TI BiH: Political abuses and conflicts of interest in financing associations and foundations

SARAJevo, (Patria) - Over 120 million convertible marks (KM) have been allocated from budgets at all levels of government in Bosnia and Herzegovina over the past two years for the financing of associations and foundations, and the procedures for distributing around 15,000 grants were non-transparent, money was distributed without criteria and public calls, and political abuses and conflicts of interest are an additional problem, shows an analysis by Transparency International.

In the first public register showing which associations receive public funds and for what purpose, Transparency International in Bosnia and Herzegovina (TI BiH) announced that over 121 million KM have been allocated from budgets at all levels of government in the last two years for the financing of associations and foundations.

As stated, TI BiH has initiated six administrative disputes before the competent courts and filed 32 appeals to government bodies, because certain institutions are hiding data about who they are financing.

"The procedures by which around 15,000 grants were distributed were non-transparent, and in most cases, money was distributed without any criteria and public calls, as indicated by auditors at all levels," stated TI BiH.

According to the analysis, political abuses and the increasingly present phenomenon of conflicts of interest, where numerous public officials simultaneously head associations that receive funds, are an additional problem. TI BiH has so far identified 47 such officials in BiH, and some of them are potentially in conflict of interest.

TI BiH data shows that in the last two election cycles, over 800 candidates headed non-governmental organizations that received public funds.

At the local level, sports clubs, veteran organizations, and religious communities received the most money, while the state level provides three percent, but most of the money is distributed from budget reserves, and according to the Audit Office, everything is done without public calls, while recommendations regarding transparency have been avoided for years, the analysis explains.

In the Federation of Bosnia and Herzegovina (FBiH), according to TI BiH data, 77.4 million KM were distributed, and the Federal Ministry of Culture and Sports allocates the most money from the entity level. Auditors assess that the money was distributed based on non-measurable criteria, and everything depended on the subjective assessment of commission members, where just one point could bring beneficiaries 10,000 KM more.

Auditors also state that the Tuzla Canton (TK) distributed around 822,000 KM to veteran organizations and around 420,000 KM to religious communities without clear and measurable criteria, and similar findings were established in Sarajevo Canton (KS), which distributed around 14.6 million KM in two years.

"These assessments by federal auditors are important because it has been established that there is a systemic problem of arbitrariness in the distribution of millions of funds, which leaves room for political abuses, conflicts of interest, and the siphoning of money into organizations connected with the authorities," the TI BiH analysis states.

According to TI BiH data, 41 officials in FBiH were simultaneously in the bodies of non-profit organizations that received money from the budget. In a third of cases, the amounts exceeded legal limits, but this law has not been applied in FBiH since 2013, and there is no one to report these cases to.

The analysis provides an example of the former mayor of Kakanj, Aldin Šljiva, now a councilor and advisor to the Speaker of the House of Representatives of the FBiH Parliament, who headed the Volleyball Club "Kakanj 78", which was financed from the municipal budget, and was in a conflict of interest for a period.

After that, his party colleague and current mayor of Kakanj, Mirnes Bajtarević, became the president of the club's Management Board. He is also a member of the Management Board of the Football Club "Rudar", and these two clubs receive over 150,000 KM annually from the local budget.

According to TI BiH data, 28.3 million KM were distributed in Republika Srpska (RS) during the analyzed period. The number of those in conflict of interest is smaller, as the law allows one to simultaneously be an official and head of multiple associations receiving up to 100,000 KM annually, which is a significantly higher threshold than at other levels of government.

TI BiH could not determine the exact amounts of donations to numerous organizations because the Ministry of Labor and Veterans' Affairs of RS hides data on the financing of public interest associations. Due to their inaction, TI BiH has requested the initiation of an inspection, as well as filed a lawsuit with the District Court in Banja Luka.

The Government of Brčko District is the second largest donor of non-profit organizations in BiH, after the Government of Sarajevo Canton, and has distributed over 12 million KM in two years, according to TI BiH. Most of the money went to sports, and there are 210 sports clubs in the District, 58 of which are football clubs, receiving 6.9 million KM annually from the budget.

Many of them do not even have a website, little data is publicly available, and it is difficult to determine where some of them compete.

In recent years, TI BiH has insisted that the analysis and improvement of transparency in the allocation of funds throughout BiH be carried out through the development of anti-corruption strategies. Some levels of government have recognized corruption risks in this area through strategies, but the current situation shows that little has been done to improve it.

TI BiH publishes data on the expenditure of public funds for the financing of associations and foundations in its register "Monitoring the Allocation of Public Funds to Associations and Foundations in Bosnia and Herzegovina".