PERFORMANCE INDICATORS FOR LOCAL GOVERNANCE LEVEL...

Document no: 22x.9-2017-08

PERFORMANCE INDICATORS FOR LOCAL GOVERNANCE

LEVEL FOR 2017

Discussion Paper

Prishtina, July 2018

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The National Audit Office of the Republic of Kosovo is the

highest institution of economic and financial control which,

according to the Constitution and domestic laws, enjoys

functional, financial and operational independence. The

National Audit Office undertakes regularity and performance

audits and is accountable to the Assembly of Kosovo.

Our Mission is through quality audits to strengthen

accountability in public administration for an effective, efficient

and economic use of national resources.

We perform audits in line with internationally recognized

public sector auditing standards and good European practices.

The reports of the National Audit Office directly promote

accountability of public institutions as they provide a base for

holding managers’ of individual budget organisations to

account. We are thus building confidence in the spending of

public funds and playing an active role in securing taxpayers’

and other stakeholders’ interests in enhancing public

accountability.

In addition to statutory audits, the Office has also been involved

in drafting reports or discussion papers on financial and non -

financial performance in certain areas of local governance

mainly, but not only. In recent years attention has been paid to

the measurement and comparability of some qualitative and

quantitative indicators, precisely where citizens may be

interested, as the main user of those services.

The report issued is a result of the audit carried out by Ardita

Salihu under the supervision of Assistant Auditor General,

Valbon Bytyqi.

NATIONAL AUDIT OFFICE – Address: Musine Kokalari, Nr. 87, Prishtina 10000, Kosovo Tel: +383(0) 38 60 60 04/1011

http://zka-rks.org

ZYRA KOMBËTARE E AUDITIMIT – Adresa: Musine Kokalari, Nr. 87, Prishtinë 10000, Kosovë Tel: +381(0) 38 60 60 04/1011

http://zka-rks.org/

ZYRA KOMBËTARE E AUDITIMIT - NACIONALNA KANCELARIJA REVIZIJE - NATIONAL AUDIT OFFICE

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TABLE OF CONTENT

1 Introduction .............................................................................................................................. 4

2 Scope and audit of data ........................................................................................................... 6

Criterion 1. Audit Opinion for 2017 .............................................................................................. 8

Criterion 2. Capital Investments .................................................................................................... 8

Indicator 1. Discussions of Audit Reports in Municipal Assemblies ....................................... 9

Indicator 2. Special Service Agreements .................................................................................... 10

Indicator 3. Financial Discipline in Payments ........................................................................... 11

Indicator 4. Implementation of procurement plan ................................................................... 12

Indicator 5. Verification of Immovable Property ...................................................................... 13

Indicator 6. Property tax collection ............................................................................................. 14

Indicator 7. Addressing of recommendations ........................................................................... 15

Indicator 8. Appointment of Project Managers ......................................................................... 16

Indicator 9. Contract Management .............................................................................................. 17

Annex 1. Audit Opinion and CI execution ................................................................................ 18

Annex 2. Discussions of Audit Reports in Municipal Assemblies ......................................... 19

Annex 3. Special Service Agreements ......................................................................................... 20

Annex 4. Financial Discipline in Payments and Implementation of Procurement Plan ..... 21

Annex 5. Updating the registry and collecting PT .................................................................... 22

Annex 6. Addressing of recommendations ................................................................................ 23

Annex 7. Project Managers and Contract Management........................................................... 24


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1 Introduction

Despite the development of the accounting system of financial transactions and maintenance of non-

financial data, measurement of performance and accuracy of information remains a challenge for

each country or institution that handles such reporting.

The National Audit Office has started producing discussion papers on financial and non-financial

performance in certain areas of local governance as of 2013. Results from these analyses have served

as a measurement and self-criticising instrument for as rational use of public funds as possible. The

content of indicators compared and measured have changed from year to year. This was done to

further improve and adapt to the reporting needs and make comparisons between municipalities,

in order to achieve progress in accountability of managing public money against services provided

or expenses incurred. In the course of initiatives on improvement of transparency and accountability

to taxpayers and stakeholders, this analysis strives to add a more enhanced culture on the

governance or even interdepartmental measurement of budget organisation, on effectiveness,

efficiency and economy of transactions

This document presents a comparative analysis of two basic criteria as well as nine other indicators.

The criteria relate to the audit opinion provided in the individual financial reports for the year ended

on 31st of December 2017, as well as the budget execution of the Capital Investments category.

Other indicators with some sub-indicators are listed as follows: Discussion of audit reports in the

Municipal Assembly; Engaged under special service agreements; Financial discipline in payments;

Implementation of the procurement plan; Verification of property taxpayers and collection rate; Addressing

the audit recommendations given for 2016; Appointment of Project Managers; as well as contract

management.

The analysis aims to encourage a debate on how these key performance indicators may be used in

Kosovo to develop overall improvement of performance not limited to donors’ interest in drawing

conclusions on the accountability of Organisations in several dimensions. Currently, performance

of municipal services is measured by the Ministry of Local Government Administration (MLGA),

respectively the Division for Municipal Performance. It conducts surveys on citizen satisfaction

whereby getting their opinion on various elements of service delivery and municipal performance.

