QUARTERLY PERFORMANCE REPORT APRIL – JUNE 2020

USAID Transparent, Effective and Accountable Municipalities (USAID TEAM) Activity in Kosovo

DISCLAIMER: This publication was produced for review by the United States Agency for International Development. It was prepared by DAI Global, LLC. The author’s views expressed in this document do not necessarily reflect the views of the United States Agency for International Development (USAID) or the United States Government. USAID Transparent, Effective and Accountable Municipalities (USAID TEAM) Activity in Kosovo

QUARTERLY PERFORMANCE REPORT APRIL – JUNE 2020

Project Title: USAID Transparent, Effective and Accountable Municipalities (USAID TEAM) Activity in Kosovo Sponsoring USAID Office: USAID/Kosovo Contract Number: AID-167-C-17-00001 COR: Jeton Cana Contractor: DAI Global, LLC Date of Submission: July 15, 2020 Prepared By: USAID TEAM

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | ii CONTENTS

Acronyms and abbreviations ...... iv INTRODUCTION ...... 6 Kosovo USAID TEAM Background ...... 6 SIGNIFICANT EVENTS THIS QUARTER ...... 7

WORK PLAN PROGRESS ...... 8 A.1. Activities serving the Adaptive Management Plan ...... 17 Component I: Develop, Refine and Roll Out Models for Transparent and Accountable Municipalities ...... 23 Component II: Engage the Central Level in Addressing Municipal Corruption within the procurement process ...... 42 Component III: Enable Civil Society to Track and Expose Corruption ...... 47 PROGRESS OF ACTIVITIES IN ACCOUNTABILITY AND ENFORCEMENT MECHANISMS ...... 55 SUSTAINABILITY AND SELF-RELIANCE ...... 58 INDICATOR PERFORMANCE ...... 60

PROJECT MANAGEMENT ...... 61 Successes during reporting period ...... 61 Challenges during reporting period ...... 63

Mitigation measures taken to address challenges ...... 64 MAJOR ACTIVITIES FOR NEXT QUARTER ...... 64 Annex A: Reports and Deliverables Completed This Quarter ...... 67

iii Acronyms and abbreviations AAR After Action Review AKM Association of Kosovo Municipalities API Application Program Interface BOQ Bill of Quantities CHU Central Harmonization Unit CLA Collaborative Learning and Adapting CPE Contractor Performance Evaluation CPP Contractor Past Performance CSO Civil Society Organization D+ Democracy Plus GLPS Group for Legal and Political Studies GOK Government of Kosovo HR Human Resources IA Internal Audit IAU Internal Audit Unit INPO Iniciativa për Progres IT Information Technology KDI Kosova Democratic Institute KJA Kosovo Justice Academy KPI Key Performance Indicators MAC Municipal Audit Committee M&E Monitoring and Evaluation MELA Monitoring and Evaluation, Learning & Adaption MEAT Most Economically Advantageous Tender MLGA Ministry of Local Government Administration MOF Ministry of Finance MOU Memorandum of Understanding NAO National Audit Office NGO Non-Governmental Organization OCDS Open Contracting Data Standard

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | iv OPDAT Office of Overseas Prosecutorial Development Assistance and Training OPTP Open Procurement Transparency Portal PFM Public Finance Management PPL Public Procurement Law PPP Private-Public-Partnership PPRC Public Procurement Regulatory Commission PRB Procurement Review Body RFA Request for Application RFP Request for Proposals ROGP Rules and Operational Guidelines of Public Procurement ROP Rules of Procedures SOP Standard Operating Procedure STTA Short-Term Technical Assistance TEAM Transparent, Effective and Accountable Municipalities TOR Terms of Reference USAID United States Agency for International Development

v INTRODUCTION This quarterly performance report for the USAID Transparent, Effective and Accountable Municipalities (USAID TEAM) activity in Kosovo documents progress from April 1 to June 30, 2020, in compliance with section F.6.c. of the referenced contract. The report is divided into the following sections: • Introduction: gives an overview of the project and events for the reporting quarter; • Work plan progress: covers the status of each activity as outlined in the current version of the approved USAID TEAM work plan; • Indicator performance: relates to activity management and progress towards specific indicators; • Project management: includes operational successes and challenges; and, • Major activities: includes activities for next quarter. A list of reports and deliverables completed during the reporting period is included in Annex A.

KOSOVO USAID TEAM BACKGROUND The USAID TEAM activity in Kosovo is a five-year project that began on January 11, 2017 and is scheduled to conclude in January 2022. The project is improving procurement effectiveness and transparency by providing comprehensive assistance to all 38 Kosovo municipalities, with more intensive coaching and mentoring in a selected sub-set of focus municipalities. At the central level, USAID TEAM is working closely with national-level actors, including the Ministry of Finance (MoF), Public Procurement Regulatory Commission (PPRC), National Audit Office (NAO), Procurement Review Body (PRB), and Anti-Corruption Agency. Civil society also plays a key oversight and watchdog role by exposing corrupt practices and working with citizens and local governments as a partner in the process of procurement modernization. The project is partnering with an active network of civil society organizations (CSOs) to promote transparency and accountability. This network is educating and engaging citizens to identify corruption when it occurs—from the municipal to the national level—and is sustaining pressure to improve transparency. Activities implemented through USAID TEAM contribute to the Country Development Cooperation Strategies Development Objective 1: Improved Rule of Law and Governance that Meet Citizens’ Needs. The project directly contributes to two intermediate results under this development objective: IR1.2: Strengthened Effectiveness and Accountability of Assemblies, Administrations, and Election Processes. USAID TEAM is improving the accountability of municipal administrations and assemblies through greater transparency and effectiveness.

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 6 IR1.4: Civil Society Strengthened to Increasingly Engage Constructively with Government. USAID TEAM is working with civil society to monitor municipal procurement.

SIGNIFICANT EVENTS THIS QUARTER • All Government of Kosovo (GoK) contracting authorities continue to post an increasing number of public contracts on the e-Procurement platform. At the close of this quarter, 21,100 procurement activities were initiated through the platform, 16,800 procedures concluded with contracts, and over 1.35 billion Euros worth of procurements were processed. • USAID TEAM developed a comprehensive Municipal Graduation Report for five original focus municipalities, presenting the progress of municipalities over the three years. Due to COVID-19 and the project’s inability to present the report to municipalities, the project adapted and instead developed detailed graduation reports and shared them with each municipality: Pejë/Peć, Vushtrri/Vučitrn, Gjilan/Gnjilane, Gjakovë/Djakovica, and Pristina. • The project developed a Municipal Graduation Baseline Report for 10 new Focus Municipalities. Due to COVID-19, the project was unable to present the baseline results, but adopted and prepared a detailed report and shared it with each municipality: Deçan/Dečane, Ferizaj/Uroševac, Hani i Elezit/Elez Han, Istog/Istok, Junik/Junik, Lipjan/Lipljane, Podujevë/Podujevo, Prizren/Prizren, Rahovec/Orahovac, and Suharekë/Suva Reka. • Finalized annual Citizens’ Perception Survey on Municipal Corruption and Transparency in Public Procurement by collecting information from civil society organizations (CSOs), the private sector, and 3,013 citizens from all Kosovo municipalities. • Finalized three important documents on project and contract management (CM), including the Assessment Report and Legal Framework Review for Project and CM Practices in Five Focus Municipalities, a document on Best Practices - Project and CM in Municipalities, and Standard Operations Procedures (SOP) for Projects and CMs. • With the successful migration of the e-Procurement system to new and more advanced hardware infrastructure, the platform is not expected to encounter any issues, such as system freezes during peak usage hours. • Despite the restrictions due to the pandemic, PRB successfully implemented all procurement complaints, using the e-Appeals Module as well as the new website and database of decisions developed by USAID TEAM. • The Open Procurement Transparency Portal (OPTP) exceeded the life-of- project target for visits to the site. From July 1 2018, when the portal was

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 7 launched, to June 15, 2020 there have been 162,182 page views and 33,663 unique users of the portal (www.prokurimihapur.org). • USAID TEAM assisted CSOs to refer cases to enforcement mechanisms, including police, prosecutors, the Anti-Corruption Agency, etc. To date, 12 draft letters were developed with cases of violation of procurement procedures, and seven of them were submitted to enforcement mechanisms for prosecution.

WORK PLAN PROGRESS This section describes the activities completed, benchmarks achieved, and performance standards completed including more detailed commentary on each component. Table 1: Work Plan Schedule Performance:

Work plan task Work plan due Status Comments date

A.1.1 After Action Review (AAR) - May 2020 Completed After every major activity (training, workshop), USAID TEAM will undertake AAR to evaluate assistance provided A.1.2 Conduct individual meetings with June 2020 Completed targeted private-sector economic operators experienced in public procurement processes A.1.3 Meetings with municipal March 2020 Completed management and partner institutions’ representatives - of five focus municipalities A.1.4 Meetings with local government June 2020 Completed representatives aiming to evaluate project assistance provided to the focus municipalities A.2.3 After Action Review - after every March 2020 Postponed Due to the pandemic, these major activity (training, workshop), workshops are postponed to USAID TEAM will undertake “after- August action review” (AAR) to evaluate assistance provided A.3.1 After Action Review - after every April, May 2020 Completed major activity (training, workshop), USAID TEAM will undertake “after- action review” (AAR) to evaluate assistance provided A.3.2 Feedback from CSOs June 2020 Completed

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 8 A.3.5 Feedback from CSO and other June 2020 Completed reports

1.1.3 Create custom work plans for March 2020 Completed First draft versions submitted focus municipalities in Q1 and finalized-approved in Q2 1.1.4 Conduct citizen perception survey April 2020 Completed 1.1.5 Municipal graduation plan - December 2020 Ongoing, on USAID TEAM adopted the Monitoring of implementation track approach and, instead of b. Introduce municipal graduation plan b. April 2020 b. Completed presenting the graduation data and present municipal graduation and to the municipalities, has organizational capacity assessment prepared comprehensive results in 10 new focus municipalities detailed reports for each of c. Present municipal graduation and c. March 2020 c. Completed the15 municipalities and organizational capacity assessment shared it with them results in five focus municipalities 1.2.1 Identify, develop, and implement December 2020 Postponed Support Fund projects Q4 1.3.1 Provide monitoring and target December 2020 Ongoing, on assistance and coaching for municipal track procurement activities a. Ongoing, a. Implement public procurement a. December 2020 on track activities for 2020 in accordance with the timeframe in the procurement plan b. Build the capacities of the bid b. September 2020 b. Ongoing, evaluation committee members on track c. Build capacities for drafting technical c. September 2020 c. Ongoing, specifications on track d. Procurement capacity building for d. September 2020 d. Ongoing, directors of requesting units of 10 new on track focus municipalities (departments, school directors, directors of health centers) e. Use of procurement activity e. June 2020 e. Completed restricting the number of lots 1.3.2 On-the-job coaching/mentoring December 2020 Ongoing on municipal mechanisms to enhance track project and contract management 1.3.3 Support GoK to strengthen May 2020 Ongoing on The activity was postponed to sustainable and self-reliant training track Q2 due to COVID-19. capabilities Advertised procurement notice 1.3.4 Support AKM Procurement June 2020 Postponed The activity was postponed Collegium as a venue for information due to COVID-19 exchange and roll-out of technical assistance 1.4.1 Provide mentoring and on-the-job December 2020 Ongoing, on c. The sub-activity was coaching in auditing track postponed due to COVID-19 a. Support municipal management to a. March 2020 a. Ongoing, strengthen internal audit units and audit on track committees

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 9 b. Support all municipalities addressing b. December 2020 b. Ongoing, NAO and IA recommendations on track

c. Quarterly evaluations of addressing c. March 2020 c. Ongoing, NAO and IA recommendations on track d. Support implementation of the d. November 2020 d. Ongoing, Standard Operating Procedure (SOP) on track and manuals developed e. Assistance in commenting on NAO e. June 2020 e. Ongoing, draft reports on track 1.4.2 Enhance the performance audit September 2020 Ongoing, on methodology for internal auditors track 1.4.3 Development of action plan for August 2020 Ongoing, on addressing NAO recommendations track 1.4.4. Build capacities of Municipal Policy May 2020 Postponed The activity was postponed and Finance Committee in audit and due to COVID-19 financial control processes in 15 focus municipalities 1.4.5. Disseminate internal audit March 2020 Ongoing, on processes to build the capacity of IAUs track and Municipal Audit Committees (MACs) 1.5.1 On-the-job coaching/mentoring of December 2020 Ongoing, on municipal Human Resources (HR) track officers 1.5.2. Assist development of Municipal July 2020 Ongoing, on Code of Ethics track

1.5.3. Engage all municipal HR managers June 2020 Postponed The activity was postponed through learning summits to roll-out due to COVID-19 solutions 1.6.1. Monitor and advise municipalities December Ongoing, on on transparency and enhance public 2020 track relations efforts 1.6.2 SOP for standardized municipal April 2020 Ongoing on Due to COVID-19, activity is web publications and dissemination of track being implemented more practices slowly 1.7.1 Provide on-the-job coaching on December Ongoing, on Public Finance Management (PFM) 2020 track b. Addressing NAO and IA b. December 2020 b. Ongoing, recommendations on municipal finance on track c. Municipal budget planning c. September 2020 c. Ongoing, on track 1.7.2 Develop and implement SOPs and December 2020 Ongoing, on Due to COVID-19, activity is finance manuals: track being implemented more a. Handbook on Internal Public a. June 2020 a. Ongoing, slowly and some sub-activities Expenditure Management Process on track were postponed b. SOP / Manual for registering & b. August 2020 b. Postponed reporting municipal revenues Q3/Q4 c. SOP / Manual for registering & c. August 2020 c. Postponed managing nonfinance municipal assets Q3/Q4

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 10 d. Update municipal finance control d. July 2020 d. Postponed (MFC) Manual Q3/ e. Municipal invoice management system e. December 2020 e. Postponed Q4 1.7.3. Disseminate handbook, SOPs, May 2020 Postponed The activity was postponed templates, codes, and practices for due to COVID-19 public financial management and control 2.1.1 Strengthen and enhance May 2020 Completed operationalization and capacity of the Anti-Fraud Unit a. Develop internal procedures and a. May 2020 a. Completed required templates for dealing with potential fraud cases during the performance of the audit and before the audit report is published b. Provide on-the-job coaching on b. April 2020 b. Completed analyzing audit findings, legal qualification, and preparation of cases with strong evidence for submission to law enforcement authorities, specifically for the new staff to be engaged in this unit 2.1.2 Guideline on Detecting Fraud June 2020 Ongoing, on becomes a regular part of NAO internal track training curriculum a. Review and update guideline on fraud a. March 2020 a. Completed detection b. Guideline is an integral part of b. June 2020 b. Ongoing, induction/refresher training curriculum on track 2.1.3 Further improvement of the December 2020 Ongoing, on selection process of priority audit areas track for performance audits of the NAO a. Analyses of the current NAO practice a. June 2020 a. Completed on the prioritization of sectors/industries (e.g. education, social welfare, procurements, etc.) 2.1.4 Database of NAO June 2020 Removed Item removed from USAID recommendations and tracking level of TEAM work plan, since NAO, implementation (internal and external) at the beginning of the year, has tasked another donor to finance and implement the envisaged database, as part of broader support from the same donor 2.1.6 Development of online training June 2020 Completed Kosovo Justice Academy module for Judges and Prosecutors conducted pilot online based on guideline training in June 2020 a. Coordinate with KJA on turning a. June 2020 a. Completed guidelines into e-Learning module 2.2.1 Further support the CHU in the December 2020 Ongoing, on- The project has provided implementation of the Quality track CHU revised Annual

