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Veles and Caska provision of intellectual services

From Municipal Cooperation

Veles and Caska provision of intellectual services
Service Areas: Administrative Services and Tasks, Culture and Education, Transportation
Country: Macedonia
Municipalities: Veles, Caska
Contact persons: Sasko Ristovski, Maja Anastasovska
Legal form: Contractual
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Coordinates: 41° 43' 23" N, 21° 47' 9" E

Description of the problem/need for IMC

The need for IMC generally results from the lack of financial resources and staff and of adequate organizational units for administering property taxes and communal fees, and carrying out supervision and inspection services in education, road transport and construction, as well as internal audit and accounting in the Municipality of Caska.

The overall objective of good practices for IMC is to compensate for the lack of capacity of the Municipality of Caska with rapid, timely and high-quality services provided by the Municipality of Veles and saving on the former’s financial resources.

Note:IMC with smaller municipalities within the immediate area is of strategic importance for the Municipality of Veles. This is due to the need to contribute to overall capacity development, both of the municipality rendering the services, and of the recipient municipalities. With the decentralization process, all municipalities in the Republic of Macedonia, although different in size and capacity, received the same competences. Such a situation inevitably calls for cooperation between the municipalities, regardless of whether its purpose is the provision of a direct service in a specific field or the creation of a shared administration for many fields.

Description of the IMC practice

The administration of the Municipality of Veles provides the administration of the Municipality of Caska with intellectual services on the administration of property taxes and communal fees, supervision and inspection services (in the fields of education, road transport and construction) as well as internal audit. The performance of services is recorded on a form specifying the type of service and duration of its preparation and delivery.

The authorized auditor and head accountant of the Municipality of Veles conduct regular working visits in which they assist the administration of the beneficiary municipality, for example, with professional advice and supervision of bookkeeping documentation and tenders for public procurement.

The authorized inspectors (the education inspector, the road transport and roads inspector, and the construction inspector) perform inspection supervision.

For high-quality and full updating of the immovable property register, an all-inclusive registration of the immovable property of the taxpayers on the territory of the Municipality of Caska was carried out through the following activities:

  • preparation of methodology for fully updating the immovable property register of taxpayers on the territory of the Municipality of Caska;
  • preparation and implementation of a promotional campaign for informing and educating citizens with the aim of supporting the taxpayer registration process – promotional materials were printed and distributed, information was publicized in the media and meetings were held with journalists;
  • forming of commissions for taxpayer registration in the Municipality of Caska;
  • development of curriculum and materials for tax administration training;
  • a three-day training provided on taxpayer registration with members of the external commissions on taxpayer registration, civil servants from the two municipalities who work in the respective units, as well as those from other units of the municipal administration, contact persons of the UNDP project and both mayors;
  • registration of taxpayers’ immovable property within the territory of the municipality of Caska;
  • installation of the tax administration software for users;
  • the preparation of video material for citizens’ awareness raising on the collection of local taxes and fees;
  • preparation of technical solutions for establishing the Wide Area Network (WAN) between the Municipalities of Caska and Veles. The network is owned by of the municipalities and has a high-speed unlimited information flow between them.

With respect to the administration of the Municipality of Veles, the services are provided by six local officials: three advisers – inspectors from the Urbanism, Communal Works, Тransportation and Environmental Protection sectors; one internal auditor from the Internal Audit Unit; two officials responsible for the administration of taxes, communal fees and accounting of the Legal, Financial, Social, Development and General Affairs Division.

The remuneration for the services by the administration of the Municipality of Veles (as service provider) is calculated according to the financial analyses of the daily costs incurred for the performance of the work of the administration of the Municipality of Veles. The service beneficiary (the Municipality of Caska) pays the fees into the account of the service provider (the Municipality of Veles) upon receiving invoices covering one month of fees.

The sustainability of IMC results from the improved capacities of the service-provider municipality (Municipality of Veles), increased quality of services, satisfaction of the recipient municipality (Municipality of Caska) with their quality and savings on financial resources and a high degree of willingness to cooperate between the entities and the administrations of the two municipalities.

Accountability is ensured through regularly reporting to the Councils of the two municipalities on the implemented activities and the financial resources obtained. It is also ensured through meetings with the neighbourhood communities to inform them on the results of the IMC.

The monitoring and evaluation through continuous and regular communication are carried out between the respective units and sectors of the administrations of the two municipalities. Additionally, the Municipality of Caska, in agreement with the signed contract, may at any time be informed on the quality and timing of the service provided by the Municipality of Veles, and may thus have insight into the documentation and the overall administrative procedure.

Establishment of the IMC practice

The IMC was established as a result of mutual consultations, i.e. an identified need for this cooperation by Municipality of Caska and the willingness of the Municipality of Veles to deliver the needed services.

