EU Exchange 6 Programme

The EU Exchange 6 Programme is financed by the European Union in the scope of IPA 2019 national allocation, and is being implemented in the direct management regime, implying that the EU Delegation in Serbia entails principal management powers.

The key competent line institutions at the national level are the Ministry of Finance and the Public Policy Secretariat, along with the Ministry of Public Administration and Local Self-Government. As in previous phases of the Exchange Programme, the Standing Conference of Towns and Municipalities (SCTM) has the role of implementing partner and direct responsibility for the implementation of planned Programme activities.

Programme total budget amounts 2 million EUR (EU contribution entirely), while projected duration is three years, from September 2021 to September 2024.

The Programme consists of three components:

Component 1 - Fostering LSGs in preparation and implementation of Development Plans and Mid-term Plans in line with their programme budgets Provision of direct expert assistance through the modality of support packages, is planned in drafting/revising LSG Development Plans for 20 LSGs to be selected on competition basis (2 public calls). As for preparation of reports on the effects of the implementation of LSG Development Plans, on-demand support to interested LSGs is envisaged. When it comes to drafting/revising the LSGMid-term Plans, provision of direct expert assistance through the modality of support packages is likewise envisaged for 20 LSGs to be selected on competition basis (2 public calls). Support package pertaining to LSG Mid-term Plan annual revision, incorporates also assistance in respect to reporting upon LSG Mid-term Plan implementation. Within this component, through horizontal support activities intended for all LSGs, emphasis will likewise be placed on further improvement of programme budgeting at the local level, primarily in light of harmonization with Mid-term plans, pursuant to requirements of the planning system legislative package.

Component 2 - Upgrading capacities of LSGs to adequately apply capital projects’ cycle and transparently operate the budget With the view of introducing functional multi-annual capital budgeting, provision of direct expert assistance through the modality of support packages is envisaged for 20 LSGs to be selected on competition basis (2 public calls). Assistance will pursue the logic of the Decree on Capital Projects’ Management and cope with requirements of the Budget System Law, but will be aligned for operating with capital projects (proposals) regardless of their estimated budget (cost), i.e., also with the so-called small value projects. Beneficiary LSGs will work on introducing procedures for internal coordination, for processing proposals of capital project ideas, their prioritization and selection, and incorporation in the budget. In order to improve good practices and apply the principles of good governance in financial management at the local level, in the scope of this component advisory support and guidance to all LSGs will be intensified concerning increasing budget transparency and participation, improving quality of public debates on budget, gender budgeting implementation, etc. Additionally, it is planned to support 20 LSGs for introducing public budget portals (BP). This is a software-based application that enables advanced electronic reporting system concerning financial documentation, financial management and coordination within LSGs, as well as for communication with interested external public. (BPs have already been introduced in some LSGs in previous years with the support of Swedish Development Cooperation). For the award of assistance in introducing public BP, no separate competition/call is planned for LSGs, as it will be based on expression of interest by beneficiary LSGs selected per competition for capital budgeting, while depending on the available limit support might be awarded also to interested LSGs participating in other Programme components.

Component 3 - Better incorporation of Public Internal Financial Control (PIFC) features in LSGs’ operations and linking with local planning and budgeting frameworks Within this component, selection of 10 LSGs is envisaged through two subsequent public calls for provision of direct technical support for introducing/improving financial management and control (FMC) and internal audit (IA). With the view of ensuring better coverage of LSGs in Serbia for support in this respect, assistance in the scope of EU Exchange 6 Programme will be consolidated with possible other development projects/programmes dealing with PIFC at the local level. Provision of support to LSGs will be directly coordinated with the Ministry of Finance/Central Harmonization Unit also within this component, and attention will be awarded to recommendations and necessary improvements as spelled out for LSGs with annual consolidated Reports on PIFC. More intensive exchange of experiences among towns and municipalities is envisaged concerning introduction and functioning of FMC and IA, and will be pursued through working arrangements of SCTM Networks for IA and local finances, through organization of regional peer-to-peer workshops, etc. Awareness rising on aspects of managerial responsibility will follow through the functioning of the competent SCTM Committees and the Presidency.

Within EU Exchange 6 Programme, support to all LSGs in the Republic of Serbia is envisaged also in the modality of accredited trainings, for: Mid-term planning in LSGs; Elaboration and implementation of LSG Development Plan; Capital budgeting in LSGs; and for Programme Budgeting in LSGs. Furthermore, implementation of three annual cycles of regional seminars is planned following the budget calendar, and intended for improving the quality of the budget process and harmonization of LSGs’ budget with planning documents, for improving budget transparency, advancing citizens’ participation in budget processes and gender responsive budgeting. Overviews and analytics within the EU Exchange 6 to be annually elaborated on implementation of programme budgeting and compliance with mid-term plans by LSGs, mapping of LSG Development plans, etc., will be used to report upon implementation of policies/planning documents accompanying the Public Administration Reform Strategy – i.e Programmes on reforming (until 2025) LSG system, financial management and public policy management.