PHOTO CREDIT: NORA SIQECA, USAID TEAM

ANNUAL REPORT January 2020 – January 2021

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

ANNUAL REPORT January 11, 2020 – January 10, 2021

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: February 11, 2021 Prepared By: USAID TEAM

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 TEAM ANNUAL REPORT 2020 | 1 CONTENTS ACRONYMS AND ABBREVIATIONS ...... 3 EXECUTIVE SUMMARY ...... 5 INTRODUCTION ...... 11

USAID TEAM BACKGROUND...... 11 WORK PLAN PROGRESS REPORT ...... 13 A COVID-19 ANALYSIS...... 13 ACTIVITIES SERVING THE ADAPTIVE MANAGEMENT PLAN ...... 17

COMPONENT I: DEVELOP, REFINE AND ROLL OUT MODELS FOR TRANSPARENT AND ACCOUNTABLE MUNICIPALITIES ...... 25 COMPONENT II: ENGAGE THE CENTRAL LEVEL IN ADDRESSING MUNICIPAL CORRUPTION WITHIN THE PROCUREMENT PROCESS ...... 70 COMPONENT III: ENABLE CIVIL SOCIETY TO TRACK AND EXPOSE CORRUPTION ...... 81 CHALLENGES DURING REPORTING PERIOD ...... 102 MITIGATION MEASURES TAKEN TO ADDRESS CHALLENGES DURING REPORTING PERIOD ...... 105 ANNEX I: WORK PLAN SCHEDULE PERFORMANCE ...... 107 ANNEX I1: AMP INDICATORS TABLE ...... 131

2 | USAID TEAM ANNUAL REPORT 2020 ACRONYMS AND ABBREVIATIONS AAR After Action Review AKM Association of Kosovo Municipalities AMS Audit Management IT System API Application Program Interface CFO Chief Financial Officer CHU Central Harmonization Unit CLA Collaborative Learning and Adapting CM Contract Management COVID-19 Coronavirus Disease 2019 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 INPO Iniciativa per Progres IR Immediate Result IT Information Technology KAJ Kosovo Academy of Justice KDI Kosova Democratic Institute KPC Kosovo Prosecutorial Council KPI Key Performance Indicators MAC Municipal Audit Committee MEAT Most Economically Advantageous Tender MELA Monitoring, Evaluation, Learning and Adapting MLG Ministry of Local Government MOF Ministry of Finance MOU Memorandum of Understanding MPFC Municipal Policy and Finance Committee

USAID TEAM ANNUAL REPORT 2020 | 3 MTBF Mid-Term Budgetary Framework NAO National Audit Office NGO Non-Governmental Organization OCAT Organizational Capacity Assessment Tool OCDS Open Contracting Data Standard OECD Organization for Economic Co-operation and Development 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 QAIP Quality Assurance and Improvement Program RFA Request for Application RFP Request for Proposals ROGPP Rules and Operational Guidelines of the Public Procurement SA Social Audit SAI Supreme Audit Institutions SOP Standard Operating Procedure SOW Scope of Work STTA Short-Term Technical Assistance TEAM Transparent, Effective and Accountable Municipalities TOR Terms of Reference USAID United States Agency for International Development

4 | USAID TEAM ANNUAL REPORT 2020 EXECUTIVE SUMMARY USAID Transparent, Effective and Accountable Municipalities Activity (USAID TEAM) continued to deliver high quality interventions in 2020, despite the challenges presented by COVID-19. All project activities were accomplished according to the approved work plan, activity budget, and timeline. Although the last three quarters of the year were affected by COVID-19, the project remains on-track with 88% of its’ activities for the year, having postponed only 15 out of 129 activities. The projects’ achievements in public procurement over the past year include: • USAID TEAM expanded its support to an additional ten new focus municipalities: Deçan/Decane, /Uroševac, Hani i Elezit/, Istog/k, , Lipjan/, Podujevë/o, , Rahovec/, and Suharekë/. • Municipalities increasingly post public contracts voluntarily on their websites. During 2020, 28 out of 38 municipalities voluntarily published 2,484 public contracts on municipal websites. • Despite difficult circumstances caused by COVID-19, USAID TEAM provided focus municipalities hands-on support in procurement, contract management, audit, finance, human resources, and communications. Municipal advisors supported municipalities using virtual communication tools including telephone and teleconferencing. Using extra caution and strictly following DAI COVID- 19 safety guidelines, municipal advisors were able to make 322 direct visits to focus municipalities. In addition, USAID TEAM Advisors made 115 visits to non-focus municipalities. • All ten new focus municipalities approved their Codes of Ethics. This addresses the growing need among all municipalities to embrace accountability and integrity by adopting a code of ethics, which serves as a guideline for municipal staff, members of assemblies, and local boards to follow. • Nine out of ten new focus municipalities approved the Handbook on Internal Public Expenditure Management Processes (known as the Book of Processes). The Book of Processes defines proper financial management and control requirements with a focus on risk analysis and management. The standardized processes outlined therein became mandatory pursuant to Ministry of Finance Regulation MOF-No. 01/2019 on Financial Management and Control. • All five original focus municipalities made progress against the project’s municipal graduation. From the initial baseline score of 51 points in 2017, and 61 points in 2018, the five focus municipalities reached 76 points in 2019. USAID TEAM shared individual graduation reports and conducted virtual workshops with the municipal managements of the five original focus municipalities (Pejë/Peć, Vushtrri/Vučitrn, /Gnjilane, Gjakovë/Đjakovica, and ), to share the annual and mid-year municipal graduation results. The Mayor of Ardian Gjini stated: “The municipality has benefited a lot from this project. The operations and systems have

USAID TEAM ANNUAL REPORT 2020 | 5 been advanced with support of USAID TEAM. The administrative culture has changed because of the targets set by the project.” • USAID TEAM presented municipal graduation baselines to all ten new focus municipalities (Deçan/Dečane, Hani i Elezit/Elez Han, Istog/k, Junik, Lipjan/Lipljan, Podujevë/, Prizren, Rahovec/Orahovac, Suharekë/Suva Reka, and Ferizaj/Urosevac). The project prepared detailed individual reports and conducted online workshops to share the municipal graduation methodology and baseline results, including mid-year internal results, with each municipal management team. The Mayor of Lipjan/Lipljan stated that: “The USAID TEAM project has taught the officials of the Municipality of Lipjan/Lipljan how to identify its flaws and weaknesses. I express my readiness to engage in the implementation of all recommendations that will emerge from this analysis.”

Semi-Annual Graduation Results - June 2020 100 90 80 72 62 62 65 64 70 57 60 48 47 48 51 50 40 30 20 10 0

Jun-20 Min. score for grad.

• Municipal graduation results for Year 4. Based on data collected for the municipal graduation indicators, the Project has generated final graduation results for 2020 or Year 4 and 14 out of 15 focus municipalities improved against 2020 mid-year results. Over the course of year 4, the average improvement towards graduation was 13%. The most impressive score has Junik, which improved 75% compared with previous year, from 41 to 72 points, followed by Hani Elezit/Elez Han which improved 68% from 46 to 77 points. Other great improvements include the municipality of Ferizaj/Uroševac with 29% from 46 to 59 points, Podujeva/Podujevo with 27% from 60 to 77 points. On the other hand, the leading focus municipalities had difficulties maintaining their scores, and / Peć declined 4% from 84 points to 81 points, while Vushtrri/Vućitrn declined 7% from 82 to 77 points. The figure below illustrates progress against the graduation criteria for the focus municipalities from 2019 to 2020.

6 | USAID TEAM ANNUAL REPORT 2020 Graduation results of All Focus Municipalities 2019-2020 84 90 82 82 81 77 77 76 77 77 80 7274 70 72 71 69 72 71 67 66 64 65 65 65 67 70 60 62 59 62 62 60 60 57 64 55 51 56 60 52 53 47 50 48 46 46 48 50 41 40 30 20 10 0

Dec-19 Jun-20 Dec-20

• USAID TEAM increased the capacity of the new focus municipalities’ staff in developing well-drafted and defined technical specifications, terms of reference, bid evaluations, and procurements, through workshops for municipal officials. • USAID TEAM shared best practices, discussed challenges, and identified issues with 38 Kosovo municipalities on the areas of public procurement, internal and external audits, financial management, human resources and transparency in seven events with 152 participants from municipal and central level government, including the Public Procurement Regulatory Commission, the Central Procurement Agency, Central Harmonization Unit, Ministry of Local Government and Ministry of Internal Affairs/Department of Civil Service Administration.

• Municipalities improved The level of NAO Reccomendations Implemented in implementation of NAO Last Three Years in all Kosovo Municipalities

recommendations by six 40% 37% percent over the previous 35% 31% year. In 2020 municipalities 30% 25% 25% addressed 37% of NAO 20% recommendations, compared 15% to only 31% last year. 10% 5% • USAID TEAM conducted a 0% Citizens’ Perception 2017 2018 2019 Survey on Municipal Corruption and Transparency in Public Procurement, for 2019, using data collected from civil society, the private sector, and 3,013 citizens from across all Kosovo municipalities. According to surveyed citizens, in 2018 and 2019 unemployment is the main problem in Kosovo with 72% in 2018 and 84% in 2019 of respondents indicating it was the most significant issue. The majority of respondents (65%) reported being satisfied with municipal services in general, compared to 58% in

USAID TEAM ANNUAL REPORT 2020 | 7 2018. The majority of the respondents are very/somewhat satisfied with the Municipal Mayor (58% in 2018 and 63% in 2019), Municipal Assembly (50% in 2018 and 56% in 2019), and Municipal Administration (58% in 2018 and 68% in 2019). In 2019, surveyed citizens reported to be more satisfied with the implementation of public projects (59% in 2018 and 68% in 2019), recruitment of municipal staff (46% in 2018 and 62% in 2019), and management of municipal public finance (45% in 2018 and 58% in 2019). Survey results reveal that the main reason which leads to corruption is fast personal enrichment sought by people in power (30%), which is an increase from 23% in previous year. • USAID TEAM piloted the implementation of Contract Management and Contractor Performance Evaluation modules in cooperation with PPRC and both have been integrated in the Kosovo e-Procurement system. The project organized an online training session for six PPRC IT staff who will administer the two modules, as well as trainings for select municipalities and central-level authorities who will pilot the implementation of the new functions. • USAID TEAM advised PPRC on migrating to new server infrastructure. The project supported the PPRC IT Department to develop an infrastructure migration plan, which was successfully implemented by PPRC IT staff. The new hardware infrastructure fixed traffic bottlenecks in the e-Procurement system and will help to avoid system slow- downs in the future. • USAID TEAM introduced PPRC to the OCDS within the e-Procurement system, which PPRC IT developed and launched under USAID TEAM guidance. OCDS will further increase transparency in the procurement process and bring Kosovo up to par with the highest international transparency standards for public procurement. Using OCDS, PPRC is now able to enhance the interoperability of e-Procurement with other government systems, such as the Kosovo Finance Management Information System (FreeBalance) and other CSO procurement monitoring systems, including the Open Procurement Transparency Portal. • USAID TEAM developed a compendium of best practices based on the International Standards of Supreme Audit Institutions (SAIs) to support prioritization of performance audits. The NAO Performance Audit Department started to use the compendium as a standard document for audit planning. A scoring matrix with criteria, factors, and risk scores is also in use for case selection. • USAID TEAM supported the development of an online training module for judges and prosecutors based on guidelines prepared for NAO auditors. Working closely with OPDAT and the Kosovo Academy of Justice (KAJ), 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 2020 as a part of the KAJ Continuous Training Program.

8 | USAID TEAM ANNUAL REPORT 2020 • The Procurement Review Body is successfully implementing the e- Appeals module. PRB confirmed that complaints from economic operators had been received seamlessly using the e-Appeals module of the e-Procurement system. According to PRB, between January and December of 2020, economic operators submitted 1,184 appeals using the e-Procurement system, compared to 1,081 appeals from the same period last year, an increase of around 9% despite the COVID-19 pandemic. • For the first time, USAID TEAM introduced Key Performance Indicators (KPIs) for internal audits at the municipal level. The project tested the implementation of the KPIs through a pilot process involving several municipalities’ IA Units. KPIs will be used by CHU to measure the performance of IAUs. This tool will help CHU improve oversight of the internal audit function. • NAO achieved a great milestone in developing the Audit Management IT System (AMS), which is a precondition for expanding audit coverage and quality. The AMS will serve as a tool to strengthen scrutiny of public finances and identify areas for improvement, it will also assist in making more informed, intelligent, and data-backed audits. • USAID TEAM supported the establishment of the Anti-Fraud Unit, which to date has reported total 141 cases to the Kosovo State Prosecutor, out of which 38 cases were detected in 2018, 49 cases in 2019 and 54 cases in 2020. In the meantime, NAO has finalized the Audit Management System that in the future will be able to serve as a repository for information and facilitate the work of this unit and other law enforcement agencies. • USAID TEAM prepared a set of criteria designed to identify risk cases for the PPRC – Monitoring Department. These criteria consist of a series of questions that monitoring officers should address before determining which monitoring activities to undertake. • The Open Procurement Transparency Portal (OPTP) exceeded the life-of- project target for site visits. During 2020, the portal (www.prokurimihapur.org) has recorded 20,735 visitors; and throughout the life of the project there have been 43,768 total users. CSOs, investigative journalists, businesses, and even GOK officials reported using the OPTP as a starting point for investigations and gathering business intelligence.