The administration of the Municipality of Veles carried out an analysis on the potential benefits of an established cooperation based on services provision following the delegation of competences. The analysis showed that it would be financially more sustainable for the smaller municipalities like Caska to use the services of the Municipality of Veles rather than to employ new staff. The offer of IMC was submitted to the Municipality of Caska. Based on Article 57 of the Law on Local Self-Government, the Council of the Municipality of Veles adopted the Proposal for Changing and Amending the Decision on Organization, Scope and Method of Performing of the Tasks of the Municipal Administration of the Municipality of Veles. Subsequently, by Decision of the Municipality of Veles, based on a written agreement, it was determined that certain competencies of the Municipality of Caska would be performed. The activities related to the implementation of the adopted Regulation consisted in working meetings with the mayors, councils of the municipalities and the “development team” of the Municipality of Veles. On 10 April 2006, the Municipality of Veles signed a contract for providing intellectual services to the administration of the Municipality of Caska, which includes:

  • administration of property tax and communal fees;
  • supervision and inspection services by an authorized education inspector, an environmental protection inspector, a road transport inspector and a construction inspector;
  • internal audit and accounting.

Based on the adopted Regulations and preparatory activities, in May 2006, the Municipality of Veles began providing intellectual services to the Municipalities of Caska.

There were six phases during the establishment of IMC:

  1. consultations;
  2. identification of the need of cooperation and assessment of the willingness to provide the respective services;
  3. benefits analysis;
  4. the proposal for the establishment of the IMC;
  5. contract drafting;
  6. contract implementation.

It must be noted that political affiliations did not influence the establishment of the IMC, and assistance of external experts in the specific fields was needed during its establishment. UNDP provided the following technical and financial assistance:

  • methodology for full updating of the immovable property register of the taxpayers on the territory of the Municipality of Caska;
  • remuneration per contract for employees filling out tax applications (three-member commissions for registration and assessments of the market value of the immovable property) on site and two persons for filling out Excel charts (for the first three-month phase and subsequently, for two months)
  • a promotional campaign for informing and educating citizens on the purpose of supporting the process of registration of taxpayers;
  • curriculum and materials for carrying out the tax administration training;
  • tax administration software for users;
  • video material for citizens’ awareness raising on the collection of local taxes and fees;
  • technical solutions for establishing the WAN (Wide Area Network) between the Municipalities of Caska and Veles.

UNDP assistance preconditioned the success of the IMC. The Central Government provided legal advice only. Except for general drawbacks of the normative framework for IMC: inter-municipal cooperation" style="cursor: help">IMC, there were no other specific difficulties/obstacles in its establishment.

The most critical success factors of the established IMC were: willingness to cooperate; the appropriate capacities (material, financial and human); a high level of knowledge on the use of information and communication technology; and ensured initial assistance from the donor community.

Benefits and shortcoming of the IMC practice

Benefits

There are several benefits of IMC: inter-municipal cooperation" style="cursor: help">IMC from the municipalities’ perspective:

  • reduced costs for provision of services (financial resources saving);
  • greater work effectiveness and efficiency;
  • new experiences acquired and enhanced knowledge and skills of employees working on IMC-related issues;
  • availability of new data;
  • timely and planned action, i.e. planning and implementation of the activities within the legal timeframes (e.g. timely submission of the decisions on property tax).

The citizens of participating municipalities directly benefit from the IMC by improved quality and reduced waiting time for the services, and indirectly by increased standards of living (saved resources are invested in improving services in education, healthcare, local infrastructure, etc.). This is shown, for example, by the savings by the Municipality of Caska on resources for covering the costs for a minimum of two employees, which total EUR12,000 annually. Moreover, these services are available in their place of residence.

Shortcomings

  • No shortcomings of the established form of IMC have been identified by either partnering municipalities or citizens.</span>

Future plans for the development of the IMC practice

At present, neither expansion in cooperation, specifically with other municipalities, nor the adoption of another form of IMC is planned.

Main lessons learned on how to establish IMC and make it a success

First, comprehensive consultations and serious negotiations are an imperative. The other important components are resources that can be made available and the political will for cooperation. It is also necessary to have adequate level of competency and professionalism, i.e. good management in the issues concerned. Also, components of a success are good communication and coordination of the joint activities.

The two municipalities believe that this practice can also be replicated in other municipalities.

The Central Government should improve the normative framework in order to overcome the following situations:

  • lack of a reasonable explanation for the chosen model of symmetrical decentralization of competencies (same package of competences for all municipalities);
  • lack of appropriate capacities of the smaller municipalities for implementing all the competences.

The Central Government should also assist by providing advice and financial resources and equipment to render the cooperation between municipalities operational.

The Association of the Units of Local Governments of Macedonia (ZELS) should encourage the municipalities to enter into contracts for various forms of IMCthrough public promotions of good practices, and should ensure technical assistance for the legal drafting of the proposals relevant to the IMC.

Readiness to support other municipalities to establish IMC

The Municipality of Caska is willing to exchange experiences on how to enter into an IMC, and on its policies and procedures.

The Municipality of Veles is willing to provide support, particularly in financial and IT management. The experience that it acquired in the coordination of activities is important and could be shared.

Acknowledgment

The information about this practice was collected and presented by Toni Popovski.