Government of Montenegro should conduct external audit of the UoM

Centre for Civic Education (CCE) submitted to Damir Šehović, Minister of Education, and Milutin Simović, Deputy Prime Minister for Economic Policy and Financial System the Initiative for conducting an external audit of the University of Montenegro (UoM) for the period from 2018 to 2020.

In line with the Contract on financing between the Government and UoM and based on the Law on Higher Education and the Law on Budget, funds are allocated for UoM. This contract refers to three academic years – 2018/2019, 2019/2020 and 2020/2021, which are covered by the fiscal years from 2018 to 2021, and the UoM receives allocated funds on an annual basis if it meets the goals set as indicators of success. The contract has four annexes with indicators of success, but to date, there is no data available on how these indicators were measured and what were the sources of verification.

For the previous three-year period, from the Budget to the UoM’s account it was transferred 60 million euros, and as far as we know, the Government has not hired an independent external auditor so far, and consequently, there is no independent assessment of the legality and efficiency of expenditure of these funds.

Furthermore, the Managing Board of UoM requested 24,808,026.84 euros for 2021, or slightly four million more than in 2020.

The Government has its representatives in the Managing Board of UoM and, surprisingly, these representatives of the Government have not raised the issue of the external audit so far, but they duly supported all new requests for an increase of the UoM’s budget at the sessions of the Managing Board and were acquainted with internal audits at UoM which are not in illustrating good conduct at this institution. This Managing Board also ignored the urgency of the CCE to order the submission of the required financial documentation in an adequate format, which sided with the rector and his practice of non-transparency in the management of UCG.

Despite the limitations of the available documentation for processing, recently introduced CCE’s analysis „Financial Alchemy of the University of Montenegro – insight into the financing of UoM from 2015 to 2019points out many reasons that should draw the Government’s attention to the need to conduct an external audit for the entire duration of the Contract between the Government and UoM.

The CCE previously sent the Initiative to the State Audit Institution (SAI) to audit the financial operations of the UoM as they have not done so for a decade, and we were encouraged by the press statement of a member of the SAI Senate that he will recommend it for the SAI plan.

For clarification, the audit that should be conducted by the SAI and the one we request from the Government are different and such two audits would be complementary and necessary.

The Government of Montenegro has no reason to reject this initiative, so we expect it to be implemented in the first quarter of 2021, and that will be one of the indicators of the actual care of the Government for the budgetary funds.

Snežana Kaluđerović, Senior Legal Adviser