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 11 Assurance and Improvement Program Reporting templates and of the IA activity developed tools for measuring a. Revision of current annual reporting a. March 2020 a. Completed KPIs. In selected templates municipalities, the project is b. Developing tools for measuring the b. March 2020 b. Completed implementing a pilot project Key Performance Indicators (KPIs) and benchmarking of selected c. Methodological guidance for the IT c. June 2020 c. Ongoing, KPIs, aligning objectives and implementation of the reporting on the on track work plan for pilot QAIP (self-assessment questionnaire implementation of agreed and KPIs) KPIs. This piloting also d. Support the implementation of a pilot d. June 2020 d. Ongoing, includes analysis of KPI- project and benchmarking of selected ongoing on track related available information KPIs, kick-off workshop with CHU and at the selected IAUs and selected IAUs on aligning objectives and defining baseline for indicators work plan for pilot implementation of agreed KPIs e. Analysis of KPI-related available e. June 2020 e. Ongoing, information at the selected IAUs and on track defining baseline for indicators 2.2.2 Roll-out automated semi-annual December 2020 Ongoing, on The automated report system reports to municipal and central level track is prepared; however, roll-out internal auditors. (Cross-cutting with (item a) will be implemented C1) in July by internal auditors to a. Roll-out the automated semi-annual a. June 2020 a. Ongoing, pilot new reporting approach reports to project’s partner on track using CHU SharePoint municipalities Intranet 2.3.1 Support implementation of December 2020 Ongoing, on Partial postponement of Contract Management Module track activity due to delays in a. Development of a video training for a. March 2020 a. Ongoing, developing the CM module. end-users on track Completion of roll-out in item b. Roll-out to focus municipalities b. June 2020 b. Postponed (b) will be delayed until December 2020 2.3.2 Support implementation of December 2020 Ongoing, on Same as the previous item, Contract Performance Evaluation (CPE) track activity is postponed due to Module delays in developing the CPE a. Develop video training for end-users a. March 2020 a. Ongoing, module. Video development is b. Piloting CPE for limited number and b. September on track postponed to October 2020. type of contracts at municipal level 2020 b. Ongoing, Consequently, completion of on track item (b) will also be delayed for December 2020 2.3.3 Support PPRC to migrate e- December 2020 Ongoing, on Migration of e-Procurement Procurement platform to new server track system to new hardware infrastructure infrastructure successfully b. Monitor infrastructure migration b. June 2020 b. Completed completed 2.3.4 Support PPRC to implement Ongoing, on With the implementation of machine-readable Digital Contract and track CM module and CPE enhance implementation of open modules, most of contract contracting data standard data is entered into the e- a. Assess all digital data available and it a. June 2020 a. Ongoing, Procurement system except satisfies digital contract data on track for offer/proposal data and requirements electronic signature. This will make contract data in the

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 12 future machine-readable and will be easily served as per OCDS API 2.3.5 Support implementation of tool to December 2020 Ongoing, on MLGA has committed its automatically publish tenders and track funds to finance changes in contracts from e-Procurement platform their intranet to enable on official municipal websites. automatic publishing of a. Monitor vendor contracting process a. June 2020 a. Completed contract data, agreement between MLGA and vendor expected to be concluded in July 2020, development and implementation are on track 2.3.6 Enable interoperability between e- December 2020 Ongoing, on USAID TEAM has supported Procurement system and KFMIS track PPRC to identify and develop a. Monitor development of API for E- a. June 2020 a. Completed the points of communication Procurement to receive from KFMIS between the two systems. relevant financial data based on USAID TEAM is coordinating commitment number, to confirm with the USAID Economic availability of funds Growth Activity for the b. Monitor development of API for E- b. September 2020 b. Ongoing, developments of the KFMIS Procurement to receive from KFMIS on track side. Despite delays due to invoice status data based on contract COVID-19 restrictions, the number, to allow Economic Operators activity is expected to be to see submitted invoice and track its completed on time by end this status year. 2.3.7 Support implementation the risk- March 2020 Ongoing, on This is an ongoing activity, based selection tool to monitor track which has been slightly shifted procurement activities more effectively due to delays in hiring the Procurement STTA to support the PPRC Monitoring Department. Nevertheless, despite COVID-19 restrictions, the STTA has been engaged by the project through an online recruitment process, and this activity is expected to be completed during Q3 2.3.8 Enhance mechanism for August 2020 Ongoing, on This item is related to item sanctioning nonperforming procurement track above and will be officers implemented with support of a. Assess current practice of sanctioning a. March 2020 a. Ongoing, STTA. It is shifted to Q3 poor-performing procurement officers on track and provide recommendations b. Enhance mechanism to b. June 2020 b. Ongoing, improve/sanction the work of poor- on track performing procurement officers 2.3.9 Support drafting process of new December 2020 Postponed This activity has been affected procurement law and monitor the due to delays in formation of adoption process at the GoK and government as well as due to Assembly level COVID-19 restrictions, and may be postponed to Y5

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 13 a. Support draft law and submission to a. August 2020 a. Postponed GoK 2.3.10 Support the PPRC to develop December 2020 Ongoing, on Activity is ongoing. Project IT and implement a procurement case track Systems Specialist will be management process supported by Procurement a. Assess case management technical a. September a. Ongoing, STTA in mapping current and requirements as well as current and 2020 on track potential business processes potential Monitoring Unit business processes 2.4.1 Monitor PRB to implement 100% September 2020 Ongoing, on of procurement reviews through e- track Appeals 2.4.2 Monitor PRB to implement the June 2020 Completed new database of appeal decisions - Support PRB to migrate and digitize past decisions from the old database to the new one 2.4.3 Monitor implementation of live June 2020 Completed streaming of PRB sessions

2.4.5 Support PRB to address CSO June 2020 Postponed This item is postponed given findings related to deficiencies in the the lack of reporting from work of PRB (cross-cutting with C3) CSOs on PRB. D+ has recently been engaged by Component 3 to monitor work of PRB 3.1.1 Empower local CSOs and citizens June 2020 Ongoing, on to prevent corruption in municipal track public procurement in second-tier municipalities 3.1.2 Promote transparent and December 2020 Ongoing, on accountable municipalities through track Transparency Index in Public Procurement for Municipalities 3.1.3 Promote efficient use of public July 2020 Ongoing, on funds through fair and transparent track public procurement 3.1.4 Support functionality and December 2020 Ongoing, on sustainability of public procurement track transparency portal 3.1.5 Digital Solution for Integrity in September 2020 On-hold This activity is related to the Public Procurement evolving API and Open Data projects 3.1.6 Support, expand and seek December 2020 Ongoing, on opportunity for co-financing of social track accountability tools to monitor public procurement and public expenditure 3.1.7 Engage national-level CSOs to December 2020 Ongoing, on monitor PRB track 3.1.8 Empower CSOs on monitoring September 2020 Ongoing, on Grant award expected to be public procurement and exposing track completed beginning of Q3

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 14 potential fraud in focus municipalities and ensure sustainability of such activity 3.2.1 Creating a sustainable December 2020 Ongoing, on environment for civil society track organizations working on monitoring public procurement and building bridges between CSOs and public institutions 3.1.9 Host annual challenges to foster December 2020 Postponed to innovative ideas which contribute to Q3 graduation of municipalities 3.3.1 Support cooperation between December 2020 Ongoing, on Grant award expected to be CSOs and investigative media to expose track completed beginning of Q3 corruption 3.3.2 Build formal mechanism for CSOs September 2020 Ongoing, on and journalist to report cases of track suspected corruption to the State Prosecutor The table below summarizes the Short-Term Technical Assistance (STTA) assignments conducted during the reporting period, along with the principal tasks of each STTA. Table 2: Technical STTA Assignments During the Reporting Period.

Main Objectives of Assignment Assignment STTA Staff Name Assignment Period Office

Support municipalities in contract management processes, identifying and proposing models Municipalities of for successful contract Pristina, Contract management. Provide 14 Aug 2019 - Gjakovë/Djakovica, Management examples, best 29 May 2020 Pejë/Peć, Gjilan/ Expert practices, and know- Gnjilane, and how to implement Vushtrri/Vučitrn. them in Kosovo and introduce mechanisms enabling more effective project and contract management Support USAID TEAM to build formal reporting mechanism for CSOs and 23 July 2019 - TEAM Legal Advisor journalist to report 30 Jun 2020 cases of suspected corruption to the State Prosecutor Provide IT support to IT and M&E 01 August 2019 USAID TEAM and TEAM support - 31 July 2020 update M&E database Provide support to NAO to develop 02 Mar-30 Legal Advisor NAO training modules, make October 2020 guidelines as integral

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 15 Main Objectives of Assignment Assignment STTA Staff Name Assignment Period Office

part of induction, Anti- Fraud Unit guidelines updated and provide capacity building on audit findings, legal qualifications and preparation of the cases for submission to law enforcement authorities. Support focus municipalities by working closely with them. Design a three- year communications/public Municipalities of relations strategy and Deçan/Dečane, implementation plan Ferizaj/ Uroševac, for 10 new focus Hani Elezit/ Elez Han, municipalities to Istog/Istok, Communication positively highlight 18 May-30 Dec Junik/Junik, Advisor results with regard to 2020 Lipjan/Lipljane, the municipal activities Podujevë/Podujevo, (especially in Prizren/Prizren, procurement, finance, Rahovec/Orahovac audit, HR and and Suharekë/Suva transparency). Support Reka. USAID TEAM in close coordination with MLGA developing Standard Operating Procedure (SOP) The STTA will assist the project in providing technical support to PPRC, specifically map- out procurement case management business Procurement processes for the 10 June-31 Dec PPRC Specialist PPRC monitoring unit 2020 and establishing a procurement case management process/methodology for PPRC’s monitoring unit.

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 16 A.1. ACTIVITIES SERVING THE ADAPTIVE MANAGEMENT PLAN USAID TEAM continued to implement activities using an adaptive management approach in an effort to be flexible and responsive to the evolving needs of the beneficiaries. During this period, the “After Action Review – (AAR)” tool has been implemented in the following activities: “Focus group meeting with CiviKos facilitators”, “Peer Learning Workshop with Ferizaj/Uroševac region local level CSOs”, “Peer Learning workshop with Gjilan/Gnjilane, region local level CSOs.” Additionally, this tool is used in focus groups with representatives of CSOs from the Pejë/Peć and Prizren/Prizren regions, and in the hands-on training on how to prepare and refer cases to enforcement mechanisms. Furthermore, as stipulated in the work plan, during this quarter meetings were held with targeted private-sector economic operators and local government representatives, and feedback was sought during the CSOs session. Due to the current pandemic, all the above-mentioned activities were implemented through adapted approaches, such as virtual meetings, interviews via phone, and questionnaires. The USAID TEAM data tracker tool, Collaborative Learning, and Adapting Map (CLA Map) contain feedback, findings and recommendations provided as a result of the implemented adaptive management activities, including the CSOs report, as well as the actions taken to address these findings and recommendations. Figure 1 - Examples from the CLA Map:

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 17 Table 3: Adaptive Management Activities planned and implemented during Q2.

Workplan Component One Timeline reference

After Action Review - After every major activity (training, workshop), A.1.1 USAID TEAM will undertake “after action review” (AAR) to evaluate Quarter Two assistance provided

Conduct individual meetings with targeted private-sector economic A.1.2 Quarter Two operators experienced in public procurement processes

Meetings with local government representatives aiming to evaluate A.1.4 Quarter Two project assistance provided to the focus municipalities

Component Three

After Action Review - after every major activity (training, workshop), A.3.1 USAID TEAM will undertake “after-action review” (AAR) to evaluate Quarter Two assistance provided

A.3.2 Feedback from CSOs meetings Quarter Two

A.3.5 Feedback from CSOs and other reports Quarter Two

A.1.1. After Action Review (AAR) – The Monitoring, Evaluation, Learning, and Adapting (MELA) Specialist, in close cooperation with Component 1 staff, identified activities for which the AAR tool can be utilized. During this quarter, feedback and recommendations were solicited from the focus group conducted with CSOs representatives of the Pejë/Peć region that was conducted through the Citizens Perception Survey activity. Participants provided feedback and recommendations regarding municipal public procurement transparency including a municipal budget, municipal investments, corruption practices, among others. CSOs participated in the following focus groups: Let’s Do it Peja, OJQ ZANA, Perspektiva Studentore, ERA, Shoqata e femrës kontabiliste – Venera, Qendra për Mirëqenien e Gruas, Abstract, Qendra furnizimi i Diturisë, GWY-YMCA, Çohu, and Syri i Vizionit. Some of the positive feedback highlighted includes: • Increased transparency at the municipal level, including publication of contracts • Published budget and procurement plans and other information related to procurement • Simplified access to information as compared to previous years

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 18 • Increased in readiness of municipal officials to accept remarks and suggestions from CSOs Recommendations provided by CSOs’ representatives to further improve the public procurement processes are: • Establish mechanisms such as monitoring commissions consisting of Municipal Assembly members and CSO representatives • Increase the number of staff in procurement offices, since in some municipalities the number of staff is very low • Law enforcement on implementation of the sanctions for indicted officials • Municipalities should inform the beneficiary community for the projects that will be implemented so they can be involved in the monitoring of the work • CSOs should participate in one of the most important processes of public procurement, the evaluation process of bid selection. According to their representatives, CSOs can participate in this process by making a request to municipality to participation in this commission. However, none of the CSOs’ representatives have taken this action so far. A.1.2. CONDUCT INDIVIDUAL MEETINGS WITH TARGETED PRIVATE SECTOR ECONOMIC OPERATORS EXPERIENCED IN PUBLIC PROCUREMENT PROCESSES. On a semiannual basis, the MELA Specialist contacts economic operators experienced in public procurement processes to solicit their feedback and recommendations related to the procurement processes at the local level. The following economic operators, who were identified from the Open Procurement Transparency Portal (OPTP) tool, were contacted via phone, as part of adaption with the pandemic situation: GRAFX Studio SH.P. K, Lulzim Katanolli B.I, REFKI Q. ÇOÇAJ B.I, ER – LIS, JOOS & KRASNIQI. The main recommendation from the economic operators was that municipalities should continue improving the process of bid evaluation, even though they have noticed improvements. Another recommendation was to use Most Economically Advantageous Tender (MEAT) criteria since it will increase the evaluation quality of works, services and supplies. A.1.3. MEETINGS WITH MUNICIPAL MANAGEMENT AND PARTNER INSTITUTIONS’ REPRESENTATIVES - OF FIVE FOCUS MUNICIPALITIES. Through this activity, the project presents graduation indicator results separately to each focus municipality. These meetings also serve to solicit feedback and recommendations from the municipalities, as well as providing recommendations on actions to be taken to improve indicator performance. Due to the current pandemic, instead of in-person meetings, USAID TEAM developed and shared detailed reports with each municipality and organized online meetings to implement this activity. A.1.4. Meetings with local government representatives. Aiming to evaluate project assistance provided to the 10 new focus municipalities, the MELA Specialist conducted individual interviews with municipal POs via phone calls. As a result of COVID-19,

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 19 municipalities prioritized emergency projects such as food, hygiene and medical supplies, protective material, disinfection, and other similar/related procurement activities. For these procurement activities, municipalities used the negotiation procedure without publication, which was not used often by municipal POs and USAID TEAM played a crucial role in providing the expertise needed. Additional support provided to the 10 new municipalities during this quarter was in the following processes: • Shared developed SOPs, guidelines, manuals, forms and templates with the 10 new municipalities • Assisted in preparing tender dossiers and contracts • Assisted in preparing Special Conditions of the Contracts (SCC) • Advised on emergency procedures, • Assisted in the review of appeals, etc. Questionnaires were also used as a tool for conducting interviews with local government representatives, such are internal auditors. Municipal internal auditors emphasized that online communication was a challenge for them and the lack of in-person communication created difficulties in understanding the issues as well as resolving them. The main assistance provided by the project was related to the: • Drafting and updating of the IAUs Status • Drafting and updating Municipal Audit Committees (MACs) Statute • Reviewing of the Annual Plan for internal auditing for year of 2020 • Training in Performance Audit (two days online training) • Commenting on the NAO Draft Reports Recommendations: • USAID TEAM should continue assisting municipal management to further improve addressing issues and recommendations in the Audit Reports. The municipal department directors should increase the level of responsibility in preparing the Action Plans and concrete actions for addressing recommendations provided by Internal Auditor and NAO. • USAID TEAM should continue to lead with the pilot audit performance by assisting the municipality in properly preparing documents for the planning phase, as well as preparing and implementing audit performance. This would help municipalities understand and use the audit performance process. The feedback to municipalities regarding finance was related to the book of processes, the publication of the reports, guidelines, etc. A.2.3 AFTER ACTION REVIEW - after every major activity (training, workshop), USAID TEAM will undertake “after action review” (AAR) to evaluate assistance provided. In the workshops planned to be held in March 2020, the project aimed to introduce the AAR tool.

