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Development planning in municipalities 

Toma Bartašė
Toma Bartašė
Administrator
Posts: 8


2017.09.07
Toma Bartašė
Toma Bartašė
Administrator
Posts: 8
In order to better prepare for the Riga Seminar in October, organizers of the Seminar invited all of us to consider few issues for discussions. Herewith, let‘s discuss some of these questions here in the forum before we all meet in the Seminar.

So, what are the practices in your countries, considering development planning in municipalities:

1. What are the specifics of the development planning system for local municipalities in your country?
2. Whether the tasks and the implementation status indicators laid out in the development planning documents of municipalities may be used as performance criteria for assessment of the overall functioning of a municipality? What other criteria are used for performance assessment of the work conduct and the use of financial resources?
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Auguste Purliene
Auguste Purliene
Posts: 1


2017.09.25
1. In Lithuania municipalities may organize development planning taking into account the recommendations of the strategic planning in the municipalities approved by the Government. It should be noted that these recommendations are not mandatory for municipalities. The recommended strategic planning process is presented in the picture.

After our done monitoring we‘ve identified a few problems, associated with strategic planning in municipalities:

  • There is no link between strategic planning of the state and the municipality. There is a lack of cooperation between state and municipal institutions in determining and implementing national targets.

  • Strategic planning in municipalities is carried out formally: there is a lack of strategic development directions; not focused on the results to be achieved; there are many goals, but their evaluation criteria are not clear; the provisions of strategic documents are repeated.

  • Municipal residents should also be involved in the preparation, consideration and supervision of implementation of development documents. However, monitoring showed, that public participation in the process is not sufficient enough.

2. We don’t use tasks and the implementation status indicators laid out in the municipal development planning documents as performance criteria for assessment of the overall functioning of a municipality. The reason is that we do not carry out performance audits in separate municipalities.
We maintain the practice to carry out audits that cover one topic in all local authorities of the country or in group of them (horizontal audits). Such audits also include audit procedures in central government institutions, which are forming the policy in the certain area related to the audit topic. In such audits there are used national indicators laid out in the national development planning documents, OECD guidelines, other good practice indicators and etc.
edited by Auguste on 2017.09.25
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Piret
Piret
Posts: 1


2017.09.25
Piret
Piret
Posts: 1
There are 3 obligatory development documents for local governments in Estonia: 1) budget, 2) budget strategy and 3) development plan. Development of documents are regulated by a Local Government Organisation Act and by a Local Government Financial Management Act.








Based on the law, NAOE has no legal rights to conduct performance audit in local governments, but at the end of day it´s a question of interpretation what to regard performance audit. We have got previously some experiences of trying to apply this kind of criteria. Not the same exactly, but criteria were also taken from legal acts of certain local government unit (i.e. expediency of expenditures). Although we ourselves have considered such approach as compliance audit, we have still encountered strong confrontation by local authorities and have been in disputes with them whether this is justified or not. So, it´s a legal question that is not clear enough now.
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Toma Bartašė
Toma Bartašė
Administrator
Posts: 8


2017.09.27
Toma Bartašė
Toma Bartašė
Administrator
Posts: 8
1. Slovakia has approximately 2.900 municipalities, from which only 140 have status of town or city. Only 416 municipalities have more than 2.000 inhabitants (= which represents 14 % of all municipalities).


Municipalities with 2.000 inhabitants and more are obliged to adopt/elaborate 3 strategic – planning documents*:

1. Economic and Social Development Programme (ESDP) of the municipality – it is medium-term strategic document for the period of 7 to 10 years. Part of the programme, are short action plans for 2-3 years.

2. Programme of the Municipal Waste Management.

3. Programme Budget – more detailed treatment of the municipal budget in respective areas with defined intentions and goals for areas; it should help to fulfil goals ESDP and incorporate its 2-3 years action plans.
*all mentioned documents should be interrelated.



Municipal strategic - planning (point 1. and 2.) is embedded into a hierarchical system of national and regional plans through set of indicators and control of the elaborated strategic planning documents by a higher level of authority.


At the municipal level, all mentioned documents are approved by municipal council. All should be monitored and updated.


The reality is, especially in the smaller municipalities, that all three planning documents are elaborated only formally as a fulfilment of the statutory duty, they do not correspond to each other and criteria are set mostly as quantity and not qualitative criteria.


Smaller municipalities do not use their budgets on the system basis according to the planning documents but according to the real needs and possibilities.




