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Published Audit Report on Annual Financial Statement of Positive Montenegro for 2014

Podgorica, 5th October 2015 – The State audit institution has performed financial and regularity audit of Annual Financial Statement of Positive Montenegro, which implies compliance with legal and other relevant regulations.

Based on the conducted audit, determined facts and the statement of the audited entity to the Preliminary Statement of the SAI, the competent Auditing Board comprised of a member of the Senate Nikola Kovačević, Head of the Auditing Board and a member of the Senate Branislav Radulović, PhD, a member of the Auditing Board, has given unqualified audit opinion on Annual Financial Statement for 2014 and qualified audit opinion on regularity audit.

Financial Audit has found that the Annual Financial Statement of the Positive Montenegro in 2014 in all important material respects had been made and presented fairly and objectively in accordance with the applicable financial reporting framework. Regularity Audit has found that the audited entity had harmonized financial and other activities with legislative and other regulations which had been identified as the criteria for the respective audit, except for the stated in the Report under Item: 2.3.2 Listing of Inventory, 2.3.4 Claims, 2.4.1, Revenues, 2.4.2, Expenses – Salaries and Fringe Benefits.

With regard to identified irregularities, the competent Auditing Board has given following recommendations to the audit entity:

- The service contracts should be created pursuant to the Law on Obligations and the employment contracts pursuant to the Labour Law.

- Pursuant to the provisions of the Article 26 of the Law on Employment and Exercising the Right of Unemployment Insurance, the audited entity is obliged to announce vacancies to the Employment Bureau for the purpose of supply and demand control at the labour market.

- The audited entity should harmonize the determined membership fees of the Party's deputies and members of the Presidency of the Party, determined through the Decision on membership fees for 2014 with the current Law on Political Entity and Election Campaigns Financing.

- It is necessary to reconcile claims with the local self‐governments and in accordance with the harmonized and verified documentation record them in the ledgers.

- The audited entity should record all new acquisition of assets to the account of class 0 – fixed assets, and not directly to the expenditures, as well as to harmonize the real with the bookkeeping balance, as it is determined by the Rulebook on the manner and deadlines for inventory listing and harmonizing bookkeeping balance with the real balance.

Through the audit of the Annual Financial Statement for 2013 of Positive Montenegro, the State Audit Institution had identified certain shortcomings and made recommendations for their elimination. The recommendations were related to: providing analytical records of fixed assets which contain all necessary information and the harmonization of supporting records to the General ledger; hiring of employees to systematized work positions through employment contracts and not service contracts.

The audit of the Annual Financial Statement of Positive Montenegro for 2014 has found that the Party had implemented the recommendation related to the provision of analytical records of fixed assets, while the recommendation regarding the hiring of employees to systematized work positions through employment contracts had not been completely implemented, since it had hired employees onto the systematized position through service contracts, and not through employment contracts as it had been recommended by the SAI.

The final Audit Report on Annual Financial Statement of Positive Montenegro for 2014 has been officially published at the web site of the State audit institution of Montenegro.

Excerpt from the Audit Report on Annual Financial Statement of the Positive Montenegro for 2014

Audit Report on Annual Financial Statement of the Positive Montenegro for 2014 (mne)