USAID TEAM ANNUAL REPORT 2020 | 9 • USAID TEAM delivered policy communication workshops for local-level Civil Society Organizations (CSOs). USAID TEAM subcontractor CiviKos is providing hands-on Peer-Learning workshops for local-level CSOs on policy communication for the first time in Kosovo. These workshops provide guidance on strategic communication for CSOs and practical tips on how to disseminate findings from procurement monitoring efforts to reach a desired outcome. • USAID TEAM supported municipalities to organize budget hearings, by involving CSOs. During the COVID-19 pandemic, CSO partners enabled municipalities to hold budget hearings by providing access to a variety of online platforms. • CSO reports show steady progress in the increase of transparency. As evidenced by the Transparency Index in Municipal Governance for 2019, Kosovo municipalities witnessed an improvement in the transparency of public procurement. The average increase of municipal transparency in 2019 was 12%, in six measured pillars, from 58% in 2018 to 70% in 2019. The transparency of municipal governments in Kosovo now extends beyond the publication of procurement documents, to engaging citizens, publishing draft budgets and agendas for discussion, publishing expense reports and documentation pertaining to grants and subsidies, and creating mechanisms for reporting corruption and unethical behavior. Each of these mechanisms plays a crucial role in maintaining the accountability of public expenditures. • CSOs are augmenting municipal efforts to engage citizens. Tapping into community networks of partner CSOs, USAID TEAM prepared one video, one TV debate, three infographics, and eight online discussions with citizens and municipal assembly members, to increase citizen engagement in the preparation stage of municipal budgets. • USAID TEAM developed Guidelines for the Monitoring of Public Procurement, which can be used by CSOs - with a focus on local-level CSOs - during their work monitoring municipal public procurement activities.

10 | USAID TEAM ANNUAL REPORT 2020 INTRODUCTION The USAID TEAM Annual Report documents the progress made in Year 4, in compliance with section F.6.f. of the referenced contract. The report is divided into the following sections: • Introduction, providing an overview of the project, including the definition of each component. • Progress report, covering the status of each activity as outlined in the USAID TEAM approved Year 4 Work Plan. • Successes during the reporting period and best practices; and • Lessons learned, covering the difficulties and challenges encountered during Year 4 as well as the proposed solutions to new or ongoing problems. An Environmental Status Report section based on the approved Initial Environmental Examination and Environmental Mitigation and Monitoring Plan is not applicable for activities covered in this annual report. A table of work plan progress is included in Annex I. The project’s Activity Management Plan, incorporating indicator performance, is presented in a separate annual Activity Management Plan report, per the instructions of the Contracting Officer Representative (COR).

USAID TEAM BACKGROUND USAID TEAM is a five-year project that began in January 2017 and is scheduled to conclude in January 2022. The project seeks to improve procurement effectiveness and transparency by providing comprehensive assistance to all 38 Kosovo municipalities, with more intensive coaching and mentoring provided to 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), the PPRC, the NAO, the 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 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 Strategy’s Development Objective 1: Improved Rule of Law and Governance that Meet Citizens’ Needs. The project directly contributes to two intermediate results (IR) 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 ANNUAL REPORT 2020 | 11 IR1.4: Civil Society Strengthened to Increasingly Engage Constructively with Government. USAID TEAM is working with civil society to monitor municipal procurement. USAID TEAM meets the above-mentioned objectives through activities organized around three main components and a support fund, detailed below. Component I: Develop, Refine, and Roll-Out Models for Transparent and Accountable Municipalities. The objective of this component is to assist local governments to carry out anti-corruption reforms, particularly around public procurement, in all 38 municipalities. Through coaching and mentoring and the introduction of new systems and enforcement mechanisms, USAID TEAM supports the capacity building of municipal procurement managers, contract managers, internal auditors, and other public officials involved in the procurement cycle. In addition, USAID TEAM supports an original five focus municipalities – Gjakovë/Ðakovica, Gjilan/Gnjilane, Pejë/Pec, Prishtinë/Priština, and Vushtrri/Vučitrn – with more intensive coaching and mentoring based on the findings of the USAID TEAM’s Needs Gap Analysis and Corruption Vulnerability Assessment. Throughout 2019, as part of its roll-out plan, USAID TEAM extended its coaching and mentoring support to ten additional focus municipalities - Deçan/Dečane, Hani i Elezit/Elez Han, Istog/k, Junik, Lipjan/Lipljan, Podujevë/Podujevo, Prizren, Rahovec/Orahovac, Suharekë/Suva Reka, and Ferizaj/Urosevac. Component II: Engage the Central Level in Addressing Municipal Corruption within the Procurement Process. USAID TEAM’s second component supports increasing the capacity of central-level institutions to target municipal corruption. Working closely with NAO as well as the MOF Central Harmonization Unit (CHU), the project is strengthening coordination mechanisms between the central government and municipal internal audit (IA) units to detect and address procurement weaknesses. In addition, the project is increasing the capacities of PPRC, especially its’ IT team, to ensure the proper long-term and sustainable operation and maintenance of the e-Procurement system. USAID TEAM also works with the PRB to promote more transparent and consistent decision-making. Component III: Enable Civil Society to Track and Expose Corruption. USAID TEAM’s civil society component is focused on supporting national and local-level non- governmental organizations (NGOs) to monitor corruption at the municipal level and report findings effectively through media, including social media. To increase the capacities of Kosovo’s civil society, USAID TEAM engages national civil society organizations (CSOs) to coach and mentor local NGOs that are monitoring municipal procurements, while ensuring greater citizen engagement. Support Fund. Through the USAID TEAM Support Fund, the project delivers in-kind grants to partner municipalities and awards grants and subcontracts to local organizations such as NGOs and think tanks, to implement activities within the component areas. The Support Fund has the following three sub-components: 1. Procure in-kind support for focus municipal administrations to identify and address corruption vulnerabilities and to increase efficiency and transparency in local financial management,

12 | USAID TEAM ANNUAL REPORT 2020 2. Support creation of a contractor past performance records system, and 3. Provide subcontracts or grants to CSOs to improve and reinforce watchdog efforts over anti-corruption by monitoring municipal procurements and exposing corrupt municipal practices. As the project implements these three components and executes Support Fund activities, USAID TEAM adheres to cross-cutting principles such as finding local solutions by subcontracting with local organizations; ensuring flexible training and coaching approaches; coordinating with government systems and non-USAID donors; incorporating project sustainability and gender concerns; and above all, following adaptive management approaches to implementation.

WORK PLAN PROGRESS REPORT This section describes the activities USAID TEAM completed, the results the project achieved during Year 4, as well as COVID-19 pandemic affects in implementing activities.

COVID-19’s Impact on USAID TEAM Activities

The Impact of COVID-19 on TEAM Activities During Year 4. On March 16, 2020, in response to the growing threat of COVID-19 in Europe the Government of Kosovo implemented a series of regulations to help reduce the spread of the novel virus. These included a limit on activities for everyone except essential workers, limitations on gatherings, and a requirement that all non-essential workers work from home. These regulations were designed to protect the health of citizens and communities. At the end of 2020, the COVID- 19 pandemic still represents a significant threat to the ongoing implementation of Project activities across Kosovo, although the vaccine rollout will hopefully allow for a gradual return to normal operations in Year 5. Below we present first the challenges that TEAM, our partners and stakeholders, faced during Year 4 due to the global pandemic. This is followed by a presentation of the opportunities that TEAM embraced as they pivoted to face these challenges as best they could, to fully implement planned activities.

CHALLENGES: Direct impacts of the COVID-19 pandemic on USAID TEAM. USAID TEAM faced significant initial challenges due to COVID-19 as the GOK restricted movement within the country, and in-person activities became obsolete. These restrictions greatly limited TEAM’s ability to conduct planned activities directly supporting the focus municipalities, and in the short term brought virtually all project activities to a halt until effective methods of overcoming these pandemic related challenges could be identified. Additionally, indirect consequences of the pandemic have included shifting government funding priorities, affecting the work that the project was able to do with municipalities due to limited potential for municipalities of fulfil their procurement plans. The GOK required municipalities to halt all activities in response to COVID-19, this significantly impacted municipalities, as work related

USAID TEAM ANNUAL REPORT 2020 | 13 to monitoring contract management implementation and procurement plans was consequently halted. Like many other organizations, during the early phase of the pandemic, USAID TEAM struggled to adapt to the new realities of online work. During the initial transition period, TEAM struggled with a number of aspects required for the pivot to online work. Like other organizations, the shift to the whole family being home, working or learning online, required adaptation and learning that was unprecedented. This included parents helping their younger children adjust to the realities of school through online platforms, parents having to adjust to the closing of day-care services, as well as families trying to identify physical space for their new at-home offices. At the same time, offices were trying to identifying which platform would be most appropriate to use, given the wide availability of options already in use by different partners (WebEx, Teams, Zoom, etc.) as well as the need for capacity for simultaneous translation – as all events in Kosovo must be held in both Albanian and Serbian – a feature which is not supported by all video-conferencing platforms. This and many other problems that the Project encountered throughout Q2 of Year 4 were magnified by the difficulties that their main partner, Kosovo’s municipalities, faced. At the outset of the pandemic, most municipalities lacked both the technical expertise, and technological resources – such as laptops – needed to work effectively from home. This caused significant difficulties for the Project, creating delays which threatened to derail the Year 4 workplan and halt entire workstreams with municipalities. The human challenge of the COVID-19 pandemic. The Project also faced significant implementation challenges as municipal and Project staff became infected with COVID-19 and had to quarantine for two to three weeks. Frequently, such a significant number of municipal staff became infected with COVID-19 that entire municipal offices were effectively closed for weeks at a time. Additionally, at least 30% of the USAID TEAM project staff themselves have been infected with COVID-19, reducing their capacity to work. Municipal and Project staff also were faced with family and friends who became infected with COVID-19. This required their attention and support from staff, and in some cases, the result was the loss of a family member or close friend. While the direct impact of this was unforeseen delays in project implementation, there are likely unforeseen challenges that will continue arise as a result of the mental stresses on both municipal and project staff alike. The COVID-19 pandemic significantly affected the ability of municipalities to achieve the targets set for graduation status. The USAID TEAM Graduation Plan considers a municipality to have reached graduate status “once they achieve a score of 80 points or more out of the total 100 and maintain that score for at least one-year. The municipalities should also achieve a minimum score of 6 points for each indicator.” Because of limitations on municipality activities as offices had to be closed for significant periods when staff fell ill, the new focus municipalities had an average increase of 23% (from 55 to 67 points) while the five original focus municipalities had a decrease of 1% (from 76 to 75 points) in graduation results. The reason for the progress achieved by the new focus municipalities when compared with the original group, was due to the low baseline of these municipalities in several indicators, such as implementation of procurement plan, transparency, contract

14 | USAID TEAM ANNUAL REPORT 2020 management, etc. Over the course of Year 4, the average improvement towards graduation was 13%. The most impressive score was Junik, which improved 75% when compared with previous year, going from 41 to 72 points, followed by Hani Elezit/Elez Han which improved 68% from 46 to 77 points. Other great improvements include the municipality of Ferizaj/Uroševac with a 29% improvement from 46 to 59 points, and Podujeva/Podujevo with a 27% improvement from 60 to 77 points. On the other hand, the leading municipalities had difficulties maintaining their scores, and Peja/ Peć declined 4% from going from 84 points to 81 points, while Vushtrri/Vućitrn declined 7% from 82 to 77 points. Activities planned in conjunction with the Government of Kosovo were affected. It is important to note that many of the PPRC staff became ill with COVID-19, which directly resulted in delays. Further, the Project activities were negatively affected by the PPRC’s decision to halt procurement activities, limiting municipalities ability to implement their full procurement plans, redirection of government funds for procurement of emergency supplies such as PPE, and staff retention difficulties. One of the most prominent examples of the problems the project faced due to reallocation of funds was a planned activity providing support for the improved sustainability of CSOs. Entering Year 4 of the Project, the MLG had allocated 50,000 Euros to support CSO monitoring efforts throughout Kosovo. As the threat of pandemic grew, however, the MOF reallocated these funds to COVID-19-releated emergency expenses. This particular activity was also impacted by staffing difficulties. Because CSOs in Kosovo primarily hire staff on limited-term, project-based contracts, staff are less willing to remain in these positions in unstable conditions if they are able to find more stable, longer-term employment elsewhere. The COVID-19 pandemic also affected the ability of CSOs to deliver planned activities. The CSOs and USAID grantees faces all of the same challenges mentioned above. The impact on CSOs and grantees resulted in delay and delivery of activities. For example, social audit teams could not be compiled to discuss challenges with project implementation, and this negatively impacted fulfilment of the contract that USAID TEAM has with GLPS. As a result, the Project has had to postpone these activities until such meetings again become feasible. There have been a number of other instances where activities planned by USAID TEAM grantees have had to be postponed to Year 5 in accordance with GOK restrictions on movements and gatherings, where it is not feasible to conduct them virtually, such as the finalization of the Memorandum of Understanding with the State Prosecutor. USAID TEAM faced staff retention challenges, impacting its ability to implement planned activities. Not unlike many CSOs in Kosovo, throughout Year 4 USAID TEAM has faced staff retention challenges in a dynamic period of implementation. The Project is entering the final year of project implementation, and it is standard to see staff roll off the project as they find alternative employment. However, this has been further exacerbated by the global pandemic’s impact, creating an unstable global economic situation. The result is that four staff left the Project during the last quarter of Year 4, including: Component Three Senior Advisor, Component Two Senior Advisor, Monitoring Evaluating Learning and Adapting Specialist, and PFM Municipal Advisor. Replacing these experts in this period added an additional challenge to already challenging circumstances.