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 20 Due to the current pandemic, this activity is postponed and will be implemented at a later stage. A.3.1. AFTER ACTION REVIEW. The MELA Specialist, in coordination with Component III staff, identified the following activities in which to implement the AAR tool: the focus group with CiviKos facilitators, the hands-on training on how to prepare and refer cases to enforcement mechanisms, and the Peer-Learning Workshop on monitoring municipal procurement with local level CSOs from the Municipalities of Ferizaj/Uroševac and Gjilan/ Gnjilane. Focus group with CiviKos facilitators: The focus group with representatives from KDI, Çohu, Birn, INPO and Democracy Plus was held in April 2020 to discuss opportunities, challenges and the certification of individuals in public procurement monitoring, and how to implement this process in spite of COVID-19. Since these activities were organized online, the participants foresaw the challenge of implementing monitoring of municipal procurement, considering that municipalities are working with limited staff and a tight schedule. As such, access to documents such as contracts and invoices will be difficult since some of this information might not be found online. During online hands-on training on how to prepare and refer cases to enforcement mechanisms, participants learned more about: • Possible violations • Where to send the file/dossier in case of violations • The importance of submitting the case to more than one institution • The available sanctions to be undertaken against government officials in the case that they abuse their official position • The importance of public pressure on the responsible institutions to investigate a case Trained CSOs compiled the cases and to date, 12 draft letters were developed with cases of violation of procurement procedures, and seven of them were submitted to enforcement mechanisms (prosecution).

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 21 The online Peer-Learning workshops with local-level CSOs to monitor public procurement were held with participants from six CSOs of the Ferizaj/Uroševac region: Iniciativa per Progres (INPO), Nisja Zhvillohu, Leadership Development Association Albania (branch in Kosovo, Shtime/Štimlje), Qendra per Edukim, Inovacion dhe Zhvillim Profesional – Akademia – Shtime/Štimlje, Youth Club Ferizaj/Uroševac, and with five CSOs from the Gjilan/Gnjilane, region: KCIC, KAND, Transparence Monitor, Dardana Press, and NOPM. According to the plan, each of the CSOs will monitor one contract and will publish the findings from the monitoring process. Participants’ feedback from the workshop was: • Development of individual and CSO skills in municipal procurement monitoring • Gain skills through learning by doing • Gain opportunity to exchange knowledge and experiences • Create CSO network experienced in monitoring the municipal procurement process The participants also expressed challenges they face during the pandemic, including issues with the online platforms, lack of laptops for some of the CSOs’ staff, and the lack of electricity. USAID TEAM will follow the publication of the findings and recommendations, collect them, enter them into the CLA Map, and share with municipalities so they may further address them. A.3.2. FEEDBACK FROM CSOs. On June 19, 2020, USAID TEAM conducted the scheduled feedback sessions from CSOs through the online platform. The session with CSOs’ partners included representatives of USAID, KDI, GLPS, Riinvest, CiviKos, D+, and Lëvizja FOL. CSOs expressed their feedback and recommendations regarding accountability in public procurement from the CSOs’ perspective – progress, challenges and recommendations for improvement, progress on anti-corruption efforts at the local and central level, as well as challenges that CSOs faced during the implementation of the activities due to COVID-19. There were many positive feedback recommendations provided by participants, including the increased will for accountability, especially since there is positive competition among municipalities; improvement of the PRB in transparency; the need for the office of the state prosecutor to be more active in pursuing procurement fraud cases, and the like. Regarding contract implementation, the participants highlighted the importance of active citizenship through mobilizing the community to supervise projects together with CSOs and village councils, and for legal measures to be taken towards municipalities that do not implement recommendations provided by NAO. Participants raised several challenges they faced in implementing activities during COVID-19, including access to public information and municipal

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 22 staff capacities; if a staff member tests positive, then the entire department will have to go into isolation, significantly reducing capacities and limiting the ability for CSOs to work with municipalities. Municipal budgets will be affected, and the reduction or prohibition of public gathering activities will continue to be an obstacle, among others. A.3.5. FEEDBACK FROM CSOs AND OTHER REPORTS. During this quarter, the “Citizens’ Perception Survey” report was developed and finalized. In total, five focus group sessions and 30 in-depth interviews were conducted. The discussions were held from March 12, 2020, until May 6, 2020, while the interviews were conducted from April 2020 to May 2020. These focus groups and interviews consisted of 40 business representatives and 38 representatives from CSOs. The main feedback and recommendations from business representatives were: • Municipalities should publish information for budget allocations, public procurements, and capital projects in their websites • Provide available access to information about all phases of contracting process • Better functionalization of the e-Procurement platform since there are cases when the platform is blocked, thus tenders are canceled • Train monitoring staff • Consider European practices for public procurements, such as those of Germany and the Netherlands Feedback and recommendations provided by CSOs were related to: • Involving CSOs in monitoring of public procurements • Adopting leading procurement practices through the digitalization of public procurement • Applying adequate penalties for companies that disregard the contract terms • USAID TEAM should expand its focus to more municipalities, by providing professional support to the CSOs and municipalities

COMPONENT I: DEVELOP, REFINE AND ROLL OUT MODELS FOR TRANSPARENT AND ACCOUNTABLE MUNICIPALITIES USAID TEAM mentored and provided monitoring and practical coaching to municipal staff in the focus municipalities, leading to new local solutions to mitigate corruption vulnerabilities in the municipal procurement process. The project’s Municipal Implementation Advisors prepared municipal staff to undertake complicated procurement procedures and developed helpful guidance documents to promote the municipalities’ journey to self-reliance. In addition to ongoing coaching and mentoring in the municipalities, Component 1 is helping to implement effective enforcement mechanisms, such as mechanisms to ensure monitoring and oversight of the procurement cycle at the municipal level, including those for contract management.

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 23 The project is supporting the implementation of robust internal controls in procurement to verify whether legal, administrative and financial procedures are followed. Now, USAID TEAM is employing an integrated and adaptive approach to achieve transformational change in the expansion phase of the project. In the original five focus municipalities, project advisors shifted their engagement from addressing the basic skills gap to implementing more effective enforcement mechanisms and more active coaching and mentoring through oversight of the procurement cycle, including contract management. This qualitative approach to monitoring and oversight is essential to build accountability and promote integrity. Furthermore, during this quarter, the project continued to support the implementation of sustainable mechanisms of internal controls in procurement to ensure that all system users follow the legal, administrative, and financial procedures. To ensure the sustainability of the actions mentioned above, the project also assisted the GoK to institutionalize these instruments, thus, making adherence to these new instruments compulsory. USAID TEAM is using replication techniques, ensuring quick engagement with 10 new focus municipalities, by introducing the know-how accumulated from the previous years from the first five focus municipalities. Major achievements for the first quarter of 2020 for Component 1 include: • Continued support to the 10 new focus municipalities: Deçan/Dečane, Ferizaj/Uroševac, Hani i Elezit/Elez Han, Istog/Istok, Junik/Junik, Lipjan/Lipljane, Podujevë/Podujevo, Prizren/Prizren, Rahovec/Orahovac, and Suharekë/Suva Reka. • Developed a comprehensive Municipal Graduation Report for five original focus municipalities, presenting the progress of municipalities over the years. Due to COVID-19 and the inability to present this report to municipalities, the project adapted and developed five graduation reports for each focus municipality: Pejë/Peć, Vushtrri/Vučitrn, Gjilan/Gnjilane, Gjakovë/Djakovica and Pristina. These reports were approved and shared with the municipalities. • Developed Municipal Graduation Baseline Report for 10 new USAID TEAM Focus Municipalities. Due to the inability to present these reports to the municipalities, the project adapted and developed 10 custom reports for each of the new focus municipalities: Deçan/Dečane, Ferizaj/Uroševac, Hani i Elezit/Elez Han, Istog/Istok, Junik/Junik, Lipjan/Lipljane, Podujevë/Podujevo, Prizren/Prizren, Rahovec/Orahovac, and Suharekë/Suva Reka. These reports were approved and shared with all municipalities. • Developed Graduation-oriented Municipal Custom Work Plans for all 15 focus municipalities. Custom Work Plans outlined the timeframe for achieving results for the respective municipality, set performance targets linked with graduation achievements, and provided a clear understanding of what each partner will contribute to USAID TEAM in terms of staff commitment and other requirements. Mayors and Assembly chairpersons are expected to sign these custom work plans at the beginning of the next quarter.

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 24 • Finalized three important documents on project and contract management: 1. Assessment Report and Legal Framework Review for Project and Contract Management Practices in Five Focus Municipalities, 2. Best Practices - Project and Contract Management in Municipalities, and 3. SOPs for Project and Contract Management. • Finalized annual Citizens’ Perception Survey on Municipal Corruption and Transparency in Public Procurement, collecting information from CSOs, private sector, and 3,013 citizens from all Kosovo municipalities. • Coached and mentored municipal procurement officers on the levels of municipal compliance with the Public Procurement Law, and vulnerability to corruption for tender dossiers (in 301 cases), bid opening (in 10 cases), bid evaluation (in 54 cases), complaints (23 cases) and contract management (11 cases). • Enforced capacities of municipal officers across the full procurement cycle and reduced vulnerabilities to corruption, including in the development of technical specifications and contract management. • Supported municipalities to further strengthen IAUs, MACs, and financial control. • Supported new municipalities on the Code of Ethics and Book of Processes.

# Component One Events Events/Groups Participants Workshops Focus group discussion with business 1.1.4 1 10 representatives Focus group discussion with CSOs’ 1.1.4 4 38 representatives 1.4.2 Performance Audit Training 1 23

1.4.2 Performance Audit Practical Training 3 5 Total 9 76 1.1. CONDUCT ANNUAL ASSESSMENT, SURVEY, AND PLANNING ACTIVITIES. USAID TEAM carried out an annual capacity assessment of the focus municipalities and a public perception survey covering all 38 municipalities. Component 1, in coordination with Components II and III, used findings from the annual capacity assessments, public perception surveys, and CSO monitoring from Component III, and other assessment tools to tailor and refine technical support to all Kosovo municipalities to increase their organizational capacity. 1.1.1. Expansion to 10 new focus municipalities. The project completed the expansion process with an additional 10 new focus municipalities. USAID TEAM immediately started its intensive support to the municipalities of Ferizaj/Uroševac, Istog/Istok, Lipjan/Lipljane, Podujevë/Podujevo, Prizren/Prizren, Suharekë/Suva Reka Deçan/Dečane, Hani i Elezit/Elez Han, Junik/Junik, and Rahovec/Orahovac. During this reporting period, the project also completed the recruitment process of Contract Management, Public procurement and Public

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 25 Finance Management advisors, who alongside other municipal advisors, are supporting new focus municipalities. However, due to COVID-19, the assistance in some municipalities had to start without physical presence in the municipality, by mainly supporting them through phone, email, and other communication means. During this quarter, USAID TEAM continued to share with the new focus municipalities all manuals, guides, templates, and documents, including a model of Code of Ethics, Book of Processes, and SOP for Auditing process, developed by the project. 1.1.3 Create custom work plans with focus municipalities. This year USAID TEAM adopted the methodology for developing the annual custom work plans. While custom work plans previously outlined the timeframe for achieving results based on project work plan joint activities, this year's work plans were extensively linked with graduation achievements and an understanding of what each partner will contribute to USAID TEAM in terms of staff commitment and other requirements. The USAID TEAM drafted the work plans serve as a guide to achieving the objectives and municipal custom work plans. outcomes of the project’s support to the municipalities. The first draft versions of work plans were submitted in March 2020, and they were finalized and approved by USAID in quarter two. Each custom work plan was also shared with each of the 15 focus municipalities. 1.1.4. Conduct citizen perception survey. The project completed the annual Citizens’ Perception Survey on Municipal Corruption and Transparency in Public Procurement for 2019, collecting information from CSOs, the private sector, and individual citizens to measure their satisfaction with public procurement, and their perception of the level of transparency in the procurement process at the municipal level. This is the fourth annual Citizen’s Perception Survey that USAID TEAM conducted since the project started. This year’s survey targeted a sample with 3,013 citizens from all Kosovo municipalities including urban and rural areas and gathered in-depth feedback through five focus groups and 30 in-depth interviews with businesses and CSOs from five original focus municipalities and 10 new ones. The Citizens’ Perception Survey was started by interviewing individual persons through a face- to-face computer-assisted personal interviewing technique (CAPI), however, due to COVID- 19, it was continued through computer-assisted telephone interviews (CATI). Some findings of the citizen perception survey are that:

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 26 1. According to surveyed citizens, unemployment is seen as the main problem in Kosovo, followed by poverty and corruption. The majority of respondents (65%) reported that are satisfied with municipal services in general. 2. The majority of surveyed citizens are satisfied with the implementation of public projects (68%), recruitment of municipal staff (62%), and management of municipal public finance (58%). Citizens’ Perception Survey on 3. The vast majority of respondents (87%) think that Municipal Corruption and personal contacts and/or relationships are important Transparency in Public Procurement. to get things done when dealing with the public sector within their municipality. 4. Pre-tendering is perceived as the most corrupted stage during the procurement process with 70% of the respondents claiming that, followed by the tendering stage (58%). 5. The vast majority of the respondents (93%) have not encountered a situation where municipal public officials have conditioned their services in return for bribes, gifts, or other favors. In focus groups with businesses, results indicate that there were differences between businesses that bid on municipal projects and those that have not. Business representatives from Pristina, Gjilan/Gnjilane, Prizren/Prizren, Suharekë/Suva Reka, Malishevë/Mališevo and Rahovec/Orahovac were mostly informed about the annual procurement plans of municipalities. According to them, this information is usually found on PPRC’s website. However, business representatives from Pejë/Peć, Gjakovë/Djakovica, Ferizaj/Uroševac, Shtime/Štimlje, and Lipjan/Lipljane were not informed about the annual procurement plans. Based on the results, there was no particular reason for this lack of information, other than a lack of interest. One finding from the CSO focus group revealed that there was an equal difference in opinions among participants. While some of the participants believed that CSOs should be given the access to tender dossier evaluation sheets of evaluation committee members, the majority believed that small organizations that operate at the local levels have neither the right expertise nor the human and financial capacities to do so. Representatives who declared that CSOs should have access stated that such access would be translated into transparency. 1.1.5. Municipal graduation plan - monitoring the implementation. The project regularly monitors the graduation plan indicators to help municipalities focus on identifying areas where bottlenecks occur. Based on this monitoring process, USAID TEAM provides targeted assistance in areas where challenges are identified. b) Introduce municipal graduation plan and present municipal graduation and organizational capacity assessment results in 10 new focus municipalities. The project, using the Graduation Readiness

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 27 Measurement Tool developed by USAID TEAM in 2017, which includes quantitative and qualitative achievement measurements, have collected baseline data for 10 new focus municipalities. The methodology of the graduation plan applied to the five original focus municipalities was applied to 10 new focus municipalities: Deçan/Dečane, Ferizaj/Uroševac, Hani i Elezit/Elez Han, Istog/Istok, Junik/Junik, Lipjan/Lipljane, Podujevë/Podujevo, Prizren/Prizren, Rahovec/Orahovac dhe Suharekë/Suva Reka. Baseline data is collected by working closely with the municipal staff. Since COVID-19 restricted movements for the staff, USAID TEAM was forced to collect some of the data through municipal officials and not through project embedded municipal experts who would typically conduct the direct assessment in the municipality. As a result, some of the data might change as the situation normalizes and USAID TEAM advisors can once again travel to municipalities and verify the data. The chart below illustrates the baseline results for the 10 new focus municipalities against the minimum score for graduation.

Ranking of 10 New Focus Municipalities Baseline - 2019 90 80 71 65 70 64 60 56 60 52 51 48 50 50 45 43 46 46 41 38 41 40 33 32 29 31 30 19 17 18 18 15 18 17 20 14 13 11 10 0

Procurement (max. 73) MPECV (max. 27) Total (max. 100) Min. score for graduation

The municipality of Lipjan/Lipljane leads the new focus municipalities with a total of 71 points, followed by Suharekë/Suva Reka with 65 points and Istog/Istok with 64, while the municipality of Junik/Junik is ranked last with 41 points. Based on the assessments conducted, USAID TEAM developed the “Municipal Graduation Baseline Report for 10 new focus municipalities – 2019”. Due to COVID-19 and the inability to present the reports to the municipalities, USAID TEAM adapted and developed 10 custom detailed reports for each focus municipality: Deçan/Dečane, Ferizaj/Uroševac, Hani i Elezit/Elez Han, Istog/Istok, Junik/Junik, Lipjan/Lipljane, Podujevë/Podujevo, Prizren/Prizren,

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 28 Rahovec/Orahovac, and Suharekë/Suva Reka. These reports were approved and shared with the municipalities. c) Present municipal graduation and organizational capacity assessment results to five original focus municipalities. Due to COVID-19, USAID TEAM was not able to meet and present the graduation results in person to the focus municipalities. Instead, the project adapted and developed comprehensive Graduation Reports which were shared with the management of the focus municipalities.

