Promoting good governance through strengthening …



Integrated Local Development in Montenegro

Country: Montenegro

UNDAF Outcome 2.2: State and independent institutions with increased capacity to ensure the realization and monitoring of human rights, support empowerment of women, enable equal opportunities for all inhabitants, including access to efficient service delivery, through a transparent system of public administration at national and local level

Expected Outcome: Fostering a democratic society that fully respects, protects and fulfils human rights through rule of law, government transparency and accountability

Expected Project: Local government system further enhanced to deliver better quality of local services to the citizens in a transparent, accountable and cost-effective manner

Executing Entity: UNDP CO Montenegro

|Brief Description: |

|In the context of ongoing decentralization reform, local governments' responsibilities are becoming increasingly more important and |

|versatile. While some progress has been made, the effective and accountable delivery of quality public services at the local level still |

|faces considerable challenges in terms of limited capacity to design and implement integrated local development strategies, insufficient |

|organizational development and financial management in line with the principles of good local governance and lack of understanding of |

|benefits of intermunicipal cooperation. |

|The project will address these challenges through following components: 1: Developing prioritized and mature project pipeline that is |

|aligned with strategic priorities at national and local level in pilot municipalities; 2: Improving transparency and accountability of |

|municipal financial management, 3: Enhancing local service delivery through inter-municipal cooperation 4: Improving municipal and |

|ministries’ management practices in order to deliver better quality of services to the citizens in a transparent, accountable and |

|cost-effective manner. |

Implementing agencies: UNDP CO Montenegro

Agreed by UNDP: ____________________________________________________________

Integrated Local Development in Montenegro

Podgorica, October 2013

Table of Contents

I. SITUATION ANALYSIS 3

II. INTERVENTION STRATEGY 4

1. Developing prioritized and mature project pipeline that is aligned with strategic priorities at national and local level in pilot municipalities 4

2. Improving transparency and accountability of municipal financial management 5

3. Enhancing local service delivery through inter-municipal cooperation 7

4. Improving municipal and ministries’ management practices in order to deliver better quality of services to the citizens in a transparent, accountable and cost-effective manner 9

Gender Mainstreaming 11

III. PROJECT RESULTS AND RESOURCES FRAMEWORK 12

IV. MANAGEMENT ARRANGEMENTS 17

Institutional Framework 17

Project Roles and Responsibilities 17

Monitoring and Evaluation 18

Reporting responsibilities 18

Visibility 19

V. LEGAL CONTEXT 19

VI. ANNEXES 20

SITUATION ANALYSIS

The Constitution of Montenegro (2007) and the Law on Local Self-Government (2003) constitute the legal basis for a decentralized system of local self-government. Montenegro is not divided into administrative regions; it has a monotype organizational structure of local self-government with omnibus distribution of responsibilities. There are in total 22 municipalities. Mayors are not directly elected by the voters but by the municipal assemblies, however, the composition of the municipal assemblies is the result of the direct elections held every four years.

The government has an overriding goal of advancing European Union (EU hereafter) integration. Accession negotiations with the EU are now ongoing. EU emphasizes the need for further institutional reform, including improvement in the public administration. In particular, EU (2013) Progress Report on Montenegro highlights that there were no developments in the rationalisation and efficiency of local administration.

Several pieces of legislation related to local self-governance were adopted in 2011, including:

• the Public Administration Reform Strategy for 2011–16, which outlines ambitious objectives for local self-government reform, including further decentralization, strengthened administrative oversight of local governments, and enhanced local financing.

• the Law on Regional Development (2011), which defines legislation on coordinating efforts between local and central authorities for developing regional provinces.

• the Strategy for Inter-municipal cooperation for 2011–15, and its Action Plan, were adopted in June of 2011;

• the Law on Territorial Organization (2011), which determines which territories belong to individual municipalities and it was amended in 2013; and

• Amendments were introduced also to the Law on Local Self-Government (with a view to enhancing the transparency, efficiency and accountability of the administration at local level) and the Law on Local Self-Government Financing (to provide the municipalities with more stable sources of revenue; these sources include a tax-sharing arrangement and an extension of local tax bases).