We would like to clarify that despite the fact that a number of information is provided by the

Treasury General Ledger and Annual Financial Statements of municipalities, the collection of

nonfinancial data is done almost manually and as such is subject to accuracy risks. Therefore,

despite the verification of data by auditors, we ask the reader to bear in mind to consider limited

assurance for information produced outside the government accounting system (KFMIS).


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Key findings

From the analysis made when reviewing reports covering local level, we have identified the

following findings:

Only 61% of municipalities discussed external audit reports within Municipal Assemblies,

out of which only half of them had discussed action plans as well;

Most municipalities have a tendency to use special service agreements not in line with the

intended purpose. Furthermore, some small municipalities engage a considerable number

of these employees;

Under the justification for lack of capacities, most municipalities do not carry through

verification of properties for property taxpayers. This leads to invoicing not being in line

with the realistic situation in the ground;

Procurement plans are not sufficiently detailed, therefore the performance in their

implementation is often not fairly presented; and

Field examinations for payments on completed works have in some cases shown that the

reports of the receiving committee or the supervisory body did not reflect the real situation

and as a consequence certain payments were certified despite the fact that the works were

not completed.

Key recommendations

The main recommendations are as follows:

Municipal Assemblies should hold the management of the Municipality into account to

report on the findings of the Auditor as well as for the reasons for the recurrence of the

recommendations, respectively the low level of their implementation. Specific actions

should be taken to continuously monitor action plans, progress made;

Municipalities should accurately assess the need to engage employees under special service

agreements. Where need for external experts really appears, simplified recruitment

procedures should be applied and their duration should be adhered to;

Municipalities, in cooperation with the Ministry of Finance, should consider the possibilities

for reallocation of human resources to municipal departments of property tax in order to

achieve the maximum effects from these revenues;

Municipal directorates should cooperate with the procurement office in order to improve

the planning of the activities to be procured; and

Municipal Assemblies as well as municipal management should demand accountability and

responsibility for payments of (not) carried out works in order that such cases are no longer

part of these statistics.


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2 Scope and audit of data

This report covers two criteria and nine fields from local government activities. As such, it answers

the questions as described in the following table:

Criteria Issues analysed in relation to criterion

1. Audit Opinion The audit opinion for the year ended on 31st of December 2017 should at least be unmodified with an Emphasis of Matter.

2. Capital Investments The Municipality should have spent at least 75% of the approved final capital investment budget for 2017.

Indicators Issues analysed with respect to the indicator

1. Discussion of the Audit Report within the Municipal Assembly

In one of the regular meetings, the Municipal Assembly discussed the external auditor’s report for 2016; and

The Municipal Assembly discussed the action plan for addressing the recommendations given by the external auditor for 2016.

2. Special Service Agreements are used in line with legislation

Simplified Recruitment Procedures have been developed

Agreements have been used in accordance with the intended purpose for specific work; and

Their duration was in accordance with the law

3. Financial discipline in payments

% of payments made within the legal deadline of 30 days.

4. Implementation of the procurement plan

% of the activities foreseen with the procurement plan for which the contract was signed

5. Update of Property Tax Registry

By the end of the year, re-survey of property tax was conducted in accordance with the law.

6. Level of collection of property tax against invoicing

% of property tax collection for the current year against invoicing (without interest and penalties)

7. Addressing of recommendations

% of fully implemented recommendations given in the audit report for 2016.

8. Project Managers Appointed to Monitor Contract Implementation

Public Contracts for which the Project Manager is appointed regularly.

9. Contract Management The Organisation accepts the work performed before any certified payments.

This list is not intended to be comprehensive but provides topics for discussion where

Municipalities may review their performance against others. To support this comparison, the

detailed annexes are attached at the end of this report.


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The information presented in this analysis was extracted from the published audit reports, the

annual financial statements, the property tax1 system data received from the Property Tax

Department within the Ministry of Finance as well as from the records in possession of respective

directorates within municipalities.

Audit teams verified data in order to reduce eventual inaccuracies. However, while some of the

results derived on the basis of the sampling performed during regular audit, the stakeholders should

take into account the limited level of assurance as to the accuracy of performance results for the

above indicators.

1 In April 2018, the NAO published a report on the effectiveness of the property tax system. Among other things, it was

reported for payment processing failure in the current system, which also risks the accuracy of reporting receivables.


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Criterion 1. Audit Opinion for 2017

By June 30, the National Audit Office (NAO) publishes regularity audit reports for the given fiscal

year for all Budget Organisations (BOs) of the Republic of Kosovo. The data on the opinions for local

level are as follows:

Table 1. Opinions given by the NAO

Unmodified Opinion

(29 municipalities)

Unmodified Opinion Peja Lipjan Viti Ranillug

Unmodified Opinion with an Emphasis of Matter

Prishtina Mitrovica Istog Shtime Novobrdo

Prizren Vushtrri Kamenica M. North Junik

Gjilan Gllogoc Deçan Obiliq Partesh

Gjakova Skenderaj Kaçanik Shtrpcaa Zubin Potok

Podujevo Fushe Kosovo Graçanica Hani i Elezit Zveçan

Modified Opinion

(9 municipalities)

Qualified Opinion with an Emphasis of Matter

Ferizaj Malishevo Klina Mamusha Leposaviq

Suhareka Rahovec Dragash Kllokot

Criterion 2. Capital Investments

Designation of public money in capital investment means better services for the citizen and

positively affecting their welfare. Municipalities should make the utmost efforts to meet the projects

emerging every year under the capital investment program. In the table below we have presented

the municipalities which have had a better budget performance, executing 75% of the final budget

designated for capital projects.