USAID TEAM ANNUAL REPORT 2020 | 15 OPPORTUNITIES: The realities of the Project’s adjustment to the COVID-19 pandemic affected the dynamics of workplan implementation. At the beginning of the pandemic, USAID TEAM was slow to implement all planned activities as Project staff worked to analyze the best ways to address new challenges encountered in virtual project implementation. However, during the adaptation period, the Project staff employed tools from its adaptive management toolbox, including pause and reflect sessions, and actively sought to identify possible solutions to the problems created for activity implementation during the COVID-19 pandemic and best analyze how to move the project forward. Ultimately the team was able to identify a number of solutions to working in this novel situation and has incorporated new systems to conduct and monitor activities in remote settings and has made significant achievements in exceptionally difficult circumstances. By the end of Year 4, due to the extraordinary efforts of Project staff, 88% of the workplan had been successfully implemented, with just 15 sub- activities being postponed to Year 5. Throughout 2020, USAID TEAM continued to provide remote and online assistance to focus municipalities in implementing planned activities, even after they again began to provide direct support in the field in September. In addition to providing in-person and remote field assistance, the project organized 136 events and workshops with 1,475 participants. The project was able to effectively connect with municipal officials and other partners through online workshops, coaching sessions, and direct phone calls, sharing best practices, discussing issues, and providing solutions. USAID TEAM grantees and subcontractors also achieved significant progress on their activities. Some examples include: grants issued to the Kosovo Law Institute (KLI) and its consortium member Iniciativa për Progres (INPO) to monitor procurement activities, to the GLPS for social audits, to the FOL for enhancing the Open Procurement Transparency Portal, to KDI for the Municipal Transparency Index, and to Riinvest for an x-index Benchmarking Tool for Public Procurement in Kosovo. TEAM also conducted an Applied Learning Workshop with the sub- contractor CiviKos, launching the role of the PRB in public procurement inefficiency reports, supported a large number of investigative media reports/news feeds and findings, and helped to move forward a number of cases containing elements of fraud to the state prosecutor. USAID TEAM used careful risk analysis techniques to safely return to fieldwork when appropriate. After working almost entirely remotely and virtually from March, starting in September USAID TEAM began holding select in-person partner meetings, additionally conducting field work that was deemed both safe and necessary. The Project considers the health and safety of its’ staff and partners to be of the highest priority and will therefore continue to conduct work remotely when possible, in accordance with the DAI corporate policies for safe field operations specified in the DAI Kosovo Risk Assessment Tool. In order to enable delivery of program elements to match demand and ensure implementation of high-quality activities despite the COVID-19 pandemic, USAID TEAM introduced new quality control mechanisms in 2020, including the engagement of DAI Home Office staff to provide final quality review before submitting deliverables to USAID.

16 | USAID TEAM ANNUAL REPORT 2020 The USAID TEAM supported e-Procurement system was instrumental in continuing procurement processes during the pandemic. The GOK, with assistance from USAID TEAM, implemented electronically enhanced procurement procedures using the e-Procurement platform in 2018, consequently, all contracting authorities were able to continue delivering goods and services, including emergency supplies to citizens. Contracting authorities were able to successfully deliver urgently required health products and services in response to the COVID-19 crisis and ensured smooth and accountable management of the ongoing activities and contracts all while working remotely. The e-Procurement system has allowed all public institutions to conduct all stages of procurement activities remotely, from drafting tender dossiers and publishing calls for application, to bid application, evaluation, protests, and signing contracts. USAID TEAM tailored their assistance to support municipalities as they adapted to COVID-19 challenges, including the reallocation of budget line-items to emergency procurements using negotiated procedures allowed by Kosovo Law in emergency situations. Using this emergency procedure enabled them to engage a short-list of preferred businesses through a limited competition, speeding up the process of procurement. Municipal Procurement Offices were not familiar with this process and our project played a crucial role in providing the expertise and advice needed to create forms and templates, including specific tender dossiers in order for these highly necessary procurements to be carried out.

LESSONS LEARNED: Throughout 2020, USAID TEAM has learned many valuable lessons about working as a unit, and with municipalities and partner organizations in unprecedented and extended emergency situations. If the Project had had a contingency plan for unexpected emergency situations, USAID TEAM could have been more prepared to deal with the pandemic. Overall, if the government had been able to mobilize resources and work remotely prior to the beginning of lockdown, we would be able to achieve an even higher standard of results and complete a greater percentage of the workplan. In addition, if the Project had considered methodologies for working online, something that was not a pre-COVID priority among the municipalities, the adjustment could have been smoother. The future of development is technology, and therefore governments should direct their efforts into advancing and enabling access to necessary technology for all government officials. The Project initially struggled with the increased workload created by the new working environment, but was able to institute new work methodologies, as well as guidelines for working remotely within the office, as well as with municipalities and other partners.

ADAPTIVE MANAGEMENT PLAN During Year 4, USAID TEAM utilized adaptive management tools that enabled the project to learn and then design and deliver more effective technical support to counterparts at the local and central levels. Through adaptive management and learning mechanisms, USAID TEAM solicited feedback and recommendations from project recipients aiming to make results more sustainable.

USAID TEAM ANNUAL REPORT 2020 | 17 Although COVID-19 restrictions continued throughout the reporting period, USAID TEAM adapted and continued to conduct activities virtually. The project closely monitored the situation and government decisions and as soon as the restrictions started to be reduced, the project shifted and started to again conduct activities in person, including conducting field visits to municipalities and partner meetings. Workshops/trainings with many participants are still conducted virtually using client-specific online communication tools (Microsoft Teams, Zoom, WebEx, Google Meet, Skype for Business, etc.). Through the use of online platforms, the Project was able to conduct all the meetings/events that were planned for Year 4 despite the restrictions in place. Throughout Year 4, the project used adaptive management tools and activities such as: After-Action Review - structured feedback and reflection from project events; feedback from municipal officials; feedback from economic operators (EOs); feedback from partner CSOs; feedback from NAO Anti-Fraud Unit representatives; a learning summit with private sector EOs; review of the custom municipal work plan activities and targets achieved for adaptive management, in meetings with municipal management; learning summits with central-level institutions, such as PRB, PPRC, NAO and CHU; focus groups/individual meetings with CSOs not directly supported by the project; most significant change stories; analysis of reports, including those from local-level CSOs as a result of the Applied Learning workshops and the Democracy Plus report with information on PRB monitoring activities. In addition, USAID TEAM developed and continues to use the Collaborating Learning and Adapting (CLA) Map. This is a data tracking tool that contains findings and recommendations from the previously mentioned adaptive management activities and CSO reports. The CLA Map serves as a source of information for the project to adapt its approach and refine its upcoming activities. It also helped the Project to design activities for Year 5. USAID TEAM identified important issues that derived from project activities with central- and local-level partner institutions, CSOs, and Eos. From Central-level institutions, the Project identified: (a) a need for harmonization of legislation that will improve contract management. This includes clarification of procedures and the responsibilities of each institution, project design, a commitment of funds before the initiation of procurement activities, and inspections, etc.; (b) the need to update the PPRC regulation to allow for the launch of the contract management and contractor past performance evaluation modules; (c) the need to monitor the PRB data migration from old database into new database and the activation of the web application for better transparency and accessibility; (d) a need for capacity building for all NAO auditors on how to treat procurement with fraud elements; (f) a need for capacity building for auditors on the use of the e-procurement platform to publish their audit reports (CHU). From Local-Level Institutions: (a) the need to enforce institutions to use economic criteria in Public Procurement; (b) re-occurring challenges with the inability of courts to solve cases in time; (c) the need for improvements in contract management, monitoring, controls, and reporting processes; (d) the need to increase the capacity of bid evaluation members; (e) the need to improve skills in drafting technical specifications (f) a need to improve the initiation of procurement activities including project design, since municipalities in most cases lack executive projects; (g) a continued need to enhance procurement capacities which have been

18 | USAID TEAM ANNUAL REPORT 2020 further limited because of pandemic necessitated remote work; (h) the need to develop a manual of reference prices for procurement activities; (i) a continued need to support municipalities in addressing NAO recommendations. From CSOs: (a) the need to increase the sustainability of local CSOs to monitor municipal procurement; (b) the need to increase active citizenship by mobilizing the community to monitor project implementation together with CSOs and community representatives. From Private Sector: (a) the need to enforce the use of economic criteria in Public Procurement by institutions. This table presents findings and recommendations as well as actions taken that are in process of addressing findings and recommendations.

No. Findings and Recommendations Actions During Year 4, USAID TEAM helped new focus municipalities with the tender evaluation processes and procedures. Municipal officials lack knowledge on the Additionally, through on-the-job-coaching, the project rules, procedures, legal deadlines to 1 procurement advisers will ensure that municipalities apply implement procurement procedures in effective procurement evaluation procedures. Further, the tender evaluation. project procurement advisers provided training on tender evaluation to the ten new focus municipalities. USAID TEAM continued to promote cross-department collaboration and advise municipalities on improving technical Improve municipal staff capacities in drafting specifications for public works (e.g. roads, schools, medical 2 technical specifications. centers, parks, etc.). Additionally, the project contract management advisor is supporting municipalities to improve the technical specifications. The project ensures better implementation In Year 4, the project continued supporting municipalities to 3 of NAO recommendations in all increase the number of addressed recommendations. institutions. In Year 4, the project assisted in developing and monitored Lack of proper municipal procurement implementation of the procurement plans for all 15 focus 4 plans and lack of specified and detailed municipalities. The project procurement advisors held budget plans in new municipalities. workshops on progress of the implementation of the procurement plans. Contract management and contractor past performance Poor performance of economic operators modules are developed and introduced to the government 5 to be documented by municipalities. officials. The regulation is drafted, and the modules will be launched in February 2021. In Year 4, USAID TEAM continuously provided on-the-job Internal auditors lack capacities to audit coaching to internal auditors to monitor procurement activities 6 procurement activities through e- electronically. In addition, the project contracted a company to Procurement platform. develop video tutorials. Municipalities are facing problems with USAID TEAM continuously advised municipalities not to initiate 7 project design. projects without ensuring project design of the activity. Old cases in the courts are causing a lot of trouble. Withdrawal of finances according USAID TEAM continuously advised municipalities to consider 8 to judicial decisions may impact the this issue during the budget planning process. implementation of the procurement plan. Municipalities should work more on the In Year 4, USAID TEAM provided budget templates designed budget planning process, so the budget and during project Year 3 to all focus municipalities through 9 the procurement plan are harmonized. This capacity building activities that took place when the would decrease the number of unplanned government budget circulars are issued. activities.

USAID TEAM ANNUAL REPORT 2020 | 19 Municipalities request changes to the Law on Public Finances to allow them to initiate projects without committing all funds. Due to the own-source revenues that are collected at the end of the year, 10 USAID TEAM raised this issue with MOF/Treasury department. municipalities plan projects considering these funds as well. Nonetheless, none of the projects that are planned to be implemented with these funds can be initiated if all the funds are not available. During Year 4, USAID TEAM planned to award small grants to local-level CSOs to continue monitoring municipalities as a The MLG could play an important role in follow-up to the CiviKos workshops. The grantees were supporting CSOs to monitor public planned to be selected (in coordination with USAID TEAM and procurement. MLG could fund CSOs to USAID) by MLG based criteria to be developed in the future 11 monitor municipal procurement and the which will include proof of capacity to monitor procurement. data could as well serve the MLG to Potential grantees will use the monitoring methodology monitor the performance of municipalities. developed by CiviKos and will target all focus municipalities. MLG assigned funds, but due to COVID-19 budget priorities for the central government, this activity is postponed for Y5. Municipalities should inform the beneficiary USAID TEAM worked with municipalities to increase municipal community for the projects that will be 12 transparency by assisting the publication of all procurement implemented so they can be involved in information, including municipal procurement plan. monitoring of the works. CSOs should participate in the one of the most important processes of public procurement, that is the evaluation and selection of bids. According to the CSOs, USAID TEAM is continually supporting the capacity building of 13 CSO representatives can participate in this the CSOs from central and local level on the monitoring of the process by only making a request to municipal procurement. municipality. However, none of the CSOs representatives have taken this option so far. Use the Most Economically Advantageous The project helps municipalities to use these criteria when 14 Tender criteria to increase quality and possible. competition. Increase the responsibilities of municipal USAID TEAM, in its Year 4 work plan, planned quarterly department directors in preparing the meetings with municipal management to discuss and evaluate 15 action plans and concrete actions for progress of the recommendation provided and addressed. Due addressing recommendations provided by to pandemic these meetings were not held as planned. internal auditor and NAO. Municipalities should introduce USAID TEAM conducted training on how to conduct audit performance auditing that includes properly performance, developed forms and templates, however, due to 16 completing the documents needed for the pandemic the pilot performance audits were postponed to the planning phase, as well as preparing and upcoming period. implementing audit performance. Fiscal number of businesses to be included The fiscal number was incorporated into the e-Procurement 17 in the e-Procurement platform. platform. Supported by USAID TEAM, the e-Procurement platform was Update of the e-Procurement platform with 18 updated with CM and CPE modules, which will be launched in new functionalities. Quarter 1 of 2021. Publication of additional documents on USAID TEAM assisted municipalities to increase transparency 19 municipal websites, such us contract by publishing all procurement information allowed by law. management reports and invoices. PRB data migration from old database into PRB will take the lead to perform the data migration. The 21 new database and activation of the web project will provide supervisory support in this process as application. needed.

20 | USAID TEAM ANNUAL REPORT 2020 USAID TEAM provided a guideline on the Handling Fraud in Capacity building for all NAO auditors on 22 Public Procurement which is now integrated in the NAO how to treat fraud cases. induction training program. Capacity building of the auditors on the use The project has already provided trainings and developed 23 of the e-Procurement platform. trainings tutorials on how to use the platform. USAID TEAM developed a SOP for standardizing municipal payment processes for legal frameworks, with the goal of digitalizing the whole payment procedure in five focus Municipalities fact issues with billing, municipalities. This will increase municipal transparency in 24 highlighting the need to introduce an reports with stakeholders, as well as accountability and fiscal invoice management system. prudence. In order to digitalize the process, the project must have a joint approach with MOF Treasury. However, due to circumstances created by pandemic and the government change, this activity is postponed for Y5.

