality, based on the Decision No. 273 dated April 10, 2012and the Letter No. 290 dated April 16, 2012, as well as the official documents published in the OfficialGazette of Montenegro: Municipal Ordinances.

The relevant Rožaje municipal authority allowed and enabled CDT to have access the access to therequired information within the legally prescribed deadline, by sending the accurate data on politicalparties funding of in 2011.

RožajeMunicipality20.

The projected 2011 Rožaje Municipal Budget amounted to €4,985,000.00, whereas, for the purposesof the Operating Budget, the projected amount was €3,223,596.80. The projected amount to betransferred to political parties was €31,916.8065 total, i.e. 0.99% of the 2011 Operating Budget.

Upon Amendments and Supplements, the 2011 Rožaje Municipal Budget was reduced to€3,982,000.00, with the Operating Budget reduced to €3,032,511.87. The amount projected to betransferred to political parties was €30,024.87€66, i.e. 0.99% of the revised Operating Budget.

The Ordinance for the Annual Statement of Accounts of the 2011 Municipal Budget of Rožaje statedthat the transfers to political parties amounted to €22.849,45.67

After the analysis of the received documents, we have concluded that Rožaje municipal authoritiesdisbursed to political parties €7,175.42 less than projected under the Budget.

The disbursed amount matches the one stated under the Annual Statement of Accounts of the 2011Municipal Budget of Rožaje, with the realization equaling to 76.10%.

REGULAR FUNDING


Bosniak Party 7,431.88Social Democratic Party of Montenegro 6,080.04

TOTAL 22,849.45



34

The information sources we used are the documents that CDT was provided with by the Secretariatfor Finance, Economic Development and Social Activities of Šavnik Municipality, based on the Decision No. 02437 and the Letter No. 02438 both dated April 11, 2012, as well as the official documents published in the Official Gazette of Montenegro: Municipal Ordinances.

The relevant Šavnik municipal authority allowed and enabled CDT to have access, within the legallyprescribed deadline, to the information about the regular political parties funding in the Municipalityin 2011.

ŠavnikMunicipality21.

The projected 2011 Šavnik Municipal Budget was €1,669,891.99, whereas, for the purposes of theOperating Budget, the projected amount was €1,081,610.47. The projected amount to be transferredto political parties and factions was €5,381.0069, i.e. 0.50% of the 2011 Operating Budget.

Upon Amendments and Supplements, the 2011 Šavnik Municipal Budget was reduced to€1,666,904.87, whereas the Operating Budget amounted to €1,112,623.35. The originally projectedamount to be transferred to political parties was not changed and remained the same, i.e.€5,381.0070, i.e. it was 0.48% of the revised 2011 Operating Budget.

The Ordinance for the Annual Statement of Accounts of the 2011 Municipal Budget of Šavnik statedthat the transfers to political parties and factions amounted to €807.14.71

REGULAR FUNDING

After considering the documents published in the Official Gazette of Montenegro, as well as the Analytical Records that we were provided with by Šavnik Municipality, we have concluded that politicalparties were disbursed, as their regular funding, €807.14, i.e. €4,573.86 less than projected underthe Appropriation Ordinance for the Municipal Budget of Šavnik.

PARTY AMOUNT (IN €)Democratic Party of Socialists 403.57

Socialist People’s Party 403.57TOTAL 807.14


69 Appropriation Ordinance for the 2011 Municipal Budget of Šavnik, Official Gazette of Montenegro: Municipal OrdinancesNo. 13/11 dated April 18, 2011.

70 Ordinance for the Amendments and Supplements to the Appropriation Ordinance for the 2011 Municipal Budget of ŠavnikOfficial Gazette of Montenegro: Municipal Ordinances, No. 01/12 dated January 12, 2012.

71 Appropriation Ordinance for the 2011 Municipal Budget of Šavnik, Official Gazette of Montenegro: Municipal Ordinances,No. 25/12 dated August 01, 2012.


Tivat Municipality

35

TivatMunicipality22.

The information sources we used are the documents that CDT was provided with by the Secretariatfor Finance and Economic Development of Tivat Municipality, based on the Decision No. 0809up27/2 dated April 17, 2012, as well as the official documents published in the Official Gazette of Montenegro: Municipal Ordinances.

The relevant Tivat municipal authority allowed and enabled CDT to have access to the required information within the legally prescribed deadline, by sending the accurate data on the political partiesfinancing in 2011.

The projected 2011 Tivat Municipal Budget amounted to €10,105,020.00, whereas the projectedamount for the purposes of Operating Budget was €4,962,020.00. The amount projected to be transferred to political parties, factions and associations was €50,000.0073, i.e. 1.00% of the 2011 Operating Budget.