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Graph 1. Execution of capital investments in relation to the approved final budget (over 75%)

Indicator 1. Discussions of Audit Reports in Municipal

Assemblies

The Law on Public Financial Management and Accountability (with amendments2) as well as the

Law on Auditor General and the National Audit Office obliges the Management of the Municipality

to report on the actions taken and proposed actions regarding the findings and recommendations

of the Auditor General in the Annual Audit Report of the financial statements of the Organisation.

There are a total of 23 Municipalities which have discussed the audit report in the Municipal

Assembly. But not all had discussed action plans. Only 13 of them had discussed the action plans

and the measures taken to address the recommendations.

Table 2. Discussion of the External Audit Report in the Assembly and the Action Plan

Discussion in the Assembly of the External Audit Report

Municipalities that discussed the audit reports within the Municipal Assemblies (*have discussed action plans as well)

Prishtina Suhareka Istog* Graçanica* Mamusha *

Prizren* Lipjan Klina* Shtime Ranillug

Peja* Malishevo* Kamenica M. North Partesh

Gjakova* Rahovec* Dragash* Hani i Elezit*

Mitrovica F. Kosovo Kaçanik* Junik*

Municipalities which did not discuss the audit report in the Municipal Assembly

(Non) discussion of the external audit report

Ferizaj Vushtrri Viti Shterpca Zubin Potok

Gjilan Gllogoc Deçan Novobrdo Zveçan

Podujevo Skenderaj Obiliq Kllokot Leposaviq

Further on, Rahovec, has also submitted the internal audit report before the members of local

assembly and its findings were subject to discussion.

2 Law no. 03/L-221 on amending and supplementing the law no. 03/L-048 on Public Financial Management and

Accountability, Articles 16 and 18, suplementing Articles 44 and 46 of Law 03/L-048.

98% 91% 90% 90% 89% 88% 87% 87% 87% 86% 85% 84% 83% 83% 81% 79% 79% 78% 78% 77% 76% 75% 75% 75% 75%


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Indicator 2. Special Service Agreements

Kosovo’s legislation on expenditures in the category of wages and salaries embeds strict rules and

restrictions for public administration. In line with the government’s strategic plans for

categorisation and the limits of operating costs, the ceiling of the employees in the municipal

administration are also defined. At the same time, with the law on civil service3, it is allowed that

where the municipality needs to engage an expert for a limited period, to develop simplified

recruitment procedures and that such contracts for special services should cover a period up to six

months.

The following notes do not indicate the reasons or all (ir)regularities while contracting4. This

analysis represents the number of engagements in relation to the size of the Organisation.

The following graph shows the rankings of municipalities that had most engaged employees in

relation to their budget.

Graph 2. Municipalities with the highest number of engagements through special service agreements

Graph 3 shows the Municipalities that had spent and contracted at least or at all in this spending

code. It is worth mentioning that there are five municipalities that have not employed any

employees of this nature, and that Municipalities of Klina, Leposaviq, Zveçan, Zubin Potok and

Ranilug.

3 Article 12, item 4 of Law 03/L-149 defines that appointments of a fixed term for a period of less than six months shall

be made on the basis of contracts called "Special Service Agreement" which are subject to the Law on obligations and for which a simplified recruitment procedure is applied.

4 To see the details of service contracts for a specific Municipality, refer to individual audit reports.

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90

10 7

49

9

5231

53

23

46

24

76 71

226

70

161

49

78

5

32

-

100

200

300

400

500

600020406080

100120140160180

,00

0€


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Graph 3. Municipalities with the lowest number of employees compared to budget size

We have collected information from aspect of law implementation that regulates this area: whether

simplified recruitment procedures have been applied, if the duration of the contract was legal (not

more than six months) and whether the engaging parties are called for any particular work or

expertise and not for ordinary work which may also be performed by regular municipal officials.

From this angle, most municipalities did not adhere to the requirements above. It is only Hani i

Elezit who met all three requirements when engaged by five employees as well as Ferizaj and

Dragash, who mainly met the criteria during contracting. For more information, refer to Annex no.

3.

Indicator 3. Financial Discipline in Payments

The Law on Public Financial Management makes every Chief Financial Officer responsible for

ensuring that any valid invoice and payment request for goods and services supplied and/or works

executed for BOs are paid within 30 calendar days after receiving invoice or payment request from

the respective Budget Organisation. In the event of failure to perform the obligations by BOs, the

invoice issuer may submit a copy of the invoice or payment request to the Treasury. The law also

contains another article which obliges the Treasury to make payments under final court decisions if

BOs have not met their obligations.