In June of 2012 the government adopted an Analysis of the functioning of the local self-government which contains recommendations for further legislative amendments and an Action Plan for the Reform of Local Self Government (2012). The National Training Strategy (NTS) for Local Governments in Montenegro was adopted in 2008 and currently is under process of updating. Also, UNDP has prepared a comprehensive Functional review of the HR function and management capacities in Montenegrin municipal administrations.

In the context of EU integration and national level policy making, in order to build a solid ground for smart, sustainable and inclusive growth at the local level, there are some challenges Montenegrin local self-governments need to tackle:

• In most cases local strategic frameworks are not aligned with national strategic documents and policies, but also various strategies at the local level are not aligned among themselves (for example, Municipal Development Strategy, Municipal Gender Equality Strategy, Municipal Social Inclusion Strategy, Municipal Environment Strategy etc.);

• Inappropriate institutional set-up for evidence based policy making, strategic planning and for the implementation of the strategic and policy framework.

• Limited capacities to translate development strategies into practical development actions.

• And finally, insufficient communication between municipalities, lack of vision and plan on issues of inter-municipal interest (municipalities with advanced administrative capacities could provide services on behalf of those with insufficient capacities) and lack of knowledge on possible forms of interest-based municipal cooperation.

Taking all this into account and facing the significant regional disparities, the UNDP with its integrated approach to capacity development at the local level intends to support the efforts of the Government of Montenegro to ensure a coordinated approach to sustainable socio-economic development of all parts of the country, by linking needs on the local level with the priorities at the national level, in the joint activities of all social actors in order to achieve balanced development of the country and reduction of socio-economic differences.

INTERVENTION STRATEGY

The overall objective of the UNDP and its integrated approach to capacity development at the local level is to contribute to achieving the key national priorities on the way towards EU, related to smart, sustainable and inclusive development and continued growth at the local level, in order to deliver better quality of services to the citizens, in cost-effective manner. For efficient implementation of this objective the enhanced/good governance, increasing transparency, accountability and quality of institutions in the public sector is a precondition.

The project will address these challenges through following components:

1. Developing prioritized and mature project pipeline that is aligned with strategic priorities at national and local level in pilot municipalities

The local self-government units are considered as main facilitators of local development and one of the key beneficiaries of EU funds in Montenegro. Therefore, the importance of developing capacities at the local level is recognized as the driving force for “localization” of national priorities and goals. Development of strategic framework for local and regional and rural development goes in parallel with the development of a pipeline of projects in order to turn the strategic priorities into investment plans, project proposals, concrete initiatives, which will be funded through the state or municipal budget, IPA funds or donors. Freedom House report on Montenegro notes: “... local employees are often under qualified to handle their new responsibilities related to European integration and the decentralization process. Expectations are nevertheless high that municipalities will be able to apply for, receive, and manage significant financial resources from EU development funds”.[1]

Following the adoption of the Law on Regional Development, local self-government units took the lead in the preparation of local strategic development plans in a participatory manner, and so far majority of municipalities developed and adopted the plans according to the unified methodology. These plans were developed based on social and economic analyses and needs of municipalities, in the consultation procedures being involved the relevant stakeholders. Now it is critical to make sure there are clearly defined priorities, actions and timeframe in the action plans for the implementation of Strategic Development Plans and together with that a sufficient number of mature, bankable, projects, fiches and initiatives in the pipeline, based on in-depth analysis and feasibility studies.

In 2010 UNDP supported the Ministry of Economy in preparation of the Strategy for Regional Development (2010-2014). Following the adoption of the Law on Regional Development, UNDP assisted in local development planning and selection of strategic projects in municipalities of Žabljak and Kolašin. The Ministry of Economy has obtained very comprehensive Electronic Database of Development Projects, which can also be used as a tool for the project preparation and implementation. UNDP has organized introductory training and prepared the draft Rulebook for the usage of the database.

Experiences of other accession countries such as Bulgaria and Croatia show that integrated approach to regional and rural development and close coordination of relevant government structures with local authorities is needed in programming and implementation to secure absorption of funds and avoid overlap. At this stage in Montenegro there are legal, institutional and financial constraints and a more systematic and coherent rural policy fine-tuned with the local strategic development is highly needed. Having in mind that the greatest potential users of these funds in Montenegro – municipalities, private companies and farmers - are insufficiently informed on this process, a lot of work has to be done in this regard while some of the business clusters related activities may be relevant and complementary. Therefore, tailored technical assistance to the relevant ministries and municipalities in ensuring integrated approach to rural and regional development will be needed.