The Ordinance for the Annual Statement of Accounts of the 2011 Municipal Budget of Tivat statedthat the transfers to political parties, factions and associations amounted to €41,373.35.74

REGULAR FUNDING



Social Democratic Party of Montenegro 5,016.53NOVA (New Serb Democracy) 5,016.53

Croatian Civic Initiative 3,917.60Movement for Changes 3,917.60

Serb People’s Party 2,818.60People’s Party 1,719.60

Democratic Serb Party 1,719.60Serbian Radical Party 1,719.60

Liberal Party 1,719.60TOTAL 41,373.35

After examining the provided documents, we have concluded that Tivat municipal authorities disbursed €8,626.65€ less than projected under the Budget.

The disbursed amount matches the one stated under the Annual Statement of Accounts of the 2011Municipal Budget, with the realization equaling to 84.19%.

73 Appropriation Ordinance for the 2011 Municipal Budget of Tivat, Official Gazette of Montenegro: Municipal Ordinances,No. 01/10 dated December 12, 2011.

74 Ordinance for the Annual Statement of Accounts of the 2011 Municipal Budget of Tivat, Official Gazette of Montenegro:Municipal Ordinances No. 24/12 dated July 30, 2012.



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The information sources we used are the documents that CDT was provided with by the Secretariatfor Finance and Budget of Ulcinj Municipality, based on the Decision No. 042016/212 dated February 17, 2012, as well as the official documents published in the Official Gazette of Montenegro:Municipal Ordinances.

The relevant Ulcinj municipal authority allowed and enabled CDT to have access to the required information within the legally prescribed deadline.

UlcinjMunicipality23.

REGULAR FUNDING

The projected 2011 Ulcinj Municipal Budget was €8,871,400.00, whereas the allocation for the purposes of the Operating Budget was €6,203,900.00. The projected amount to be transferred to political parties, factions and associations was €50,000.0076 total, i.e. 0.80% of the 2011 OperatingBudget.

The Ordinance for the Annual Statement of Accounts of the 2011 Municipal Budget of Ulcinj statedthat the transfers to political parties, factions and associations amounted to €58,083.88.77

The Decision that we were provided with by the Secretariat for Finance and Budget of Ulcinj Municipality stated that the funds projected by the Municipal Budget for regular political parties’ activities during the reporting period (January 1st – December 31st 2011) had not been disbursed yet.Besides, it is unclear how the very high amount of funds disbursed to political parties was statedunder the Annual Statement of Account if there was information from competent authorities thatsuch disbursement had not taken place.

76 Appropriation Ordinance for the 2011 Municipal Budget of Ulcinj, Official Gazette of Montenegro: Municipal Ordinances,No. 14/11 dated April 28, 2011

77 Ordinance for the Annual Statement of the 2011 Municipla Budget of Ulcinj, Official Gazette of Montenegro: MunicipalOrdinances, No.24/12 dated July 30, 2012.

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Ulcinj Municipality

The scanned Decision made by the Secretariat for Finance and Budget ofUlcinj Municipality as of February 17, 2012


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ŽabljakMunicipality24.

The information obtained from the competent authorities of Žabljak Municipality were submittedby the email dated May 09, 2012. In addition to that, we used also the official documents publishedin the Official Gazette of Montenegro: Municipal Ordinances.

The projected 2011 Žabljak Municipal Budget amounted to €1,891,830.00, whereas, for the purposesof the Operating Budget, the projected amount equaled to €1,194,230.00. The projected amountto be transferred to political parties and councilor clubs was €14,500.0078 total, i.e. 1.21% of the2011 Operating Budget.

Upon Amendments and Supplements to the Appropriation Ordinance for the Municipal Budget79,Žabljak Municipal Budget was reduced to €1,218,155.00, whereas the Operating Budget was reduced to €768,205.00. In addition, the funds projected to be transferred to political parties were reduced to €2,100.00.

Žabljak Municipality provided us only with the information about disbursement, but did not sentthe pertaining Analytical Records.

REGULAR FUNDING

PARTY AMOUNT (IN €)Serb People’s Party 800.00

Democratic Serb Party 100.00TOTAL 900.00

Based on the foregoing, it can be concluded that the final analysis of regular political parties’ fundingin Žabljak Municipality can be done properly only after the Annual Statement of Accounts of the2011 Budget is approved.


78 Appropriation Ordinance for the 2011 Municipal Budget of Žabljak, Official Gazette of Montenegro: Municipal Ordinances,No. 13/11 dated April 18, 2011.

79 Ordinance for the Amendments and Supplements to the Appropriation Ordinance for the 2011 Municipal Budget of Žabljak,Official Gazette of Montenegro: Municipal Ordinances, No. 41/11 dated December 30, 2011


Analysis of Legislative Framework

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25.