Annex 4, presents the rate of payments for which invoices are paid in time within 30 days. However,

another negative phenomenon for which the NAO has reported repeatedly has to be taken into

account, and that may somehow affect the outcome of these financial discipline. Purchase order

(ordering goods) generated from the current accounting system is often not timely made or when

ordering goods (or contract signing in capital projects), but only after the BO accepts the invoice or

work.

However, the Annex shows an average of 86% of the fulfilment of this obligation by the

Municipalities, thus disclosing a total of 14 municipalities below this average.

6

12

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9

18

68

46 6

0 0 0 0 0

-

500

1,000

1,500

2,000

2,500

3,0000

5

10

15

20

25

,00

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Table 3. Financial discipline in payments

Low-performing municipalities in terms of meeting the obligation within the legal deadline

Payments carried out within the legal deadline

Hani i Elezit 85% Lipjan 81% Kaçanik 76% Peja 71% Ferizaj 57%

Zveçan 82% Gjakova 78% Mitrovica 73% Junik 63% Leposaviq 32%

Prizren 82% Suhareka 77% Deçan 73% Shtërpca 59%

Being irresponsible in relation to settling invoices, this may cause the municipalities to be subject to

interest and penalties arising from contractual clauses and the law on rights and obligations.

Indicator 4. Implementation of procurement plan

Every year, municipalities should plan activities that will be procured for 12 months of the year.

Among other things, planning should eliminate the need for emergency procurement as well as the

splitting of tenders. All supplies, services, works as well as design contests should be thoroughly

included in the forecast and submitted to the Central Procurement Authority.

In order to have a better planning, the procurement officer should cooperate with all departments

and in particular with the Budget and Finance Directorate.

We have initiated an analysis that would indicate the extent to which contracts were signed in

comparison to the plan.

During field verification, this indicator appears to be not fully comparable and accurate since the

submitted plans involved grouped procurement activities. As a result, the rate of implementation

in some municipalities was over 100%5.

There are 16 municipalities which have executed over 90% of the procurement plan. While the

municipalities in the graph below have had a poorer performance in this regard.

5 The Municipalities of Peja, Podujeva, Obiliq, Vushtrri, Istog, Viti and Dragash haveexecuted over 100% of the plan as a

result of inadequate planning. On the other hand, Partesh Municipality has not prepared a procurement plan and there is no report of signed contracts.


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Graph 4. Municipalities that have executed less than 90% of the procurement plan

Indicator 5. Verification of Immovable Property

Municipalities are responsible for registering immovable property and securing the necessary

information in this regard, for the purpose of administering property tax. The continuous change of

property features as well as the ongoing constructions that take place should be the point of

departure of surveyors in the field, considering that the invoicing to a taxpayer depends from the

condition and size of the property. Article 13 of the AI for Collection and Registration of Property

and Taxpayer Information obliges the Municipality to annually verify 1/3 of the registered

properties. The verification process is completely similar to that of the registration except that it

does not result in registration of a new property but with improvement of the existing records.

The repetition of recommendations is once again present, as municipalities still have a low average

of property verification in site. Furthermore, only three municipalities are in line with this article,

verifying over 33% or approximately one third of the registered properties.

Graph 5. Municipalities which have verified over 10% of registered properties

88% 85% 85% 83% 82% 82% 81% 81% 81% 80% 77% 76% 76% 72%67% 64% 60%

55%50%

36%

0%

100%

35% 35% 32% 31% 28% 24% 24% 20% 17% 14% 13% 13% 11% 11%


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Graph 6. Municipalities which have verified 0% or less than 10% of the registered properties6

The reasoning by the Property Tax Department for such non-verification mainly relates to lack of

sufficient human capacities for surveys.

Indicator 6. Property tax collection

Property tax is the most significant category of the municipal revenues, not only in terms of collected

value but also for the purpose why this revenue is collected. In particular, for this purpose, the

Municipality should reward citizens in public goods or investments, mainly in infrastructure.

Since the beginning until today, property tax is the only tax that is decentralised at the municipal

level. The Property Tax System in Kosovo started applying throughout Kosovo in 2003 when the

first comprehensive property registration was conducted. The system is managed by the Property

Tax Department (PTD) within the Ministry of Finance.

It has always been emphasised that the local level should take the necessary measures in order for

the collection to be as high as possible. The higher the collection, the higher the number of potential

projects that can be covered by municipal revenues. In the case of budget planning, municipalities

do not budget the collection value as much as they invoice! This is because a number of projects

would remain unexecuted if the concerning amount is not collected within this category.

Consequently, municipalities plan to collect based on the previous trend of revenues from this

category. However, in this regard, the NAO has reported on their inadequate planning. In some

cases, is planned to be collected less than the previous years without any reason. Such non-

ambitious planning has an impact on the overall budget.

The following data show how much the municipalities could only collect the invoiced tax principal

in 2017 without including penalties and interest rates7. Out of the total of 34 municipalities that

collect property tax, the overall invoicing collection rate for 2017 was 43%. On average, there are 16

municipalities which are presented in the following graph.