This will be reached through following steps:

1.1 Technical support in amending legal framework related to regional development;

1.2 Technical assistance for upgrading existing strategic plans and developing Action Plans for the Implementation of Strategic Development Plans in the pilot municipalities,

1.3 Targeted technical support to municipalities to develop project pipeline, mature bankable projects and project fiches in pilot municipalities;

1.4 Strengthen national and local capacities through trainings, exchange of experiences, regional conferences, study tours, mentoring including related to development and implementation of IPA project proposals;

1.5 Technical support to municipalities in populating the Electronic Database of Development Projects with the strategic priorities and projects identified in the strategic plans;

UNDP is currently discussing the possibilities for funding of these activities and the Ministry of Economy has included the 20,000€ (US$ 27,000 approximately as per October2013 exchange rate) in the plan for the 2014 budget. With regard to IPA 2011 project related to business clusters, UNIDO will be direct partner, whereas UNDP will implement part of the activities related to the project development and this funding will be in the amount of 55,700€ (US$ 75.613 approximately as per October2013 exchange rate). UNDP’s contribution will be US$ 50,000.

2. Improving transparency and accountability of municipal financial management

Since independence, Montenegro has been active in the area of institutional reform of the budget process, including the introduction of the single treasury account (STA in 2002). The introduction of PIFC and internal audit in accordance with EU standards is currently underway. As from the 2010, the budget classification was refined so as to apply more systematically the economic classification at the line-item level. Montenegro has started a reclassification of the budget on a more programmatic basis, thus providing a foundation for more systematic monitoring of policy results. With International Monetary Fund (IMF) support, the MoF intends to introduce a medium term expenditure framework (MTEF) as a basis for fiscal planning.

Municipal governments in Montenegro continue to be overstaffed and underfunded, with significant financial disparities among the regions. Local authorities do not have firm control over municipal finances. Given the fact that the process of decentralization (and fiscal decentralization in particular) is still work in progress in Montenegro, and given the growing training needs of the municipalities in the face if the EU accession and continued reforms in many areas, there will certainly be a need to invest additional efforts.

Financial discipline in terms of taxes and revenues collection and expenditures and more facts based planning must be enforced among municipalities in Montenegro. Also, the Law on Local Self-Government stipulates the obligation of the municipality which is in financial difficulties for more than 90 days, to prepare a recovery plan with the program of measures to overcome financial difficulties, within 30 days from the warning of the Government. These municipalities are also obliged to submit reports on the implementation of the contract and all relevant information related to the contract, but most of them are not doing so.

Also, municipal budgets should be prepared in a way which reflects local priorities, the mission and the vision of the municipality, as well as its strategic plans which have to be developed. More tailored-made trainings on EU funded projects implementation should be organized for local finance departments and detailed procedures for accounting, public procurement and spending of donor’s funds should be developed. For some projects, public-private partnership may be an acceptable solution. For the successful functioning of public-private partnership models, it is necessary to ensure that tax and other societal benefits are well-defined and inductive to potential private investors and partners.

Tax system in Montenegro has significantly improved over the last few years, especially following the independence in 2006. The fiscal system is decentralised with the significant fiscal revenue given to the municipalities as original sources. Municipalities were often given powers, but unfortunately the appropriate training and capacity building has not been foreseen. Taking all that under consideration local governments have performed rather well and have raised revenues. However, the local tax/revenue collections are still rather weak, with compliance in good cases being just over 50 per cent. Hence, it is necessary to provide additional capacity building and equip the local tax administration (or equivalent local bodies) technologically and operationally to be able to perform better. Equally, the central government does not share many of its registers with the local tax authorities, although local tax authorities can also be blamed partly, as they often wait for the central government tax authorities to provide full support and give them all the registers and information; without their own attempts to build solid databases themselves.

In the current state of the affairs the municipalities are not in the position to really financially perform, as they cannot define well their wealth status. In other words, in the future it may be difficult to have serious public debt market – as municipalities may not be in a position to borrow again the property or even future cash flows from the use of property. Therefore, it is of utmost importance to define clearly the status of municipal property.

