Local Governance in Kosovo (Efforts towards efficient services at the local level)

Durrës, Republic of Albania
27 – 29 November 2014


Speakers:
•    Besnik Tahir, Master of Local Governance and International Development
•    Fatmir Haxholli, Master of European Integration

Topics:
•    Local Governance in Kosovo (Efforts towards efficient services at the local level)
•    Municipalities in the role of high performance organizations
•    The Role of Municipalities towards European Integration

LOCAL GOVERNANCE AND ADMINISTRATION – IN THE ROLE OF THE ORGANISATION WITH HIGH PERFORMANCE


Municipalities should engage that through a functional review of administration define the work references and the positions of the staff in each sector. Municipalities should add attention to a range of important issues, which are focused specifically on the need to make a functional review and to ensure civil servants in municipal level to fulfil the required administrative and professional conditions that are needed to carry out the municipal functions.

Functional review of the personnel in municipal level

Municipalities should be based on the experience of the Eastern Europe countries, which have dealt with similar challenges of the personnel based on the work that is related to functional review with the purpose of identification in systematic manner, to re-determine the important functional needs and to make the organisational divisions in the municipality, by re-systemising the employees based on the their profiles and skills related to the re-defined functional units of the municipality.

Functional review is related to significant efforts for training the employees with the purpose of enhancement of their skills. Such an initiative should be supplemented also with auxiliary packages of professional and technical support by MLGA and MPA aiming at creation of a sustainable system for personnel management based on meritocracy.

Management and leadership in the process of modernisation

Modernisation of management aims at comprehensively develop the important skills and in general to change the manner of thinking by the managers and municipal employees towards a more proactive culture of management.

INTER-GOVERNMENTAL AND MUNICIPAL FINANCE


Generation and management of local revenues

Tax collection is a significant challenge for municipalities in Kosovo, which take their majority of financing from the central government. On the other hand this has led to an important discussion regarding the appropriate levels of financing of municipalities through grants – i.e., whether municipalities have been given mandate without having been allocated respective funds. For this reason the Municipalities should be able to determine the quantity of difference between own potential revenues and their demands for funds for administering services which have been given to them as responsibility.

Local systems of capital investment

For fulfilment of their new responsibilities at service provision in determined sectors as per LLGF and as provided for by Proposal of Ahtisari, local governments would need a large increase of financing for capital investments - not to say a complete change of the existing system of local financing for capital investment.

At the moment, municipalities of Kosovo function with weak mechanisms, formed in ad hoc basis, for financing of capital investments, limited greatly to options which are available within the annual budget process. Having in consideration the lack of vision of development planning in the budget process, financing of capital investment in the municipalities has been similarly impeded also from ad hoc short term decision making.

Municipalities are at risk of ending the year of 2014 with budget surplus of tens of millions  
Being limited by applicable laws, complicated procurement procedures and the inability to review the budget Municipalities are expected to end up with tens of millions in surplus
Kosovo Local Government Institute within its program “Academy of Local Governance–Moduli V”, together with participants from municipalities discussed about the direction we should take towards further advancing of the local governance, with particular emphasis on service provision and improving the performance of the municipalities.

The discussions emphasized the financial management of the municipalities considering the fact that the Law on Local Government Finance (LLGF) aims the strengthening of the fiscal autonomy and the management responsibilities of the municipalities – in relation to their competencies for providing services – and at the same time ensuring an efficient framework for cross-institutional fiscal responsibility.

The municipalities in Kosovo are currently functioning with impromptu established, very weak capital investment mechanisms and are, in addition, largely limited by the available options in the yearly budget process. Taking into account the lack of a vision for developmental planning in the budget process, the financing of capital investments in municipalities was similarly obstructed by ad hos, short-term decision making, as well.

Limited by the applicable laws, complicated procurement procedures and the inability of reviewing the budget, municipalities are expected to end up with tens of millions in surplus, including also the fact that they have taken up the responsibility to cover the salary increase. Thus the need for municipalities and the Ministry of Local Governance, and other relevant ministries, to find more accurate ways for financial planning and management at the local level.

Therefore, it is necessary for the municipalities to develop an Integrated Planning System, which would include a whole set of operational practices to ensure efficient and coherent planning and monitoring of overall governance policies. This would ensure a broad framework for the functioning of the main governance processed for financial and policy planning. The Integrated Planning System should be the key decision making system for setting strategic directions and the distribution of resources.
Through an inclusive process the main purpose of the IPS should be the drafting of a strategic plan, including harmonization, adjustment of the existing planning systems within the new system, reorganization of organizational structures and elimination of repeated requests by sectors. This way we can avoid fragmentation and repetition between the main governance policies and the financial planning processes.