6 Suhareka and Klokot have not verified 1/3 of the properties but we also have not been able to obtain information on the

extent to which the verification has been verified (if any property has been verified), therefore in Annex no.5 are presented with 0%.

7 Records have been received from the Property Tax Department within the Ministry of Finance.

9% 9%8% 8%

5% 4% 4% 3%3%

1% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%


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Graph 7. Municipalities with the highest rate of collection of invoiced tax for 2017

Graph 8. Municipalities with the lowest rate of collection of invoiced tax for 2017

Note: Total invoicing for 2017 including only the principal without interest and penalties was

€26,968,073 whilst the collection was €11,714,734 or 43%.

Indicator 7. Addressing of recommendations

The importance of the audit reports lies in providing practical recommendations that would

improve or change the wrong approach or actions of an Organisation. A serious approach by the

management of each municipality to implement the recommendations is essential to achieve

maximum benefits from the audit report. However, in overall level, the National Audit Office

reported8 an unsatisfactory level of implementation of the recommendations. The occurrence of

repeated recommendations continues in the current year.

In 2017, at the local level, the overall average of the implementation of recommendations is 25.38%.

8 See Annual Audit Reports as per years, http://www.zka-rks.org/publications/

68%

56%51% 48% 48% 47% 46% 45% 45% 45% 44% 44% 43% 42% 42% 42%

40% 40% 39% 39% 38% 38% 37% 37% 37% 36% 35% 33% 31% 30% 27% 25% 24%20%

0% 0% 0% 0%

http://www.zka-rks.org/publications/


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Graph 9. Municipalities with the highest percentage of implementing recommendations or above average (25.38%)

Graph 10. Municipalities with the lowest percentage of implementation of recommendations or below overall average (25.38%)

Indicator 8. Appointment of Project Managers

The legal framework on public procurement in Kosovo has been constantly amended by lawmakers

and is quite specific. This, in order to enable the most favourable purchase of services and capital

projects.

According to the Public Procurement Guidelines, amongst others, after the signing of the contract

by the winning operator and the Contracting Authority, the Chief Administrative Officer appoints

a Project Manager who is held accountable for managing or overseeing the contract and keeping the

Procurement Officer informed. Thus, contract management, in addition to the power to change or

terminate, at this moment passes from the Procurement Department to the Project Manager. The

project manager must prepare a contract management plan as a condition for the implementation

54%47% 47%

40% 38% 38% 38% 37% 36% 36% 35% 35% 33% 33% 32% 32%29% 27% 27% 27% 26%

25%22%

18% 17% 17% 15% 15%12%

9% 8% 8% 8% 7% 7% 5%

0% 0%


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of the contract, using the standard form approved by the Public Procurement Regulatory

Commission9.

We have assessed whether, the appointment of the project manager was done on a regular basis for

the contracted contracts. In general, the results are satisfactory with regard to their appointment.

But in individual audit reports, it has often been mentioned as a phenomenon that contract

management plans are not always updated when new conditions on the ground emerged. Annex 7

reveals that in some isolated cases this appointment was not done properly, specifically within the

Municipality of Klokot and Graçanica.

Indicator 9. Contract Management

The regulation on spending public money defines the essential elements of internal controls and

accountability lines, on the basis of which the Organisations should act. All steps mentioned in the

regulation should precede the documentation on certification of payment. Certifying Officer is

responsible for not certifying a payment if any of the documents is missing. The National Audit

Office for 2017 reported for four municipalities for which sampling revealed that the payment was

made even though works/ goods were not accepted.

Table 3. Payments executed without works/goods being accepted

Payments executed without works/goods being accepted

Municipality No. of identified cases

The issue reported in individual audit reports

Podujevo 1 case Issue 12 – Execution of payments for goods not received

Gllogoc 1 case Issue 10.3 - Shortcomings in contract management plans

Shtrpca 1 case Issue 11.4 - Poor contract management

Leposaviq 2 cases Basis for Qualified Opinion

Any obligation that is the result of a document, agreement or arrangement should not apply if the

document does not meet the conditions set forth in the LPFMA and the accompanying regulations.

This report is a translation from the Albanian original version. In case of discrepancies, Albanian version shall

prevail.

9 Contract management plan will be prepared for all contracts except for contracts with minimal value.


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Annex 1. Audit Opinion and CI execution

No Municipalities Criterion 1. Unmodified Audit Opinion Criterion 2. Execution of Capital Investments

