UPP Municipal Finance Self-Assessment Workshop in Prcanj, Montenegro

Categories: Events, Workshops | Author: Maja | Posted: 9/27/2017 | Views: 3202

On June 14-15, 2017 in the small town of Prcanj (bay of Boka Kotorska) in Montenegro Urban Partnership Program gathered around 30 participants from 12 Serbian and Montenegrin cities and municipalities (including Belgrade, Sabac, Pancevo, Nis, Subotica, Mojkovac, Pljevlja, Tivat, Bijelo Polje, Kotor, Budva and Bar), joined together with the representative from the Montenegro Ministry of Finance and Standing Conference of Towns and Municipalities (Local Government Association) of Serbia to discuss municipal finances and share experiences with their peers from neighboring country.


Main focus of the workshop was presenting the current status and progress in each of the two respective countries and participating cities/municipalities. During the course of the workshop participants had the opportunity to discuss financial positions, key indicators and action plans. While in Montenegro more than half of the total number of municipalities have been engaged in Municipal Finance Self-Assessment (MFSA) process in Serbia so far eight cities and municipalities have been working on it. Both capital cities of Belgrade and Podgorica have been using the tool for several years now. So far both countries have developed Action plan for all participating municipalities and will present their work in the upcoming City to City Dialogue (to be organized in Macedonia in the Fall 2017). Second part of the workshop was dedicated to the Capital Investment Planning, including basic functions, key steps as well as criteria to be followed when selecting projects.


The cities and municipalities appreciated the opportunity to share and discuss important issues of joint interest and compare laws and regulations, provide suggestions and advice to one another and to pose questions to the Ministry and LGA representatives in a safe environment.


At the end of the second day, the group visited Porto Montenegro (Tivat) as one of the most successful investment examples in Montenegro. Participants had the opportunity to hear and learn more about the history of the project, investments and upcoming developments from the representative of Porto Montenegro.

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"The MFSA tool is very useful and can help LGs assess their financial performance and look for additional financing. On the other hand, it is a huge responsibility to translate the budget into strategies that will drive LG's development",
Reisa Duraj, Head of Finance and Treasure Relations Sector of the Shkoder Municipality, Albania

"This capacity building program will enhance knowledge and skills of local governments, particularly of medium and large cities."

 All testemonials >>>


Municipal Finances Self-Assessment (MFSA)

MFSA, an assessment tool developed by the World Bank and customized for SEE with the support of international and local experts, is aimed at evaluating city’s financial health and identifying specific actions to improve mobilization of local resources, financial management, public spending, public assets management, investment programming and access to external funding. It performs several functions:

(a) it reviews municipal budgets (revenues and expenditures), financial management practices, savings capacity, investments efforts, and financial projections for the next five years;
(b) it provides some benchmarking through a set of simple and comparable key indicators and ratios;
(c) it defines key actions to be included in a Municipal Finance Improvement Plan aiming for greater accountability, visibility and efficiency in the use of public funds. 

MFSA framework of analysis includes eight steps organized in four complementary modules and is continually being evolved in practice and validated by all stakeholders. It provides a platform for making a vital connection between data inputs from various municipal financial and technical departments and allows a creditworthy assessment and strategic and capital investment planning anchored in financial realism.

More than 25 municipalities and cities took part in the Municipal Finances Self-Assessment in Phase I of UPP. Phase II intends to scale up the use of diagnostic tools for local governments and take advantage of the great momentum to replicate the LG tools in more municipalities across the region.

Belgrade MFSA Summary
Crikvenica MFSA Summary
Rijeka MFSA Summary
Sabac MFSA Summary
Subotica MFSA Summary

For full MFSA brochure, please click here.

Urban Audit (UA)

The Urban Audit, which provides a snapshot of the levels and quality of the services and infrastructure that the city provides, is typically carried out in parallel and in concentration with MFSA. Its main objectives are the gathering of baseline information of the existing location and condition of infrastructure and services, the identification of patterns of urbanization and pockets of poverty and underserviced areas, and the spatial location and quantification of the gaps, leading to the identification of a priority investment program.

The added value of an Urban Audit is that it should be carried out with:

(1) a full knowledge of the absorptive financial capacity of the municipality based on the findings of the MFSA (reality check); and
(2) with citizen participation in the screening process of priority investments.

The two self-assessments or audits lay the groundwork for a detailed Municipal Program or Contract that includes both a Municipal Finances Improvement Plan and a Priority Investments Plan.