Municipal property is still not catalogued, and it remains a problem for municipalities to clearly establish what they really own. Linked with that is that they are not really motivated to catalogue the property, as it will be more or less listed (registered) as state property, with municipality having some right of use. Similarly some other laws are in conflict with the Law on State Property, which does create additional confusion. It seems that in Montenegro there is lack of legislative coordination, which is to ensure the consistency of legal system.

There is a need of systematic work by the Government of Montenegro, Union of Municipalities, municipalities and other partners on further strengthening and stabilizing the financial performance and capacity of local governments in the following areas: municipal debt, public procurement and external audit and internal control.

The citizens’ participation and involvement of citizens in budget discussions is rather insignificant and it is of a highest importance to develop new instruments and incentives for increasing citizens engagement in budgeting process.

In order to address these challenges the funds are not provided, therefore, indicative activities would include:

2.1 Technical support in amending legal framework in accordance with international and national standards, including fiscal impact analysis and simulation;

2.2 Tailored technical support to address Ministry of Finance’s priorities such as revision of the recovery plans;

2.3 Strengthen capacities at national and local level through tailor made trainings, exchange of experiences, regional conferences, study tours and mentoring in the priority areas;

2.4 Strengthen capacities at national and local level to use new technologies to enhance financial transparency and accountability;

3. Enhancing local service delivery through inter-municipal cooperation

There are two levels of government in Montenegro – central (national) and local (municipal) level. In the absence of intermediate (regional) government level, municipalities should play a major role in decentralisation reform and they should become an active partner to the government through the process of decentralization reforms. Municipalities in Montenegro are becoming increasingly aware of the need to undertake certain joint activities in order to solve problems that, for various reasons, cannot be solved by each municipality individually. In this area, problems to be addressed in include:

• insufficient communication between municipalities;

• lack of vision and plan on issues of inter-municipal interest;

• weak capacity and knowledge on possible forms of interest-based municipal cooperation.

There are services that many municipalities, due to their size and available financial resources are not able to deliver, or for which service provision has been inadequate, although they are legally responsible for providing them. Apart from insufficient financial resources, lack of administrative capacities is the most frequently cited reason for weak service delivery. In addition, many municipalities have small number of population and subsequently limited ability to individually support significant infrastructure projects (waste water, water supply and similar) and raise private investors’ interest.

During the 2010, in cooperation with the Ministry of Interior and Union of Municipalities, UNDP prepared publication Strengthening inter-municipal cooperation in Montenegro, which presents a guideline to institute frameworks in the area of inter-municipal cooperation (IMC) and create joint service provision and administration through the establishment of cooperative arrangements among municipalities in Montenegro. In preparation of publication, legal, institutional, and operational experiences of developing IMC practices in Former Yugoslav Republic of Macedonia were used. UNDP also supported Ministry of Interior in development of the Strategy for inter-municipal cooperation (2011-2015).

Furthermore, four cost-benefit analyzes have been developed for the following municipalities:

• Nikšić, Plužine and Šavnik in the field of communal police;

• Plužine, Šavnik and Žabljak in the field of tax administration and collection;

• Andrijevica, Berane, Bijelo Polje and Plav in the field of disaster risk reduction management (reduction of floods in Montenegro);

• Andrijevica, Kolašin and Podgorica, in the field of natural resources management of a special value in Montenegro (natural regional park Komovi).

UNDP also prepared and presented document Review of Slovakia’s experience in inter-municipal cooperation: Case Studies on Joint Municipal Offices, their legal status, financial and human capacities during the Conference on Inter-municipal cooperation organized for all municipalities and national stakeholders in February 2013.

IMC was promoted by the UNDP as a means to facilitate cost-effective operations and improved service delivery by the municipalities. Responding to the Call for Proposals for Inter-Municipal Development Grants Programme (by the EU Delegation in Montenegro) the project supported the Municipality of Mojkovac in developing a project proposal (related to establishment of the Regional Park Sinjajevina); the funding was approved recently. While EU projects do provide training on IMC, according to the representatives from the municipality of Mojkovac, the assistance from the UNDP project was unique in that it was hands- on and very practical. In addition, the project supported the municipality of Plav in writing of a Concept Note for an IMC project proposal (related to tourism promotion in Plav, Andrijevica and Berane).