Municipal graduation results 2017 - 2018 - 2019

90 84 82 77 80 73 72 70 64 60 62 62 60 57 53 51 51 50 44 44 40 30 20 10 0 Pejë/Peć Vushtrri/Vućitrn Gjilan/Gnjilane Gjakovë/Đjakovica Pristina

Dec. 2017 Dec. 2018 Dec. 2019 Min. score for graduation

All focus municipalities increased their overall graduation scores in 2019, from 12% to 45%. The municipalities of Peja/Peć with 84.4 and Vushtrri/Vučitrn with 82.4 points, exceeded the minimum score of 80 points to qualify for graduation but did not fulfill the graduation criteria of achieving a minimum score of 6 points for all individual indicators. Considering the sustainable trend of results achieved by Peja/Peć and Vushtrri/Vučitrn municipalities during 2017, 2018 and 2019, where both municipalities exceeded the total graduation threshold of 80, these two municipalities from January 1, 2020, to January 2021 reached the status of monitoring municipality, which brings these municipalities close to graduation. If the Peja/Peć and Vushtrri/Vučitrn municipalities prove that they meet both the overall graduation criteria of 80 points and individual indicator criteria of scoring at least 6 points for each indicator in the next performance evaluation in January 2021, then both municipalities will reach the status of a graduated municipality. Progress was also achieved by the other three focus municipalities - Gjilan/Gnjilane with 77.4, Gjakovë/Đakovica with 71.5, and Pristina with 62 points. 1.2. AWARD AND IMPLEMENT IN-KIND GRANTS TO FOCUS MUNICIPALITIES THROUGH THE SUPPORT FUND. 1.2.1. Identify, develop, and implement Support Fund projects. USAID TEAM will help focus municipalities to identify and implement innovative projects to decrease corruption vulnerabilities in project and contract management or innovative projects to increase financial control in public expenditures. Due to COVID-19, this activity is postponed.

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 29 1.3. ENHANCE MUNICIPAL CAPACITIES IN THE PROCUREMENT CYCLE. USAID TEAM extended its support from five original focus municipalities to 10 new municipalities, by rolling out practices, processes, and forms from the original five focus municipalities. In the original focus municipalities, as described in the sub-activity 1.3.1, project procurement advisors shifted the focus of their assistance from filling the basic skills gap to implementing effective enforcement mechanisms, such as mechanisms to ensure monitoring and oversight of the procurement cycle at the municipal level, including contract management. 1.3.1. Provide monitoring and targeted assistance and coaching for municipal procurement activities. USAID TEAM Procurement Advisors continued to support the 15 focus municipalities through monitoring and targeted assistance. Even though all municipalities worked with reduced capacities, the advisors continued to maintain online communication and to support them remotely. During late May, all municipalities started to work with full capacity. However, due to COVID-19, the procurement advisors continued providing support remotely. Specifically, during the reporting period, the procurement advisors mentored/supported focus municipalities in the following areas that are related to the graduation indicators: (1) implement public procurement activities for 2020 in accordance with the timeframe in the procurement plan, (2) build the capacities of the bid evaluation committee members, (3) build capacities for drafting technical specifications, (4) build capacities for qualification criteria, (5) use of MEAT award criteria or lowest price with scores award criteria, among others. The project’s procurement advisors worked with municipal counterparts to champion anti- corruption reforms in public procurement, supported knowledge sharing and the dissemination of control mechanisms, guidelines, and streamlined processes to support transparent and accountable municipalities. All focus municipalities prepared and submitted the procurement plans according to the PPL – 15 days after the GOK approve the budget. This year the budget was approved on March 18, 2020. As soon as the procurement plans were published, the procurement advisors supported the 15 municipalities to publish Indicative Notices for all activities which have an estimated value of more than 500,000 Euros. Publication of the Indicative Notice is intended as an aid to transparency and is for the benefit of the economic operators and permits the municipalities to reduce the minimum time limit for tendering - not less than 24 days instead of the normal minimal time limit of 40 days. Only Pristina and Gjakovë/Djakovica had procurement activities with an estimated value of more than USAID TEAM Procurement Advisor supported Pristina Municipality to publish all 500,000 Euros. Procurement Indicative Notices. advisors also prepared a “how-to” guide to facilitate the process of preparing and publishing the Indicative Notices.

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 30 Since all of the municipalities were working remotely and with reduced staff, the procurement advisors outlined all the activities in the procurement process for 15 municipalities. As the process has several phases, there were activities waiting to be launched, activities on the evaluation stage, activities waiting for the commitment of funds and activities on standstill. The procurement advisors encouraged and advised the procurement managers to proceed with the activities since many steps could be concluded while working remotely considering that all phases are conducted through the e-procurement platform. The Procurement Advisors advised the procurement managers to continue with the publication of tenders for all activities for which the request had been delivered, and to request from the head of the evaluation committees to send the offers to the evaluation committee members and continue with the evaluation. For activities waiting for the commitment of funds, they informed the procurement managers to await commitment, and continue only with those for which funds are committed. As such, all municipalities continued Procurement advisors prepared a ‘How-to guide’ to facilitate the process of preparing and publishing with implementing these processes. the Indicative Notices. Although all municipalities developed procurement plans in time, they faced difficulties in initiating 2020 procurement activities due to the current pandemic and because the municipalities were working with reduced capacities. Nonetheless, during this reporting period, the project Procurement Advisors remotely advised the Requesting Units and procurement officers to initiate the procurement activities in line with the planned time frame. The Procurement Advisors worked with all focus municipalities daily to improve the quality of tender dossiers, bid openings, and bid evaluations, reducing vulnerabilities to corruption. The advisors provided extensive mentoring in procurement processes; they systematically checked levels of municipal compliance with the Public Procurement Law and vulnerability to corruption for tender dossiers (in 201 cases), bid opening (in eight cases), bid evaluation (in 36 cases), claims (19 cases), and contract management (10 cases). USAID TEAM also provided professional advice to ensure that processes followed the PPL Rules and Operational Guidelines for Public Procurement (ROGP). In March and April 2020, PPRC published several mandatory Notices for all Contracting Authorities (CAs). As such, the Procurement Advisors assisted the municipalities in adopting the PPRC Notices in all activities initiated. As a result of PPRC Notice #42-2020, the municipalities stopped initiating procurement activities. However, on April 10, it was clarified that the decision of the MoF to stop capital investments is not applicable at the local level; therefore, they advised them to continue with their activities according to their plans, but,

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 31 emphasized that municipalities should be careful when initiating activities based on Memorandum of Understandings (MoU) with the ministries and advised them to take the other notices into consideration. The notices were invalidated on June 12, 2020, and accordingly, all municipalities were informed to continue with the procurement procedures in compliance with the provisions of the PPL. USAID TEAM continued assisting municipalities in adopting procurement procedures based on municipal needs. One of these procedures is the negotiated procedure without publication of the Contract Notice. Considering that the COVID-19 situation was escalating, many municipalities were required to initiate emergency activities for disinfection services. Therefore, procurement advisors supported the municipalities in this process and outlined the steps to record the use of this procedure in the e-Procurement platform. Since standard USAID TEAM procurement advisors supported the tender dossiers are not adopted by the PPRC Municipality of Pristina to draft two tender dossiers for a negotiated procedure for public contract: for for this kind of procedure, the procurement advisors drafted four templates for tender dossiers for framework and public contracts. Also, the municipalities were advised that they should play an active role in determining the terms of the contract, with special reference to prices, delivery deadlines, quantities, technical characteristics and guarantees; to ensure that the contracted price is not higher than the concerned market price, and to carefully assess the quality of the concerned product, service or works. Unit Price Contracts present a similar case. The procurement advisors supported focus municipalities to apply “lowest price with scores contract award criteria” whenever the municipalities do not know the Indicative Quantities. The project also informed and advised the procurement department about the PPRC interpretation related to the implementation of the framework contracts with unit prices, which states that the derivation +/- 30% is not valid for Unit Price Contracts. There is no financial limit, but the estimated value cannot substantially be exceeded, and the quantity spent cannot and should not differ from the ratios provided in the tender dossier, i.e., the procurer cannot order only a certain article, but the order must be in relation to the weight given in the Price List. USAID TEAM procurement advisors notified all focus municipalities regarding the Administrative Instruction published by the Central Procurement Agency (CPA) on May 8, 2020, on the e-Procurement platform advising the PMs to use the approved list of joint procurements. CPA has concluded several contracts for commonly used items that are obligatory to be used by all respective Contracting Authorities in the municipalities. CPA concluded procurement procedures with several Lots; therefore, different EOs were awarded for different municipalities. CPA has published all contracts on its website, but the website is not very user friendly. As such, the advisors produced lists of contracts for each municipality containing the title, name of the EO and the duration of the contract, and advised the municipalities to order the supplies/services from the respective EO.

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 32 The project’s procurement advisors provided direct assistance to the procurement offices in focus municipalities on using the procedure of “restricting the number of lots” and “most economically advantageous tender” (MEAT) award criteria or “lowest price with scores”. As a result of this assistance, 10 focus municipalities used the procurement procedure “restricting the number of lots”, and nine focus municipalities used the “most economically advantageous tender” (MEAT) award criteria or “lowest price with scores”. The advisors also provided support on various procurement steps: such as solving disputes during the contract implementation; including entering necessary information into the platform, applying the procurement rules on the abnormally low prices, making corrections on the price list using the e-Procurement platform, supplying of second- hand equipment, etc. In addition, the advisors provided support to municipalities on the Private-Public-Partnership (PPP) activities, the qualification criteria, as well as support to bid-evaluation committee members during the evaluation process, PRB appeals, legal deadlines, and adopted templates on framework contracts produced by the project to facilitate the contract management of a contract signed by the municipality. During the reporting period, the procurement advisors also supported the procurement officers in drafting comprehensive tender dossiers, especially those focusing on Contract Award Criteria – the MEAT or lowest price with scores. For instance, in the Municipality of Pristina, they initiated a construction activity to “Construct a new green market” using a MEAT contract award criterion (80% price plus 20% maintenance). This was the first time that MEAT was used in Kosovo, making Pristina the first CA using this award criteria in a construction contract. Pristina during this reporting period also used the MEAT contract award criteria in the activity “Supply and repair elevators” with sub-criteria 80% price plus 20% guarantee. In addition to providing support to the procurement office, the procurement advisors also supported the requesting units, such as the Capital Investments Directorate, regarding qualification criteria for the works, as well as developed and shared a template produced for qualification criteria – works contract. 1.3.2. On-the-job coaching/mentoring municipal mechanisms to enhance project and contract management cycle. The project started to provide on-the-job coaching on municipal mechanisms to enhance the project and contract management cycle. The USAID TEAM Contract Management advisor advised the Municipalities of Pejë/Peć, Gjilan/Gnjilane, Vushtrri/Vučitrn, Pristina, Junik, Rahovec/Orahovac, Lipjan/Lipljane, Istog/Istok, Suharekë/Suva

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 33 Reka, Podujevë/Podujevo and Prizren on 98 published tenders. In most cases, the advice was given mainly related to the description and technical specifications of different positions for construction works in different facilities (sports halls, various renovations), while in the technical specifications for the roads, municipalities are better informed according to the contract management advisor. The advisor noticed differences in technical specification capacities between municipalities, which will support him in tailoring assistance according to municipal needs. The advisor suggested that officials drafting technical documentation should consult the manuals published on the PPRC website before drafting the technical documentation. During quarter two, important documents which will support project and contract management were finalized: 1. Assessment Report and Legal Framework Review for Project and Contract Management Practices in Five Focus Municipalities – This report provides results from the assessment study on actual contract management practices in five focus municipalities of Kosovo and the review of the relevant legal framework in Kosovo. The report was conducted in municipalities through interviews, on-the-job support, and observations. The second part of the report reviews flaws and inconsistencies among the legal documents, particularly the legal framework of Kosovo legislation which is related to the management of contracts in public institutions. In general, the report shows that contract and project management activities in Kosovo municipalities are inefficient. 2. Best Practices - Project and Contract Management in Municipalities - This document describes various best practices related to the provision of municipal public projects in Kosovo. The document aims to produce a structured guide about the steps and processes that are necessary to implement a municipal project. Described experiences are collected from successful stories identified from local, regional, or international cases. The document is organized into three parts: the first part covers the overall organization of the project portfolio within the municipality structure, including organizational proposals for Project Management in Municipalities. The second part describes the stages in the pre-contract management phase, and the third part deals with the contract management phase.

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 34 3. Standard Operating Procedures (SOPs) for Project and Contract Management – This document was prepared with the purpose of developing basic procedures for Project and Contract Management activities in Kosovo municipalities. However, the SOP is also applicable for different public entities such as central and local government bodies, public enterprises, and other agencies involved in public projects. The content of the procedures presented in this SOP was prepared as per the regulatory requirements in Kosovo, Project Management practices from literature, and the author’s experiences. The procedures identified as SOPs aim to describe the working environment and the steps of how certain processes should be performed. Each procedure is identified with a specific sign, description of activities, responsibilities, legal references, timing, step by step activities, and reporting issues. In the next stage, these documents will be shared with all stakeholders at municipalities and central level institutions. Where possible and if the situation permits, as well as considering the municipal capacities, USAID TEAM will start implementing the above-mentioned procedures with municipalities. 1.3.3. Support the Government of Kosovo (GoK) to strengthen sustainable and self-reliant training capabilities. In the past, USAID TEAM developed training videos for e-Procurement processes and modules targeting municipal officials, intending to replace traditional classroom-based training sessions with an online experience that can be viewed at the user’s convenience. As part of this sub-activity, USAID TEAM advertised a procurement notice for the development of a video training tutorial on e-Procurement for auditors. The training video materials will be based on PPRC manuals and the usage of the current version of e-Procurement platform modules. The video materials will be published in the training section of PPRC e-Procurement and YouTube. This sub-activity is the result of cross- component cooperation, with sub-activity 2.3.1, where component synergies are favored to obtain better results with local and central-level stakeholders. 1.3.4. Support Procurement Collegium as a venue for information exchange and roll-out of technical assistance. USAID TEAM will continue to support the Association of Kosovo Municipalities (AKM) Procurement Collegium to facilitate the exchange of information among procurement officers from all 38 municipalities. Although there was a plan to conduct the collegium during this quarter, due to COVID-19, and Kosovo Government restrictions, this event is planned to be conducted online in the next quarter. 1.4. INCREASE THE CAPACITIES OF MUNICIPAL INTERNAL AUDIT UNITS (IAUS) AND MUNICIPAL AUDIT COMMITTEES (MACS). USAID TEAM is supporting 15 focus municipalities in auditing to increase accountability through improved auditing. The project emphasized the importance of IAUs, audit committees, and auditing processes and shared best practices from the original five focus municipalities. As anticipated, the new focus municipalities have similar weaknesses: non-functional audit committees, lack of capacities of audit committee members, municipal policy and finance committee, and a lack

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 35 of capacity on behalf of department directors on addressing audit recommendations (NAO and internal audit). USAID TEAM supported the new focus municipalities to fulfill the legal requirements by establishing and/or functionalizing their audit committees and training and equipping audit committee members with the necessary skills and knowledge to perform their activities. 1.4.1. Provide mentoring and on-the-job coaching in auditing. The USAID TEAM Audit Advisor continued to support the five original and 10 new focus municipalities to address issues regarding the implementation of audit recommendations. a) Support municipal management to strengthen internal audit units and audit committees for 15 focus municipalities. USAID TEAM Audit Advisors during this period supported municipal IAU’s in drafting IAU statutes, MAC Statutes, reviewing Annual Audit Plans, and introduced the methodology of Performance Auditing based on recognized international standards. The municipalities of Gjakovë/Djakovica, Pejë/Peć, Istog/Istok, Prizren/Prizren, Rahovec/Orahovac, Suharekë/Suva Reka and Junik/Junik were equipped with the IAU model Statute as most of the IAUs of these municipalities were acting with the old IAU Statutes. The Mayors of the Municipalities of Gjakovë/Djakovica, Pejë/Peć, Prizren/Prizren and Suharekë/Suva Reka signed the updated Statutes whereas the Municipality of Istog/Istok will approve the Statute after it is discussed at the MAC meeting. With USAID TEAM assistance, the Municipality of Istog/Istok has also established MAC and was equipped with a MAC Model Statute. With USAID TEAM Audit Advisors’ suggestion, and later on with CHU-s request, all focus municipalities started revising the Annual IA Plans. Due to the pandemic, however, it became unrealistic to implement them. The municipalities of Ferizaj/Uroševac, Gjakovë/Djakovica and Pristina decided not to make changes after they analyzed the Annual Plan timetable. The municipalities of Vushtrri/Vučitrn and Gjilan/Gnjilane decided to remove one of the planned audits from their plan. USAID TEAM Audit Advisors provided all focus municipalities with a checklist that the municipal IAUs should follow when revising the IAU Annual Plan. The USAID TEAM Audit Advisor suggested keeping the high-risk audits in the plan in the areas of procurement, finance, HR, etc. Although USAID TEAM Audit Advisors continuously insisted, the municipality of Gjakovë/Djakovica did not yet establish the new MAC as the old one was not functioning properly. USAID TEAM Audit Advisors also advised the municipal Heads of IAUs to compile the Control List of audit activities for organizational reconsolidation of IAU activities; review the descriptions of the Annual Plan 2020 of the IAU; update the permanent dossier of audit activities according to the Annual Plan 2020 of the IAU and prepare the description of the planned process audit activity. b) Support all Kosovo municipalities to address and implement NAO and IA recommendations. The project audit advisors supported focus municipalities on addressing NAO recommendations related to the audit area. The project also supports the other 23 non-focus municipalities in addressing NAO recommendations through the engagement of the short-term Audit Experts who will commence providing this assistance next quarter.

