Procedure javnih nabavki u Ministarstvu odbrane Bosne i Hercegovine
Public procurement procedures in the Ministry of Defense of Bosnia and Herzegovina

Author(s): Samir Mušović
Subject(s): Governance, Public Law, Security and defense, Transformation Period (1990 - 2010), Present Times (2010 - today), Law on Economics
Published by: Fondacija Centar za javno pravo
Keywords: public procurement for the BiH Ministry of Defense; 2004-2017; financial statements and financial operations; Supreme Audit Institution; BiH Public Procurement Law;
Summary/Abstract: At the end of November 2018, the official confirmation of the BiH Ministry of Defense appeared in local media was related to the problematic delivery of the canned meat for the Ministry. It was officially confirmed that the inadequate deliveries were already terminated since content of the tested meat-cans confirmed presence of the pork meat in a cans that were marked as the beef meat product in accordance with the manufacturer's declaration. Delivery of the meat cans was forgotten soon, but unfortunately, this case confirmed again a continuity of the multi-annual trend of the questionable public procurement for the BiH Ministry of Defense. Public audit reports confirmed in a 14 years long continuity of the shortcomings related to the procurement procedures performed by the BiH Ministry of Defense. This trend is clearly visible in the attached table (Annex 1) consisted of audit findings related to the public procurement procedures, audit recommendations, and issued auditor’s opinions copied from public audit reports for the BiH Ministry of Defense from 2004. to 2017. Despite to the intensive parliamentary oversight of the BiH Defense Ministry and the BiH Armed Forces performed by the three Committees of the Parliamentary Assembly of Bosnia and Herzegovina (the "Joint Committee for Defense and Security of BiH", and two "Finance and Budget Committees" from both Houses of the Parliamentary Assembly of Bosnia and Herzegovina), Ministry was not able to overcome shortcomings of its public procurement procedures. Even more, the BiH Ministry of Defense from 2004 to 2017 did not received even single positive auditor’s opinion on the annual financial statements and financial operations. For all these years, annual financial statements and financial operations were rated with the “reserved auditor’s opinions” (conditional opinion) except for 2011, when the Ministry received a "negative auditor’s opinion" (negative qualification). In accordance to the new practice, the BiH Supreme Audit Institution published several years back a separate audit report on the “Major annual audit findings and recommendations”27 that covers the most frequent audit findings and the systemic deficiencies as well. It would be very useful for the Ministry to undertake comprehensive analysis of the Chapter “Financial Audit” (3.2.), at least for the three years back, in order to create appropriate comparisons with the audit findings that were addressing deficiencies of the procurement procedures presented here in “Annex 1” (attachment). Moreover, it will be necessary to organize the highest level of internal consideration of the audit recommendations for improvement of the procurement procedures published in annual financial audit reports for the BiH Ministry of Defense. In addition to the internal consideration of the recently received audit recommendations, it will be very important to discuss and to apply the following measures in order to reduce the risks of repetition of the already reported procurement problems of the Ministry of Defense: a) To enable wider participation to the training sessions on the implementation of the “BiH Public Procurement Law” of the majority of staff and the key personnel of the BiH Ministry of Defense, especially for those employees that confirmed their interest in participating to the procurement procedural activities (constant training should reduce risk that procedural mistakes will be repeated due to the incompetence); b) To adopt internal Decision by which any staff member/manager who participated to the procurement procedure that was subject of any chapter of the last audit report (starting from the 2018 budget year) will be banned to participate in any procurement procedure for the period of next three to five years; c) To establish procedure by which any staff member/manager who is going to participate to any procurement teams or to any procurement procedural step, will receive the “engagement decision" that will precisely define his/her work assignments, responsibilities and sanctions for failures and/or for breaches of the legal and procedural obligations. These “engagement decisions" could be standardized in a form of several textual definitions given in the “engagement decision” for the leading member of a working group", for the "working group member" etc., in order to simplify preparations and the execution of the given tasks; d) In cooperation the “Internal Audit Unit”, all public procurement procedures could be segmented by stages and it is possible to define pre-conditions or requirements for the each following stage of the each legally defined procurement procedure. In addition, it is possible to establish internal obligation (the mandatory one) that each procurement stage should be performed in consultation with the internal auditor and/or procurement stages should be certified (approved) by internal auditor (please consider option to learn more about the stage-certification practice active in internal audits of Spain); e) To establish obligatory practice of documenting of each procurement procedure in order to enable follow-ups, to prevent the repetition of the same mistakes, to trace individual responsibilities and to avoid "collective responsibility"; f) To establish prevention measures against of the corruptive misuses of assignments in procurement or misuse of public resources, as well as to establish system of internal sanctions for those individuals or members of the procurement teams who will breach regulations or will try to avoid obligatory steps/procedures; g) In a case that the BiH Ministry of Defense will not succeed to overcome inherited public procurement problems, or will continue with the low level implementation of the audit recommendations related to the public procurement, it will be useful to consider and to initiate adoption of the new legal solutions that will enable “outsourcing” procurement service solution for the BiH Ministry of Defense and for other institutions that were not able to overcome their deficiencies in their procurement for many years back (please consider learn more about the Swedish solutions applied for the public procurement performed by the outsourcing service providers/agencies).

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