2. The tasks and the implementation status indicators laid out in the development planning documents of municipalities can be used as performance criteria for assessment of the overall functioning of a municipality, but these must fulfil the qualitative criteria (in terms of their logical context and the way, quality of monitoring and evaluation of community service programmes).


Other criteria which can be used for performance assessment, e.g.:
  • legislation
  • indicators of an identical activity performed by another municipality
  • indicators in the audited entity from previous periods
  • professional standards in the respective area
  • existence of municipal documents necessary for effective performance of the municipal functions, e.g. road plans and road maintenance plans, etc.
  • documentation, programmes on the European level (in the European agenda 2020) or other regional groupings, or on the state level
  • inhabitants' expectations in the respective area
  • the results of the inhabitants' satisfaction questionnaire
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Ivana Krmić
Ivana Krmić
Posts: 1


2017.09.28
Ivana Krmić
Ivana Krmić
Posts: 1
1. The Republic of Croatia consists of 576 local and regional self-government units, out of them 20 with the status of regional self-government unit (county), 127 with the status of a city and 428 with the status of a municipality. Capital city of Zagreb has the authority and legal status of both a county and a city (separate from the surrounding Zagreb County).

Development planning system in municipalities is defined by The Budget Act. According to this Act, local and regional self-government unit’s annual budget shall be composed of a general part, a special part and a developmental programme plan.

The developmental programme plan shall be a document to be prepared by each local and regional self-government unit for a three-year period, containing local or regional government developmental goals and priorities related to organizational and programme classification of the budget.

The developmental programme plan consists of:
  • development goals
  • development measures
  • link to the budget (organizational and programme classification of the budget)
  • indicators of results.

Administrative bodies of local and regional self-government units shall, in charge of administrative body for finance as coordinator, prepare developmental programme plan.

In preparing their developmental programme plan, administrative bodies shall include all budgetary users and extra-budgetary users under their purview.

Ministry of Finance issues guidelines on budgeting which gives instructions to local and regional self-government units for preparing developmental programme plan.


2. The tasks and the implementation status indicators laid out in development planning documents of municipalities can be used as performance criteria for assessment of the overall functioning of a municipality.
Other criteria which can be used in a process of performance assessment: legislation, internal acts (such as ordinance, decisions on different topics, etc.), municipal documents (programs of public needs in sport, culture, education and other municipality affairs).
edited by Ivana Krmić on 2017.10.11
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Toma Bartašė
Toma Bartašė
Administrator
Posts: 8


2017.09.28
Toma Bartašė
Toma Bartašė
Administrator
Posts: 8
Israel

Introduction
A municipality in Israel is a single urban administrative division having corporate status and powers of self-government and jurisdiction as granted by national and state laws to which it is subordinate. Therefore, as far as municipal autonomy is considered, it would be fair to claim that in Israel a municipality is viewed as a basic local self-governing and autonomous community.


This is not to say that the central government does not hold much clout: Central government supervises local authorities; the Ministries of Finance and the Interior aim at upholding the local authorities in a regime of balanced budget. With regard to most of the municipalities – i.e. those not considered fully independent due to their financial stability – the Minister of the Interior is authorised to audit their actions and approve or disqualify their budgets, acceptance of loans, guarantees, selling of land and committing to agreements. The Minister may appoint on his behalf an auditor to check and approve financial reports of local authorities. He is also authorised to appoint a special accountant to inspect all expenditures; enforce the collection of debts through the appointment of a debt collector; and may even dissolve a council and appoint another on his own behalf. The relations between the government and local authorities are regulated in additional laws concerning, inter alia, local services in education, welfare, planning and construction, fire safety, transportation and public health.

Nevertheless, municipalities are largely regarded as autonomous local mini-democracies which should be allowed to freely decide their own character and path of development.

