Overall Context
In 2016, Kosovo government has approved the PFM Reform Strategy 2016-2020. The timing of the development and the approval of the Strategy is synchronised with the negotiation for two Sector Budget Support (SBS) programmes, funded by the EU and supporting the PAR and PFM sector. One of the main conditions for a country to benefit from such an instrument is the sound public finance management, supported by solid PFM reforms. In addition to the SBS programme conditionality, the need for the PFM Reform Strategy came as a result of the overall Public Administration Reforms initiated by Kosovo government. Within the PAR framework, PFM represent the third main pillar – aside of policy development and coordination (managed by OPM) and public service and human resource management, administrative service delivery and accountability (managed by MPA). Kosovo aims to have a modern system of PFM that is consistent with best international practices. In turn, this will contribute to the efficient and effective functioning of PFM in Kosovo. The proper functioning of PFM is of key importance for the Government of Kosovo. The PFM Reform Strategy, as part of the overall Public Administration Reform strategic framework, is sufficiently relevant as a policy tool, addressing pressing challenges of the Government of Kosovo in this area.
Project Objective
The overall objective of the project is to contribute to a sound financial management and improved service delivery in Kosovo by improving fiscal discipline, increasing revenue mobilisation and the better planning and strategic allocation of resources through the provision of policy advice and support to institutional and human resource capacity building in the Ministry of Finance, Labour and Transfers (MoFLT) and related institutions.
Project Approach
The Project Purpose is to improve and strengthen policies, legislation and capacities of key stakeholders (in particular the PFM Coordination Group) involved in implementation of the PFM Sector Reform Program by providing technical assistance to support the implementation of the PFM reforms. The project has been assisting Kosovo institutions, primarily the MoFLT and its departments and executive agencies (the Tax Administration of Kosovo (TAK), the Kosovo Customs and the Central Procurement Agency (CPA)), as well as the relevant independent agencies (the Public Procurement Regulatory Commission (PPRC) and the Procurement Review Body (PRB)) in:
1) Supporting the Ministry of Finance and other relevant PFM institutions and coordination partners in improving policy and legislative developments and their implementation monitoring to increase fiscal discipline, allocative and operational efficiency and, transparency of the use of public funds;
2) Strengthening internal control and internal audit to increase the accountability of management in budget organizations;
3) Supporting Kosovo Institutions in increased domestic revenue mobilisation;
4) Supporting key public procurement institutions and regulatory bodies in Kosovo by increasing the efficiency of centralised procurement.
Project Results
The project activities led to progress in the legal framework through the adoption of several new laws, acts and regulations (e.g. 2022-2026 Public Financial Management Strategy (PFMS) and Action Plan for 2022-2024, Law on Public Finance Management for Kosovo, etc.) which resulted in an improved legal base for the public budget planning process, fiscal discipline, allocative and operational efficiency and, transparency in the use of public funds.