Success stories Effective Online Procurement of Emergency Supplies During the Country’s Lockdown. The COVID-19 pandemic brought extraordinary challenges to governments all over the world, they had to ensure public health while continuing to provide services to their citizens. In March 2020, like most countries worldwide, Kosovo declared a lockdown introducing movement restrictions. Citizens could go out only for one hour within a day; schools, education institutions, and public institutions were closed; and the private sector was not allowed to operate – except for the businesses that provided necessities like food, hygiene, and medicine. The situation in Kosovo was especially chaotic as the country was experiencing political crisis as well. Notwithstanding, Kosovo was able to effectively deliver goods and services to its citizens, including efficiently managing emergency supplies. Thanks to the electronic enhancements introduced by the Government of Kosovo in recent years, contracting authorities in Kosovo working remotely delivered urgently needed health products and services in the immediate response to the COVID-19 crisis and ensured smooth and accountable management of the ongoing activities/contracts. Supported by the project, in 2018 the Government of Kosovo (GOK) functionalized the e-Procurement platform. This platform enabled Kosovo’s local and central government to continue with their procurement operations despite the movement restrictions caused by the COVID- 19 pandemic. The e-Procurement system allowed all public institutions “…the e-Procurement platform is our hero. Two years to conduct all aspects of ago, this system was a dream for us – something procurement activities online, from unimaginable, while today it saved lives, bypassed a drafting tender dossiers and system collapse, and avoided misconduct of public publishing calls for applications, to money. We are proud that we could deliver goods and bid applications, evaluations, services in an efficient and transparent manner even protests, and the signing of during COVID-19.” contracts. More importantly, the e- - Sami Uka, Public Procurement Regulatory Procurement system was crucial in Commission Board Member smoothing the operation of all

USAID TEAM ANNUAL REPORT 2020 | 21 emergency procurements necessary for the country's medical staff and patients including Personal Protective Equipment, PCR tests for COVID-19 for regional hospitals and local family medical centers. Without this mechanism, it would have been impossible for Kosovo institutions to address the global emergency without putting people at risk, leading to a higher number of positive cases, and ultimately risking a higher death toll. According to the PPRC, in the period between March and September 2020, contracting authorities conducted around 4,000 procurement activities using the e-Procurement system, out of which 400 contracts totaling 50 million Euros provided medical supplies for staff and patients in need. The technological enhancements introduced by the GOK marked transformational change as they are not limited to processing procurement activities. Today, Kosovo has a system that allows for better and more fair competition in the procurement process as a result of the opportunity for online appeals and advanced oversight by civil society and interested partners that the e-Procurement system provides. The project supported the PRB to develop the e- Appeals module within the e-Procurement platform, enabling economic operators to appeal online without needing to be physically present. In the past, economic operators that wished to appeal had to go the PRB offices in Pristina to submit their appeals, this was time consuming and would have been impossible during the coronavirus movement restrictions enforced by GOK for much of 2020. In addition, USAID TEAM, supported the PRB in developing an online database, where interested parties can watch live bid-protest hearings and search through records of older bid-protests. The Head of PRB, Blerim Dina gratefully informed the project: “[that] during the most difficult times when people couldn’t go out of their homes, our e-Appeals module and database allowed interrupted work increasing the transparency of the procurement review process thereby building public confidence in the fairness and impartiality of the PRB as a government institution.” The Head of the PRB also confirmed that complaints from economic operators were received seamlessly using the e-Appeals module of the e-Procurement system. He added that between March and September of 2020, economic operators submitted 598 appeals using the e- Procurement system, 42 cases than in the same period in 2019 despite the pandemic. Enabling businesses to appeal online has increased the transparency and fairness of the procurement processes even during these difficult and unprecedented times. Performance Management Plan During Year 4, USAID TEAM measured and reported on the progress of 25 project indicators. Because of the recent activity expansion to ten (10) additional municipalities, the indicators added, separately measure the performance of the additional 10 municipalities. Therefore, these indicators were categorized in two groups, (a) and (b). Group (a) represents indicators for the five original municipalities while group (b) represents indicators for the 10 new focus municipalities. Including these sub-indicators, TEAM measured feedback on 38 indicators. USAID TEAM has exceeded the target for 17 indicators. Due to the low baseline of the new focus municipalities in several indicators, such as implementation of procurement plans,

22 | USAID TEAM ANNUAL REPORT 2020 transparency, contract management, etc., and due to the extra effort that these municipalities put into reaching the targets for the mentioned indicators, the new focus municipalities exceeded their targets for seven indicators (4b, 6b, 7b, 10b, 12b, 13b, 17b). In addition, the five original focus municipalities also progressed and exceeded their targets in two indicators (13a and 15a). Nonetheless, there are 17 indicators for which the municipalities did not meet their set target, although for many they came quite close to the goal. Despite the difficulties that the pandemic caused for all municipalities, there are only 5 indicators that did not come within 10% of the target. In Year 4 USAID TEAM continued to provide support to the original five focus municipalities, as well as to the ten new focus municipalities which came on board at the beginning of 2020. Though faced with the pandemic, USAID TEAM continued to mentor and provide practical coaching to municipal staff in the fifteen focus municipalities, leading to new local solutions to mitigate corruption vulnerabilities in the municipal procurement process. The support was provided both in person when feasible, and online, making sure that although many municipalities were working only in a limited capacity, activities did not stop. The project carefully tailored its’ assistance, so the municipalities were able to progress in addressing corruption vulnerabilities and enhancing transparency in public procurement to “graduate” from project assistance. As a result, the new focus municipalities on average had an increase of 23% from 55 to 67 points (indicator 4b), while the five original focus municipalities a decrease of 1% from 76 to 75 points (indicator 4a). As a direct result of project assistance, the level of performance in the five focus municipalities improved by an average of 11% according to the project’s Municipal Procurement Effectiveness and Corruption Vulnerability (MPECV) Index (Indicator 17a) which measures municipal performance in (1) planning and budgeting, (2) staff capacity, (3) contract administration, (4) audit, (5) appeals and review, and (6) transparency, ethics, anti-corruption, and anti-fraud. And for the 10 additional focus municipalities, the MPECV Index (Indicator 17b) the level of performance improved by an average of 12%. USAID TEAM coached and mentored all fifteen municipalities to hold online procurement planning sessions for 2021. Now, through project assistance, municipal procurement plans are detailed, linked to the municipal budget, and legally compliant. As a result of improved planning and implementation, the ten additional municipalities increased the percentage of their implementation of municipal procurement plans from a baseline of 68% in 2019, to 75% in 2020, 7% points higher than the baseline and 3% above the target of 72% for the year (Indicator 6b). However, in the five original municipalities though there has been an increase of the percentage of the implementation of their municipal procurement plans from the baseline of 60% in 2016 to 74% in 2020, there was a decrease from 82.1% in 2019 to 74% in 2020 (Indicator 6a). Following last year’s training of procurement officials on the Advanced Procurement Certificate Program, the PPRC and Kosovo Institute for Public Administration (KIPA) certified more than 330 officers. The PPRC in cooperation with KIPA also trained 184 officials on basic procurement and helped 213 procurement officials gain their advanced certification training. This marked an important milestone, as Kosovo public institutions expanded their capabilities and ability to provide sustainable and self-reliant training in public procurement at the basic and advanced levels. During Year 4, the project assisted the PPRC to develop its in-house capacity and self-reliance to operate and maintain the e-Procurement platform in the long-term. Throughout the year, the project helped the PPRC develop the 12th, Contract Management Module, which was operationalized at the beginning of Year 5. Additionally, the project worked with the PPRC

USAID TEAM ANNUAL REPORT 2020 | 23 to develop an additional 13th module for the e-Procurement platform, the Contract Past Performance Module. As a result, all 13 modules are now fully active (Indicator 19). The project also introduced the PPRC to the Open Contracting Data Standard (OCDS) within the e-Procurement system, which the PPRC IT began developing in Year 4 under USAID TEAMs guidance. During Year 4, USAID TEAM worked with municipalities, central institutions, civil society, and the media to establish and strengthen accountability mechanisms. The project supported the Kosovo National Audit Office’s to monitor and strengthen the role of Anti-Fraud Unit, it helped establish in Year 2. In Year 4, the operational Anti-Fraud Unit identified 54 cases with suspected fraud elements and forwarded them to the State Prosecutor for further action, including 27 cases that specifically deal with public procurement (Indicator 21). Previously USAID TEAM, assisted all 38 municipalities in Kosovo to develop comprehensive action plans to be used as a tool to address NAO recommendations (Indicator 14). In 2019, Kosovo municipalities had implemented 32% of KNAO recommendations, while in 2020 the level reached 38% with the project support, a significant improvement despite being 4 percentage points below the target set for the year, which was 42%. Earlier, with project support the PPRC drafted a new regulation governing sanctions for non- performing procurement officers. Building on this, USAID TEAM continued to support PPRC by enhancing mechanism for sanctioning nonperforming procurement officers, using procurement performance data produced by the monitoring department to form the basis for evaluating the performance of procurement officers. USAID TEAM will continue to support PPRC by introducing practices that enhance the current mechanism to improve and/or sanction the work of poorly performing procurement officers. To ensure that the improved mechanism will be enforced, the project worked with the PPRC Board and supported the update of the current instruction which regulates the performance of procurement officers. During Year 4, a total of 79 letters – from a set target of 58 - were sent by the PPRC monitoring unit regarding public procurement with irregularities or red flags, a 36% increase above the target set for this year (Indicator 22). USAID TEAM continued to assist all focus municipalities in the use of instruments such as municipal websites to publicize all non-confidential procurement and finance management data on municipal websites in formats that can be readily used by civil society, media, and the public for analysis and increase in transparency and public trust. As a result, the percentage of procurement financial and audit documents publicized1 in five original focus municipalities increased from 95% in 2019 to 98.4% (Indicator 13a) in 2020. Whereas, the percentage of procurement financial and audit documents publicized in the ten additional focus municipalities has reached 87.2% against a target of 70% for 2020 (Indicator 13b).

1 Documents that are published include: procurement activities, budget proposals, approved budgets, periodic financial reports, annual financial reports, monthly time-series on revenues and expenditures, annual procurement plans, municipal annual plans, NAO reports, and mayors’ semi-annual reports.

24 | USAID TEAM ANNUAL REPORT 2020 COMPONENT I: DEVELOP, REFINE AND ROLL OUT MODELS FOR TRANSPARENT AND ACCOUNTABLE MUNICIPALITIES At its core, Component 1 supports the implementation of an effective public procurement system at the municipal level based on transparency, fair competition, and integrity. If the procurement system lacks transparency and competition, this creates opportunities for corrupt behaviors. During the first three years of USAID TEAM implementation, Component 1 activities involved an extensive diagnosis of development problems, identification of corruption vulnerabilities, training to fill the basic skills gaps, preliminary institutional capacity building, and design and development of different accountability tools. During the reporting period, USAID TEAM employed an integrated and adaptive approach to achieve transformational change, specifically during the expansion phase of the project. In the original five focus municipalities, project advisors shifted their engagement from addressing basic skills gaps to implementing more effective enforcement mechanisms and more active coaching and mentoring through on-the-job oversight of the procurement cycle, including contract management. This qualitative approach to monitoring and oversight is essential to build accountability and promote integrity. Furthermore, the project continued to support the implementation of sustainable mechanisms of internal controls in procurement, to ensure that all system users follow the appropriate 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 compulsory. USAID TEAM is using replication techniques to ensure quick engagement with the 10 new focus municipalities, introducing the know-how accumulated from the previous years working with the first five focus municipalities. During 2020, the project had to adjust its activities according to the COVID-19 pandemic. Project advisors, including procurement, finance, and audit advisors, continued to utilize online tools as well as in-person coaching sessions for the municipalities, ensuring that although many municipalities were working only in a limited capacity, the USAID TEAM activities did not stop. This work was completed effectively, allowing municipalities to continue progressing along the path to graduation. Major 2020 achievements for Component I include: • Extending its support to an additional ten new focus municipalities: Deçan/e, Ferizaj/Uroševac, Hani i Elezit/Elez Han, Istog/k, Junik, Lipjan/Lipljan, Podujevë/o, Prizren, Rahovec/Orahovac, and Suharekë/Suva Reka. • Finalizing the 2019 and 2020 Municipal Capacity Assessment Reports, which assess municipal performance for the 15 focus municipalities in public procurement, financial management, municipal transparency, and publication of key municipal information, employing the organizational capacity assessment tool. • Supporting Kosovo municipalities to further strengthen Internal Audit (IA) Units, municipal audit committees, and financial controls.

