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QUICK PFM ASSESSMENT ON THREE SELECTED MUNICIPALITIES (LEZHE, SHKODER AND DURRES)

km — Wed, 25 May 2016 10:43:24 +0000

The Albanian Government started a new decentralization reform in 2014 and a reorganization of the local administrative boundaries, concluding to a much smaller number of Local Government Units (LGUs) 61 municipalities compare to 373 before (municipalities and communes). The reform aims to empower the newly created municipalities by enhancing their capability to provide high quality and timely services to citizens and increasing the efficiency of local governments’ resource management.

It is expected that the new Territorial and Administrative Reform (TAR) will lead to more professional governance at the local and regional level, more efficient service delivery and more effective collection of taxes and fees by local governments, and greater ability to promote and encourage sustainable local economic development.

Law on Local Finances

km — Thu, 05 May 2016 08:28:03 +0000

Assignment:
Prepare comprehensive model for PFM section of law on local finances; exclude revenue section
Compare model with current legislation
Collect insights into the state of current local PFM practice

Current results
Draft model based on PFM theory, international good practice standards and legislation in other countries
Model compared with current legislation in Albania
Reports from rapid PFM appraisals from 3 municipalities (Shkoder, Lezha, Durres) & survey-based assessment from 53 municipalities carried out by Albanian municipality experts

Law on Local Finances – Considerations on its Content & Possible dldp Support

km — Thu, 05 May 2016 08:21:06 +0000

Local revenues or management of local finances or both?
Local revenues
=> Logical continuation of ongoing decentralisation process
Management of local finances
=> Multitude of existing laws regulations, directives etc.
=> Need for more consistent and complete PFM guidance in
accordance with international standards
Law with two sections:
Section A on local revenues
Section B on the management of local finances

Law on local finances and the current legislation context

km — Wed, 04 May 2016 11:20:07 +0000

The law on “Local Self Governance” approved in December 2015 expressively foresees on the article no. 34, point 6 that:
“Each local self-government shall prepare, adopt, carry out, and administer a budget each
year that does not include a deficit in compliance with applicable legislation that regulates the administration and implementation of budgetary system and with the law on local finances”.
There for the implicit fact that the policy maker has decided to develop and take clear reference on the law on “Local Finances”.

Law on Local Finance Section B on PFM

km — Wed, 04 May 2016 11:07:21 +0000

1.1 Objectives of the provisions on local public financial management

The provisions on local public financial management shall – support the effective and transparent use of local financial resources in accord with strategic priorities and local needs, ensure fiscal discipline and enable efficient delivery of public services; – describe the instruments and procedures which are necessary for the management of local finances; – regulate the management of local finances and performance particularly with regard to the budget planning process, the authorisation for local spending, the accounting and reporting procedures, the procedures for the oversight on local finances and performance as well as the interaction between the Ministry of Finance and the municipalities in the area of the management of local finances.

Albania Public Finance Management Strategy

km — Wed, 04 May 2016 11:00:52 +0000

The Public Finance Management Strategy 2014-2020, is the result of successful cooperation between the Ministry of Finance, the national and international partner institutions, and civil society active in the field of public finance.

This document, bears a significant importance, as it not only paves the ground for reinstating the public finances in the long-term sustainability trajectory, thus creating the prerequisites for economic growth, but also constitutes an obligation arising from agreements with international partners, in particular the World Bank, International Monetary Fund and the European Union.