In their session held on July 29, 2008, the Parliament of Montenegro approved the new Law on Financing of Political Parties that was published in the Official Gazette of Montenegro on August 15,2008 and entered into force the day after its publishing. Upon entering into force of the said Law,the Law on Financing of Political Parties (“Official Gazette of the Republic of Montenegro”, Nos.21/04, 33/05 and 47/06) ceased to be applicable.

The new Law introduced new provisions governing the financing of the regular activities of politicalparties holding seats in the Parliament, by its Article 8 that reads as follows:

„Budget funds for financing regular activities of parliamentary parties in the Parliament may neitherbe less than 0.2% nor more than 0.4% of the total budget funds reduced by the capital budget fundsand national funds budgets, i.e. by the Operating Budget of a year in which the budget is adopted.

Budget funds for financing regular activities of the parties holding seats in municipal councils may neither be less than 0.5% nor more than 1.00% of the total budget funds reduced by the capital budgetfunds and national funds budgets, i.e. by the Operating Budget of a year in which the budget is adopted.

The 15.00% of the funds referred to under paragraph 1 and 2 of this Article shall be allocated in equalamounts to parliamentary parties holding seats in the Parliament and/or municipal councils, whereasremaining 85.00% of the funds shall be distributed proportionate to the overall number of seats in theParliament and/or municipal councils at the time of such allocation.

The Ministry and/or the local government body in charge of finance (hereinafter referred to as the:local government body) shall transfer the funds referred to under paragraphs 1 and 2 of this Article toparliamentary parties monthly, in arrears, within five days from the beginning of any month.“

As it can be seen from the quoted Article, the new Law introduced several significant amendments,as follows:• the funds allocated for the regular activities of political parties are subject to the legally pre

scribed maximum limits of 0.4% and 1.00% relative to the national budget and municipal budgets respectively;

• the funds allocated for the activities of political parties are no longer calculated relative to thetotal Budget, but they are calculated relative to the current one;

• the minimum and maximum amounts expressed as percentages proscribed by the Law are nolonger equal at both the national and the municipal level;

• the formula based on which the allocation of funds to the parties holding seats was changed, infavor of those parties which win more deputy of councilor seats in the election.

Analysis ofLegislative Framework

Law on Financing of Political Parties (“Official Gazette of Montenegro”, Nos. 49/08, 49/10)

FINANCING OF REGULAR ACTIVITIES OF POLITICAL PARTIES


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In their session held on August 04, 2010, the Parliament approved amendments and supplementsto the Law on Financing of Political Parties (Official Gazette of Montenegro, No. 49/10 as of August13, 2010). The Law was amended only in the section governing the percentage of the Budget fundsappropriated for the financing of the regular activities of political parties, as well as that governingthe financing of electoral campaigns. Thus, according to the new provision:

The Budget funds for financing regular activities of the parties holding seats in the Parliament shallbe 0.5% of the total budget funds reduced by the capital budget funds and national funds budgets,i.e. by the Operating Budget of a year in which the budget is adopted.

The Budget funds for financing regular activities of the parties holding seats in municipal councilsshall be 1.00% of the total budget funds reduced by the capital budget funds and national fundsbudgets, i.e. by the Operating Budget of a year in which the budget is adopted.

Besides, also the percentage of the amount appropriated for the financing of electoral campaignsfor the election of deputies and, instead of 0.15% of the Operating Budget, it is now provided that0.25% of the Operating Budget shall be ensured for electoral campaign financing.

The amended provisions are not referred to under the findings of the present Publication, since theamendments were made in 2010.

Annexes

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Annexes26.

Pursuant to Article 4 of the Law on the State Audit Institution; Article 23 of the Law on Financing of Political Parties; and the Decision No. 401130438 of the Competent Board, the StateAudit Institution carried out the audit of the 2011 annual financial statements of parliamentarypolitical parties.

The said audit was completed pursuant to the Law on the State Audit Institution; the Instructions on the Work Methodology of the State Audit Institution; the Rules of Procedure of theState Audit Institution; and International Standards on Auditing for public sector (INTOSAI).

Based on the factual situation and the analysis of the replies given by the audited entities tothe Preliminary Report of the SAI, while pursuant to Article 50 of the Rules of Procedure of theState Audit Institution, the Competent Board comprising Mr. Miroslav Ivanišević, President; Mr.Dragiša Pešić, a member of Senate; Mr. Milan Dabović Dsc(econ), a member of Senate, and Mr.Branislav Radulović LL.D, a member of Senate, in their meeting held on November 15, 2012,approved the following:

FINAL REPORT on the Audit of the 2011 Annual Financial Statements of Parliamentary Political

Parties, with the Following Explanatory Notes, Conclusions and Recommendations:

The State Audit Institution subjected the 2011 Annual Financial Statements of 11 (eleven) political parties and 2 (two) NonGovernmental Organizations namely the NGOs that comprisesthe Albanian Coalition Perspective and that are funded from the Budget of Montenegro to theaudit concerned. Under the Final Report, in its Chapter II, the factual situation found is statedper audited entity and the recommendations are given for eliminating irregularities and shortages found in the operations of the audited entities.

