Local Government in Kosovo (efforts towards efficient services at local level)

Durrës, Republic of Albania
27 – 29 November 2014

Lecturers:
• Besnik Tahir, MA in Local Governance and International Development
• Fatmir Haxholli, MA in European Integration

Topics:
• Local Government in Kosovo (efforts towards efficient services at local level)
• Municipalities in the Role of High-Performance Organisations
• The Role of Municipalities in European Integration

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

Municipalities should commit, through a functional review of the administration, to defining the terms of reference and staff positions in each sector. Municipalities should pay greater attention to a range of important issues that focus specifically on the need to carry out a functional review and to ensure that municipal civil servants meet the appropriate administrative and professional requirements needed to perform municipal functions.

Functional review of personnel at municipal level

Municipalities should draw on the experience of Eastern European countries that have dealt with similar personnel challenges, relying on functional review work in order to systematically identify and redefine the most important functional needs and make the organisational divisions in the municipality, reassigning employees on the basis of their profiles and skills in relation to the municipality’s redefined functional units.

Functional review is linked to major efforts to train employees in order to raise their skills. Such an initiative should also be complemented by a package of professional and technical assistance and support from the MLGA and the MPA, aimed at creating a sustainable, merit-based system of personnel management.

Management and leadership in the modernisation process

The modernisation of management aims to comprehensively develop important skills and, in general, to change the mindset of municipal managers and workers towards a more proactive management culture.

INTERGOVERNMENTAL AND MUNICIPAL FINANCE

Generating and managing local revenue

Tax collection is a very great challenge for Kosovo’s municipalities, which receive most of their funding from central government. On the other hand, this has led to an important discussion about the appropriate levels of municipal funding through grants – i.e. whether municipalities have been given mandates without the corresponding funds being allocated. For this reason, Municipalities should be able to determine the size of the gap between their potential own-source revenue and their funding needs for administering the services they have been given responsibility for.

Local capital investment systems

To fulfil their new responsibilities for delivering the sectoral services set out in the LLGF and in the Ahtisaari Proposal, local governments will need a large increase in funding for capital investment – not to say a complete change of the existing local system of funding capital investment.

At present, Kosovo’s municipalities operate with weak, ad hoc mechanisms for financing capital investment, largely limited to the options available within the annual budget process. Given the lack of a development planning vision in the budget process, the financing of capital investment in municipalities has likewise been hampered by ad hoc and short-term decision-making.

Municipalities risk ending 2014 with a surplus of tens of millions

Constrained by the Laws in force, complicated procurement procedures and the impossibility of a budget review, Municipalities are expected to have a surplus of tens of millions

As part of the Local Governance Academy training programme – Module V, the Kosovo Local Government Institute discussed with municipal participants the path to be followed towards the further advancement of local governance, in particular service delivery and raising the performance of municipalities.

The discussions emphasised financial management by municipalities, given that the Law on Local Government Finance (LLGF) aims to strengthen fiscal autonomy and municipalities’ management responsibilities – in proportion to their competences for service delivery – while at the same time ensuring an efficient framework for inter-institutional fiscal accountability.

At present, Kosovo’s municipalities operate with weak, ad hoc mechanisms for financing capital investment and are also largely limited to the options available within the annual budget process. Given the lack of a development planning vision in the budget process, the financing of capital investment in municipalities has likewise been hampered by ad hoc and short-term decision-making.

Constrained by the Laws in force, complicated procurement procedures and the impossibility of a budget review, Municipalities are expected to have a surplus of tens of millions, added to which they have also taken on covering the salary increases. Hence the need for Municipalities, together with the Minister of Local Government Administration and the line ministries, to find more precise approaches to planning and managing finances at local level.

Municipalities therefore need to build an Integrated Planning System, establishing within it a set of operational principles to ensure the most effective and harmonised implementation, planning and monitoring of governance policies as a whole. This provides a broad framework within which the main governance processes for financial and policy planning operate. The Integrated Planning System should be the key decision-making system for setting strategic directions and allocating resources.

Through an inclusive process, the main aim of the IPS should be to draw up a strategic plan, including the harmonisation and adaptation of existing planning systems within the new system, the reorganisation of organisational structures and the elimination of duplicate requests from sectors. In this way fragmentation and duplication between the main governance policies and financial planning processes are avoided.