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 36 c) Quarterly evaluations for addressing NAO and IA recommendations in 15 focus municipalities. Project Audit Advisors continuously supported focus municipalities on increasing awareness for addressing IA and NAO recommendations. Due to COVID-19, the project was unable to hold the planned face-to-face meetings, but provided support through other means of communication and mainly channeling through municipal Heads of IAUs. d) Support implementation of (SOPs) and manuals in 15 focus municipalities. Following the publication of SOP on CHU’s website and the audit process conducted by NAO, USAID TEAM Audit Advisors shared the SOPs with all focus municipalities and monitored whether municipalities that received draft reports are following the steps described in SOPs. They found that all municipalities that had received NAO Financial Draft Audit Reports had appointed the audit process coordinator, and the team responsible for commenting on the NAO Financial draft Audit Report and shared the draft Audit Report with the responsible departments. The steps to be followed during this process are presented in the audit SOP already approved by CHU the MoF. e) Assistance in commenting on NAO draft reports to all Kosovo municipalities. Commenting on the draft report is a phase that enables municipalities to present their facts and arguments regarding a finding in the NAO draft Audit Report. The project supported the Municipalities of Pristina, Podujevë/Podujevo, Vushtrri/Vučitrn and Istog/Istok to comment on draft reports. In Pristina, the draft report was relatively unfavorable by receiving a Qualifying Opinion, while after the commenting phase, where USAID TEAM also provided support, the final report Pristina received the Unmodified Opinion. Also, in Podujevë/Podujevo, the number of recommendations was reduced from 16 that were on the draft report, to 15 on the final published report. 1.4.2. Enhance the performance audit methodology for internal auditors. USAID TEAM, during Year 3, developed the Performance Audit Manual. The purpose of the Performance Audit Manual is to serve as a methodology in support of the internal auditors in the public sector for providing an independent, objective and reliable assessment of the audited systems, operations, programs, activities, or organizations. Regarding the Performance Audit Methodology, all focus municipalities participated in PA training. The objective of this training was to present the aim of PA, and the PA methodology describing the definition of audit objectives, audit questions, audit criteria, etc. USAID TEAM also presented the forms and templates that may be used during the planning stage and the template for drafting PA reports. This audit aims to measure the economy, efficiency, and effectiveness of the audit processes. Also, the project through this activity is supporting CHU in establishing standards for IAUs in conducting such audits. This event gathered 25 municipal officials and CHU internal auditors

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 37 who participated in two-day working sessions. Furthermore, USAID TEAM introduced the Performance Audits in the Municipalities of Vushtrri/Vučitrn and Gjilan/Gnjilane which enables internal auditors to develop analytical and critical thinking skills to conduct PAs. IAUs assisted by the Audit Advisor defined the objective, scope, and audit risks. The approach in the Municipality of Gjilan/Gnjilane will be measuring the efficiency of property tax collection, whereas in Vushtrri/Vučitrn, the focus will be on the procurement area. Both Municipalities, with the support of USAID TEAM Project Audit Advisors, have prepared an initial framework for conducting pilot audits. 1.4.3 Development of action plan for addressing NAO recommendations. USAID TEAM provided intensive support to the focus municipalities that received final NAO reports, such as the Municipalities of Pristina, Vushtrri/Vučitrn, Gjilan/Gnjilane, Podujevë/Podujevo, and Deçan/Dečane in reviewing and advancing municipal action plans to address NAO audit recommendations and develop a risk registry. This activity will continue next quarter, as the NAO during the reporting period has published only five reports for focus municipalities. 1.4.4. Build capacities of Municipal Policy and Finance Committee in audit and financial control processes in 15 focus municipalities. USAID TEAM started updating the presentation materials for Municipal Policy and Finance Committees (MPFC), based on the latest recommendations of NAO Audit Reports. This activity will continue next quarter when all NAO reports are expected to be presented and the Action Plans are prepared for addressing these recommendations. MPFC members of 15 focus municipalities will participate in these workshops, with the aim to increase their capacities in analyzing documents, reports, plans, and other financial-related documents and to assist them to report effectively. As planned, in September, Committees will draft their first progress report; and in March next year, Committees will draft their second progress report. 1.4.5. Disseminate internal audit processes to build capacity of IAUs and MACs to all municipalities. To share practices developed in the first five focus municipalities, USAID TEAM with CHU planned to conduct summits with the heads of municipal IAUs and MACs. The project planned to hold these events in this quarter, but these sub-activities were postponed due to COVID-19. 1.5. SUPPORT MUNICIPAL HUMAN RESOURCES MANAGEMENT. 1.5.1. On-the-job coaching/mentoring of municipal HR offices. Project advisors continued to monitor focus municipalities in the implementation of the municipal code of ethics and other good practices in the area of HR Management. Recently, the Gjilan/Gnjilne municipality held a public discussion on the updated Code of Ethics. The public debate was organized jointly by the municipal management and the assembly, which, among others, explained to the general public key elements of this document and, at the same time, provided feedback to participants. 1.5.2. Assist the development of Municipal Code of Ethics. Despite the pandemic, USAID TEAM quickly adopted a new approach and continued to provide support to municipalities remotely. The advisors’ work during this period was mainly concentered on motivating and coaching municipal teams on how to implement the Code of Ethics. After

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 38 sharing USAID TEAM and the Ministry of Local Government Administration’s (MLGA) template document with all the new focus municipalities, the project advisor provided guidance on reviewing and adopting this document for their specific municipality. Based on experience with the original focus municipalities, the advisors provided relevant information on working groups, including the tasks and responsibilities of these working groups. Additionally, the advisors provided materials/templates that were user-friendly and ready-to- use by HR and other municipal officials. As a result of USAID TEAM support, during this period, the Municipalities of Hani Elezit/Elez Han, Istog/Istok, Lipjan/Lipljane, and Prizren/Prizren have officially established the municipal working groups and began the adaption and implementation process. Rahovec/Orahovac has been the most proactive municipality by finalizing and approving the municipal Code of Ethics, making them the first municipality to officially adopt this document. 1.5.3. Engage all municipal HR managers through learning summits to roll-out solutions. USAID TEAM, in cooperation with MPA and AKM, planned to engage all municipal HR managers in June to share common findings and practices, generate local solutions, and develop action plans to operationalize these solutions. Due to COVID-19, these learning summits were postponed. 1.6. INCREASE MUNICIPAL TRANSPARENCY. USAID TEAM continued to assist focus municipalities in the use of government systems to publish all non-confidential procurement and financial management data on the municipal websites and in formats that can be readily used by CSOs, media, and the public for analysis. 1.6.1. Monitor and advise municipalities on transparency and enhance public relations efforts. USAID TEAM continued with its regular activity of monitoring the original five focus municipalities and assisting new focus municipalities in the publication of procurement, finance, and auditing reports and documents on the municipal websites. Regarding the new focus municipalities, USAID TEAM has actively provided remote support to the 10 new focus municipalities in the field of PFM transparency. Through this activity, the project advisor instructed the new focus municipalities by remotely coaching the heads of finance/CFOs, and mayor’s cabinet representatives on transparency and publication. The project advisor has utilized the know-how accumulated from the original five focus municipalities to analyze and assess websites of each focus municipality. The next step was to share the results with each focus municipality followed by detailed instructions on what to publish and how to make a publication of non-confidential information of finance, audit and the executives’ activities on municipal websites in a format that can be easily accessed and used by citizens and civil society. Many of the municipalities expressed readiness to adopt these changes to publish documents and reports as per the proposed scheme for publishing them. During this period, the Municipalities of Hani Elezit/Elez Han, Istog/Istok, Prizren/Prizren, Rahovec/Orahovac, Suharekë/Suva Reka prepared and published monthly time-series of the own-source revenues and expenditures according to the provided templates. The other municipalities have either their own templates or are in the process of adopting the USAID TEAM template. The original focus municipalities no longer need direct support because they perform well in this aspect.

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 39 Regarding municipal transparency in public procurement, USAID TEAM procurement advisors have continued to monitor the publication of procurement activities on the websites of the five original focus municipalities. Project advisors also provided direct assistance and remote support to the 10 new focus municipalities in the field of transparency in public procurement. During the period of January – June 2020, 24 out of the 38 municipalities have published 460 contracts signed as a result of procurement activities. 14 out of 24 municipalities that have published contracts in their municipal websites are USAID TEAM focus municipalities, which during these six months have published 305 contracts. USAID TEAM advisors will continue to monitor and coach municipalities in the publication of procurement, finance, and auditing reports and documents on the municipal websites. 1.6.2. SOP for standardized municipal web publications and dissemination of practices. The USAID TEAM-engaged STTA started to draft the concept note and framework for SOP for standardized municipal web publications. It will be shared with the MLG working group for the development of SOP, and their concurrence will be sought. Due to COVID-19, the overall working group is performing slower than anticipated as some MLG staff tested positive for COVID-19. 1.7. ENHANCE MUNICIPAL FINANCIAL MANAGEMENT AND CONTROL. USAID TEAM continued to support the original five focus municipalities and expanded its support to the 10 new focus municipalities to strengthen systems for financial management and control. 1.7.1. Provide on-the-job coaching on public finance management. Working in all focus municipalities, PFM advisors are coaching finance directors, CFOs, and other financial officers on performance-based budgeting and financial management control, including: b) Addressing NAO and IA recommendations on municipal finance. This activity requires team engagement and efforts by all municipal officials, but due to the circumstances, the municipal officials couldn’t meet because they worked from home. However, the project advisors used this period to assess the NAO’s and IA’s recommendations and update the activity plan to be ready to engage with focus municipalities as quickly as the situation allows. In the meantime, the NAO issued 2019 Audit Reports for a few municipalities. Thus, the project advisors continued working on identifying key segments/actions from the NAO Audit Report for 2019 in the field of public finance, in coordination with IA in order to start addressing the recommendations. c) Municipal budget planning - promoting comprehensive municipal budget planning. During Year 3, USAID TEAM, jointly with its subcontractor KPMG, piloted a budget planning activity in two focus municipalities (Pejë/Peć and Vushtrri/Vučitrn) employing the best practices and comprehensive tools in municipal budget planning. In this period, USAID TEAM through its advisors continued to provide “know-how” by providing budget documents and templates (designed in Year 3) to all focus municipalities by aligning them with MoF budget circulars. Upon approval of the municipal Mid-Term Budgetary Framework (MTBF) for 2021-2013, USAID TEAM started to support the municipalities in addressing challenges with the budget planning process. USAID TEAM provided support to finance officials on municipal budgeting

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 40 in the remaining 13 focus municipalities by sharing templates, charts, and information related to comprehensive budget planning. After starting the drafting process of the MTBF for 2021- 2023, the focus municipalities initiated public hearings with the general public, private sector, and CSOs where Mayors and heads of departments presented municipal projects planned to take place in 2021. 1.7.2. Develop and implement SOPs and finance manuals. Following the completion of the Handbook on Internal Public Expenditure Management Process (known as the Book of Processes) in the first five focus municipalities, USAID TEAM is in the initial phase of replicating this activity with the 10 new focus municipalities. The standardized processes outlined in the Book of Processes became mandatory based on the MoF Regulation No. 01/2019 on Financial Management and Control. a) Monitor implementation of Handbook on Internal Public Expenditure Management Process. USAID TEAM continued to support new focus municipalities by guiding them in terms of PFM performance and accountability, processes, and operating procedures. After designing and developing a template document of the Book of Processes on Managing Public Expenditures, USAID TEAM shared the template document with all focus municipalities and demanded that they establish designated working groups to review and adapt the Municipal Book of Processes. In addition, the project instructed heads of finance departments of Hani i Elezit/Elez Han, Junik/Junik, Istog/Istok, Podujevë/Podujevo, Rahovec/Orahovac, and Suharekë/Suva Reka on how to establish a working group, as well as what sort of activities are required during this period. Meanwhile, the Podujevë/Podujevo working group went a step further by finishing the first round of discussions and currently they are in the process of receiving feedback from stakeholders. This process is based on experience with the first group of focus municipalities which enabled many of them to improve their internal processes and increase accountability. b) SOP/Manual for registering and reporting municipal revenues. Following the Book of Processes developed previous year, the Project will develop the SOP for registering and reporting municipal revenues. This sub-activity is slightly postponed. c) SOP/manual for registering and managing non-finance municipal assets. This sub-activity will address the growing need among focus municipalities to embrace accountability and integrity by adopting sustainable instruments to enable focus municipalities to properly register and manage municipal non-financial assets. This sub-activity is slightly postponed. d) Update the Financial Management Control Manual. Due to changes in Kosovo’s legal framework, the existing Manual for Financial Management Control needs to undergo an amendment to reflect new circumstances in the public finance sector. The project agreed to create a working group with CHU to coordinate activities and update this manual. e) Municipal invoice management system. USAID TEAM developed an SOP for standardizing municipal payment processes for legal frameworks, with the ultimate goal of digitalizing the whole process of payment procedure in five focus municipalities. This will increase municipal transparency in reports with stakeholders, accountability, and fiscal prudence. This activity must be conducted in cooperation with the MoF Treasury to digitalize the whole process. However, due to circumstances created by COVID-19 and the change of government, the

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 41 MoF Treasury paused this activity, and for the time being, their participation is on hold. Nonetheless, the project will continue the activity of the technical teams (USAID TEAM & MoF Treasury) to finalize the process before moving to the next step, which is drafting Terms of Reference (ToR) for automatization of this mechanism. 1.7.3. Disseminate handbook, SOPs, templates, codes, and practices for public financial management and control. USAID TEAM aims to engage all municipal directors of finance to share common findings across municipalities and support efforts to produce local solutions in municipal financial management and control. The project planned to hold these events in this quarter, but these sub-activities were slightly postponed.