The Competent Board in charge of the present audit developed also a set of recommendationsrelating to improving the legislative framework that governs both political parties operationsand activities of all audited entities.

1. The audit has established that political parties do not keep their respective business booksin the uniform manner and that they state their respective revenues, expenditures, assetsand liabilities according to different accounting standards.

ANNEX A EXPLANATORY NOTES, CONCLUSIONS AND RECOMMENDATIONSOF THE STATE AUDIT INSTITUTION


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− For the purpose of ensuring the uniform accounting records, the Ministry of Financeis required to pass, by the end of the fiscal year, a document that will both govern themethod of keeping the business books by political parties and establish the principlesfor stating political parties’ revenues, expenditures, assets, liabilities and fundsources.

2. The audit has found also that the government, through the Real Estate Directorate, fundedoffice rents for four political parties {SNP (Serb People’s Party), NOVA (New Serb Democracy), PzP (Movement for Changes) and Bošnjačka stranka (Bosniak Party)} and that thegovernment assigned beneficial occupation of the state property to two political parties{DPS ((Democratic Party of Socialists) and SDP (Social Democratic Party of Montenegro)}

− The Law on Financing of Political Parties is required to govern all forms of politicalparty funding and competent authorities are required to apply the uniform methodof governing the provision of business premises for political parties’ activities at bothnational and local level.

3. The audit has found that the majority of political parties did not establish appropriately aneffective internal control system.

− The audited entities are required to ensure through an effective internal control system legal, costeffective and successful funds and other assets management and toenhance the sense of the responsibility of persons involved in using the funds andother assets.

4. The audit has found that all the audited parties paid out from the expense account significantcash amounts for salaries and benefits, fuel costs, telephone charges and vehicle maintenance costs and alike. Besides, the audit has found that the substantiation of one portion ofexpenditures referring mainly to expense account, fuel costs, telephone charges and maintenance of equipment and covered from the cash account funds was made by certain parties {DPS (Democratic Party of Socialists of Montenegro), BS (Bosniak Party), SNP CG (SerbPeople’s Party of Montenegro), NOVA (New Serb Democracy), DUA (Democratic Union ofAlbanians), DS u CG (Democratic League in Montenegro), and FORCA} based on the unreliable documentation (nonfiscal receipts).

− The audited entities are required to reduce cash payments from cash account and toprovide more reliable fiscal documentation to substantiate their expenses.

5. The audit has found that the revenues from local selfgovernments were not credited onlyto the primary accounts of parties, but they are credited also to the current accounts of municipal committees of those parties.

− For improving fiscal discipline and more effective funds management, the audited entities are required to credit all the revenues gained on all grounds to their respectiveprincipal accounts..

Annexes

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6. The audit has found that one number of parties {(Serb People’s Party of Montenegro) andNOVA (New Serb Democracy)} did credit financing of natural persons through lending byparties’ members. It has also found that certain parties pay electoral campaignrelated expenses from the funds intended for regular activities of parliamentary parties.

− The Law on Financing of Political Parties is required to govern precisely the matterof lending that certain political parties use as a form of credit financing.

7. The audit has found that, out of the total revenues generated by the audited parties, morethan 90.00% are from the Budget of Montenegro and budgets of local selfgovernments.

− The State Audit institution is of the opinion that it is required to consider a possibilityto make the parties funded from the Budget sources (i.e. parliamentary parties) subject to the Law on Public Procurement.

8. The audit has found that, in 2011, in addition to the funds amounting to € 3,158,044.00 thatthe Budget allocated to political parties for their regular activities also the funds amountingto €247,186.00 were allocated by the Budget of the Parliament of Montenegro for grosssalaries of the staff in councilor clubs. Besides, it has been established that two parties{NOVA (New Serb Democracy) and Bošnjačka stranka (Bosniak Party)} did not use the fundsentirely for gross salaries of the staff in councilor clubs, since the tax and contribution baseswere not respected in the pertaining calculations.

− The Parliament of Montenegro should make fund transfers for councilor clubs’ operations to the current accounts of their respective political parties and in such mannerto avoid exceeding the prescribed 0.5% limit out of the Operating Budget amount thatwas defined under the Law on Financing of Political Parties. Therefore, the paymentsto the councilor clubs’ staff shall be at the expense of the funds allocated to politicalparties for their regular activities and through direct payment of salaries to thosepersons.

Miroslav IvaniševićPresident of the Senate


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Financing to Political Parties in 2011

Documents

Transcript of Financing to Political Parties in 2011