Audit Opinion Final Budget CI Execution Execution Rate

1 Prishtina Unmodified Opinion with Emphasis of Matter 31,486,064 17,803,525 56.54%

2 Prizren Unmodified Opinion with Emphasis of Matter 16,263,659 13,984,206 85.98%

3 Ferizaj Qualified Opinion with Emphasis of Matter 9,686,186 8,620,886 89.00%

4 Peja Unmodified Opinion 7,474,530 6,485,738 86.77%

5 Gjilan Unmodified Opinion with Emphasis of Matter 5,129,362 3,863,208 75.32%

6 Gjakova Unmodified Opinion with Emphasis of Matter 7,465,982 5,476,889 73.36%

7 Podujevo Unmodified Opinion with Emphasis of Matter 6,238,768 4,899,844 78.54%

8 Mitrovica Unmodified Opinion with Emphasis of Matter 3,745,279 3,130,176 83.58%

9 Vushtrri Unmodified Opinion with Emphasis of Matter 4,880,060 3,668,704 75.18%

10 Suhareka Qualified Opinion with Emphasis of Matter 4,908,385 4,167,361 84.90%

11 Lipjan Unmodified Opinion 4,495,597 3,741,768 83.23%

12 Gllogoc Unmodified Opinion with Emphasis of Matter 4,322,801 3,377,939 78.14%

13 Malishevo Qualified Opinion with Emphasis of Matter 4,150,411 3,590,954 86.52%

14 Rahovec Qualified Opinion with Emphasis of Matter 4,003,150 3,536,486 88.34%

15 Skenderaj Unmodified Opinion with Emphasis of Matter 3,437,086 3,369,827 98.04%

16 Viti Unmodified Opinion 1,812,308 1,473,069 81.28%

17 Fushe Kosovo Unmodified Opinion with Emphasis of Matter 5,689,428 2,935,774 51.60%

18 Istog Unmodified Opinion with Emphasis of Matter 2,710,803 2,070,342 76.37%

19 Klina Qualified Opinion with Emphasis of Matter 2,624,099 2,178,292 83.01%

20 Kamenica Unmodified Opinion with Emphasis of Matter 381,624 241,427 63.26%

21 Deçan Unmodified Opinion with Emphasis of Matter 2,254,705 1,486,128 65.91%

22 Dragash Qualified Opinion with Emphasis of Matter 3,004,391 1,766,606 58.80%

23 Kaçanik Unmodified Opinion with Emphasis of Matter 1,494,610 1,178,859 78.87%

24 Graçanica Unmodified Opinion with Emphasis of Matter 3,912,422 2,894,316 73.98%

25 Shtime Unmodified Opinion with Emphasis of Matter 1,764,553 1,583,023 89.71%

26 M. North Unmodified Opinion with Emphasis of Matter 3,975,169 3,116,763 78.41%

27 Obiliq Unmodified Opinion with Emphasis of Matter 2,028,030 1,521,227 75.01%

28 Shtrpca Unmodified Opinion with Emphasis of Matter 1,262,621 951,581 75.37%

29 Hani i Elezit Unmodified Opinion with Emphasis of Matter 993,295 767,590 77.28%

30 Novobrdo Unmodified Opinion with Emphasis of Matter 419,644 364,888 86.95%

31 Junik Unmodified Opinion with Emphasis of Matter 532,013 479,604 90.15%

32 Mamusha Qualified Opinion with Emphasis of Matter 781,576 553,847 70.86%

33 Ranillug Unmodified Opinion 614,303 366,872 59.72%

34 Partesh Unmodified Opinion with Emphasis of Matter 78,570 50,558 64.35%

35 Kllokot Qualified Opinion with Emphasis of Matter 352,793 65,007 18.43%

36 Zubin Potok Unmodified Opinion with Emphasis of Matter 2,247,497 1,130,096 50.28%

37 Zveçan Unmodified Opinion with Emphasis of Matter 2,779,052 1,862,913 67.03%

38 Leposaviq Qualified Opinion with Emphasis of Matter 2,630,284 2,385,933 90.71%

Total 162,031,110 121,142,226 74.76%


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Annex 2. Discussions of Audit Reports in Municipal Assemblies

No Municipalities External Audit Report Action Plan

1 Prishtina Yes No

2 Prizren Yes Yes

3 Ferizaj No No

4 Peja Yes Yes

5 Gjilan No No

6 Gjakova Yes Yes

7 Podujevo No No

8 Mitrovica Yes No

9 Vushtrri No No

10 Suhareka Yes No

11 Lipjan Yes No

12 Gllogoc No No

13 Malishevo Yes Yes

14 Rahovec Yes Yes

15 Skenderaj No No

16 Viti No No

17 Fushe Kosovo Yes No

18 Istog Yes Yes

19 Klina Yes Yes

20 Kamenica Yes No

21 Deçan No No

22 Dragash Yes Yes

23 Kaçanik Yes Yes

24 Graçanica Yes Yes

25 Shtime Yes No

26 Mitrovica North Yes No

27 Obiliq No No

28 Shtrpca No No

29 Hani i Elezit Yes Yes

30 Novobrdo No No

31 Junik Yes Yes

32 Mamusha Yes Yes

33 Ranillug Yes No

34 Partesh Yes No

35 Kllokot No No

36 Zubin Potok No No

37 Zveçan No No

38 Leposaviq No No

% Yes 61% 34%


20

Annex 3. Special Service Agreements

No. Municipalities

Are simplified procedures implemented?

Are they engaged in specific work?

Was the duration legal?

