Millions Spent on Public Competitions Poorly Controlled, BIRN Serbia Report Reveals

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Serbia spent millions of euros on thousands of projects with little control over spending, no evaluation of projects’ impacts and no oversight if projects were implemented as agreed, a new report by BIRN Serbia shows.

Photo: BIRN

Serbia’s state institutions and local governments distributed around 6.5 billion dinars [€55 million] to finance 13,407 projects carried out by 7,788 civil society organisations, companies and associations in 2023.

The data are published in BIRN Serbia’s new annual report “Publicly about Public Competitions” that highlights some of the key issues and shortcomings of state project financing processes.

“State funds are one of the main sources of financing for civil society, and many [organisations] are financed with small sums of money. What we recognise as systematic problem is the lack of evaluation – we almost never see reports on how the money was spent and whether it was spent as intended,” said Tanja Maksic, program coordinator of BIRN Serbia.

This is the fifth year in which BIRN Serbia and Gradjanske inicijative (Civic Initiatives), together with a team of 16 researchers from local civil society organizations, have been monitoring the spending of state funds on projects in four fields – media, civil society, culture and youth.

The report is based on data collected in a database that provides insight into state spending on projects in these four sectors between 2019 and 2023. This is currently the largest public database of this type.

In procedural terms, the report says, the biggest problems are: the lack of evaluation of projects’ accomplishments; lack of audits of narrative and financial reports; non-standardised decisions on allocation of funds; an inadequate appeals mechanism that cannot prevent abuses; and non-transparent work of committees that decide on the allocation of money.

Zarko Stepanovic, from the Ministry for Human and Minority Rights and Social Dialogue, said an analysis and amendment of the regulations on public financing of CSO projects is expected in 2024 and 2025. “This process should be completed by the end of 2025,” said Stepanovic, adding that he expects that many shortcomings will be addressed and amended with new regulations.

BIRN’s research into 396 organisations that received more than one million dinars from state ministries revealed that a third of them are so-called phantom organisations, meaning that almost no information can be found about them or their projects. The same research showed that 27 organisations meet one or more criteria for qualifying them as „governmental non-governmental organizations” (GONGOs).

These GONGOs have ties to the ruling parties and government or support their agenda through their actions.

The financing of phantom organisations and GONGOs, a trend BIRN has been following for years, endangers the financial sustainability of legitimate organisations that are active in their communities and provide real services to citizens, often members of some of the most vulnerable groups, the report says.

Ministries, provincial secretariats and local governments are obliged to finance projects through public calls, in order to help local civic society or companies to implement tasks and activities in public interest that the state cannot implement on its own.

In addition to the media, civil society, culture, and youth, the state also finances many other fields, such as education or sports. There are no centralised data on the total amount that Serbia distributes annually through public calls.