USAID TEAM ANNUAL REPORT 2020 | 25 • Developing a comprehensive Municipal Graduation Report for the five original focus municipalities, presenting the progress of each municipality over the years. In the beginning of the year, due to COVID-19, the project adapted and developed graduation reports for each of the five focus municipalities: Pejë/Peć, Vushtrri/Vučitrn, Gjilan/Gnjilane, Gjakovë/Đjakovica, and Pristina. While, in the second half of the year, USAID TEAM presented the annual 2019 and semi-annual 2020 graduation results to the municipal management of the five original focus municipalities. • Developing Municipal Graduation Baseline Reports for the ten new focus municipalities. In the beginning of the year, due to the COVID-19 pandemic making it impossible to present these reports to the municipalities in person, the project adapted, developing, and sharing custom reports with all ten new focus municipalities. In the second half of the year, the project presented the Municipal Baseline Reports for 2019 and semi-annual 2020 graduation results to all new focus municipalities. • Developing Custom Municipal Work Plans for all 15 focus municipalities. Custom work plans outlined each municipalities timeframe for achieving results, setting performance targets linked with graduation achievements, and providing a clear understanding of what each partner will contribute to USAID TEAM in terms of staff commitment and other requirements. Despite the impact of COVID-19 on municipality workload and capacity throughout 2020, these joint work plans have generally been successfully implemented. • Finalizing three major 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. Standard Operating Procedures (SOP) for Project and Contract Management. • Improving the capacity of municipal officers in procurement cycles and reducing vulnerabilities to corruption, including in the development of technical specifications and contract management. • Nine new focus municipalities approved the Handbook on Internal Public Expenditure Management Processes (the Book of Processes). The Book of Processes defines proper financial management and control requirements with a focus on risk analysis and management. The standardized processes outlined in this document became mandatory based on the MOF Regulation No. 01/2019 on Financial Management and Control. • All ten new focus municipalities approved the Code of Ethics, which addresses the growing need among all Kosovo municipalities to embrace accountability and integrity by adopting codes of conduct for municipal staff, members of assemblies, and local boards.

26 | USAID TEAM ANNUAL REPORT 2020 • Improving the implementation of NAO recommendations by six percent over the previous year. This year, municipalities were able to address 37% of NAO recommendations compared to 31% last year. • Supporting ten new focus municipalities in developing NAO Action Plans, based on the shared SOP which includes a clear timeline and delegation of responsibilities. • Coaching and mentoring municipal procurement officers on the varying levels of municipal compliance with the PPL, and the vulnerability to corruption for tender dossiers (1,134 cases), bid opening (30 cases), bid evaluation (268 cases), complaints (122 cases), and contract management (73 cases), as well as coaching municipalities on the review of 375 project technical specifications. • Reinforcing the capacity of municipal officers across the full procurement cycle and reducing vulnerability to corruption, including in the development of technical specifications and contract management.

USAID TEAM ANNUAL REPORT 2020 | 27

Component I Events Events/Groups Participants Workshops 92 1,002 1.1.4 Focus group discussion with business representatives 4 40 1.1.4 Focus group discussion with CSOs’ representatives 4 38 1.1.5. a Measure and report on the annual project and graduation indicator 5 38 results 1.1.5.b Introduce municipal Graduation plan and OCA results in 10 new 10 85 focus municipalities 1.3.1.a Progress of Procurement Plan Implementation 10 98 1.3.1.b Build the capacities of the bid evaluation committee members 10 135 1.3.1.c Build capacities for drafting technical specifications 11 137 1.3.1.d Procurement capacity building for Municipal Directors 11 93 1.3.1.d Procurement capacity building for School Directors 10 196 1.3.2. Managing public projects and contracts - challenges and 1 30 recommendations 1.4.3 Development of Action Plan for addressing the NAO 8 49 recommendations 1.4.4 Build capacity of Municipal Committee for Policy and Finance on 4 26 procurement, audit and financial control processes 1.7.2.a Handbook on Internal Public Expenditure Management Process 4 37 Trainings 1 28 1.4.2 Enhance the performance audit methodology for internal auditors 1 28 Roundtables 7 152 1.3.4 Support AKM Procurement Collegium as a venue for information 2 35 exchange and roll-out of technical assistance 1.4.5 Disseminate internal audit processes to build capacity of IAU and 2 50 MACs 1.5.3 Engage all municipal HR managers through learning summits to roll- 1 38 out solutions 1.6.2 SOP for standardized municipal web publications and dissemination 1 10 of practices 1.7.3 Disseminate handbook, SOP’s, templates and practices for Public 1 19 Financial Management and control Total 100 1,182

1.1. CONDUCT ANNUAL ASSESSMENT, SURVEY, AND PLANNING ACTIVITIES. USAID TEAM carries 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, uses findings from the annual capacity assessments, public perception surveys, and CSO monitoring from Component III and other assessment tools to tailor and refine the technical support provided to all Kosovo municipalities in order to increase their organizational capacity. 1.1.1. Expansion to ten new focus municipalities. As part of the expansion process, USAID TEAM firstly developed a method of selecting the additional ten municipalities. The project first selected the six second-tier municipalities to be new focus municipalities. Subsequently, working in close coordination with USAID, the project selected the remaining four municipalities based on Ministry of Local Government (MLG) municipal performance

28 | USAID TEAM ANNUAL REPORT 2020 management, and selected the best performing municipalities from the latest report. As such, the project expanded its intensive support to the following ten new focus municipalities: Deçan/e, Ferizaj/Uroševac, Hani i Elezit/Elez Han, Istog/k, Junik, Lipjan/Lipljan, Podujevë/o, Prizren, Rahovec/Orahovac, and Suharekë/Suva Reka. As the project expanded its support to an additional ten municipalities, it also grew internally, recruiting additional advisors in contract management, procurement, audit, and public finance management, to support the new focus municipalities alongside other municipal advisors.

USAID TEAM and the Mission conducted initial visits to new focus municipalities.

During Year 4, USAID TEAM, together with the USAID Mission organized initial visits to each of the new focus municipalities. During the meetings, the project provided a brief introduction to the activity. All municipalities appreciated the cooperation and support offered by the project, highlighting the need to improve the following areas procurement, audit, finance, transparency, and human resources. Some of the visits were also publicized on municipal websites, including those of Deçan/Dečane, Hani i Elezit/Elez Han, Junik, and Rahovec/Orahovac municipalities.

Upon completion of the initial meetings, the projects municipal implementation advisors (procurement, public finance management and audit) immediately started working with the new focus municipalities to identify the preliminary areas for support. For instance, in Junik, the municipal officials highlighted the need for support in procurement processes, including drafting technical specifications and tender dossiers, while the Finance Department requested assistance in registering inventory and assets under 1,000 Euros in the e-Pasuria system.

USAID TEAM initiated activities to start supporting the additional ten focus municipalities While, the Municipality of Deçan/Decane highlighted delays in project implementation and the internal audit unit requested assistance in developing an action plan to address NAO recommendation. Finally, in Hani i Elezit/Elez Han and Rahovec/Orahovac municipalities, the Public Finance Management advisor provided guidance to the Heads of Finance on asset

USAID TEAM ANNUAL REPORT 2020 | 29 management, bad debts, the CHU self-assessment questionnaire, and developed an agreement to coordinate activities with key municipal departments to address these issues. USAID TEAM continuously supported all fifteen focus municipalities. From mid-March to July, COVID-19 restrictions and best practices meant that assistance had to be shifted from physical presence in municipalities to phone, email, and other virtual means of communication. Throughout the rest of the year, project advisors were able to provide a combination of virtual and in-person support in accordance with the changing pandemic situation and Government-imposed limitations. Using extra caution and strictly following DAI COVID-19 safety guidelines, during Year 4, municipal advisors were able to make 322 direct visits to focus municipalities and 115 visits to non-focus municipalities. Throughout Year 4, USAID TEAM shared all its manuals, guides, templates, and documents, including a model of Code of Ethics developed by the project, with new focus municipalities. 1.1.2. Assess organizational capacities of focus municipalities. The project continues to utilize its Organizational Capacity Assessment Tool (OCAT) to assess the performance of the 15 focus municipalities. The OCAT data enables the project to identify municipal needs and challenges, and through learning and adapting, address these findings and challenges. At the beginning of Year 4, USAID TEAM conducted the OCAT for 2019 with all 15 focus municipalities. In the past, the OCAT was conducted for the five focus and six- second tier municipalities. Starting in 2020, however, the OCAT included the four additional focus municipalities. At the beginning of 2020, USAID TEAM conducted USAID TEAM conducted the interviews to collect OCAT data its annual survey interviews and collected and establish the baseline in new focus municipalities. data related to the performance of all focus municipalities in public financial management (PFM), municipal transparency, the publication of key municipal financial information, and human resources. This is the project’s fourth annual assessment utilizing the assessment methodology developed by the Organization for Economic Cooperation and Development (OECD) to evaluate the procurement systems and practices of Kosovo municipalities. Considering that the selection of the focus municipalities was conducted in different periods of performance, USAID TEAM worked with selected municipalities to collect data for the original five focus municipalities, the six second-tier municipalities, and the four new selected focus municipalities. The OCAT results are generated based on the interviews conducted with senior municipal officials in procurement, public finance management, municipal transparency, and human resources. Based on the results, the average scores show that there

30 | USAID TEAM ANNUAL REPORT 2020 are differences in capacity between the three groups of municipalities. The results generated from OCAT have been incorporated in the Municipal Capacity Assessment Report, which serves as a measurement of each municipality’s progress towards graduation. Overall, in 2019 the five focus municipalities scored an average of 15.53 out of 18 points or 86.3%. In the same period, second-tier municipalities achieved an average score of 11.83 points or 65.7%. When compared to the previous year’s assessment results, the original five focus municipalities improved their performance by 14% (from 13.6 to 15.5 points), while the second-tier municipalities improved their performance by 8% (from 10.97 to 11.83 points). USAID TEAM’s target outcome for the five focus municipalities in the Municipal Capacity Assessment Report for 2019 was 80%. The diagram below presents the progress made throughout the years:

Annual Capacity Assessment Results - 2019 90.0 86.3 85.0 80.0 75.8 74.9 75.0 70.0 67.7 61.8 65.0 61.061.4 61.0 60.1 56.8 60.0 55.156.0 55.0 50.0 Baseline 2016 2017 2018 2019

5 Focus municipalities Second-tier municipalities All - Focus and second-tier

Finally, at the end of Year 4, the project initiated its annual OCAT assessment of focus municipalities for Year 5. USAID TEAM visited focus municipalities to assess their progress related to procurement, finance, and audit indicators. The data collected will be incorporated into next year’s OCAT Report. According to assessment data, 15 focus municipalities achieved 14.32 points out of 18 points, or 79.53%, which marks an improvement of 15.6% compared to 12.39 in 2019. Five original focus municipalities in 2020 achieved an average score of 16.8 or 93.15%, and compared with 15.5 points in 2019 improved performance for 8%, while ten new focus municipalities in 2020 achieved an average score of 13.09 points or 72.72%, which compared to 10.8 points in 2019, improved their performance by 21%. According to the data, Junik improved performance 43%, from 9.1 points in 2019 to 13.0 points in 2020, Rahovec/Orahovac improved 31% from 9.6 points in 2019 to 12.6 points in 2020 and Hani Elezit/Elez Han with 26%, from 8.6 points in 2019 to 10.9 points in 2020.

USAID TEAM ANNUAL REPORT 2020 | 31

Annual Capacity Assessment Results 2019/2020

18 17 17 17 17 16 16 16 15 16 15 16 15 14 14 14 13 13 13 14 12 13 13 12 12 12 12 12 12 12 12 11 10 10 10 9 9 8 6 4 2 0

2019 2020

1.1.3. Create custom work plans with focus municipalities. USAID TEAM drafted custom work plans and shared them with all 15 focus municipalities. This year the project adopted a new methodology for developing custom annual 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 USAID TEAM drafted the municipal understanding of what each partner will contribute to USAID custom work plans and shared with 15 municipalities for their approval. TEAM in terms of staff commitment and other requirements. The work plans served as a guide for achieving the objectives, and outcomes of the project’s support to the municipalities. Despite the impact of the COVID-19 pandemic on the priorities, workloads, and capacities of municipalities during 2020, generally these joint work plans have been successfully implemented. 1.1.4. Conduct citizen perception survey. USAID TEAM developed 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 perceptions 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 has conducted since the project began. This year’s survey targeted a sample of 3,013 citizens from every Kosovo municipality including urban and rural areas and gathered in-depth feedback from five focus groups and 30 in-depth interviews conducted with businesses and CSOs from the five original and ten new focus municipalities.

32 | USAID TEAM ANNUAL REPORT 2020 The Citizens’ Perception Survey was initiated by interviewing individual persons through a face-to-face computer-assisted personal interviewing technique, however, due to restrictions arising from COVID-19, it was continued through computer-assisted telephone interviews. Key findings of the citizen perception survey include: 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 they are satisfied with municipal services in general. 2. The majority of surveyed citizens are satisfied with the implementation of public projects (68%), the recruitment of municipal staff (62%), and the management of municipal public finance (58%). 3. The vast majority of respondents (87%) believe that personal contacts and/or relationships are important to getting things done when dealing with the public sector in their municipality. 4. Pre-tendering is perceived as the most corrupt stage Citizens’ Perception Survey on of the procurement process with 70% of Municipal Corruption and respondents selecting it, followed by the tendering Transparency in Public Procurement. stage (58%). 5. The vast majority of respondents (93%) have not encountered a situation where municipal public officials have offered their services in return for bribes, gifts, or other favors. In addition, this year, the project included comparative data from previous years findings, illustrating changes on a general level, which was complemented by an annex table providing greater detail. At the end of Year 4, USAID TEAM has already published the call and made selections for the annual Citizens’ Perception Survey on Municipal Corruption and Transparency in Public Procurement for 2020. 1.1.5. Municipal Graduation Plan - Monitoring Implementation. The project regularly monitors graduation plan indicators to help municipalities focus on identifying areas where bottlenecks occur. Based on this monitoring process, USAID TEAM provides targeted assistance to areas where challenges are identified. a) Measure and report on the annual project and municipal graduation indicator results. At the beginning of Year 4, considering that the project extended its support to additional municipalities, USAID TEAM utilized its Graduation Readiness Measurement Tool to collect baseline data for the ten new focus municipalities. The project applied the methodology from the graduation plan used for the original five focus municipalities to gather data for the ten new focus municipalities. However, due to movement restrictions arising from the COVID-19 pandemic, USAID TEAM staff had to collect some data through municipal officials, rather than from the project embedded

USAID TEAM ANNUAL REPORT 2020 | 33 municipal experts who ordinarily have been responsible for conducting the direct assessment in that municipality. Based on these assessments, the Municipality of Lipjan/Lipljan leads the new focus municipalities with a total of 71 points, followed by Suharekë/Suva Reka with 65 points, and Istog/k with 64, while the municipality of Junik is ranked last with 41 points. The chart below illustrates the baseline results for the ten new focus municipalities against the minimum score for graduation.