COMPONENT II: ENGAGE THE CENTRAL LEVEL IN ADDRESSING MUNICIPAL CORRUPTION WITHIN THE PROCUREMENT PROCESS. The project’s support to enable 100% online procurement procedures proved to be essential in allowing Kosovo to develop both procurement procedures and procurement appeals without any interruption as a result of the COVID-19 restrictions. During the pandemic restrictions which took place throughout this quarter, Component II leveraged on the fact that Kosovo has a strong and stable internet connection and turned to online conferencing tools to conduct its planned project activities with partner institutions. Component II also prioritized the work plan activities to focus on those that could be carried out online during the government state of emergency. In this regard, Component II was able to focus its efforts on developing the Contract Management Module as well as the Contractor Part Performance Database, which are now an integral part of the Kosovo online e- Procurement system. Also, it supported PPRC to develop the Open Contracting Data Standard (OCDS) Application Program Interface (API) within the e-Procurement system, based on the international standard set by the Open Contracting Partnership (OCP). API will enable Kosovo to make procurement data available online for monitoring and to be used for analytical purposes by the public or private sector. OCP has confirmed that the PPRC OCDS API is far more advanced compared to many countries in the world. The digitalization of procurement processes supported by the project during this period will help Kosovo to be recognized as a regional pioneer and an important member of the international community to implement open and transparent procurement data based on international standards. Remote support was also rendered to CHU on the implementation of the Quality Assurance and Improvement Program (QAIP) of the IA activity. Remote support was also provided to NAO on improving their selection process of priority audit areas for performance audits and on further consolidation of their Anti-Fraud Unit. 2.1. BUILD THE CAPACITY OF NAO IN THE AREAS OF FRAUD DETECTION AT THE LOCAL GOVERNMENT LEVEL. USAID TEAM continued to support NAO in strengthening and improving the role of the Anti-Fraud Unit, specifically on the consolidation of the unit with additional staff, ensuring that fraud detection is integrated into the new auditor induction training and updating the guidelines on detecting fraud based on the two-year experience created by the unit. In addition to the Anti-Fraud Unit, the project

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 42 is also supporting the Performance Audit Department to develop a methodology that will help them select priority cases to audit performance. 2.1.1 Strengthen and enhance operationalization and capacity of the Anti-Fraud Unit. As part of updating the guideline of the Anti-Fraud Unit, the project has supported NAO to develop internal procedures and required templates for dealing with potential fraud cases during the execution of the audit (item a. completed). Furthermore, the project’s STTA also provided remote coaching on analyzing audit findings, legal qualifications, and preparing cases with strong evidence for submission to law enforcement authorities, specifically for the new staff engaged in this unit (item b. completed). 2.1.2 Guideline on Detecting Fraud becomes regular part of NAO internal training curriculum. The project’s legal STTA who supported the establishment of the Anti-Fraud unit was engaged again by the project to support the head of the unit in reviewing and updating the guideline on fraud detection (item a. completed). The project, due to COVID-19 restrictions, has postponed to Q3 the work on making the guideline an integral part of the induction/refresher training curriculum with the NAO internal training (item b. ongoing). 2.1.3 Further improvement of the selection process of priority audit areas for performance audits of the NAO. The project’s subcontractor, KPMG, has successfully cooperated with the NAO’s head of Performance Audit Department to analyze current NAO practices on the prioritization of sectors/industries (e.g. education, social welfare, procurements, etc.) (item a. completed). As per the original work plan timeline, the project will now develop a matrix with the criteria and steps to be performed by NAO. In addition, it will develop a compendium of good practices based on the International Standards of Supreme Audit Institutions (SAIs) to serve as a benchmark against other SAIs, including an example for a specific sector/industry (item b. and c. ongoing). 2.1.4. Develop online database with NAO recommendations and track level of implementation. NAO presented the need for this database to several donors towards the end of 2019 including USAID TEAM. Hence, USAID TEAM included this in its 2020 Work Plan proposal. However, by the time the proposal was approved, NAO received a commitment from another donor (SAI of Poland) to implement this database. Hence, this item has been recommended to be removed from the project’s work plan. 2.1.6. Development of online training module for judges and prosecutors based on guideline. Working closely with OPDAT and the Kosovo Academy of Justice, the project supported the process of adapting the guidelines for online training delivery. The first online, Specialized Training Program on Public Procurement, was conducted in June as part of the KAJ Continuous Training Program (activity completed).

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 43 2.2. BUILD THE CAPACITY OF THE MINISTRY OF FINANCE'S CENTRAL HARMONIZATION UNIT TO OVERSEE AND DIRECT MUNICIPAL INTERNAL AUDIT UNITS. Until now, USAID TEAM focused on providing CHU with guidelines on detecting fraud in performance audits of public procurement and supported them to develop an automated semi-annual audit report system through the CHU Intranet System. In Year 4, and during this reporting period, the project is further enhancing the performance audit methodology for internal auditors. Jointly with Component 1, the project is supporting CHU on rolling out the automated report system to internal auditors initially at the municipal level, followed by central level auditors. 2.2.1. Further support the CHU in the implementation of the Quality Assurance and Improvement Program of the internal audit. Last year, the project supported CHU to develop an audit quality assurance program and associated KPIs. In the first quarter of this year, USAID TEAM through the subcontractor KPMG conducted an assessment and provided recommendations to CHU on annual reporting templates with integrated tools for measuring KPIs. In coordination with CHU, the project has provided the revised annual reporting templates and developed tools for measuring KPIs. Methodological guidance for the IT implementation of the reporting on the QAIP self-assessment questionnaire and KPIs is currently being drafted. In select municipalities, the project also began implementing a pilot project and benchmarking of selected KPIs, aligning objectives and the work plan for pilot implementation of agreed KPIs. This piloting also includes analysis of KPI-related available information at the selected IAUs and defining a baseline for indicators. This activity will be followed by a workshop on defining target KPIs and supporting CHU with methodological guidance on benchmarking of the KPIs. 2.2.2. Roll-out automated semi-annual reports to municipal and central level internal auditors. USAID TEAM within CHU’s Intranet developed a tool to automate the semi-annual reports, which enables CHU to gather statistical data very quickly and make informed decisions accordingly. Additionally, the project conducted a focus group training for the CHU technical staff on the use of the semi-annual reporting tool within the SharePoint Intranet. The staff is now equipped with necessary skills related to its functionalities such as columns, lists, views, data entry, views control, and export of reports in excel format. However, the roll-out will be postponed for two months as a result of the pandemic to allow municipal internal auditors to pilot a new reporting approach using CHU SharePoint Intranet. The overall activity is expected to be completed on time by the end of this year. 2.3. ENHANCE PPRC INSTITUTIONAL CAPACITIES TO INCREASE TRANSPARENCY, EFFECTIVENESS, AND ACCOUNTABILITY. As mentioned in the introduction of Component II activities, during the restriction caused by the pandemic, the project focused heavily on supporting PPRC’s IT department on completing the development and integration of the Contract Management Module and the CPE module into the e-Procurement system, as an addition to supporting PPRC to enhance transparency in public procurement through the development and implementation of OCDS API.

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 44 2.3.1. Support implementation of Contract Management (CM) Module. Despite some delays in the first quarter, the project’s vendor completed the development of the Contract Management module in this quarter. USAID TEAM in close coordination with PPRC reviewed all developed functionalities as well as the effects and implications of the new modules in the overall e-Procurement system. As part of the contract, the project has requested the vendor to develop a Dashboard functionality, which is intended to be a powerful tool for monitoring contract progress. This will give the CA management (i.e. Mayors, contract managers) a holistic view for all contracts, which will enable easy monitoring of contract implementation and detection of any potential risks e.g. delayed deliverables, overdue contracts, poor performance, and financial disbursements. USAID TEAM and PPRC successfully identified issues with certain functionalities and various system bugs. However, this process of identifying bugs and receiving feedback from the vendor has postponed the original module development date as per contract terms with Komtel. As such, the first item of this sub-activity, the development of video training for end-users, has been initiated in this quarter; the roll-out to focus municipalities has been postponed to the third quarter. 2.3.2. Support implementation of Contract Performance Evaluation (CPE) Module. This activity runs parallel to the above-mentioned activity (2.3.1). The first item of this sub-activity, the development of video training for end-users, has been initiated in this quarter. 2.3.3. Support PPRC to migrate e-Procurement platform to new server infrastructure. PPRC, with the support and monitoring of USAID TEAM, has managed to successfully migrate the e- Procurement platform to the new server infrastructure as of May 11, 2020. The new server infrastructure resources will allow an overall more stable functioning of the e-Procurement platform, with greatly improved performance and responsiveness of the system. With the new infrastructure, PPRC has the adequate capacity for the foreseeable future to serve user needs, both economic operators and CAs, and will improve availability and capacity to New server infrastructure. meet the needs of PPRC, especially with upcoming new modules and functionality related to CM/CPE and OCDS API. A by-product of the previous USAID TEAM Assessment and Security and Penetration Testing yielded an e-Procurement infrastructure blueprint on its detailed configuration and a setup which provided valuable information for the e-Procurement infrastructure migration planning. Furthermore, a byproduct of USAID TEAM CM/CPE development was the setup of the Microsoft Team Foundation Server, where all e-Procurement source code resides, and all changes to the code are visible to PPRC IT developer staff. With these tools and information, PPRC IT staff were well equipped and informed on the needed changes and managed to perform the server migration independently. During a meeting with PPRC, a Board Member

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 45 pointed out that they were extremely satisfied with the process and that PPRC has managed to complete the infrastructure migration without any dependence on the subcontractor, but by relying on their resources. This is by far a great achievement and a positive change in terms of stakeholder (PPRC) improved self-reliance. With the implementation of CM/CPE, it is anticipated that the e-Procurement user count will increase by a few thousand soon, and the new infrastructure should accommodate the increased workload without any issue. Furthermore, the new infrastructure has released some of the old servers that PPRC agreed to consider to be used for other services, such as monitoring tools. During July-December 2020, USAID TEAM will work closely with PPRC in identifying and implementing proactive monitoring tools of all e-Procurement infrastructure and applications. 2.3.4. Support PPRC to implement machine-readable Digital Contract and enhance implementation of Open Contracting Data Standard. USAID TEAM has monitored the work of the PPRC IT Department during the development of the OCDS API, which enables digital sharing of data from the e-Procurement platform. The IT department has completed all API methods of data exposure as a “Web API.” The design of OCDS API entails the creation of its own database where data is pulled from a real e-Procurement database and served to third parties via the API functions. Due to pandemic restrictions, the activity will be postponed to Q4 of this year and will be completed in Year 5 as originally envisaged. With the implementation of the CM module and CPE modules, most of the contract data is entered into the e-Procurement system except for the offer/proposal data and electronic signature. This will make contract data in the future machine-readable and will be easily served as per OCDS API (item a. ongoing). 2.3.5 Support implementation of tool to automatically publish tenders and contracts from e-Procurement platform on official municipal websites. MLGA has committed funds to finance changes in their Intranet which will enable automatic publishing of contract data. The project IT systems expert has supported MLGA to draft the technical requirements for the development of the tool and monitored the vendor contracting process. The agreement between MLGA and the vendor is expected to conclude in July 2020. Development and implementation of this functionality are on track and are expected to be completed by the end-year of 2020. 2.3.6. Enable interoperability between e-Procurement system and KFMIS. USAID TEAM has supported PPRC to identify and develop the points of communication between the two systems. USAID TEAM is coordinating with the USAID Economic Growth Activity for the developments of the KFMIS side. Despite delays due to COVID-19 restrictions, the activity is expected to be completed on time by the end of this year. 2.3.7. Support implementation of the risk-based selection tool to monitor procurement activities more effectively. This is an ongoing activity, which has been slightly shifted due to delays in hiring the Procurement STTA to support the PPRC Monitoring Department. Nevertheless, despite the COVID-19 restrictions, the STTA has been engaged

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 46 by the project through an online recruitment process, and this activity is expected to be completed during Q3. 2.3.8. Enhance mechanism for sanctioning nonperforming procurement officers. This item is closely related to activity 2.3.7, using procurement performance data produced by the monitoring department to form the basis for evaluating the performance of procurement officers. The activity is ongoing and is expected to be completed on time. 2.3.9. Support drafting process of new procurement law and monitor the adoption process at the Government of Kosovo (GoK) and assembly level. PPRC’s working group has completed drafting the concept note on the new PPL. USAID TEAM has provided thorough inputs to the final version of the note. However, PPRC submitted the concept note to the government, establishing the working group. The work on drafting law may be affected due to delays in the formation of the government as well as pandemic restrictions, thus, it may be postponed to the Y5 work plan. 2.3.10 Support the PPRC to develop and implement a procurement case management process. This is an ongoing activity that is being implemented by USAID TEAM IT Systems Specialist, who will be supported by Procurement STTA in mapping current and potential business processes. 2.4.1 Monitor PRB to implement 100% of procurement reviews through e- Appeals. Despite the COVID-19 restrictions, PRB reported that the work of their appeal review panel continued without any interruption as a result of USAID TEAM support in implementing 100% of the online appeals module. 2.4.2 Monitor the PRB to implement the new database of appeal decisions – Although initially the project planned to hire two interns to support PRB to migrate and digitize past decisions (from old database to new one), the PRB is implementing this activity on its own, with minor supervision from the project. 2.4.3 Monitor implementation of livestreaming of PRB sessions. This item faced challenges caused by COVID-19. Although the PRB was able to use online conferencing tools for remotely conducting review sessions with economic operators and experts, the ability to live stream was limited only to sessions held in the PRB offices. 2.4.5 Support the PRB to address CSO findings related to deficiencies in the work of the PRB (cross-cutting with C3). This item is postponed given the lack of reporting from CSOs on the PRB. D+ has recently been engaged by Component 3 to monitor the work of the PRB.

COMPONENT III: ENABLE CIVIL SOCIETY TO TRACK AND EXPOSE CORRUPTION. Through USAID TEAM interventions, including grants and subcontracts, a growing number of local-level CSOs have developed and tested the skills needed to effectively monitor procurement, and hold their local governments accountable. At the central-level, UASID TEAM has funded monitoring at the PRB which resulted in a full mapping of shortcomings in

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 47 this institution, including providing data on the inconsistency of PRB decisions, and this analysis points to the need for change. The use of new technology tools, such as the Open Procurement Transparency Portal, is making the process of monitoring more sustainable and easier while flagging new issues such as awarding of contracts to blacklisted companies. Highlights from empowering CSOs during this quarter include: • Finalized Public Procurement Barometer (x-Index) for 2018 • Finalized Manual for CSOs on conducting social audits in Kosovo • Conducted online Peer-Learning Workshop on monitoring public procurement with CSOs from six Kosovo regions (Ferizaj/Uroševac, Gjilan/Gnjilane, Mitrovica e Jugut/ Južna Mitrovica, Pejë/Peć, Pristina and Prizren) • Conducted eight hands-on trainings for CSOs on how to prepare and refer cases to enforcement mechanisms, including police and prosecutors • Conducted social auditing for infrastructure selected projects in six second-tier municipalities (Prizren/Prizren, Suharekë/Suva Reka, Ferizaj/Uroševac, Lipjan/Lipljane, Podujevë/Podujevo and Istog/Istok)

# Component Three Events Events/Groups Participants Meetings Social auditing in selected infrastructure projects 3.1.1 9 31 in six second-tier municipalities Applied Peer Learning workshop for CSOs on 3.2.1 6 43 monitoring public procurement Initial hands-on training for CSOs on how to 3.3.2 prepare and refer cases to enforcement 8 19 mechanisms, including police, prosecutors Total 22 93 3.1. ENSURE SUSTAINABILITY AND ENHANCE CSO’S ABILITY TO MONITOR PROCUREMENT. This activity aims to support national-level think tanks and CSOs to analyze municipal procurements, and other spending and recruitment actions. In addition, this activity seeks to support the development and usage of IT tools such as municipal scorecards, reports, databases, and other materials that would help these organizations expose corrupt practices. This activity will also build mechanisms that ensure the sustainability of results in terms of monitoring procurement by CSOs and will also incentivize cooperation and transfer knowledge from national-level CSOs to the local-level CSOs. To achieve these goals, several sub-activities will be undertaken.

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 48 3.1.1. Empower local CSOs and citizens to prevent corruption in municipal public procurement in second-tier municipalities. USAID TEAM subcontractor, Kosova Democratic Institute (KDI), in coordination with its consortium members, ISDY, YAHR, Syri i Vizionit and Ekovizioni, during 2019 has monitored and analyzed 12 tenders announced by the municipalities of Prizren/Prizren, Suharekë/Suva Reka, Ferizaj/Uroševac, Lipjan/Lipljane, Podujevë/Podujevo and Istog/Istok. The findings from this monitoring process are presented in the “Municipal Challenges in Conducting Tender Procedures” report which has been finalized during this quarter highlighting these key findings: a. The ROGP for Public Procurement does not provide sufficient information for Article 65 of PPL which specifies that bidders should present two certificates, issued by two different courts. Due to the lack of information, companies submitted only certificates on bankruptcy-related claims. The companies did not provide certificates that the economic operator or any manager or director in the past 10 years have been determined by a court of competent jurisdiction to have committed a criminal or civil offense (involving corrupt practices, money laundering, bribery, kickbacks or any similar activities). b. A discrepancy has been noticed between the PPL Article 108/A and the ROGP Article 43. Article 108/A of PPL says: Article 3.2: “If the alleged violation relates to the decision to award a contract or design contest, within five (5) days after the date of notification of the contract award notice or the design contest results are sent to the complainant.” Whereas, according to Article 43 of ROGPP, this term starts running from the date of publication of Form B58 - Notice on the Decision of CA. Some of the key recommendations are related to the role of PPRC such as reviewing the amendments to the secondary legislation to avoid conflicts with the PPL and monitor the Published Notices. In the case of finding a preferential criterion (over-estimated or under-estimated), undertake action against the CAs as per PPL. On the other hand, municipalities should engage to improve the planning in terms of demand and finances to avoid over or under budgeting and to avoid contract annexes. USAID TEAM subcontractor KDI, under the project “Empower local CSOs and citizens to prevent corruption in municipal public procurement in second-tier municipalities,” conducted social auditing of nine projects in the selected municipalities with citizens from the location where the projects have been implemented. In this regard, KDI developed a questionnaire that intended to collect information from citizens on how much they were engaged in the process of selecting priorities, monitoring the process of implementation of the projects, and their level of satisfaction with the quality of the implemented project.