Issues for Discussion
  • As self-governing bodies, planning system for local municipalities is based on each community's own discretion and judgement; albeit, as already stressed, the budgets of most of them are submitted to the approval of the Ministry of the Interior in a fixed framework decided by that Ministry.
  • There is no single development planning system for local municipalities in Israel. Each municipality is free to implement its own method, with the larger more financially capable ones retaining a strategic unit which usually develops a thorough development plan, including a series of predefined goals and results measurements, which is closely related to the budget plan.
  • The relevant laws and regulations do not stipulate the obligation for municipalities to prepare development planning. As a result, no certain goals and tasks, deadlines, and corresponding outcome indicators are defined by them. Nonetheless, it should be emphasised that more and more municipalities do engage in development and strategic planning. It should also be noted that the lack of any planning system may lead to a negative notification in the Detailed Reports which the Ministry of the Interior publishes on each and every local authority. Also, the budget framework and structure of all municipalities can be seen as a development plan præliminaris, since the budget is divided into current and project-based sections with the later related to specific aims and goals.
  • Where municipalities do employ development planning, the municipal budget is usually, but not necessarily, closely related to the development plan. In that case the municipal budget is planned with the aim of reaching the pre-defined goals within the development plan.
  • The tasks and the implementation status indicators laid out in the development plan of municipalities may be used as performance criteria for assessment of the overall functioning of a municipality. Other criteria used for performance assessment of the work conduct and the use of financial resources have been developed by the Ministry of the Interior; among them, the number of municipal employees relative to the population, budgeting ratio, total revenue generated and others which are mainly financial in character. A report published by SAI Israel in 2012 stressed the urgent need for the employment of non-financial performance indicators in order to improve service quality provided by local governments.
  • The performance criteria are set upon by the audited entity.
  • Although a development plan is not required by law, if in the course of audit a municipality does not provide the goals and tasks of specific audited actions and the corresponding use of financial resources, our report will deem them defective. However, as far as setting general outcome indicators is concerned, with no legal duty at hand, if the municipality has failed to set such indicators, our Office will usually only stress the need and benefits of doing so.
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corteconti
corteconti
Posts: 1


2017.09.28
corteconti
corteconti
Posts: 1
The decree law October 10, 2012, n. 174, passed with amendments by Law 7 December 2012, n. 213, can be considered the source of the reform concerning the instruments for supervising public finances that, in regulatory design, form a coordinated system.
The reform provides for the strengthening of internal and external auditing and for greater effectiveness of supervision measures.
As for the external audits, assigned to the Corte dei conti, the evolution of the regulations marks a proceduralization of the auditing phases aimed at verifying the sound execution of the recommendations.
The audit procedure includes a contradictory with the audited administrations, also with investigation purposes, in order to clarify uncertain profiles for each individual case in point.
In the new context, the Regional Audit Chambers are not confined to carry out observations and oversee their implementation but are entitled to ensure the fulfillment of the corrective measures within a period determined by the Chambers themselves, punishing the inertia and/or the inadequacy of the action with the further course of the procedure (eg. art. 148-bis, Legislative Decree. n. 267/2000). After completion of the audit procedure, whose nature is of ascertainment, the spending programmes of the audited local authority can be inhibited.
The core of audits of the Corte dei conti, that have been strengthened after the decree law n. 174/2012, is represented by the audits carried out taking into account the analysis of the internal auditors of local entities (according to law n. 266/2005). With the European law 2013-bis (art. 30, para. 2, law n. 16/2014), this model has been generalized, with the provision that the ECA "defines the methods and guidelines which the internal control and audit bodies of the public administration must follow ".
It is of particular importance, for the Regions, the introduction of the rule, in the aforementioned decree law n. 174/2012, which provides for the judgement of parification on the financial statement of the Regions, as it fits into a much more complex process aimed at achieving, on the regulatory and constitutional plane, the strengthening of the public finance coordination, in particular between the State and Regional level of government, in which plays a fundamental role the strengthening of the participation of the Corte dei conti in the audit of the financial management of the Regions, targeted at the respect of budgetary obligations in European perspective and, therefore, at the pursuit of balanced budget declined in terms of equilibrium, as principle incorporated in the Constitution by the constitutional law n. 1 / 2012.
Such constitutional novel, by amending articles 81, 97, 117 and 119 of the Constitution, introduces a balance between revenue and expenditure of the budget, the so-called "balanced budget", correlating it to an obligation of sustainability of the debt for all public administrations, in compliance with the rules in economic and financial matters deriving from European regulations.
In particular, the principle of equilibrium is contained in the amended article 81, which states, in the first paragraph, that the State ensures the balance between revenue and expenditure of the budget, taking into account the different phases - adverse or favorable - of the economic cycle.
With special amendment to the article 97 of the Constitution, it is extended to all public administrations the obligation to ensure balanced budget and the sustainability of public debt, in line with the regulation of the European Union.
In addition, the Regional Audit Chambers assess that the statements of Regions also take account of holdings in subsidiaries and to whom is entrusted the management of public services for the regional community and of instrumental services to the Region, as well as of the final results of the management of the national health services and similarly it is provided for in the examination of the final balance of local entities.
The increased incisiveness of these audit measures is also evident from the forecast of appeals to the Corte dei conti’s United Chambers for jurisdiction, in a special composition, against the decisions adopted by the Regional Audit Chambers, which can be detrimental to the interests of the audited local entities. The matter has been cleared up by the Accounting Justice Code (Legislative Decree. n. 174/2016), by means of the introduction of art. 11, paragraph 6.