Ranking of 10 New Focus Municipalities Baseline - 2019 90 80 71 65 70 64 60 52 56 60 46 46 50 50 41 40 30 20 10 0

Dec-19 Min. score for grad.

In addition, the project measured and reported the performance of the original five focus municipalities in 2019, finding that all five original focus municipalities had increased their overall graduation scores from 12% to 45%. The municipalities of Pejë/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 each individual indicator. Considering the sustainability of the trend in results achieved by Pejë/Peć and Vushtrri/Vučitrn municipalities during 2017, 2018, and 2019, and the fact that both municipalities exceeded the total graduation threshold of 80, during Year 4 these two municipalities were considered monitoring municipalities. If either municipality is assessed as meeting both the overall graduation criteria of 80 points and the individual indicator criteria of at least 6 points for each indicator in the January 2021 performance evaluation, then they 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.

34 | USAID TEAM ANNUAL REPORT 2020 Graduation results 2017 - 2020 Five original focus municipalities

90 84 82 82 81 77 77 76 80 73 73 72 80 70 69 71 69 67 67 70 64 64 66 63 62 60 60 62 60 57 54 53 55 55 51 51 50 44 44 44 39 40 30 20 10 0 Pejë Vushtrri Gjilan Gjakovë Prishtinë

Dec. 2017 Jun. 2018 Dec. 2018 June 2019 Dec-19 Jun-20 Dec-20 Min. score for grad.

The results confirm that all five original municipalities reduced procurement activity cancelations through better planning and improved preparation of tender dossiers. Municipalities have also performed well in the implementation of the 2019 Annual Procurement Plan. The number of unplanned procurement activities has been minimal. Transparency is the area where all municipalities improved the most and they excelled in this indicator as a consequence the publication of financial, procurement, and audit documentation. Improvements were also identified in planning and budgeting, staff capacity, transparency, and ethics. Nevertheless, all five original municipalities face challenges in addressing the following indicators: procurement appeals at PRB, contract management effectiveness, and addressing NAO and Internal Audit (IA) recommendations. Additionally, during 2020, due to COVID-19 restrictions on movement, USAID TEAM adapted and developed detailed Graduation Reports for each of the 15 focus municipalities and shared them with the appropriate municipal management teams.

USAID TEAM ANNUAL REPORT 2020 | 35 The graph below present semi-annual graduation results – June 2020

Semi-Annual Graduation Results - June 2020

100 82 73 80 67 66 62 65 64 60 55 62 57 60 48 47 48 52 40 20 0

Jun-20 Min. score for grad.

Finally, at the end of Year 4, the project started to collect, process, and analyze graduation data from all focus municipalities. Based on the data, in 2020 Pejë/Peć, achieved 81 points, and although it declined by 4% when compared to the previous year, it continued to be the leading performing municipality exceeding the 80-point minimum required for graduation. Podujevë/Podujevo increased its performance by 27%, from a score of 60 in 2019 to a score of 77 points in 2020. Vushtrri/Vućitrn also achieved 77 points in 2020, however its’ score had decreased by 7% from 82 points in 2019. Hani Elezit/Elez Han had improvement of 68% comparing to previous year from 46 to 77 points. , Gjakovë/Đakovica also showed a 7% improvement since 2019, from 72 to 76 points in 2020. Robust growth was shown by the municipalities of Junik – increasing its performance by 75%, from 41 points in 2019 to 72 points in 2020; and Ferizaj/Urosevac which increased its performance by 29%, from 46 to 59 points in 2020. Based on the graduation results for 2020, none of the focus municipalities have managed to meet all the criteria necessary to be considered a graduated municipality. Although Peja municipality have reached the status of municipality under monitoring and may soon reach the status necessary for graduation. It is clear that there were a number of extraordinary circumstances throughout 2020 that have had a direct impact on municipalities ability to make progress towards these graduation indicators. These include • Late Government Budget approval, delaying the initiation of planned procurement activities • At the outset of the pandemic the Kosovo Treasury and the PPRC required that institutions not initiate capital investment activities for a significant period and instituted delays in the implementation of projects. Both of these actions have created difficulties in the timely implementation of procurement plans and initiated projects housed within them.

36 | USAID TEAM ANNUAL REPORT 2020 • Protective measures undertaken by institutions to minimize risk of COVID-19, as well as infected officials in municipalities caused difficulties in reaching targeted levels for some specific indicators. A more detailed analysis of these limiting factors will be presented in the graduation report for the focus municipalities once the results have been verified and finalized. b) Introduce municipal graduation plan and present municipal graduation and organizational capacity assessment results in 10 new focus municipalities. USAID TEAM worked with the ten new focus municipalities to ensure they achieve tangible results against the graduation criteria. To do this, USAID TEAM held internal sessions with mayors, chairpersons of municipal assemblies, chief financial officers, finance directors, procurement managers, HR managers, heads of IA Units, and related stakeholders to present and discuss issues related to their progress against the graduation indicators. The project introduced and presented the municipal graduation and organizational capacity assessment baseline for 2019, and semi-annual results for the period January - June 2020 to the management of the ten new focus municipalities. This includes Deçan/e, Ferizaj/Uroševac, Hani i “The USAID TEAM project taught the Municipality of Elezit/Elez Han, Istog/k, Junik, Lipjan/Lipljan officials to identify flaws and weaknesses. I express my readiness to deal with the implementation Lipjan/Lipljan, Podujevë/o, Prizren, of all the recommendations that will emerge from this Rahovec/Orahovac, and Suharekë/Suva analysis.” Reka. These workshops were held - Imri Ahmeti, online due to COVID-19 restrictions. Mayor, Municipality of Lipjan/Lipljan During these workshops, the project introduced the methodology for measuring graduation progress and presented each municipality’s results to them. The focus was on discussion of results related to the cancelation of procurement activities and the need to align procurement plans with approved budgets, as well as on improving project oversight, contract management, transparency, and other indicators which were identified as weak points across the new focus municipalities.

They generally appreciated this tool and the Meetings with the municipal management mayors committed to periodically review of Pejë/Peć and Vushtrri/Vučitrn. performance on graduation indicators with their municipal teams. In terms of baseline results, as mentioned in section a) of this sub-activity, the Municipality of Lipjan/Lipljan leads the new focus municipalities with a total of 71 points,

USAID TEAM ANNUAL REPORT 2020 | 37 followed by Suhare kë/Suva Reka with 65 points, and Istog/k with 64, while the municipality of Junik is ranked last with 41 points. Generally, Mayors and municipal directors appreciated the presentation of these reports and the support they received from the project, providing detailed information on identified challenges. Municipal directors committed to work on overcoming issues, especially in the fields of procurement, contract management, and auditing. c) Present municipal graduation and organizational capacity assessment results to five original focus municipalities. Similar to the above-mentioned workshops, the project held online sessions to present the municipal graduation and organizational capacity assessment results for 2019 and semi-annual results from January “The municipality has benefited a lot from this project. The to June 2020 to the management of operations and systems are advanced due to the USAID the five original focus municipalities: TEAM project. The administrative culture has changed due to the pursuit of targets set by the USAID TEAM project.” Gjakovë/Đjakovica, Gjilan/Gnjilane, Pejë/Peć, Pristina, and Vushtrri/ - Ardian Gjini, Mayor, Municipality of Gjakovë/Djakovica Vučitrn. According to the annual results, all focus municipalities made improvements towards the minimum graduation scores in 2019, increasing from an average of 12% to 45%. The municipalities of Pejë/Peć with 84.4 points and Vushtrri/Vučitrn with 82.4 points, exceeded the minimum score of 80 points to qualify for graduation but did not fulfill the graduation criterion of achieving a minimum score of six points for all individual indicators. The graph below presents 2017 baseline data, annual data for 2018, and 2019:

Municipal graduation results 2017 - 2018 - 2019

90 84 82 80 77 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

38 | USAID TEAM ANNUAL REPORT 2020 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 helps focus municipalities to identify and implement innovative projects to decrease corruption vulnerabilities in project and contract management as well as those designed to increase financial control over public expenditures. However, due to COVID-19 restrictions, the project was unable to implement this activity and postponed it to Year 5. 1.3. ENHANCE MUNICIPAL CAPACITIES IN THE PROCUREMENT CYCLE. In Year 4, USAID TEAM extended its support to ten new focus municipalities. The project rolled out the practices, processes, and forms from the original five focus municipalities to these new focus municipalities. In the original focus municipalities, as described in sub-activity 1.3.1., project procurement advisors shifted the focus of their assistance from closing basic skills gaps 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 original focus municipalities through monitoring and the provision of targeted assistance. Specifically, the procurement advisors supported focus municipalities in the following areas related to the graduation indicators: (1) implementing public procurement activities for 2020 in accordance with the timeframe in the procurement plan, (2) building the capacity of the bid evaluation committee members, (3) building their capacity to draft technical specifications, (4) using the most economically advantageous tender (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. They also supported knowledge sharing, and the dissemination of control mechanisms, guidelines, and streamlined USAID TEAM Procurement Advisor supported Pristina Municipality to publish all processes to support Indicative Notices. transparent and accountable municipalities.

USAID TEAM ANNUAL REPORT 2020 | 39 In the beginning of Year 4, USAID TEAM procurement advisors supported all focus municipalities to develop procurement plans designed to reduce their exposure to corruption. During its’ first three years, the project more actively supported the focus municipalities to develop specific, detailed, and legally compliant procurement plans by holding workshops. This year the project transitioned to a mentoring role, supporting the process of drafting procurement plans, and helping municipalities only when needed. Furthermore, this year, the Municipality of Gjakovë/Ðakovica took initiative to organize a workshop to finalize its procurement plan, gathering requesting unit representatives, all procurement officers, the Mayor, and Chief Financial Officer. During the event, the project procurement advisor only assisted the municipal team in planning work activities and provided guidance on public versus framework contracts. In contrast to previous years where the project had to advise the municipality to initiate this activity, this year, the Procurement advisors prepared a ‘How-to guide’ municipalities on their initiative organized the to facilitate the process of preparing and publishing development of the procurement plans and the Indicative Notices. coordinated the process. Additionally, in Gjakovë/Ðakovica, for the first time the members of the Policy and Finance Committee and the members of the Municipal Assembly were informed about, and involved in discussion regarding Procurement Plan activities, a practice that has not been applied by other municipalities. The Assembly meeting also grabbed local media attention, full coverage of which is available here.

In Gjakova, for the first time, the members of the Policy and Finance Committee and the members of the Municipal Assembly have been informed and discussed in detail the Procurement Plan. The event grabbed media attention too. All focus municipalities prepared and submitted their procurement plans per the legal requirement – 15 days after the Government of Kosovo approves the budget. This year the budget was approved on March 18, 2020. As soon as the procurement plans were published, procurement advisors assisted the 15 municipalities to publish Indicative Notices for all activities which had an estimated value of more than 500,000 Euros. Publication of the Indicative Notice is an aid to transparency and is for the benefit of the economic operators, permitting the municipalities to reduce the minimum time limit for tendering, to not less than 24 days instead of the normal minimum of 40 days. Only Pristina and Gjakovë/Đjakovica had procurement activities with an estimated value of more than 500,000 Euros. Procurement

40 | USAID TEAM ANNUAL REPORT 2020 advisors also prepared a “how-to” guide to facilitate the process of preparing and publishing the Indicative Notices. The procurement advisors also supported all focus municipalities to prepare 2019 Procurement Reports. At the beginning of the year, they advised procurement officers to prepare annual reports on large, medium, small, and With its own initiative, Gjakova Municipality gathered municipal minimal value public contracts officials to finalize the Procurement Plan 2020 promoting signed during 2019 according to sustainability and self-reliance. PPRC requirements. In some municipalities, like in Pristina, the draft that was prepared by the procurement officers did not match the data. In these cases, the project guided the municipal procurement officers to prepare a complete report and make necessary corrections to ensure that the submitted reports were accurate and comprehensive. Also, in the Municipality of Ferizaj/Uroševac, the procurement officers did not complete the daily procurement log as advised. When PPRC requested them to submit a report on signed contracts, USAID TEAM supported the municipality to complete the report with the missing information. As all municipalities were working with either reduced staff, or entirely remotely throughout the pandemic, procurement advisors provided outlines of all activities in the procurement process to each of the 15 focus municipalities.

As the procurement process has several Procurement advisors supported focus municipalities phases, these were divided into activities remotely to the implementation of the procurement phases. waiting to be launched, evaluation stage activities, activities awaiting commitment of funds, and activities on hold. Procurement advisors encouraged procurement managers to proceed with all activities, as following the introduction of the e-Procurement platform, many steps could be concluded while working remotely. Procurement advisors also advised that procurement managers continue to publish tenders for all activities for which requests had been delivered, and to request that the head of the evaluation committees send offers to the evaluation committee members to continue the evaluation process. For activities awaiting commitment of funds, they informed procurement managers to continue only with those with funds already committed. Based on preliminary analyses of 2020 results as can be seen on the chart below the focus municipalities, despite pandemic situation performed much better than non-focus municipalities on implementation of procurement plan.

