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Published Compilation Audit Report on Annual Financial Statements of Political parties for 2013

Podgorica, 12th december 2014 – Pursuant to article 23 of the Law on financing political parties, the State audit institution has performed audit of annual financial statements of 18 political parties, which realized revenues in the amount higher than 10.000,00€.

The subject matter to the audit are the Annual Financial Statements of 2013 and compliance of the business operation of the following political parties with legal regulations: Democratic Party of Socialists of Montenegro; New Serbian Democracy; Socialist People’s Party of Montenegro; Social democratic Party of Montenegro; Positive Montenegro; Movement for Changes; Bosnian Party; Croatian Civic Initiative; Liberal Party; Democratic Union Party; New Democratic Power (FORCA); Democratic Party; People's Party; Democratic Serbian Party; Democratic League in Montenegro; Democratic Union of Albanians and Albanian Alternative.

Based on the established state of facts and deliberations of the audited entities' Opinions regarding the  SAI Preliminary Reports, and pursuant to Article 44 of the Law on SAI and Article 50 of the Rules of Procedure of the State Audit Institution, the competent Collegium, composed of Mr Nikola Kovačević  (Head of Collegium - member of Senate) and dr Branislav Radulović (member of Collegium - member of Senate), has adopted the Final Compilation Audit Report on Annual Financial Statements of Political parties for 2013.

With aim to eliminate identified irregularities and improve the legal framework regulating the business operation of the political parties as well as the quality of reporting of the audited entities, the competent Collegium of the SAI has given following recommendations:

The audit has found that the audited entities do not adopt the annual programs for planned activities which makes the control on proper spending of allocated funds difficult. The audit has also found that some audited entities (7) do not adopt the Financial plan till the end of current year for the following year or they do not determine the deadline for adopting the one by the Statute.

The audit has found that the audited entities do not keep their business books in a uniform manner, as they use different accounting principles for recording financial transactions due to the lack of regulations which would regulate their business operation and it makes the work of the political parties and the audit difficult.

The audit has found that some audited entities do not submit consolidated final statements for 2013 and they do not provide recording of the financial transactions related to election campaign in their business books.

The audit has found that a great number of the audited entities do not provide the records on receivables from the local self-government units, or they keep records on basis of noncompliance of documentations with the local self-government units. It is mostly due to the lack of transparent publication of the data on raised related amount of funds on the basis of the mandates won as well as unsettled debts towards political parties.

The audit has found that the political entities which enter the election as a coalition do not express all financial transactions (revenues, expenditures, liabilities etc) in their business books and Annual financial statements, related to election campaign, and they do not determine by a Coalition agreement which of the member of coalition will keep records of these transactions. It has had effect on accuracy and completeness of published financial statements of these political entities.

The audit has found that some parties do not conclude Service contracts on voluntary work, temporary service contracts and contracts for temporary and casual jobs which is not in all important aspects complied with the applicable laws (Labour Law, Law on voluntary work, Law on Contractual Relations etc).

The audit has found that a great number of parties do not perform calculation and disbursement of daily allowances for business trips in a manner prescribed by Regulation on Compensation Costs to Civil Servants and State Employees as the main regulation which prescribes this area and this issue is not regulated by their internal acts.

The audit has found that some political parties do not properly classify part of their costs within appropriate chart in accordance with the applicable Rules on the Chart of Accounts.

The competent Collegium has agreed that the final Compilation Audit Report is to be submitted to the Ministry of finance of Montenegro and Parliamentary Committee on economy, finance and budget of Montenegro.

The Final Compilation Audit Report on Annual Financial Statements of Political parties for 2013 has been officially published at the web site of the State audit institution of Montenegro.

Compilation of the Audit on Reports on Annual Financial Statements of Political Parties for 2013 (mne)