Centre for Civic Education (CCE), on the occasion of the published Report on Financial Audit and Regularity Audit of the Operations of the Spending Unit Judiciary for 2019 by the State Audit Institution (SAI), notes that even after a few weeks there is no adequate reaction from the judiciary, and it should at least include the resignations of those responsible due to the SAI’s assessments.
The CCE reminds that the SAI gave a negative opinion on the regularity audit and a conditional opinion on the audit of the Annual Financial Report of the Spending Unit Judiciary for 2019. The fact that finances are being managed in this way in the judiciary, which received almost 33 millions of euros from the budget last year, underlines concerns about the state of affairs in that branch of government, whose leaders have become a barrier to further process of European integration and democratization of Montenegrin society.
A comprehensive review of the SAI report brings to light significant deficiencies in financial management that require accountability of all members of the Judicial Council, the Supreme, Appellate, Administrative and Commercial Courts, as well as higher courts in Podgorica and Bijelo Polje, but almost all basic courts because irregularities are not found in only two basic courts (Bijelo Polje and Berane). There are also irregularities in all misdemeanor courts. In addition, the Prosecution would have to examine whether there are elements of a criminal offense in such managing that are prosecuted ex officio. The scope of violations of the law and other identified irregularities by those who should be law protectors caused harm to the budget, but also pointed to the inadmissible attitude of the court management in the law enforcement.
The SAI report indicates that the judiciary has not carried out all activities to establish a system of financial management and control, ie. a whole set of documents in this area has not been adopted, nor has the implementation in various segments been monitored, including the control of the expenditure of funds allocated to the courts.
Irregularities in the inventory and records of fixed assets were also noted, including the fact that there is no list of the inventory of fixed assets and the judiciary does not provide analytical records of assets. Furthermore, a discrepancy was found between the data on the value of assets from the inventory lists and the Inventory Report. For example, the inventory lists do not include buildings worth € 2,993,186, newly purchased equipment worth € 116,360, current investments of € 25,589, equipment in the amount of € 68,738.15, vehicles worth € 43,941.12, computer equipment of € 37,655.20 €, as well as donations, etc.
It is also unbelievable that the judiciary ends 2018 with unpaid contributions for the employment for persons with disabilities from previous years of almost one million euros (935,725.38 €) with other accompanying unpaid obligations for taxes and contributions to benefits and all of that is not even stated in outstanding liabilities report as of 31 December 2018.
They were also reckless in the judiciary during business trips, as indicated by the exchequer documentation. Most travel orders were not submitted within the deadline for the calculation of travel expenses, nor are these travel orders accompanied by reports from the business trip, which violates the Regulation on Reimbursement of Expenses of Public Sector Employees.
The judiciary hired persons in systematized positions under service contracts and temporary job contracts contrary to the Law on Civil Servants and State Employees and paid them compensation in the net amount of € 237,482.90 (total expenditures are much higher). In addition, payments of fees to members of the Judicial Council commissions were not in line with the Rules of Procedure of the Judicial Council, and it was determined that individual members of the Judging Council were paid several times during a month, which is against internal acts of the Judicial Council.
In the judiciary, they did not save on their salary supplements as per their readiness and watch, paying € 558,775.41 (gross). They only failed to pay the allowances based on the decision, the part of which related to those allowances was abolished by the Constitutional Court in mid-2017, so they did not have a legal basis for determining the amount of the allowance per hour for payment of readiness and duty. For overtime work, employees in the judiciary were paid € 671,562.88, but even this calculation was not in accordance with legal regulations, nor is there evidence in the form of valid attendance records at work as a basis for these payments.
The delicate area of public procurement in the judiciary was not addressed with due care, so in the Report on performed public procurements and concluded public procurement contracts are included procurements in a smaller amount by € 159,695.47, ie € 208,883.45, if the procurements that are settled through the forced collection are taken into account. The electronic record of conducted public procurement procedures was also not done in accordance with the provisions of the then valid Law.
One part of expenditures in the amount of € 183,932.27 was not paid in accordance with Regulation on Unified Classification of Accounts for the Budget of Montenegro and Budget of municipalities, and payment of expenditures in the amount of € 156,356.09 was made contrary to the Instructions of the State Treasury. Namely, this was not accompanied by evidence that the performed contracted works or provided performed services, ie the payment was made on the basis of incomplete documentation (pro forma invoices, non-fiscal invoices, etc.).
The Judicial Council did not provide analytical records of revenues based on court fees, fines and proceedings costs. The discrepancy between the data on these revenues provided by the Ministry of Finance and the data of the judiciary was also determined.
Almost four million were paid based on the decision on the execution of public enforcement officers through the Ministry of Finance (€ 3,989,031.71) and an additional quarter of a million (€ 267,105.22) through the Judicial Council based on final court decisions, decisions of the Agency for Peaceful Settlement of Labor Disputes and decisions on the conducted inspection supervision of the Tax Administration, and these are linked to labor disputes and disputes related to the work that the judiciary has lost. There is only 42.56% of documentation for the payment of these obligations, ie for only € 1,811,521.06 there is adequate documentation, and there are indications that there may have been double payments under the same decision, which requires additional checks and determination of liability.
The Judicial Council does not have data on the spending of funds transferred for bankruptcy proceedings to the account of the Commercial Court in the amount of € 450,000.00, but this documentation is in the Commercial Court. Also, contracts on the business lease premises for the needs of the Judicial Council and the premises for the needs of the Basic Court of Kotor have not been certified by the competent authority, as prescribed by Article 639 of the Law of Obligations.
The judiciary has been identified for years as a serious obstacle to the establishment of a functional rule of law, as indicated also by relevant international reports. This is not accompanied by a sense of accountability in the judiciary itself, as evidenced by the many times pointed out multiple, unconstitutional and illegal mandates of the President of the Supreme Court and a series of other courts, as well as such irresponsible and illegal financial management. A number of officials in the judiciary consider that they are irreplaceable and that everything is allowed to them, and that requires a serious reaction from all stakeholders. That is why this SAI report is an additional alarm that things must change radically in the judiciary, and the first step would be the resignation of members of the Judicial Council, the entire management of this unit, but also the presidents of all courts where illegalities were found.
Tamara Milas, Human Rights Programme Coordinator