A significant amount of money from the state budget for the past year was spent from items or on items and accounts that were not provided for by law and regulations. Cases of money being paid out without the necessary or sufficient explanation, as well as without justification from the person to whom the money was paid, have been recorded. Part of the money paid to spending units was not spent for the planned purposes or was not spent at all, but was not returned to the budget. A case was also established where part of the earmarked donation from the European Union for supporting culture was spent for other purposes, and after a request – a note was returned to the European Agency for Education, Audiovisual and Culture.
This was stated, among other things, in the report by the State Audit Institution (SRI), which gave a qualified opinion on the financial audit and a negative opinion on the audit of the regularity of the Draft Law on the Final Budget Account (Report on the Actual Spending of Money) for 2024.
The Minister of Finance last year was also the current Minister Novica Vuković.
“The draft law on the final accounts of the budget of Montenegro for 2024 has determined that spending units have not, in all material aspects, harmonized their business activities with the legal and other regulations governing budget operations in Montenegro, and accordingly, the competent Collegium expresses an adverse opinion,” the DRi report on the regularity audit stated.
The SAI has given a negative opinion in its audit of the regularity of spending money from the budget every year since 2019, which means that a significant number of irregularities are not being resolved but rather continue from year to year.
A qualified opinion was given on the accuracy of the financial statements because the final budget statement for 2024 contains “identified errors that have a material and pervasive effect on the financial statements.”
“Based on the factual situation, it was determined that the misstatements, individually or collectively, are materially significant in relation to the established criteria for the financial audit, on the basis of which the competent Collegium expresses a qualified opinion,” the SAI stated.
The EU demanded the money back in a note.
The report states that the European Commission’s European Agency for Education, Audiovisual and Culture (EACEA), during the financial audit of projects from EU funds implemented in the period from 1 June 2015 to 31 May 2019, determined in its final audit report that the Royal Theatre “Zetski dom” (coordinator of the EU Collective Plays project) unjustifiably spent the amount of 202.943,60 euros, i.e. that the costs were not recognized as justified.
“Given that the project costs were not implemented in accordance with the Multi-Beneficiary Grant Agreement, a refund of funds is requested in accordance with the debit note dated 13. 6. 2024, which on 27.12. 2024, with calculated daily interest, amounted to 209.343,13 euros. Spending units should use donor funds exclusively for costs that meet the criteria prescribed by the donor,” the SAI stated.
They cite the example of the Government approving the spending of 11 million euros for the expropriation of real estate in the Phase II of the Tivat Airport project in the locations of KO Đuraševiči and KO Mrčevac, and that this money was paid into the account of the Ministry of Spatial Planning, Urbanism and State Property at a commercial bank. They point out that it was not spent, but it was not returned to the budget, even though it had to be done.
“Dakić’s” 7,7 million, 2,7 million paid
Also, in December last year, the amount of 7.787.128 euros was paid from the budget reserve to the deposit account of the Commercial Court for the payment of labor and work-based claims for all remaining employees of “Radoje Dakić” in bankruptcy, which have not been settled so far in the bankruptcy proceedings. The SAI determined that this money was not paid last year, but that 2.738.312,61 euros were paid in the first three months of this year.
The Ministry of Spatial Planning was paid 24.601.425 euros at the end of last year for the expropriation of land for the Smokovac – Mateševo highway section. That money was not paid for that purpose in February of this year, and the account it is on does not have the state designation.
“Recorded as an expense through the Treasury General Ledger, however, it cannot be recorded as an expense until the final payment is made based on adequate documentation. The account in question, although not labeled as a state account, in which these funds are located, is part of the Consolidated Account, in accordance with Article 9 of the Law on Budget and Fiscal Responsibility. On this occasion, the Ministry of Spatial Planning, Urbanism and State Property was obliged to notify the Ministry of Finance of the unspent funds, which should have reduced expenses by the same amount, increased deposits and recorded this amount as cash in the Consolidated Account of the State Treasury,” the SAI stated.
Cost of music capital investment
One of the many irregularities is that out of the total amount of 893.767 euros for the program “Development Projects of the Royal Capital of Cetinje”, payments of 635.045 euros do not have the character of capital projects.
“The payments relate to the landscaping of green areas, services for organizing entertainment and music programs, and the implementation of marketing campaigns for events in the Royal Capital,” the DRI said.
SAI warns of rising costs for subsidizing employment of people with disabilities
Subsidies for employment of persons with disabilities in 2022 exceed the revenues of the Professional Rehabilitation Fundphoto: Shutterstock
The SAI warns in its report that expenditures for subsidizing the salaries of persons with established disabilities, which are paid through the Employment Agency – Professional Rehabilitation Fund, have exceeded the Fund’s revenues since 2022.
The largest difference was recorded in 2024, when the Fund’s revenues were 14,2 million and expenditures were 33,1 million, meaning that the deficit of 18,9 million was compensated from the state budget.
“The attention of the Parliament and the Government of Montenegro is drawn to the growing deficit of the Fund for Professional Rehabilitation and Employment of Persons with Disabilities and the potential risk of jeopardizing the activities of professional rehabilitation of persons with disabilities,” the SAI stated.
For three years now, “Vijesti” has been writing about the enormous growth in the number of people with established disability certificates, predominantly from the two cities of Rožaje and Berane, and that this has led to a drastic increase in expenditures from the state budget.
At the beginning of August, this Fund spent the entire amount planned for the entire year 2025 on payments to employers for employment of persons with disabilities.
Money paid to religious organizations illegally and without the obligation to justify it
The Ministry of Justice, according to the DRI, paid 1,7 million euros to religious schools last year, including 900.000 euros to the Sveti Sava High School and 800.000 euros to the Mehmed Fatih Madrasah, exceeding legal norms.
“The General Law on Education stipulates that the amounts of funds used to finance secondary religious schools are determined based on the economic cost of educating students for the educational program, the number of students, the coefficient of the program group into which the educational program is classified, and other criteria characteristic of the educational program, institution, and specific area. It has been determined that the Ministry has not developed a methodology for calculating the economic cost of educating students for educational programs. The contracts on financing secondary religious schools do not contain an article that prescribes or ensures control over the intended use of allocated funds, as well as the obligation to compile reports by users on the manner in which budget funds are spent,” the SAI stated.
They also point out that, by a special conclusion of the Government, assistance was paid from the budget reserve in resolving the issue of spatial capacities of the Museum of Islamic Culture and Art in Podgorica, owned by the Islamic Community, in the amount of 200.000 euros.
The SAI states that the money was paid out even though no supporting documentation was attached, nor was there any obligation to report on the expenditure of the said funds.
“The said purchase of the facility has not yet been realized, and the Meshihat of the Islamic Community of Montenegro received the funds on October 30, 2024. The said payment is not in accordance with point two of the Government Conclusion and the Instruction on the Work of the State Treasury, which defines the verification and approval of payments by spending units,” the SAI stated.
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