Future focus should be put on implementation of the Strategy for inter-municipal cooperation (2011-2015) and Public Administration Reform Strategy for the Period 2011 – 2016, although activities in both strategies are fully harmonized. Specifically, the focus will be on inter-municipal cooperation (IMC) for delivery of decentralized services and functions with more focus on implementation on prepared IMC projects.

In order to address these challenges the funds are not provided, therefore, indicative activities would include:

3.1 Support enhanced service delivery through support to establishing and development of inter-municipal partnerships by drafting relevant bylaws, commentaries and assisting Government in defining incentive measures and structures.

3.2 Enhance capacities at the national and local level to better understand and implement different models of inter-municipal cooperation.

3.3 Provide technical support to local self-government units in preparing and further developing projects which anticipate a model of inter municipal cooperation.

4. Improving municipal and ministries’ management practices in order to deliver better quality of services to the citizens in a transparent, accountable and cost-effective manner

Good local governance could be defined as an institutional system, a set of organizational and procedural measures for managing local public affairs, characterized by three critical dimensions: performance, participation and partnership. Reorganizing municipalities in line with the principles of good local governance implies a need to modify the human element of the system. This does not require a complete replacement of the existing employees, but does require change concerning their work habits, attitudes and thinking. More emphasis needs to be given to professional knowledge, merit, performance, promotion of new ideas and initiatives. No ready-made models can be adopted for this reform process. Solutions have to be tailored to the cultural background, traditions, expectations and experience of the people.

This Project aims to tackle one of these key challenges faced by municipal administrations, that of human resource management. Human resource management lies at the heart of municipal performance. If officials and staff are skilled, and work effectively and efficiently, they are the key to dealing with all the other challenges faced by municipal administrations, especially posed by the EU and new technology wave of up-to-date skills and competencies.

UNDP will approach organizational development at the local level from a holistic perspective by supporting development of organizational capacities and project related capacities, working on modernization of municipalities and supporting accountability and transparency in work of municipalities.

A lot has been done in facilitating public administration reform by accelerating open data and transparency (visualization of the state budget, databases on municipal finances, recommendations to municipalities on how to improve their websites), good governance and evidence-based HR policy at the local level (Functional review of the HR function and management capacities in Montenegrin municipal administrations, Functional Review of Local Self Governance, updated National Training Strategy (NTS) for Local Governments in Montenegro). But still this is work in progress which needs full-fledged implementation both at the national and local level.

In order to address these challenges the funds are not provided, therefore, indicative activities would include:

4.1 Provide tailor made support to inform organizational development, including support through workload survey and comprehensive organizational assessments;

4.2 Technical support in amending legal framework in accordance with international and national standards;

4.3 Tailored technical support to municipalities in strengthening human resources function;

4.4 Strengthen capacities at national and local level to use new technologies for monitoring the quality of services/analysis of the citizens’ perception, and increase citizens participation in support of transparency and accountability at all levels.

Gender Mainstreaming

Gender mainstreaming is a strategy for making women’s and men’s concerns and experiences an integral dimension of design, implementation, monitoring and evaluation of policies and programmes in all areas of UNDP’s work. Gender mainstreaming efforts in programming are aiming to improve the gender equality situation in the country by addressing particular field of programme intervention through gender responsive approach.

The full participation of women is a prerequisite for long term socio-economic development and creation of good local governance. In Montenegro, women continue to be under-represented in formal decision-making structures. Although women are increasingly active in community support systems, gender disparities persist in public positions at all levels in Montenegro.

Therefore, the Project will mainstream gender policy and gender equality through all envisaged activities, based on the following elements: gender equality consolidates the work of combating poverty; gender equality is of fundamental importance for sustainable and democratic development; unequal power structures for women and men constitute an obstacle to economic growth and democratic development and equal opportunities for women and men to own land and assets, to access employment and exercise other human rights are essential for sustainable and democratic development.

There are differences in relations between women and men in different municipalities in Montenegro (and even within different communities) and Project Team should take this into consideration - but without abandoning any requirements in respect of human rights.