No. of the Engaged

No of samples

Fulfillment of legal requirements

1 Prishtina 11% 0% 0% 161 9 0%

2 Prizren 100% 0% 100% 78 8 0%

3 Ferizaj 100% 33% 100% 70 6 33%

4 Peja 43% 0% 51% 49 49 0%

5 Gjilan 100% 0% 100% 76 6 0%

6 Gjakova 0% 0% 100% 71 1 0%

7 Podujevo 100% 0% 0% 23 10 0%

8 Mitrovica 0% 33% 100% 32 3 0%

9 Vushtrri 100% 0% 100% 18 3 0%

10 Suhareka 0% 0% 100% 53 2 0%

11 Lipjan 100% 0% 100% 6 2 0%

12 Gllogoc 17% 0% 0% 21 6 0%

13 Malishevo 100% 0% 0% 46 2 0%

14 Rahovec 0% 0% 100% 6 6 0%

15 Skenderaj 25% 0% 50% 8 4 0%

16 Viti 33% 67% 33% 90 6 33%

17 Fushe Kosovo 100% 0% 100% 52 2 0%

18 Istog 100% 0% 100% 49 5 0%

19 Klina 100% 100% 100% 0 0 100%

20 Kamenica 0% 17% 50% 22 6 0%

21 Deçan 0% 0% 100% 31 2 0%

22 Dragash 100% 56% 100% 9 9 56%

23 Kaçanik 20% 0% 100% 24 5 0%

24 Graçanica 0% 0% 0% 12 4 0%

25 Shtime 100% 0% 100% 4 1 0%

26 M. North 100% 0% 80% 6 5 0%

27 Obiliq 0% 0% 0% 23 5 0%

28 Shtrpca 0% 0% 50% 6 6 0%

29 Hani i Elezit 100% 100% 100% 5 3 100%

30 Novobrdo 0% 33% 100% 6 3 0%

31 Junik 0% 0% 100% 9 1 0%

32 Mamusha 100% 0% 100% 18 6 0%

33 Ranillug 100% 100% 100% 0 0 100%

34 Partesh 0% 0% 100% 7 6 0%

35 Kllokot 0% 0% 0% 10 10 0%

36 Zubin Potok 100% 100% 100% 0 0 100%

37 Zveçan 100% 100% 100% 0 0 100%

38 Leposaviq 100% 100% 100% 0 0 100%

Total 1,101 202

Average 29 5


21

Annex 4. Financial Discipline in Payments and Implementation

of Procurement Plan

No. Municipalities Number of samples (GS and CI)