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 49 Also, during the reporting period, KDI with its consortium members observed that there is an increase in municipal expenditures as a result of COVID-19. These procurements have been mainly related to social assistance and expenditures for supplies of protective health materials. This situation will impact the collection of municipal revenues which is expected to be lower and affect the implementation of budget and procurements plans. 3.1.2. Promote transparent and accountable municipalities through Transparency Index in Public Procurement for Municipalities. USAID TEAM signed a grant agreement with KDI for the implementation of the Transparency Index in Public Procurement. The goal of this activity is to increase overall transparency, accountability, integrity, and efficiency of municipal governments toward the public with a focus on public procurement and increase citizen’s information on public spending. During the reporting period, KDI submitted a detailed work plan describing activities that will be implemented under this activity. KDI submitted it for approval, and it has been reviewed and approved by USAID TEAM: 1. The updated methodology, pointing system, and weighted score 2. Upgraded indicators that will be used for Transparency Index for 2019 and 2020 3. Draft of informative letters for municipal authorities planned to be shared with municipalities together with the methodology and the list of indicators Upon approval, KDI sent letters to all 38 municipalities informing them of the methodology and indicators that will be measured during the project’s implementation. The requests for access to public documents and information have also been sent to all 38 municipalities while KDI started analyzing municipal webpages. USAID TEAM discussed lessons learned from previous experience and challenges that KDI might face during the process of gathering data from municipalities due to the pandemic situation in Kosovo. 3.1.3 Promote efficient use of public funds through fair and transparent public procurement. As reported in the previous quarter, USAID TEAM grantee, Riinvest, finalized and designed the Public Procurement Barometer (x-Index) for 2018. The report, based on the grant agreement, had to be published through a roundtable event with the participation of local and central level officials, CSOs, and media. Due to the current pandemic, it was impossible to hold such an event; therefore, it was agreed that the report will be published on Riinvest’s official website. In the meantime, Riinvest continued to work on the Public Procurement Barometer (x-Index) for 2019. The data of the preliminary report was shared with USAID TEAM mainly for its validation. In this regard, USAID TEAM held a meeting with the grantee Riinvest to clarify data sources and the measurement of x-Index for 2019. The USAID TEAM Procurement Advisors provided instruction to Riinvest on how and where to

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 50 look for the data collected through the PPRC platform. The draft report is expected at the beginning of Q3. The preliminary data from the report shows an improvement in original focus municipalities. 3.1.4. Support functionality and sustainability of public procurement transparency portal. USAID TEAM finalized administrative procedures for awarding the grant to Lëvizja FOL, which was signed on June 12, 2020, with the Executive Director of Lëvizja FOL. With this grant, the project aims to ensure the sustainability of OPTP by establishing a partnership bet grant, OPTP will be widely promoted using a variety of channels (online and offline) to engage online communities as well as to introduce the portal to smaller groups of communities in municipalities that are often neglected and far from the focus of institutions, media, and CSOs. Additionally, this grant will further develop the capacities of OPTP to increase the transparency of public procurement in Kosovo by adding network visualizations, a connection of businesses with contracting authorities, and adding annex contracts to contracts that have been already captured by the project. The OPTP exceeds life-of-project target visits on the website. From July 1, 2018, when the portal was launched, until June 15, 2020, the webpage had 162,182 page views and 33,663 users of the portal. Members of CSOs, businesses, investigative journalists and government officials report that they are using the OPTP as a starting point for monitoring, analyzing and investigating procurement processes and the expenditure of public funds. 3.1.5. Digital Solution for Integrity in Public Procurement. As reported in the previous quarter, this activity, which is implemented by USAID TEAM grantee, Democracy Plus, is put on hold until the PPRC finalizes the API. This was done to avoid manual data entry which would take longer and require additional cost. Democracy Plus developed red-flag indicators that will be used as algorithms to build into the red flag platform. API will allow the ‘red flags platform’ to call on data automatically from the PPRC, thus, enabling seamless communication between API and the platform. Although the activity was planned to be completed by the end of 2019, the PPRC is still working on finalizing the application.

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 51 3.1.6. Support, expand, and seek opportunity for co-financing of social accountability tools to monitor public procurement and public expenditure. The key activities of this project implemented by USAID TEAM GLPS with a focus on social auditing, involving the engagement of social audit team members in the monitoring processes. Due to the pandemic and restriction measures taken by GoK and Kosovo Institute for Public Health, it was impossible to carry out monitoring activities that involved field activities. It is also worth mentioning that all infrastructure projects in Kosovo were put on hold in order to protect the health of citizens and avoid exposure to possible viral infection. GLPS, during this quarter, revised and finalized Manual on Conducting Social Audit in Kosovo. As reported previously, this manual provides CSOs and communities with means to address their concerns, in a Manual on Conducting Social Audit in more institutionalized and structured manner. The designed Kosovo by GLPS. manual is currently being translated into local languages and will be disseminated to CSOs interested in applying social auditing for monitoring public procurement and expenditure of public funds. 3.1.7. Engage national-level CSOs to monitor PRB. In line with the Year 4 Work Plan, USAID TEAM has developed a Scope of Work (SoW) and issued Requests for Proposals (RoP) for engaging national-level CSOs to monitor the PRB. In total, two project proposals (Democracy + and INDEP) were submitted. The evaluation committee has completed the evaluation process and recommended Democracy + as a potential subcontractor for implementing this project. The main objectives of the project are: • Monitor all decisions of PRB and assess consistency of such decisions by using technology • Continue to populate existing database with relevant information, and where possible mine data automatically from the PRB webpage • Develop visualizations to inform the public on the performance of the PRB on quarterly basis • Monitor the transparency of the PRB, including timely publication of decisions and expert reports • Provide data on the number of complaints per CA and economic operators who submit complaints to PRB The risk assessment has been completed and the subcontract with D+ was signed on June 30, 2020.

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 52 3.1.8 Empower CSOs on monitoring public procurement and exposing malfeasance in focus municipalities and ensure sustainability. USAID TEAM developed a SoW and issued an RFA for eligible CSOs or a consortium of CSOs to monitor nine municipalities on compliance with legal requirements on: • Developing municipal budgets and municipal budget planning • Developing municipal procurement plans • Identifying and monitoring tendering processes for a certain number of projects • Monitoring implementation of the tenders with a focus on contract management and development of technical criteria This is a bridging activity for nine months until local level CSOs, through the CiviKos subcontractor, take over this type of monitoring of focus municipalities in a sustainable matter. In total, three national-level CSOs (Çohu, Kosovo Law Institute and Democracy+) submitted project proposals. The evaluation committee concluded the evaluation process and recommended the engagement of the Kosovo Law Institute as the potential grantee for the implementation of this project. The risk assessment is in process, and the grant agreement is expected at the beginning of Q3. 3.1.9 Host annual challenges to foster innovative ideas which contribute to graduation of municipalities. The publication of the Request for Application for this activity is postponed to September. 3.2. Enable national-level CSOs through CiviKos and the support fund to provide knowledge and expertise to local-level CSOs on procurement monitoring. USAID TEAM is working with the subcontractor, CiviKos, and other national-level CSOs to increase the expertise of municipal-level CSOs in monitoring public procurement and exposing municipal-level malfeasance. 3.2.1. Create a sustainable environment for civil society organizations working on monitoring public procurement and building bridges between CSOs and public institutions. USAID TEAM subcontractor CiviKos updated the manual on “Monitoring procurement” and developed a new manual on “Communicating with policymakers and constituencies.” Building upon last year's applied learning workshops, through this package, CSOs will prepare short reports, articles, op-eds, and other communications materials to inform the public on findings from their monitoring efforts. These workshops on policy communication will be organized in conjunction with workshops on monitoring procurement. Additionally, CiviKos held a focus group meeting with facilitators that will be engaged for workshops on “Monitoring Procurement” and “Policy Communication.”

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 53 The facilitators are representatives of CSOs engaged in public procurement. The main topic of the focus group was to discuss options for organizing the workshops online due to the current pandemic in Kosovo. Facilitators stated that they are anticipating challenges during the monitoring of the procurement activities of the institutions since they are working with limited capacities. Other topics discussed were the testing system for the certification of local- level CSOs eligible for public funding, and the establishment of a website with CSO-related materials and resources on procurement. As the situation with COVID-19 was not improving and based on the recommendation of the Kosovo Institute of Public Health on avoiding gatherings of larger groups of people and respecting social distance, CiviKos in coordination with USAID TEAM, initiated the Peer Learning Workshop for CSOs on monitoring public procurement online. During this period, six workshops were conducted with the participation of CSOs from six Kosovo regions: Ferizaj/Uroševac, Gjilan/Gnjilane, Mitrovica e Jugut/Južna Mitrovica, Pejë/Peć, Pristina and Prizren. In total, representatives from 42 CSOs attended these online workshops. 3.3. Enable CSOs to use media to expose corrupt municipal practices. CSOs and media play a key role in demanding accountability in the use of public funds by government officials. To be able to fulfill this role, CSOs and media outlets should be able to prepare compelling investigative reports to highlight shortcomings in managing public funds. To reinforce the impact of cooperation between CSOs and media, the following activities will be undertaken. 3.3.1. Support cooperation between civil society organizations and investigative media to expose corruption. USAID TEAM released the RFA for CSOs for the implementation of activities that have been proven to be successful regarding the dissemination of information and reporting potential cases of corruption at the municipal level. In total, three CSOs (YAHR, ACDC, and BIRN) submitted project proposals. The evaluation committee conducted the evaluation process and recommended BIRN as a potential grantee. The risk assessment process is ongoing and the grant award is expected to be concluded at the beginning of Q3. Through this grant, USAID TEAM is expecting to support CSOs and investigative media by providing opportunities for more in-depth investigation and publishing of their stories. CSOs and media will be encouraged to report cases of violation of laws to the state prosecutor including general information of the public based on their research and findings. 3.3.2 Build formal mechanism for CSOs and journalist to report cases of suspected corruption to the State Prosecutor. USAID TEAM started to assist CSOs to refer cases to enforcement mechanisms, including police, prosecutors, Anti-Corruption Agency, etc. The project engaged an STTA who delivered an initial hands-on training remotely. In total, 19 participants from eight CSOs participated in this training. Trainings were conducted separately with each organization providing them the opportunity to feel comfortable sharing their experiences and

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 54 findings for cases that might be sent to law enforcement mechanisms. Upon completion of the training, the STTA shared with participants, forms that have been developed for reporting cases and continued to work with them on formal letters. To date, 12 draft letters were developed with cases of violation of procurement procedures, and a law on public procurement is expected to be finalized and submitted to enforcement mechanisms in the upcoming period.

PROGRESS OF ACTIVITIES IN ACCOUNTABILITY AND ENFORCEMENT MECHANISMS USAID TEAM implemented activities related to accountability and enforcement mechanisms as defined in the project’s Year 4 Work Plan. The table below outlines the project’s progress on these enforcement mechanisms.

YEAR 4 ACTIVITIES IN ACCOUNTABILITY AND ENFORCEMENT MECHANISMS No. Activity Implementation Status

Support municipal mechanisms to enhance Ongoing, although some activities are 1.3.4 project and contract management postponed due to COVID-19

Implement municipal pilot performance 1.4.2 Ongoing audit

Monitor and advise municipalities on transparency - Publish procurement activities on the municipal websites 1.6.1 Ongoing - Publish Financial reports and plans, financial time-series, mayors plan and reports Publish NAO report for municipalities

SOP for standardized publication of 1.6.3 Municipal documents in municipal web Ongoing page

Develop and implement SOPs and finance Ongoing, although some activities are 1.7.2 manuals postponed due to COVID-19

Develop internal procedures and templates for dealing with potential fraud 2.1.1 Completed cases during the performance of the audit and before the audit report is published Guideline on Detecting Fraud becomes 2.1.2 regular part of NAO internal training Ongoing curriculum

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 55 Develop a matrix with criteria and steps 2.1.3 to be performed in the process for Completed performance audit Recommended to be removed since another Database of NAO recommendations and 2.1.4 donor expressed interest in implementing this tracking level of implementation activity

Develop online training module for Judges 2.1.6 Completed and Prosecutors based on guideline

2.2.1 Develop tools for measuring the KPIs Completed

Roll-out automated semi-annual reports 2.2.2 to municipal and central level internal Ongoing auditors

2.3.1 Implement Contract Management Module Ongoing

2.3.2 Implement CPP Evaluation Module Ongoing

Implement machine-readable Digital 2.3.4 Contract and enhance implementation of Ongoing an open contracting data standard

Implement tool to automatically publish tenders and contracts from e- 2.3.5 Ongoing Procurement platform to official municipal websites Enable interoperability between e- 2.3.6 Ongoing Procurement system and KFMIS Implement risk-based selection tool to 2.3.7 monitor procurement activities more Ongoing effectively

Develop and implement a procurement 2.3.10 Ongoing case management process

Implement the new PRB database of 2.4.2 Completed appeal decisions 2.4.4 Implement new communication strategy Completed

Empower local CSOs and citizens to Ongoing 3.1.1 prevent corruption in municipal public procurement in second-tier municipalities

Digital Solution for Integrity in Public On-hold - this activity is related to the evolving 3.1.5 Procurement API and Open Data projects Support, expand and seek opportunity for Ongoing co-financing of social accountability tools 3.1.6 to monitor public procurement and public expenditure

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 56 Engage national-level CSOs to monitor Ongoing 3.1.7 PRB Empower CSOs in monitoring public Ongoing – grant award expected to be procurement and exposing malfeasances completed beginning of Q3 3.1.8 in focus municipalities and ensure sustainability of such activity

Support cooperation between civil society Ongoing -grant award expected to be 3.3.1 organizations and investigative media to completed beginning of Q3 expose corruption

Build formal mechanism for CSOs and Ongoing 3.3.2 journalist to report cases of suspected corruption to the State Prosecutor

Support CSO activities to demand Planned for Q4 3.3.3 accountability during the Anti-Corruption Week

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 57 SUSTAINABILITY AND SELF-RELIANCE Below is a list of activities from the Year 4 work plan that will promote the GoK’s journey to self-reliance.