PROJECT RESULTS AND RESOURCES FRAMEWORK

|Intended Outcome as stated in the Country Results and Resources Framework: |

|Fostering a democratic society that fully respects, protects and fulfils human rights through rule of law, government transparency and accountability |

|Outcome indicators as stated in the Country Results and Resources Framework, including baseline and targets. |

|Indicators: Public Perception on Transparency and Effectiveness of Public Administration |

|Baseline: 2010 survey baseline 6 (10 being highest) on quality of service in public administration |

|Applicable MYFF Service Line: |

|Partnership Strategy: The project will contribute towards building partnership with the Government of Montenegro and the line ministries (the Ministry of Interior, the Ministry of Finance, the Ministry of Economy and|

|other line ministries and Governmental agencies), with the national institutions (the Union of Municipalities of Montenegro the Human Resources Management Authority) and with municipalities in Montenegro. |

|Project title and ID (ATLAS Award ID): Integrated Local Development in Montenegro |

| | | | | |

|Intended Output |Output Targets |Indicative Activities |Responsible parties |Inputs |

|Local government system further enhanced to deliver the |1. At least one legal |Key activity: Developing prioritized and mature project pipeline that is |UNDP |UNDP Project Team |

|better quality of local services to the citizens in a |act/document or amendments to |aligned with strategic priorities at national and local level in pilot | |International and Local |

|transparent, accountable and cost-effective manner |the legal documents/acts in |municipalities | |Experts/Companies |

| |the field of regional and | | |Total Activity: |

|Baseline: Limited general strategic and project |rural development drafted; |1.1 Technical support in amending legal framework related to regional | |152.613 USD |

|development capacities within the municipalities (some | |development; | | |

|trainings and mentoring organized by the UNDP, GIZ, USAD,|2. At least one Action plan |1.2 Technical assistance for upgrading existing strategic plans and | |UNDP 50,000 |

|EU). None of the municipalities prepared Action plan for |for the implementation of the |developing Action Plans for the Implementation of Strategic Development | |MoE 27,000 |

|the implementation of the Municipal Development |Municipal Development |Plans in the pilot municipalities, | |IPA 2011 75,613 |

|Strategies (MoE). The Electronic database of |Strategies drafted; |1.3 Targeted technical support to municipalities to develop project | | |

|development projects has just been launched, therefore | |pipeline and mature projects and project fiches in pilot municipalities; | | |

|none of the municipalities have started populating it |3. At least one project fiche |1.4 Strengthen national and local capacities through trainings, exchange | | |

|(MoE), |developed in selected pilot |of experiences, regional conferences, study tours, mentoring including | | |

| |municipality; |related to development and implementation of IPA project proposals; | | |

|Indicators: | |1.5 Technical support to municipalities in populating the Electronic | | |

|1. Number of legal acts/documents or amendments to the |4 At least four trainings |Database of Development Projects with the strategic priorities and | | |

|legal documents/acts in the field of regional and rural |organized and other forms of |projects identified in the strategic plans; | | |

|development drafted; |knowledge exchange | | | |

|2. Number of Action plans for the implementation of the |implemented; | | | |

|Municipal Development Strategies drafted; | | | | |

|3. Number of project fiches developed (in line with the |5. At least one municipality | | | |

|national and local priorities and having strong emphasis |supported in populating | | | |

|on regional and rural development, IMC); |Electronic Database and | | | |

|4. Number of trainings, exchange of experiences, regional|populating Electronic database| | | |

|conferences, study tours, mentoring organized in |of development projects; | | | |

|strengthening national and local capacities for strategic| | | | |

|and project development; | | | | |

|5. Number of municipalities supported in populating | | | | |

|Electronic database of development projects; | | | | |

ANNUAL WORKPLAN BUDGET SHEET - Year 2013

|Project ID |Key Activities |Time Frame |Responsible Party|Planned Budget 2013 in USD |

|Expected | | | | |

|Outputs | | | | |

| | |Start |End | |Donor |

| | |GMS 7%: | | | |

| |Enhancing local service delivery through |01/11/13 |31/12/13 |UNDP |UNDP |

| |inter-municipal cooperation | | | | |

| | |GMS 7%: | | | |

| |Project Management |01/11/13 |31/12/13 |UNDP |UNDP |

| | |GMS 7%: | |  | |

| |TOTAL ACTIVITIES WITHOUT GMS |  |  |  |

|  |TOTAL |  |  |  |  |

| | |Start |End | |Donor |

|  | |GMS 7%: | | |5,425 |

|  |Enhancing local service delivery through |01/01/14 |31/12/14 |UNDP |unfunded |