Samples where payment was made within 30d

% of payments made within 30d

% of signed contracts/plan

1 Prishtina 193 193 100% 82%

2 Prizren 177 145 82% 80%

3 Ferizaj 182 103 57% 64%

4 Peja 66 47 71% 325%

5 Gjilan 87 79 91% 83%

6 Gjakova 36 28 78% 50%

7 Podujevo 94 91 97% 194%

8 Mitrovica 79 58 73% 55%

9 Vushtrri 98 97 99% 126%

10 Suhareka 65 50 77% 88%

11 Lipjan 62 50 81% 91%

12 Gllogoc 101 99 98% 101%

13 Malishevo 105 104 99% 76%

14 Rahovec 105 91 87% 76%

15 Skenderaj 100 94 94% 81%

16 Viti 72 66 92% 115%

17 Fushe Kosovo 79 74 94% 72%

18 Istog 62 55 89% 125%

19 Klina 65 58 89% 67%

20 Kamenica 24 23 96% 81%

21 Deçan 22 16 73% 36%

22 Dragash 68 68 100% 110%

23 Kaçanik 71 54 76% 82%

24 Graçanica 91 90 99% 60%

25 Shtime 33 32 97% 100%

26 M. North 72 72 100% 100%

27 Obiliq 65 63 97% 135%

28 Shtrpca 41 24 59% 81%

29 Hani i Elezit 85 72 85% 85%

30 Novobrdo 38 33 87% 90%

31 Junik 16 10 63% 90%

32 Mamusha 45 45 100% 77%

33 Ranillug 44 44 100% 98%

34 Partesh 28 26 93% N/A

35 Kllokot 31 31 100% 0%

36 Zubin Potok 46 41 89% 100%

37 Zveçan 68 56 82% 85%

38 Leposaviq 75 24 32% 100%

Average 2,791 2,406 86% 94%


22

Annex 5. Updating the registry and collecting PT

No. Municipalities Verification of 1/3 of properties

% verification

Estimated Tax for 2017

Collected Tax for 2017

% of collection against invoicing

1 Prishtina No 24% 8,078,266 3,802,866 47%

2 Prizren No 9% 2,264,112 981,399 43%

3 Ferizaj No 31% 1,908,089 833,183 44%

4 Peja No 1% 2,004,143 756,167 38%

5 Gjilan No 14% 1,608,856 678,829 42%

6 Gjakova No 24% 1,557,667 694,877 45%

7 Podujevo No 9% 512,837 159,741 31%

8 Mitrovica No 0% 845,703 250,404 30%

9 Vushtrri No 8% 651,697 316,013 48%

10 Suhareka No 0% 741,472 329,058 44%

11 Lipjan No 8% 874,305 446,474 51%

12 Gllogoc No 5% 423,663 157,191 37%

13 Malishevo No 20% 287,739 69,851 24%

14 Rahovec No 3% 375,355 145,420 39%

15 Skenderaj No 13% 220,107 81,209 37%

16 Viti No 28% 371,424 139,725 38%

17 Fushe Kosovo No 0% 700,095 312,099 45%

18 Istog No 4% 348,431 168,724 48%

19 Klina No 32% 332,509 131,813 40%

20 Kamenica No 4% 298,119 124,253 42%

21 Deçan No 0% 258,989 85,433 33%

22 Dragash No 13% 217,450 75,648 35%

23 Kaçanik No 17% 272,468 107,636 40%

24 Graçanica Yes 100% 604,568 338,273 56%

25 Shtime Yes 35% 149,677 63,382 42%

26 M. North No 0% - - 0%

27 Obiliq No 11% 390,196 263,567 68%

28 Shtrpca No 11% 274,707 54,069 20%

29 Hani i Elezit No 0% 98,787 44,089 45%

30 Novobrdo No 1% 92,320 33,742 37%

31 Junik Yes 35% 51,662 23,769 46%

32 Mamushë No 3% 31,282 7,681 25%

33 Ranillug No 0% 36,015 13,989 39%

34 Partesh No 0% 12,458 4,432 36%

35 Kllokot No 0% 72,906 19,727 27%

36 Zubin Potok No 0% - - 0%

37 Zveçan No 0% - - 0%

38 Leposaviq No 0% - - 0%

Total Yes 3 (7.89%) 0%

Total No 35 (92.10%) 0%

Average of verification/ Total 7.89% 26,968,073 11,714,734 43%


23

Annex 6. Addressing of recommendations

No. Municipalities Recommendations given in 2016

Fully implemented recommendations

Implementation rate

1 Prishtina 26 7 26.92%

2 Prizren 16 0 0.00%

3 Ferizaj 29 5 17.24%

4 Peja 19 9 47.37%

5 Gjilan 18 6 33.33%

6 Gjakova 22 7 31.82%

7 Podujevo 17 3 17.65%

8 Mitrovica 22 7 31.82%

9 Vushtrri 20 7 35.00%

10 Suhareka 11 1 9.09%

11 Lipjan 16 6 37.50%

12 Gllogoc 18 4 22.22%

13 Malishevo 13 2 15.38%

14 Rahovec 13 2 15.38%

15 Skenderaj 20 7 35.00%

16 Viti 18 3 16.67%

17 Fushe Kosovo 19 5 26.32%

18 Istog 16 4 25.00%

19 Klina 17 8 47.06%

20 Kamenica 13 1 7.69%

21 Deçan 20 8 40.00%

22 Dragash 15 1 6.67%

23 Kaçanik 24 9 37.50%

24 Graçanica 21 7 33.33%

25 Shtime 11 4 36.36%

26 Mitrovica North 17 2 11.76%

27 Obiliq 19 7 36.84%

28 Shtrpca 15 4 26.67%

29 Hani i Elezit 15 4 26.67%

30 Novobrdo 14 5 35.71%

31 Junik 14 4 28.57%

32 Mamushë 13 1 7.69%

33 Ranillug 13 7 53.85%

34 Partesh 13 5 38.46%

35 Kllokot 20 1 5.00%

36 Zubin Potok 13 1 7.69%

37 Zveçan 14 1 7.14%

38 Leposaviq 16 0 0.00%

Total recommendations and implementation average

650 165 25.38%


24

Annex 7. Project Managers and Contract Management

No. Municipalities % of public contracts where PM is regularly appointed

% of contracts for which the Municipality accepts work prior to

payment

1 Prishtina 100% 100%

2 Prizren 100% 100%

3 Ferizaj 100% 100%

4 Peja 100% 100%

5 Gjilan 100% 100%

6 Gjakova 100% 100%

7 Podujevo 100% 98%

8 Mitrovica 100% 100%

9 Vushtrri 100% 100%

10 Suhareka 100% 100%

11 Lipjan 100% 100%

12 Gllogoc 100% 99%

13 Malishevo 100% 100%

14 Rahovec 100% 100%

15 Skenderaj 100% 100%

16 Viti 100% 100%

17 Fushe Kosovo 100% 100%

18 Istog 100% 100%

19 Klina 100% 100%

20 Kamenica 100% 100%

21 Deçan 100% 100%

22 Dragash 100% 100%

23 Kaçanik 100% 100%

24 Graçanica 96% 100%

25 Shtime 100% 100%

26 Mitrovica North 100% 100%

27 Obiliq 100% 100%

28 Shtrpca 100% 96%

29 Hani i Elezit 100% 100%

30 Novobrdo 100% 100%

31 Junik 100% 100%

32 Mamushë 100% 100%

33 Ranillug 100% 100%

34 Partesh 100% 100%

35 Kllokot 80% 100%

36 Zubin Potok 100% 100%

37 Zveçan 100% 100%

38 Leposaviq 100% 97%

Date post:	11-Jul-2020
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