USAID TEAM ANNUAL REPORT 2020 | 41 The procurement advisors continued to Implementation of the procurement plan - 2020 work with all focus municipalities on a day-to-day basis to improve the quality of 100% tender dossiers, bid openings, and bid 80% 74% 65% evaluations, reducing vulnerabilities to 55% 60% corruption. During Year 4, they coached 40% and mentored municipal procurement 20% officers on the levels of municipal 0% compliance with the PPL, and tender Non-focus All Kosovo Focus dossiers vulnerabilities to corruption Municipalities Municipalities Municipalities (1,134 cases), bid opening (30 cases), bid evaluation (268 cases), complaints (122 cases), and contract management (73 cases). They also reviewed and coached municipalities on 375 project technical specifications. USAID TEAM also provided professional advice to ensure that processes complied with the Public Procurement Law, and Rules and Operational Guidelines for Public Procurement. USAID TEAM procurement advisors continuously worked with the procurement officers to facilitate their daily work. During 2020, advisors drafted nine types of template contracts and advised procurement officers on how to use them while preparing tender dossiers. Procurement advisors also guided municipal teams on public contracts and public framework contracts, which are categorized into works, supplies, and services. Furthermore, the framework contracts are divided into indicative quantities (cases where ceiling is +/- 30%) or unit prices (cases where Procurement advisor drafted nine types of contract templates for value is foreseen). These contract templates will help public and framework contracts procurement officers achieve consistency in their work. The project advisors continued to support requesting units to develop technical specifications. In the Municipality of Pristina, the project procurement advisor coordinated with During the Technical Specifications workshop organized for Pristina’s Public service the Public Services Department, the project advisor supported the municipal officials to draft the technical specifications, qualification criteria, and price lists for the procurement activities of this Director to organize a department. two-day workshop for the directorate on the preparation of technical specifications. During the workshop, the advisor supported municipal officials to draft technical specifications, qualification criteria, and price lists for procurement activities. In addition, due to interest on behalf of the municipality,

42 | USAID TEAM ANNUAL REPORT 2020 participants were advised on consultancy services. As a result, by the time the budget was approved, this directorate was ready to initiate all activities. USAID TEAM procurement advisors also supported procurement officers to draft comprehensive tender Project procurement advisor established a dossiers, with a focus on formula for evaluating the bids for a construction work using the most contract award criteria. The economically advantageous tender award criteria. advisors also provided direct assistance on how to “restrict the number of lots” and how to select the most economically advantageous tender (MEAT) or lowest price with scores award criteria. As a result of this assistance, 12 of the focus municipalities restricted the number of lots in their procurements, and 14 of the focus municipalities used the MEAT or lowest price with scores award criteria. For example, when the Pristina municipality initiated a construction work activity to “construct a new green market,” the procurement advisor assisted the municipality to conduct this activity using a MEAT contract award criterion (80% price plus 20% maintenance). Not only was this the first time that this municipality has used the MEAT criteria in a construction works contract, it was the first time that this award criterion had been used in Kosovo. This practice was also implemented by Rahovec Municipality during the last quarter of the year for the procurement activity “Construction of the Museum in Krushe e Madhe.” The USAID TEAM procurement adviser also supported Rahovec municipality during the evaluation of the tender and shared a template for the evaluation with them. USAID TEAM assisted municipalities in adopting procurement procedures based on municipal needs. One such procedure is the negotiated procedure without publication of the contract notice. Considering the current situation with the COVID-19, many municipalities were required to initiate emergency contracts for disinfection services. Therefore, procurement advisors provided municipalities support in navigating this process and outlined steps to record the use of this procedure in the e- Procurement platform. Since standard tender dossiers are not used by PPRC for this procedure, the procurement advisors drafted four templates. Municipalities were advised that they should play an active role in determining the USAID TEAM procurement advisors supported the terms of the contract, with special reference to Municipality of Pristina to draft two tender dossiers for a negotiated procedure for public contract: for prices, delivery deadlines, quantities, technical services and for supply. characteristics and guarantees; they should

USAID TEAM ANNUAL REPORT 2020 | 43 ensure that the contracted price is not higher than the market price; and should carefully assess the quality of the contracted 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 advisors also worked with the ten new focus municipalities and advised them on various procurement procedures. In Istog/k, for example, advisers counselled the procurement manager on how to cancel a negotiation procedure and initiate an open procedure with accelerated time limits. In the course of expanding project support to the ten new focus municipalities, the project advisors shared guidelines, manuals, standard forms, and templates that were developed by the project with the municipalities. These documents will guide the new focus municipalities in conducting procurement activities and procedures effectively. Consultancy services was another uncommon procedure used by the municipalities in 2020. The project supported the procurement officers and bid- evaluation committee members of the Municipality of Pristina to evaluate proposals for such services. Considering the rarity of this procedure, PPRC did not adopt any forms or templates for such evaluations. As such, the procurement advisor produced a standard template based on the criteria determined in the tender dossier. These criteria are a two-envelope system with the Procurement advisors developed a MEAT score award criteria. This is the first time that the template on Evaluation Report for municipality has reached this stage of the procurement Consultancy Services - 2nd Phase process for consultancy services. USAID TEAM also facilitated communication between the central and local levels, ensuring that municipalities are well informed with latest central-level notices and legal amendments. This was especially important at the beginning of the COVID-19 pandemic. In March and April 2020, PPRC published several mandatory notices for all contracting authorities. The procurement advisors assisted municipalities to adopt these PPRC notices in all activities they initiated. Per the PPRC Notice #42-2020, municipalities stopped initiating procurement activities. However, in April, it was clarified that the MOF decision to halt capital investments was not applicable at the local level; therefore, municipalities were advised to continue with all activities according to their work plans. It was emphasized that municipalities should be careful when initiating activities based on Memorandum of Understandings (MOU) with ministries and advised them to take other notices into consideration. These notices were invalidated in June 2020, and all municipalities were informed to continue with their procurement procedures in compliance with the PPL provisions. Last year, the project supported the Municipality of Pristina to conduct procurement procedures for a private-public-partnership (PPP) activity to construct an underground parking garage in the city. The project has continued to support the municipality throughout the implementation phase of this activity. The Municipality of Gjilan/Gnjilane is currently entering into a PPP contract, and the project is currently transferring knowledge and advising

44 | USAID TEAM ANNUAL REPORT 2020 the municipality on conducting a two-stage restricted procedure to conduct the feasibility study, and once this is completed, proceed with initiating PPP procurement procedures. The Municipality of Pristina, is conducting a second PPP activity “the construction of three new schools, maintenance and provision of services in the Municipality of Pristina.” The project to date has supported the Municipality of Pristina to conduct procurement procedures and as such completed the first phase successfully, shortlisting six of the ten applications received according to PPL provisions. Due to the COVID-19 pandemic, project advisors supported the municipality to organize a virtual pre-bid conference for the PPP activity. Currently, the municipality is in the tendering phase. During Year 4, project procurement advisors also held various virtual workshops with the ten new focus municipalities on topics including progress on implementation of the procurement plan, bid-evaluation, Public Procurement Training with School Directors technical specifications, procurement procedures for municipal directors, and procurement procedures for school directors. The procurement advisors conducted ten virtual workshops with the directors of the ten new focus municipalities to review their progress implementing procurement plans. These plans are the first step in the procurement process, and as such, failure to implement them may have a detrimental impact on the entire CA, the attainment of its objectives, and results in emergency procurement. Despite the difficulties created by COVID-19, the PPRC’s notices regarding procurement procedures, and late approval of the budget, all municipalities showed positive progress in implementing their Procurement Plans. During the last quarter of 2020, procurement advisors also conducted ten virtual workshops with bid evaluation commission members from the ten new focus municipalities. The workshops covered topics related to evaluation procedures and processes, and the tender comparison, including specific problems and difficulties that may be encountered during this process. These workshops involved practical exercises where procurement advisors addressed the issues of abnormally low prices, contract award Calculating Abnormally Low Prices Tool criteria, lowest price with scores and MEAT, as well as restriction of the number of lots to be awarded to one economic operator. In addition, procurement advisors conducted ten workshops on Public Procurement Procedures with school directors and health care employees. The project organized this workshop twice for the Municipality of Podujeva/o, following a change in municipal management after an extraordinary local election. In the interim, the project organized an additional session for the new appointed directors of the Municipality of Podujeva/o.

USAID TEAM ANNUAL REPORT 2020 | 45 The project organized ten workshops for staff from requesting units on the preparation of technical specifications, and the officials attending had the opportunity to discuss issues they often face in drafting technical specifications, as well as to obtain appropriate legal information, including Terms of Reference. While supporting local level institutions, procurement advisors also supported central-level procurement institutions in enhancing procurement procedures. Consequently, USAID TEAM procurement advisors reviewed and provided technical inputs on the draft Concept Note of the Public Procurement Law. USAID TEAM’s procurement advisor provided support to the PPRC’s close working group during the rewrite of the Public Procurement Law (PPL). The procurement advisors also supported the PPRC in drafting the Rules for Procurement of Special Services and in drafting a tender dossier for this service. The procurement advisors assisted the PPRC in finalizing the tender dossier, available here, and the rules, available here. All 15 focus municipalities were informed about the new rules. Considering that this is a new procedure that was not previously regulated in procurement, the advisors produced a template for preparing the TOR that was shared with municipalities, helping them conduct this procedure properly. Additionally, the procurement advisors assisted the PPRC to draft two notices related to the execution of the contracts during COVID-19, with the intention of simplifying the tender process. The notices were published on the e-Procurement platform on September 10, 2020, and all focus municipalities were informed. The project also reviewed a legal interpretation regarding the deadlines for filing complaints drafted by PPRC to assess its’ compliance with Article 108/a of Public Procurement Law. There are cases when the contracting authorities do not issue any decision after receiving a complaint from an economic operator. In such cases, PRB is not able to review the complaint, and therefore, the economic operator does not have any evidence to submit a complaint to PRB, losing the right to complain. Upon reviewing the PPRC’s interpretation, the team advised them to amend the interpretation, requesting that PRB notify PPRC in such cases, allowing the latter to issue a notice in accordance with the Regulation 02/2017 on the Award and Revoke of Professional Procurement Certificates. Procurement advisors continuously reviewed the publication of procurement related data and supported focus municipalities to improve their performance on the transparency indicator, noting great progress. For example, in the first half of 2020, the Municipality of Junik, published only 8.82% of its documents however, pursuant to project advice, by the end of 2020, the municipality was publishing 100% of its documents. Due to the COVID-19 situation, the GOK adopted the Law on Economic Recovery, Law no. 07/L-016, which amended the PPL preference for local products and services. Consequently, municipalities were advised on how to apply the new provision, which gives an advantage to local economic operators that offer services and products that are not more than 15% more expensive than other offered prices, when this condition is specified in the tender documents. The CPA has concluded two framework agreements with several economic operators. These are “Supply with IT equipment” and “Supply with fruits and vegetables” on behalf of all contracting authorities. Article 56.36 of the ROGPP stipulates that re-opening of competition

46 | USAID TEAM ANNUAL REPORT 2020 in cases of central procurement activities conducted by the CPA on behalf of other contracting authority (CA) shall be conducted by the CA itself whenever the need arises. These procedures can only be applied under a limited number of special circumstances, where it is not possible to determine prices or a pricing structure when a public framework contract is established. In such cases, the CA shall award any subsidiary contracts by re-opening competition (also called a mini-tender) between the economic operators already party to the framework agreement, capable of performing the proposed contract. Accordingly, the procurement advisers supported the focus Municipalities to conduct mini tenders (re-opening competition) since it was the first time that this procedure was applied by the Municipalities. In order to support the procurement process, advisors have supported all focus municipalities in activities related to NAO and IA procurement recommendations; initially this was done by analyzing the given recommendations, and subsequently by addressing them. 1.3.2. On-the-job coaching/mentoring municipal mechanisms to enhance project and contract management cycle. At the beginning of Year 4, the project organized a roundtable with central and local-level institutions to discuss the complexity of the public projects and contract management processes, challenges they face, and opportunities to improve these processes. The project presented key vulnerability issues in the contract management process as identified in the assessment report and legal framework review. Such issues include, but are not limited to, legal construction frameworks, confusions related to the roles of project vs. contract management and oversight bodies, and responsibilities of inspections. The discussion was highly interactive as participants, including representatives of the Ministry of Infrastructure and Environment (formerly the Ministry of Environment and Spatial Planning), MOF – Treasury, and focus municipalities highlighted issues that their institutions are facing in this regard. The participants then participated in working groups and presented some important steps to be taken toward sustainable reforms for the successful implementation of public projects and contracts.