| |inter-municipal cooperation | | | | |

|  | |GMS 7%: | | |1,995 |

| |Improving municipal and ministries’ management |01/01/14 |31/12/14 |UNDP |unfunded |

| |practices in order to deliver better quality of | | | | |

| |services to the citizens in a transparent, | | | | |

| |accountable and cost-effective manner | | | | |

| | |GMS 7%: | | |5,775 |

|  |Project Management |01/11/13 |

# |Description |Date Identified |Type |Impact &

Probability |Countermeasures / Mngt response |Owner |Submitted, updated by |Last Update |Status | |1 |RM unsuccessful, lack of donor interest. Only UNDP funds in the amount of 50,000$ are secured, while the funds from the MoE (27,000$) and from IPA funding (75.598$) remain to be confirmed by the end of 2013. For all other activities, the funding is not provided yet.

|21/10/2013 |Strategic

(Donors, partnerships fail to deliver) |If additional resources are not (or not sufficiently) mobilized to continue and expand envisaged activities the impact/change in the society will be limited.

Impact (I) = 5

Probability (P) = 3 |Efforts are being made to mobilize resources with the Government of Montenegro (Ministry of Economy), IPA 2011 (partner with UNIDO), Norwegian Embassy and other bilateral donors |DG Team Leader

UNDP senior management |Project Manager |28/10/2013 |No change. | |2 |Organizational culture resists changes to administrative processes, organizational structure and methods of work |21/10/2013 |Political

(Government, non-UN partners and CO commitment)

Organizational (Execution capacity)

|Willingness to change organizational culture is one of the main challenges in the public administration of Montenegro.

I = 5

P = 3 |The project will approach organizational development carefully involving municipal leadership in the process from the earliest stages;

-propose modest, feasible changes; |Project manager

UNDP senior management |Project Manager |28/10/2013 |No change. | |3 |Municipal fixed expenses (caused by high number of employees) are affecting financial sustainability

|21/10/2013 |Organizational (Execution capacity)

|Majority of municipalities in Montenegro are experiencing serious issues with overstaffed administrations and public utility companies, which is resulting in rather high fixed expenses. This will even in a short-term perspective become one of the main risks for local governments in Montenegro.

I = 5

P = 3 |The project will not deal with the issue of staff reduction, but it will provide experience from other countries on desirable amount of fixed-expenses (vs. development budget). |Project manager

UNDP senior management

|Project Manager |28/10/2013 |No change. | |4 |Sustainability of the project’s results

|21/10/2013 |Organizational (Execution capacity)

|Project results should surpass the duration of the project. The project might not be able to establish sustainable systems in the first six months of its implementation.

I = 3

P = 3 |In addition to efforts to mobilize additional resources and foster long-lasting partnerships, the project management team will endeavour to support the design of self-sustainable systems |Project Manager

DG Team Leader

|Project Manager |28/10/2013 |No change. | |

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[1]

[2] Salaries for the Project Manager, Project Coordinator and 15% of the salary of Project Assistant are included.

[3] Salaries for the Project Manager (approximately 2,600 USD a month), Project Coordinator (approximately 2,200 USD a month) and 15% of the salary of Project Assistant (approximately 400 USD a month) are included. The total costs for the salaries per a month are approximately in the amount of 5,200 USD, therefore for the whole year 2014 the amount is 62,400 USD. UNDP will provide 20,000 (32%) and unfunded amount is 24,400 USD (39%), while the remaining amount will be available from the Government contribution for the management costs from the project “Local Governance Capacity Development” in the amount of 18,000$ (29%).

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Programme Period: November 01, 2013 – December 31, 2014

Programme Component:

Project Title: Integrated Local Development in Montenegro

Project ID:

Project Duration: 14 months with possibility for extension

Management Arrangement: DEX

Total Budget: US$ 354.308

Allocated resources: US$ 50,000

• UNDP US$ 50.000

Unfunded budget: US$ 304,308

Project Manager

Project Board

Senior Beneficiaries

Government of Montenegro, Union of Municipalities and municipalities

Executive

DG Team Leader

Senior Supplier

Government of Montenegro, EU Delegation in MNE

Project Assurance

Project Support

Project Coordinator and Programme Assistant, Operations Unit

Project Organisation Structure

Capacity Development Programme providing inputs as necessary

DG team providing input as necessary

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