YEAR 4 SELF-RELIANCE ACTIVITIES No. Activity Implementation Status

1.3.4 Support municipal mechanisms to Ongoing, although some activities postponed enhance project and contract due to COVID-19 management

1.3.3 Support Government of Kosovo to Ongoing, advertised procurement notice strengthen sustainable and self-reliant training capabilities

1.4.1 Provide Mentoring and on-the-job Ongoing coaching in auditing - Support implementation of SOP and manuals developed

1.4.2 Implement municipal pilot performance Ongoing audit

1.6.3 SOP for standardized publication of Ongoing municipal documents in municipal web page

1.7.2 Develop and implement SOPs and Ongoing, although some activities postponed finance manuals due to COVID-19

2.1.1 Develop internal procedures and Completed templates for dealing with potential fraud cases during the performance of the audit and before the audit report is published

2.1.2 Guideline on Detecting Fraud becomes Ongoing regular part of NAO internal training curriculum

2.1.3 Develop a matrix with criteria and steps Completed to be performed in the process for performance audit

2.1.4 Database of NAO recommendations and Recommended to be removed since another tracking level of implementation donor expressed interest in implementing this activity

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 58 2.1.5 Coordinate with OPDAT on Completed disseminating guidelines

2.1.6 Coordinate with KJA on turning Completed guidelines into e-Learning module

2.2.1. Implement benchmarking of selected Ongoing KPIs

2.3.3 Implement proactive system monitoring Ongoing tools

2.3.5 Implement tool to automatically publish Ongoing tenders and contracts from e- Procurement platform on official municipal websites

Implement risk-based selection tool to Ongoing monitor procurement activities more 2.3.7 effectively

3.1.4 Support functionality and sustainability of Ongoing public procurement transparency portal

3.1.5 Digital Solution for Integrity in Public On-hold – this activity is related to the Procurement evolving API and Open Data projects

3.1.6 Support, expand and seek opportunity Ongoing for co-financing of social accountability tools to monitor public procurement and public expenditure

3.1.7 Engage national-level CSOs to monitor Ongoing PRB

3.1.8 Empower CSOs in monitoring public Ongoing – grant award expected to be procurement and exposing malfeasances completed beginning of Q3 in focus municipalities and ensure sustainability of such activity

3.2.1 Create a sustainable environment for Ongoing civil society organizations working on monitoring public procurement and building bridges between CSOs and public institutions

3.2.2 Provide seed funding in cooperation with Planned for Q3 Government of Kosovo institutions to

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 59 ensure sustainability of CSO monitoring activities

3.3.2 Build formal mechanism for CSOs and Ongoing journalists to report cases of suspected corruption to the State Prosecutor

INDICATOR PERFORMANCE Indicator one (1) # of people trained from local and central institutions, civil society, private sector and media in USAID TEAM events. This indicator measures the number of people trained from local and central institutions, civil society, the private sector, and media in USAID TEAM events, and will be reported quarterly. During this quarter, the project conducted 33 activities with a total of 178 participants. Due to the current pandemic, the activities presented in the table under this indicator were held online. Detailed information is presented in the table below:

Year Year Year Year LoP Reporting Indicator 1 Baseline One Actual Two Actual Three Actual Four Actual Target Frequency Target Target Target Target # of people trained from local and central Q1 Q2 institutions, 91 178 civil Quarterly society, the - 900 1,076 995 1,072 1,054 1,447 1,095 4,680 private Annually sector and media in USAID 269 TEAM events

Work plan Activity Number of events Number of participants reference Focus group discussion with 1.1.4 1 10 business representatives

Focus group discussion with CSOs’ 1.1.4 4 38 representatives

1.4.2 Virtual - Performance Audit Training 1 23

Virtual - Performance Audit Training – 1.4.2 3 5 Practical training

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 60 A.3.2 Virtual - Feedback from CSOs 1 9

Virtual - Hands-on training - how to 3.3.2 prepare and refer cases to 8 19 enforcement mechanisms

3.2.1 Virtual - Peer Learning workshop 6 43

Social auditing in selected 3.1.1 infrastructure projects in six second- 9 31 tier municipalities Total 33 178

Indicator twenty-three (23): # of Hits on The Procurement Transparency Portal The OPTP exceeded the life-of-project (LOP) target visits to the site. From July 1, 2018, when the portal was launched, to June 15, 2020, there have been 162,182 page views and 33,663 users of portal. Members of CSOs, businesses, investigative journalists and government officials reported that they are using the OPTP as a starting point for monitoring, analyzing and investigating procurement processes and expenditure of public funds.

Life of Year 1 Year 2 Year 3 Year 4 Reporting Indicator 23 Baseline Actual Actual Actual Actual Project Target Target Frequency Target Target Target

# of hits on the procurement 0 0 N/A 0 4,924 7,000 21,354 30.000 33.663 35.000 Monthly transparency portal PROJECT MANAGEMENT

SUCCESSES DURING REPORTING PERIOD Successes during the reporting period include the following: • Finalized annual Citizens’ Perception Survey on Municipal Corruption and Transparency in Public Procurement, collecting information from CSOs, the private sector, and with 3,013 citizens from all Kosovo municipalities. • Finalized Municipal Graduation Baseline Report for 10 new USAID TEAM focus municipalities for 2019. The Municipality of Lipjan/Lipljane is leading from the new focus municipalities with a total of 71 points, followed by Suharekë/Suva Reka with 65, and Istog/Istok with 64, while the Municipality of Junik/Junik is last with 41 points. • Finalized three important documents on project and contract management: 1. Assessment Report and Legal Framework Review for Project and Contract Management Practices in Five Focus Municipalities, 2. Best Practices - Project and Contract Management in Municipalities, and 3. SOPs for Project and Contract Management.

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 61 • Coached and mentored municipal procurement officers on the levels of municipal compliance with the Public Procurement Law and vulnerability to corruption for tender dossiers (in 201 cases), bid opening (in eight cases), bid evaluation (in 36 cases), claims (19 cases), and contract management (10 cases). • Enforced capacities of municipal officers across the full procurement cycle and reduced vulnerabilities to corruption, including in the development of technical specifications and contract management. • Supported municipalities to further strengthen IAUs, MACs, and financial controls. • Supported new municipalities on Code of Ethics and Book of Processes. • Equipped municipalities with IAU and MAC Statutes. • Equipped municipalities with knowledge on commenting on NAO Financial draft Audit Report. • The implementation of the e-Procurement platform continues to be a success, with PPRC initiating 21,000 procurement activities, 16,800 procedures concluded with contracts, and over 1.35 Billion Euros value of procurements processed. • With the successful migration of the e-Procurement system to a new and more advanced hardware infrastructure, the platform is not expected to suffer any issues, such as system freezes during peak usage hours. • The project, in cooperation with PPRC, has completed the development of the Contract Management module and the CPE module while ensuring that they are both integrated within the Kosovo e-Procurement system. • The PPRC IT Department, with support from the USAID TEAM, has finalized the development of the OCDS API within the e-Procurement system, based on the International Transparency Standards set by the Open Contracting Partnership (OCP). This API enables automatic digital sharing of procurement data from the e- Procurement platform to third parties for monitoring and analytical purposes by public institutions, NGOs, or the private sector. • USAID TEAM, in coordination with OPDAT and the Kosovo Justice Academy, transformed the guideline for judges and prosecutors on handling fraud in public procurement into practical online training modules. • Despite pandemic restrictions, PRB successfully implemented all procurement complaints by using the e-Appeals Module as well as the new website and database of decisions developed by the project. • Finalized Public Procurement Barometer – x-Index for 2018. • Designed Manual for CSOs on conducting Social Audit in Kosovo.

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 62 • Conducted online Peer Learning Workshop on monitoring public procurement with CSOs from six Kosovo regions (Ferizaj/Uroševac, Gjilan/Gnjilane, Mitrovica e Jugut/ Južna Mitrovica, Pejë/Peć, Pristina and Prizren). • Conducted eight initial hands-on trainings for CSOs on how to prepare and refer cases to enforcement mechanisms, including police and prosecutors. • Conducted social auditing for infrastructure selected projects in six second-tier municipalities. • Awarded grant to KDI for implementation of Transparency Index in Public Procurement. • Awarded grant to Lëvizja FOL for supporting functionality and sustainability of public procurement transparency portal. • Released RFA for Empowering CSOs on monitoring public procurement and exposing malfeasances in focus municipalities and ensure sustainability of such activity.

CHALLENGES DURING REPORTING PERIOD USAID TEAM experienced several challenges and opportunities during this reporting period that required a flexible management approach. The COVID-19 pandemic and the decision of the GoK to work remotely with a limited number of staff affected some of the activities that were planned for the end of Quarter two. Since the situation with COVID-19 is very unpredictable, and there is no indication on when it will be normalized, the project is working to define different methodologies on conducting activities virtually by using client-specific online communication tools (Microsoft Teams, Zoom, WebEx, Google Meet, Skype for Business, etc.) depending on the platform suitable and acceptable by the partner institution. . Some of the activities affected and difficulties created by this situation are: • Adopting to new circumstances in regard to communication with municipal partners • Municipal IAUs were working with minimal capacities that impacted support • Slow transformation of municipalities in response to the pandemic and limited ability to work remotely • Lack of communication technologies (apps) that enable municipalities to work remotely • Conducting roundtables and the procurement Collegium meeting in cooperation with the AKM. USAID TEAM is working with AKM to define the methodology on conducting this activity virtually • Stalling of project support towards PPRC concerning new Public Procurement Law (PPL) activities. Dissolution of the GoK and the current pandemic delayed the work of the PPRC working group drafting the PPL Concept Note. It is yet uncertain whether the newly formed Government will support the initiative as part of its legislative agenda

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 63 • Uncertainties caused by government restrictions as a result of COVID-19 initially delayed recruitment of STTAs, which resulted in a slight delay of activities • The current pandemic caused delays during this quarter, affecting activities that required public gatherings such as social audit teams and workshops planned for this quarter • The unstable political situation at the central level led to delays which required political counterparts, such as funding of local-level CSOs by MLGA

MITIGATION MEASURES TAKEN TO ADDRESS CHALLENGES USAID TEAM took the following mitigation measures to address these challenges during the reporting period: • Established ongoing contacts with counterparts at focus municipalities • Identified and employed proper communication channels such as Microsoft Teams, Skype, etc. • Continued communication with IAU, MAC and other municipal officials in accordance with planned activities • Procurement Collegium Roundtable and Audit Roundtable, in agreement with AKM and CHU, was postponed until the circumstances change and allow it to be organized. USAID TEAM is developing new methodology in mitigating this issue • The project has encouraged PPRC leadership to meet with representatives of the Prime Minister’s Office to clarify the new government’s position with respect to the new PPL • In close coordination with USAID guidance from the home office, USAID TEAM immediately resumed the STTA recruitment processes using online conferencing tools • USAID TEAM, in coordination with its subcontractor CiviKos, initiated an online Peer Learning workshop on monitoring public procurement • USAID TEAM, through the support of the engaged STTA, started to assist CSOs via online trainings to prepare and refer cases to enforcement mechanisms, including police, prosecutors, Anti-Corruption Agency, etc.

MAJOR ACTIVITIES FOR NEXT QUARTER The project looks forward to the following major activities and milestones in the upcoming quarter: Component I: • Continue coaching focus municipalities on municipal procurement, contract management, auditing, finance control, ethic, and transparency

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 64 • Develop e-Procurement video tutorial for auditors, • Ensure that the preparation of the Municipal NAO Action Plan for the municipal published audits, and the revision of the action plans comply with SOP requirements • Ensure that the Action Plan is shared with the Municipal Committee for Policy Finance and its discussion within the Committee and Assembly • Support in addressing NAO and IAU recommendations and Progress Reports • Support adoption of Code of the Ethics by the new focus municipalities • Support adoption of Book of Process by the new focus municipalities • Draft comprehensive municipal budgets for 2021 • Organize Procurement Collegium and share best practices • Organize roundtable for internal auditors and share best practices • Conduct Performance Audits on two pilot municipalities • Build the capacity of Municipal Committee for Policy and Finance on procurement, audit and financial control processes • Enhance public relations efforts of the 10 new focus municipalities • Organize PFM Roundtable and share best practices Component II: • Integrate Anti-Fraud guidelines into NAO’s induction/refresher training curriculum • Develop online video trainings on the use of Contract Management and CPE Modules • Support MLGA with contracting the development of widget to publish contracts directly on the municipal websites • Continue piloting of Contract Management and CPE modules • Continue piloting CHU semi-annual reporting using SharePoint Intranet and integrated Report Template for project partner municipalities • Support PPRC implement OCDS API • Continue supporting PPRC with system interoperability efforts Component III: • Oversee activities implemented by GLPS under the “Promote Civic Activism in Monitoring and Keeping Accountable Local Governments through Social Accountability Tools” project • Continue to provide support and monitor activities implemented by Riinvest under the “Public Procurement Barometer (x-Index)” project

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 65 • Continue to provide support and monitor activities implemented by KDI through the “Supporting local level CSOs to monitor procurement cycle in Kosovo municipalities” project • Continue to provide support to USAID TEAM subcontractor CiviKos on continuing with peer-to-peer activities foreseen • Continue to provide support and monitor activities implemented by Democracy + under the “Digital Solution for Integrity in Public Procurement” project pending finalized API at PPRC • Sign grant agreement for implementation of project for “Supporting cooperation between CSOs and investigative media to expose corruption”, and follow up on initiation of activities under this project • Coordinate with Democracy Plus initiation of activities on monitoring the PRB, • Sign grant agreement for implementation of project on “Empowering CSOs on monitoring public procurement and exposing malfeasance in focus municipalities and ensure sustainability” and follow up on initiation of activities under this project • Monitor the process of finalizing and referring cases to enforcement mechanisms, including police and prosecutors

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 66 Annex A: Reports and Deliverables Completed This Quarter Reports and deliverables completed this quarter

Person or Due (per Submission Submission Approval/ # Deliverable1 Description USAID TEAM contract, WP, date of first date of final acceptance date completing or SOW) draft draft of final version

Quarterly Summary of USAID Performance TEAM activity 1 USAID TEAM 15 April 2020 15 April 2020 15 April 2020 17 April 2020 Report Jan – Mar. progress during Jan – 2020 Mar. 2020 DAI’s self-assessment Award Fee of its performance Contractor’s Self- implementing the 2 Assessment USAID TEAM activity USAID TEAM 15 April 2020 15 April 2020 15 April 2020 17 April 2020 Report during Jan – Mar. Jan – Mar. 2020 2020, for award fee determination Summary of Financial Report expenditures and 3 USAID TEAM 15 April 2020 15 April 2020 15 April 2020 17 April 2020 Quarter 1 - 2020 accruals for January – March 2020

1 In the interest of brevity, this table does not include the weekly activity reports submitted each Friday, as required by Section F of the subject contract. All required weekly reports were submitted on time during this quarter.

USAID TEAM Quarterly Performance Report – Year 4 Quarterly 2 | 67 Person or Due (per Submission Submission Approval/ # Deliverable1 Description USAID TEAM contract, WP, date of first date of final acceptance date completing or SOW) draft draft of final version

10 calendar Accruals Report for Accruals Report days before the 4 the quarter ending 17 June 2020 end of the Quarter 2 - 2020 June 30 quarter AMP document AMP Revised with updated with the 5 baselines and baseline and targets 29 May 2020 11 June 2020 15 June 2020 targets for 10 new municipalities.

USAID TEAM’s Municipal Capacity fourth annual assessment of 28 February 6 Assessment 30 March 2020 3 April 2020 3 April 2020 Report – OCAT procurement 2020 for all 15 practices in focus municipalities municipalities

Summary of Municipal municipal 7 Graduation performance towards USAID TEAM 31 March 2020 24 March 2020 2 April 2020 2 April 2019 Report 2019 graduation from project’s assistance

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Detailed individual Peja Municipal municipal 7a. Graduation performance towards USAID TEAM 31 March 2020 21 April 2020 23 April 2020 23 April 2020 Report 2019 graduation from project’s assistance Detailed individual Vushtrri Municipal municipal 7b. Graduation performance towards USAID TEAM 31 March 2020 7 May 2020 8 May 2020 Report 2019 graduation from project’s assistance Detailed individual Gjilan Municipal municipal 7c. Graduation performance towards USAID TEAM 31 March 2020 13 May 2020 13 May 2020 14 May 2020 Report 2019 graduation from project’s assistance Detailed individual Gjakova Municipal municipal 7d. Graduation performance towards USAID TEAM 31 March 2020 28 May 2020 29 May 2020 Report 2019 graduation from project’s assistance

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Detailed individual Pristina Municipal municipal 7e. Graduation performance towards USAID TEAM 31 March 2020 29 May 2020 3 June 2020 Report 2019 graduation from project’s assistance Summary of baseline Municipal Graduation municipal performance data to 8. Baseline Report 30 April 2020 26 May 2020 29 May 2020 29 May 2020 2019 - for 10 new evaluate graduation focus progress from municipalities project’s assistance Detailed individual Decan Municipal baseline for municipal performance data to 8a. Graduation USAID TEAM 30 April 2020 5 June 2020 15 June 2020 15 June 2020 Baseline Report evaluate graduation 2019 progress from project’s assistance Hani i Elezit Detailed individual Municipal baseline for municipal 8b. Graduation performance data to USAID TEAM 30 April 2020 19 June 2020 23 June 2020 23 June 2020 Baseline Report evaluate graduation 2019

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Detailed individual Rahovec baseline for municipal Municipal performance data to 8j. Graduation USAID TEAM 30 April 2020 19 June 2020 23 June 2020 24 June 2020 evaluate graduation Baseline Report 2019 progress from project’s assistance Results from the assessment study on Assessment Report and Legal contract management Framework practices in five focus 9 Review for municipalities and the USAID TEAM 29 May 2020 26 May 2020 17 June 2020 Project and review of the Contract relevant legal Management framework in Kosovo.

Standard Basic procedures for USAID TEAM Operating Project and Contract 10 Procedures for Management activities 29 May 2020 29 May 2020 17 June 2020 Project and Contract in Kosovo Management municipalities. Structured guide USAID TEAM 11 Report: Best 29 May 2020 26 May 2020 17 June 2020 Practices - about the steps and

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Guideline for CSOs to monitor public Communication procurement and 14 and Procurement USAID TEAM April 2020 3 April 2020 3 April 2020 guidelines for CSOs Guidelines on policy communication

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