The audits carried out by the Regional Audit Chambers in proceedings under law n. 266/2005 or in the multiannual financial rebalancing procedures (in case of structural imbalances in the budget capable of causing financial default, ex art. 243-bis of legislative decree n. 267/2000) are addressed to the representative bodies of the entity, which are called upon to undertake, through its operational structures, the appropriate corrective measures.
The role of regional political bodies is most evident in judgment for the parification of the General Account of the Region.
The decision of parification taken by the Regional Chamber at the end of the audit procedure, which reaches its climax at the public judgement, falls fully within the regional legislative process.
In the audit system innovated by decree law n. 174/2012, there are numerous examples of follow up of the Corte's recommendations. Staying on the theme of the judgment of parification of the general statements of the Regions, it has to be considered that the law establishes a report of the internal auditors on the statement’s scheme (art. 1, para. 3). The examination of that report gives to the Regional Chamber the framework of the comments, expressed during the parification, which were actually implemented in the law that approves the statement.
More generally, the assessment of the degree of adhesion to the measures suggested by the Corte is a constant its audit activity. The deliberations under art. 148-bis of legislative decree n. 267/2000, are adopted in a procedure that assigns to the local administration a period for fulfillment, after which the situation is re-evaluated and, if serious irregularities persist, measures that are more stringent are adopted, until the interdictive effect foreseen by law.
Similarly, it is realized the monitoring on multiannual financial rebalancing plans. The provisions of the consolidation act (art. 243-bis et seq., legislative decree n. 267/2000) provide for a continuous monitoring, first of the reliability of the plan, and subsequently to its approval, of the suitability of the measures therein foreseen to avert the financial default of the entity.
Monitoring on the follow up of the decisions taken by the Regional Audit Chambers is an integral part of that strengthening of the external audit system that justifies the above-mentioned forecast of appeals to the United Chambers for jurisdiction of the Corte dei conti, which decide with a special composition, against such deliberations.
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BlertaGaniu
BlertaGaniu
Posts: 1


2017.09.29
BlertaGaniu
BlertaGaniu
Posts: 1
1. In the Republic of Macedonia, there are 80 municipalities which all have same legal competencies, regardless of the size of the budget and the size of the municipality (area, population, city or rural municipalities, etc.). The City of Skopje is a special unit of local self-government which consist 10 municipalities whose work is regulated by a special law (Law on the City of Skopje).


The State Audit Office has a mandate to conduct regularity, financial and performance audits in municipalities.
The adoption of the budget in the municipalities is regulated by the Law on Financing Local Self-Government and the Law on Budgets.
The preparation and execution of the budget is the responsibility of the Mayor and the administration, and the adoption is the competence of the Municipal Council.
For the preparation of the Budget, municipalities receive a circular letter / guidelines issued by Ministry of Finance containing the strategic priorities of the government, as well as the planned amount of funds that the municipalities receive from the central government.

The Council of the municipality, according legislation is obliged to adopt a Budget Calendar setting out the deadlines for drafting and adopting the budget.
The municipal budget consists of:
- General part,
- Special part and
- Plan of development programs

The plan of development programs is an overview of programs that are intended for development of investments and it contains mid-term projections (three year projections) of the approved funds for certain budget programs for the years in which they will be executed, as well as the sources of their financing.

In determining the revenues, the municipality assesses its own financial resources and in accordance with the legislation, it is based on executed (collected) and audited revenues in the previous year. In order for the municipal budget to provide coverage of the planned expenditures for achieving the goals and priorities set by the council of the municipality, it is necessary for the municipal administration to prepare real estimates of the revenues.
According to the competencies of the municipalities, the municipal budget contains several programs and sub-programs (urban planning, local economic development, culture, sports and recreation, education, social protection and protection of children, protection of the environment etc).

