ICMA hosted five mayors from Bosnia-Herzegovina

In 2013, ICMA hosted five mayors from Bosnia-Herzegovina to discuss local governance and service delivery practices in the U.S. and Eastern Europe, including the relationship between the professional appointed manager and elected officials.

From 1995-1999 ICMA carried out seven projects in support of local governments in Bosnia-Herzegovina and the Republic of Srpska with the financial support of USAID and the Organization for Security and Cooperation in Europe (OSCE). The following highlights ICMA’s local government technical assistance activities.

Reorganization of Municipalities (1997)

In late April 1997, Federation Vice President Ejup Ganic asked USAID for assistance in developing a meth­odo­logy for dividing municipalities along ethnic lines. The issue of municipal boundaries had the potential to undermine the viability of municipal government in the Federation. USAID, through its Public Administration Program, asked ICMA to review the issue and recommend how to resolve it.

ICMA identified for the Federation President and Vice President the strategic steps needed to resolve the issue. ICMA recommended against quick political decisions and supported the establishment of govern­mental working groups to discuss appropriate local government models. Specifically, ICMA recommended that any model of local governance must provide adequate criteria for “operating standards” (e.g., spatial, geographic, and other characteristics used to define efficient municipal service delivery areas) and “demo­cratic governance” (e.g., “super majority” for crucial policy decisions; citizen advisory committees; mandatory prior referral of “critical issues” to community boards). ICMA emphasized that these criteria should be applied to any municipality prior to redrawing municipal boundaries to ensure the local governments are viable.

Capital Planning Process (December 1998-1999)

OSCE began a Municipal Infrastructure Finance and Implementation Training Program (MIFI-1) in December 1998 to promote the use of long-range capital planning techniques in 11 “pilot” municipalities in the Federation and the RS. OSCE contracted with ICMA to provide training in these capital planning techniques. In a three-day workshop held in December 1998, ICMA presented a capital planning process to these municipalities which included several major milestones: establish a capital planning committee; develop a standardized process to collect capital project information from spending units; design criteria with which to evaluate each capital project; and prioritize capital projects based upon a weighted scoring matrix. In a second phase of MIFI-1, the municipalities will present capital project proposals to the international lending community for funding consideration.

From January to May 1999, the municipalities implemented the capital planning process in their commu­nities to assess their infrastructure needs and priorities. During May and June 1999, ICMA provided follow-up, on-site technical assistance to the municipalities. ICMA’s technical assistance activities helped the municipalities to: carry out a systematic capital planning process to determine their long-range infrastructure priorities; employ consensus-building techniques in their decision making processes; use the Federation of Bosnia Herzegovina’s IMF and UN accounting structure to improve financial transparency; and develop their capacity to determine their financial condition and ability to pay back infrastructure loans.

Financial Management Capacity Building (1995–1998)

Between 1995 and 1998, with funding from USAID, ICMA provided fiscal management assistance to all 10 cantons and selected municipalities within the Federation to help them organize and staff their respec­tive Ministries of Finance, provided training in Western budget and financial management practices, and automated budgeting functions. ICMA also provided staff with budget preparation software and trained a number of staff in the use of spreadsheets to monitor expenditures and revenues during the budget cycle.

As a result of ICMA technical assistance, many cantons and municipalities improved their budget prepa­ration and implementation procedures in the following ways: (1) All cantons and most municipalities prepared budgets for the first time utilizing formats based on economic classifications defined by the International Monetary Fund (IMF), with some also utilizing functional classifications that significantly improved budget clarity and transparency; (2) canton/municipal budget users now utilize a quasi-line item approach with program budgeting type justifications accompanying any requests for additional funds; (3) Capital projects are now presented individually, with narrative justifications; (4) ICMA introduced analytic techniques that will permit local governments to produce more reasonable and reliable revenue estimates; and (5) public budget hearings were used to solicit input from citizens. 

Establishment of an Organization for Cantonal Ministers of Finance (1995–1998)

Under USAID’s Public Administration Program, ICMA assisted in convening ministers of finance from all ten cantonal governments within the Federation, many of whom had never previously met. They gathered several times with ICMA staff and subsequently decided to hold regular quarterly meetings to discuss issues affecting fiscal decentralization and financial management at the cantonal level. Despite the strained ethnic relations that plague democratic reforms in BiH, the group contains both Bosniac and Croat ministers, and meetings are hosted by each canton on a rotating basis. 

Through these meetings the cantonal ministers of finance learned how to effectively lobby the national government. In late 1997, the national government enacted a change in the collection and distribution of the sales tax. The ministers of finance, collectively, perceived that this new revenue system was not working as anticipated and asked the national government to prepare an analysis to clarify the situation and present its findings to the group. A Deputy Minister of Finance and his staff met with the cantonal minis­ters of finance at their June 1998 meeting and presented the requested analysis, which was generally conceded to be objective. Now, the Ministry of Finance is considering changes in the collection proce­dures, based on input from the cantons. 

Association Development (1997–1998)

In an effort to institutionalize the finance reforms achieved under USAID’s Financial Management Capacity Building program, ICMA funding helped create a professional finance officers’ association in BiH among the stakeholders in the program. Officials and staff from the Federation Ministry of Finance, cantonal ministries, and municipal secretariats secured membership commitments from over 100 officials around the country and began the process of formally organizing an association, known as UG JAFIS.

ICMA helped arrange two initial organizational meetings in September 1997. A Decree and Statute of Association was adopted, and an interim Management Committee of 13 members from all ten cantons and a President of the Association were elected. The primary formal objective of the Association is “to strengthen democracy and improve professionalism in public expenditure management at all levels where public expenditures and taxes emerge.”

With the support of the World Bank, UG JAFIS held its first annual conference May 15-17, 1998. Over 100 participants representing the Federation, all ten cantons, and 34 municipalities were present. Seminar topics ranged from accounting reform to association building. UG JAFIS membership now exceeds 100 public finance officials from the Federation of BiH.

Public Budget Hearings and Network (1995–1998)

The purpose of this project funded under USAID’s Public Administration Program was to increase citizen participation in the budget process in Bosnia through the creation of more transparent budget documents, the initiation of public budget hearings, and the development of an intergovernmental budget information network. 

In 1997 the first two budget hearings in modern BiH history were held. During the 1998 budget preparation cycle in Bosnia, as a result of ICMA training and technical assistance, five cantonal and five municipal governments held budget hearings for the first time. In virtually every cantonal and municipal budget, information was presented in formats that made the budgets easier for the public and officials to understand and use, with expanded narratives and more extensive press coverage than in previous years. 

Budget Information Network (1995–1998)

The purpose of this USAID-funded project was to improve the performance of government finance officials in Bosnia through the development on an intergovernmental budget information network. UG JAFIS in coordination with ICMA, put in place an electronic mail network that links it with the finance minister’s office in each of the ten cantons and the national Minister of Finance. The network is used to distribute newly enacted laws and regulations on a more timely basis and to enable the cantons to submit information on compliance with reporting requirements, according to the IMF agreement. In an effort to make the network more effective, UG JAFIS is converting all relevant laws and regulations from the State, Federation, cantons, and municipalities into electronic format, which will be available through a future UG JAFIS Internet Web page. 

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