Improving financial execution and reporting in municipalities increases efficiency in spending public money

The KLGI Institute held a discussion session on “The legal framework, budget execution and reporting at the local level” to analyse the current state of the local finance framework, as well as financial execution, reporting and control at the local level.

Participants in this session were representatives of the Directorates for Budget and Finance from all municipalities of the Republic of Kosovo. The session concerned the importance of municipalities improving financial planning and reporting in order to achieve sustainable development, while also addressing the recommendations of the National Audit Office.

Furthermore, the session aimed to produce concrete recommendations/proposals, based on the problems set out by the municipalities, to facilitate and improve the process of financial execution and reporting. Financial reporting is the main mechanism for monitoring the municipality's budget, through which information is provided on progress in and fulfilment of revenue collection plans, the fulfilment of planned obligations, and the ways money is spent according to the nature of the expenditure and the defined budget categories.

Opening the session, the Executive Director of the KLGI Institute, Mr Besnik Muçaj, stressed that a well-integrated budget process results in better financial decisions, thus having a positive impact on the overall functioning of municipalities. The budget in local government represents the financial plan that specifies revenue and expenditure for a given period of time. Therefore, through the budget process, institutions at the local level assess their needs against the level of budget available to them.

The Director General of the Treasury, Mr Ahmet Ismaili, stressed that the Treasury's responsibilities also include state accounting and the preparation of periodic and annual budget execution reports. All state budget expenditure, for central and local bodies, is made through the State Treasury Directorate via the Treasury Single Account system.

It is important that the relevant legislation in the field of public finance is strictly implemented, in order to avoid and prevent cases in which sufficient funds have not been committed for the implementation of projects.

During the discussions, participants were informed of news from the Treasury, comments were received and some common challenges were addressed in relation to improving the process related to local finance.

This activity falls under the pillar of improving the public policy cycle at the local level and is being carried out within the project ‘Support for Stronger and More Sustainable Municipalities (SSSM)’, funded by the Royal Norwegian Embassy in Kosovo.