2. Development programs – tasks and implementation status laid in the programs can be used as indicators of municipalities performance criteria in overall functioning of a municipality, with the exception of rural and economic weaker municipalities where development programs are designed to meet legal obligations. Also, annual programs urban planning, local economic development, culture, sports and recreation, education, social protection and protection of children, protection of the environment etc can be indicators for successful operation of one municipality.
edited by BlertaGaniu on 2017.09.29
edited by BlertaGaniu on 2017.09.30
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Baiba Bebre
Baiba Bebre
Posts: 2


2017.09.29
Baiba Bebre
Baiba Bebre
Posts: 2
Latvia


Legal Base of Local Planning in Latvia:
  • Law On Local Governments (1994)
  • Development Planning System Law (2008)
  • Territory Development Planning Law (2011)
  • Government regulations about planning documents
  • Methodological guidelines of the Ministry of Environmental Protection and Regional Development
  • Law On Budget and Finance Management (1994)
  • Law On Local Governments Budgets (1995)
Legislative acts stipulate that municipalities must plan their activities in detail – up to setting particular tasks.

The main problem in Latvia is that the development planning system is governed by two legislative acts (Development Planning System Law and Territory Development Planning Law) and opinions differ on whether each municipal institution has to develop strategies and plans, such as annual action plans.

Legislative acts also stipulate that municipalities must ensure a link between development planning and budget planning.
edited by Baiba Bebre on 2017.09.29
edited by Baiba Bebre on 2017.09.29

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Tea Arveladze
Tea Arveladze
Posts: 1


2017.09.29
Tea Arveladze
Tea Arveladze
Posts: 1
Georgia
1.
There are 76 municipalities in Georgia. Development planning documents preparing process are regulated by the Budget Code of Georgia, local self-government code and other normative acts. Municipalities are obliged to elaborate 2 development planning documents:
  • Document of the priorities of local self-government body,
  • Program budget
The documents should be interrelated.
Document of the priorities of local self-government body is the development master plan of the administrative entity, which includes the information of the medium-term action-plan. The document of priorities of the municipality shall be drafted by the executive authority. The document of priorities of municipality shall include at least the following:
  • revenues and expenditures of the budgets of municipalities, operations with financial and non-financial assets and aggregate indicators of liabilities for the past, current, planned and post-planned three budgetary years;
  • analysis of the final results for fulfilment of the past budgetary year by the budgets of local self government bodies and adjusted forecast for the current year;
  • for the planned budgetary year and three post-planned budgetary years: priorities of the local self-government body, defined by the executive body of the local self government; medium-term priorities of local self-government body and volume, purpose and outcome of funding of the main programs and events implemented for their fulfilment;
  • Indicators of performance evaluation for the expected outcomes of programs / sub-programs planned within the priorities.
The executive bodies of the local self-government shall present the priority documents to the representative body of local self government.
Document of the priorities of local self-government body is not approved.
Program budget includes information about programs / sub-programs, their expected results and performance assessment indicators, as well as information about capital projects. The representative body of local self government considers and approves the municipality budget. It should be noted that municipalities have been obliged to prepare program budget since 2013.
2.

The tasks and the implementation status indicators laid out in the development planning documents of municipalities can be used as performance criteria for assessment of the overall functioning of a municipality, but in some cases the indicators are not clear, so we use other indicators also: legislation, indicators of an identical activity used by another municipality, professional standards in the respective area, Experts' opinions, other municipality’s good practice and etc.


edited by tarveladze on 2017.09.29
edited by tarveladze on 2017.09.29
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laurasp
laurasp
Posts: 2


2017.10.02
laurasp
laurasp
Posts: 2
SPAIN
1ST QUESTION


  • There are 8.124 municipalities in Spain, and they shall enjoy autonomy within the framework of their competencies granted by law.
  • There are some documents that the municipalities must include when elaborating their annual budgets and the only one that could be considered as a part of the development planning system is the annual investment annex.
  • Also, they can attach, the investment plans and programs for a time horizon of four years, as well as the financial projections required. Although these documents are not mandatory there are many local entities that elaborate them. According to the Spanish transparency law these plans have to be published on the Internet and the results obtained must be evaluated periodically. Some municipalities include monitoring indicators.



2ND QUESTION


  • From 2015 onwards, municipalities with more than 50.000 inhabitants have to attach financial, budgetary and some management indicators to their annual statements.
  • Usually the Spanish Court of Audit carries out horizontal audits that include management evaluation; the first thing we ask for is if they had laid out any indicators about the subject matter, and we proceed to look them over, in case the indicators were appropriate we use them in our performance audits.
  • Although the Spanish Court of Audit and the regional audit institutions haven´t define any general management indicators (by now just financial and budgetary ones), each audit team designs proper indicators in order to carry out performance audits.
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