Kosovo Budget Proves Hard To Keep In Check

By Linda Karadaku

As Kosovo struggles to keep its budget deficit in check, analysts and policy organisations continue to call attention to what they describe as a climate of rampant financial mismanagement.

“Kosovo has a very favourable [climate] for officials who intentionally or unintentionally enter public institutions only to get rich, by misusing public money,” said Merita Mustafa of the Kosovo Democratic Institute (KDI), the local contact point for Transparency International.

According to KDI, weak mechanisms of state control are to blame, along with political leaders’ lack of interest in reforms.

Similar concerns were flagged in the most recent report from Kosovo’s Auditor-General, Lage Olofsson.

The report, released in August and covering the 2010 fiscal year, said there is a “need for strong commitment at the central level, consistency and co-ordination, when it comes to spending public money”.

“Budget spenders need more guidance, examples of good practice and other forms of support within these areas,” it added.

According to Mustafa, the report’s findings appear to have mostly fallen on deaf ears, with little in the way of reaction coming from authorities in Pristina.

That, she said, gives the impression that “even those in high positions are themselves involved in misuse and are indifferent to mismanagement of citizen taxes.”

Kosovo analyst Ibrahim Rexhepi says the problem is that Auditor General reports lack executive power. Lawmakers, he added, are not much help either.

“Parliament misses the mechanism that would force the institutions or the government to make a deeper assessment of the auditor’s findings, find those who committed the mistakes or violated criteria, and take concrete measures,” Rexhepi told SETimes.

Most violations go on for years and involve public procurement procedures, he said.

Aleksander Lumezi, chief prosecutor for Pristina district court, has pledged to examine the findings. “We will co-operate with the state Prosecution Office and if there are elements of penal acts, then we will treat those cases,” Lumezi said in July, according to the Kosovo news site Ekonomisti.

Hasan Preteni, head of the Kosovo Anti-Corruption Agency, said specifics of the Auditor General’s report will be handled by his agency, especially serious violations.

“There is space for a co-ordinated action with the rest of the Prosecutor’s Offices [in the districts]; it is very important not to have dualisms in the investigations,” Preteni told local journalists.

Media reports say the deficit in 2012 could reach 160m euros. According to the daily Zeri, the government budgeted for 1,361,000,000 euros, but may end up having spent 1,520,000,000 euros.

Some good news, however, came out of last month’s meeting between Kosovo government officials and the EC Liaison Office in Pristina. The government reported that Kosovo’s 2011 budget deficit would be smaller than expected.

“The Commission welcomed the fact that budgetary execution in 2011 is expected to lead to a lower than initially planned budget deficit of 3.4% GDP by the end of the year. This was mainly due to activation of contingency savings of 60m euros for expenditures, and some additional one-off revenue,” the EC said.