Federation Government Spent 11 Million KM on Service Contracts

Friday February 14th, 2014

The Federation of Bosnia and Herzegovina agencies have spent 11 Million KM on service contracts during the past three years. At least 10 percent of these contracts involve government employees.

Protesti u Sarajevu

Protesters’ demands include cutting remuneration to civil servants. (Photo: CIN)

By The Center for Investigative Reporting

The Federation of Bosnia and Herzegovina(FBiH) institutions have spent 11 Million KM on service contracts and at least 10 percent of them involve government employees, found a performance audit conducted by the FBiH auditors. Fifty-seven FBiH agencies signed a combined 7,500 contracts—enabling some hires to get paid as much as 5,000 KM—between 2010 and 2012.

The auditors found that the spending on service contracts has increased since the FBiH Parliament passed an austerity legislation in 2009 which set the guidelines for savings including these costs. The law was passed in response to a stand-by arrangement with the IMF which called for cutting of public expenditure.

The auditors divided the service contracts in two groups. One is about service contracts involving the work done by commissions, task forces and other bodies involved either in the examination procedures or the issuing of permissions and licenses. The mean value of these contracts was around 1,000 KM while the money came from persons or companies applying for licenses and other government-issued permissions.

Task force members come from one or more FBiH agencies and in cases when there are no in-house experts for a certain field, then the government agency is recruiting outside expertise. The FBiH authorities have not set aside money from the applicants’ fees to cover the material expenses related to the licensing and certification procedure. Also, there are no bylaws governing how much money should a government agency use from the fees to cover its costs. Instead, each agency’s head decides how much they’ll pay commission members.

The other type of service contracts are those paid mostly from the FBiH budget. These are the so-called commission contract, which are independently concluded by the governments senior managers and the FBiH government.

Auditors found that 16 institutions, theFBiH Parliament, a president and two vice-presidents, the FBiH Government and 13 ministries have signed around 1,800 of such service contracts thus spending 2.8 million KM over a three-year period. The value of a service contract depended on a job and it ranged between 100 KM and 5,000 KM per a contract.

The FBiH institutions concluded service contracts mostly for work that their employees should have done themselves as it was part of their regular job. Some of these concerned IT consultants. Also, nine FBiH government institutions hired drivers on service contracts which were extended monthly for years on end. Then, there were contracts for whitewashing, cleaning, hospitality and other services.

The auditors also found that there were cases of vacancy notices being put out during the time that the post was filled on a service contract basis. Upon completion of the recruitment procedure people who worked on service contracts during the previous period would often get a permanent job with the agency.

The abolishing of extra pay for commission work in the executive branch institutions was one of the demands of the protesters in Bihać. The protests of the disgruntled citizens started last week in Tuzlaand spread over to other BiH towns. Four cantonal governments have resigned in response to the protests.

Published on February 14, 2013.

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The Center for Investigative Reporting in Sarajevo (CIN) work is available for free to all organizations that credit CIN as their source and link to www.cin.ba.

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