USAID TEAM organized a roundtable with the central and local institutions to discuss the complexity of the public projects and contract management processes, challenges they face, and opportunities to advance these processes. USAID TEAM also started to provide on-the-job coaching on municipal mechanisms to enhance the project and contract management cycle. The project’s Contract Management Advisor reviewed 375 activities related to contract management. In most cases, the advice that was given mainly related to the description and technical specifications of different positions for construction works in various facilities (sports halls, various renovations). The main observation in most of the specifications was failure to define the compression module in positions where required construction materials usually lack technical descriptions. In the construction of roads, the specifications are generally different, and it was necessary to advise municipalities to improve or correct their activities. Deficiencies were noted in supply requirements, which often lacked clear and precise specifications; for example, the planting of

USAID TEAM ANNUAL REPORT 2020 | 47 seedlings lacked specifications of their exact type, planting depth, size, phytosanitary certificate, origin, and maintenance, etc. The advisor noticed differences in technical specification capacities between municipalities, which supported a need for tailored assistance according to municipal needs. The advisor suggested that officials drafting technical documentation should consult manuals published on the PPRC to assist in the drafting process. The USAID TEAM Contract Management Advisor recommended that municipalities include very clear descriptions in technical specifications. On several occasions’ municipalities shared technical specifications with the Contract Management advisor for review prior to publication on the e- Procurement platform, in order to ensure they had well drafted and clear descriptions. USAID TEAM Advisor Conducted Field Visits to Partner Municipalities Provided Advice and Suggestions on Site. The advisor also supported the new focus municipalities in redrafting and re-publishing technical specifications. One such case happened in the Municipality of Lipjan/Lipljan, where due to poorly written technical specifications, the Procurement Office was forced to cancel the tender "Lot 2 - Renovation of the pensioners' house in Janjevo.” The project provided support to the municipality, improving the quality of the technical specifications prior to the re-announcement of the tender dossier by the procurement office. As the pandemic situation improved, the USAID TEAM advisor conducted field visits to focus municipalities, providing advice and suggestions on site. The advisor visited a wide variety of projects across the focus municipalities (squares, family medicine centers, roads, sidewalks). In addition to discussions about contract management, the consultant also distributed the project's Public Contract Management Manual. The most commonly given advice concerns being certain to sign the construction logs and updating other documentation on a daily basis, complying with dynamic plans, conducting quality control for materials, performing tests and reviews of materials, and complying with compression measurements. Additionally, USAID TEAM procurement advisors held online trainings on "Technical specifications and terms of reference" with ten focus municipalities, providing professional advice on how to improve the quality of specifications. During Year 4, USAID TEAM met with the Mayors of Vushtrri/Vucitrn and Pejë/Pec municipalities to discuss establishing contract management offices. The mayors of the above- mentioned municipalities expressed interest in and commitment to establishing a project/contract management office, so long as there are no administrative obstacles, such as an increase in staff, in the budget request for 2021. As the project has identified numerous shortcomings in the legal framework for contract management, USAID TEAM representatives met with the Ministry of Economy and Environment to improve and harmonize these laws and bylaws. Frequent changes in government, and the restructuring of the Department of Spatial Planning have created

48 | USAID TEAM ANNUAL REPORT 2020 uncertainty and slowed this complex process. While at the beginning of 2020, this department was located within the Ministry of Environment and Spatial Planning, as the GOK changed throughout the year it was moved first to the Ministry of Infrastructure, and subsequently to the Ministry of Economy and Environment. Despite the changes in government structure and in the officials themselves, USAID TEAM continued to follow up on this issue, and at the most recent meeting came to an agreement to continue with legal reforms of project and contract management. At the beginning of 2021, new elections were declared for Kosovo, which again affected the process. USAID TEAM is closely monitoring the situation and will follow up with the respective department as soon as the new government is established. During Year 4, the project also finalized major documents which will support project and contract management in municipalities, including: 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 across Kosovo as well as a review of the relevant legal framework in Kosovo. The information for the report was gathered 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 framework of Kosovo public institution contract management framework legislation. 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 covering the steps and processes that are necessary to implement a municipal project. It includes success story experiences identified from among local, regional, and international cases most relevant to current experiences in Kosovo. 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 of the pre-contract management phase, and the third part covers the contract management phase.

USAID TEAM ANNUAL REPORT 2020 | 49 3. Standard Operating Procedures (SOPs) for Project and Contract Management – This document was prepared in order to develop basic procedures for Project and Contract Management activities in Kosovo’s municipalities. However, the SOP can also be applied to a range of different public entities including central and local government bodies, public enterprises, and other agencies involved in public projects. The content of the procedures presented in this SOP were prepared according to regulatory requirements in Kosovo, Project Management best practices from relevant literature, and the author’s personal experience. The procedures identified as SOPs aim to describe the appropriate working environment as well as providing step-by-step instructions detailing how certain processes should be performed. Each procedure is identified by a specific sign, and a description of activities, responsibilities, legal references, timing, step by step activities, and reporting issues. To increase efficiency in contract management, USAID TEAM supported the PPRC to develop modules for Contract Management, which are described in detail in sub-activities 2.3.1. Support implementation of Contract Management (CM) Module, and 2.3.2. Support implementation of Contract Performance Evaluation (CPE) Module. The project will extend its’ support to help municipalities take advantage of these tools in their own contract management. 1.3.3. Support Government of Kosovo to strengthen sustainable and self-reliant training capabilities. Following last year’s training of procurement officials on the Advanced Procurement Certificate Program, the PPRC and Kosovo Institute for Public Administration (KIPA) certified more than 330 officers. The PPRC in cooperation with KIPA also trained 184 officials on basic procurement and helped 213 procurement officials gain their advanced certification training. This marked an important milestone, as Kosovo public institutions expanded their capabilities and ability to PPRC and KIPA certified more than 330 officers in provide sustainable and self-reliant training in public Advanced Procurement Certification Program advancing their knowledge to ensure a well- procurement at the basic and advanced levels. functioning and transparent public procurement system. Furthermore, the project continues to support central-level institutions to strengthen their training capacities. In the past, USAID TEAM has developed training videos for e-Procurement processes and modules targeting municipal officials that were intended to replace traditional classroom-based training sessions with an online experience that is much more convenient. This year, USAID TEAM sub-contracted with a company to develop a video-based training on e-Procurement for the auditors of Kosovo’s institutions, based on the PPRC manuals and the user guides for the current version of the e-Procurement platform. The modules have been published in the training section of the PPRC e-Procurement system and on YouTube. This sub-activity is the result of cross-

50 | USAID TEAM ANNUAL REPORT 2020 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 continued to support the Association of Kosovo Municipalities (AKM) Procurement Collegium to facilitate the exchange of information among procurement officials from all 38 municipalities. Procurement Collegium Roundtable During Year 4, the project organized and conducted two roundtables of the Procurement Collegium, gathering key actors from central-level institutions, including the PPRC and CPA, and all municipal-level procurement managers to discuss procurement-related developments and difficulties. In the first roundtable, the concept document for the new Public Procurement Law (PPL) was presented, while during the second roundtable participants discussed the draft of the new Public Procurement Law (PPL). In addition, during these roundtables participants discussed issues related to the monitoring of the qualification criteria by PPRC, centralized procurements planned for 2021, and the proposed project manual on technical specifications. 1.4. INCREASE THE CAPACITIES OF MUNICIPAL INTERNAL AUDIT UNITS AND MUNICIPAL AUDIT COMMITTEES. USAID TEAM extended its support to ten new focus municipalities to increase accountability through improved auditing. The project emphasized the importance of Internal Audit (IA) Units, audit committees, and auditing processes and is sharing best practices from the five original focus municipalities. As anticipated, the new focus municipalities have similar weaknesses, such as non-functional audit committees, and poor capacities of audit committee members, municipal policy and finance committees, and department directors to address audit recommendations (National Audit Office and internal audit). USAID TEAM is now supporting the new focus municipalities to fulfill their 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 responsibilities. 1.4.1. Provide mentoring and on-the-job coaching in auditing. USAID TEAM Audit Advisors continued to support all focus municipalities to address issues regarding the implementation of audit recommendations. For instance, in the Municipality of Pristina, they supported the Urbanism Director and the Head of Property Tax in preparing action plans to address IA Unit recommendations. Additionally, they requested that all directors actively participate in assessing the degree to which NAO recommendations were implemented and to submit evidence of their respective findings. In the Municipality of Gjakovë/Ðakovica, advisors supported the Internal Auditor to prepare a brief report for the Mayor regarding key audit objectives, findings, and recommendations of IA Unit audit reports. Consequently, based this request, the Mayor decided to present the IA Unit findings and recommendations to the Municipal Assembly. While this practice is not required by law and no other municipality

USAID TEAM ANNUAL REPORT 2020 | 51 has instituted such a practice, the Mayor considered it to be a necessary part of the process of improving transparency. The audit advisors also support the new focus municipalities and offer them tailored assistance to address their NAO recommendations. For instance, in Istog/k, the advisors assisted the municipality to prioritize which current recommendations can be addressed immediately, like the creation of a risk register, and which recommendations may require more time to be addressed, such as accounts receivable and advised to submit their findings to the Chief Financial Officer and Finance Director. The audit advisors also supported focus municipalities in providing evidence-based information to the Central Harmonization Unit (CHU) to completing the Self-Assessment Questionnaire. For instance, in the Municipality of Vushtrri/Vucitrn, their overall score was 2.68 out of 3 points. Several documents required by CHU were related to activities developed with the support of USAID TEAM, including the development of code of ethics, approval of the Book of Processes, publication of time series, and increased transparency. a) Support municipal management to strengthen internal audit units and audit committees for 15 focus municipalities. At the beginning of Year 4, USAID TEAM Audit Advisors supported all IA Units in the focus municipalities to prepare periodical reports on their progress implementing NAO recommendations, and supported the Heads of IA Unit to organize a joint meeting with the MAC’s and Municipal management to discuss NAO and IA Unit recommendations. Throughout Year 4, USAID TEAM provided extensive support to focus municipalities on updating the IA Unit and MAC statutes, and as a result during Year 4, 12 out of 15 focus municipalities have updated their IA Unit statutes and eight municipalities have updated their MAC statutes. Other municipalities are in the process of updating these documents. Throughout the year, the project shared necessary documents with all municipal MACs, including the MAC

statute, the Law on Internal Control, Meeting with the Mayor of Rahovec to Discuss Audit and the Administrative Instruction for Recommendations. Establishment and Functionality of MAC’s. Due to the situation with COVID-19, per USAID TEAM Audit Advisors’ suggestion, and later in accordance with the CHU’s request, all focus municipalities began to revise their Annual IA Plans. The municipalities of Ferizaj/Uroševac, Gjakovë/Djakovica and Pristina decided not to make any changes after they analyzed their Annual Plan timetable, while the municipalities of Vushtrri/Vučitrn and Gjilan/Gnjilane decided to remove one of their planned audits. USAID TEAM Audit Advisors provided all focus municipalities with a checklist that the municipal IA Units should follow when revising the IA Unit Annual Plan

52 | USAID TEAM ANNUAL REPORT 2020 and recommended keeping all high-risk audits in the areas of procurement, finance, and HR in the plan. The project also supported municipalities to ensure that MACs are established and regularly conduct meetings according to the Administrative Instruction for establishing the functionality of MACs. The Mayor of Gjakovë/Djakovica was actively involved and supported establishment of the new MAC due to the dysfunctionality Rahovec/Orahovac approved IAU’s Statute by of the previous one. The lack of a Mayor and Audit Committee Chair. functional MAC was also a finding in this municipality’s NAO Audit Report. While municipality of Gjilan/Gnjilane was not able to establish well-functioning MAC, which may result in an audit finding. In addition, the Municipality of Ferizaj/Uroševac also lacks a functional MAC, however, the project is supporting the municipal management to establish one. USAID TEAM Audit Advisors also advised the municipal Heads of IA Units to compile a Control List of audit activities for the organizational reconsolidation of IA Unit activities; to review the descriptions of the IA Unit Annual Plan 2020; to update the permanent dossier of audit activities according to the IA Unit Annual Plan 2020 and to prepare a description of the planned process audit activity. b) Support all Kosovo municipalities to address and implement NAO and IA recommendations. Based on NAO’s Annual Reports for 38 Kosovo municipalities, the municipalities showed an average of six percent improvement in the implementation of NAO recommendations when compared to the previous year. Based on the NAO’s audit reports, 20 municipalities have received an unmodified opinion, 17 municipalities received an unmodified opinion with emphasis on the matter, and one received an unqualified opinion. Municipalities have improved the level of NAO recommendations implemented by 6% (from 31% to 37%), central-level The level of NAO Reccomendations institutions have improved by 1% (from Implemented in Last Three Years in all 40% to 41%), and independent Kosovo Municipalities institutions have improved by 6% (from 40% 37% 31% 65% to 71%). In their 2019 Audit 30% 25%

Reports, the NAO provided 586 20% recommendations across all 38 Kosovo 10% municipalities, with the 15 USAID 0% TEAM focus municipalities receiving a 2017 2018 2019 total of 223 recommendations. During Year 4, the project continued to work with the heads of the IA Units to address NAO and IA recommendations. For instance, in Gjakovë/Ðakovica, project advisors working with the municipal coordinator to address NAO recommendations, preparing a list of requirements for implementing NAO recommendations to be submitted by the

USAID TEAM ANNUAL REPORT 2020 | 53 relevant authority. In addition, based on a request from the Acting Head of IA Unit, USAID TEAM helped to revise the municipal risk register and advised that they request updates from municipal departments. In Istog/k, project advisors worked with the municipal coordinator for addressing NAO recommendations and the Head of the IA Unit, to revise the NAO action plan and suggested that the Finance Director establish committees for asset registration, evaluation, and depreciation, providing some practical examples. Finally, the USAID TEAM Audit Advisor developed and shared a matrix for preparing the NGO Subsidy Annual Plan with the finance director. USAID TEAM supported the IA Unit of Pristina municipality to conduct internal audits, including those related to the payment of vehicle registration taxes. This sector was identified as a source of corruption in 2019; a related news article is available here. Pristina addressed the recommendation by allowing payments only through bank accounts and increased the number of officials in the front desk offices. Despite delays in audit activities due to COVID-19, all focus municipalities conducted audits based on the revised annual IA Unit plans, including high-risk audits. The project’s audit advisors continued to provide tailored assistance to the municipalities based on their needs. For instance, the advisors supported the Chief Financial Officer (CFO) and the Head of Internal Audit Unit of the Vushtrri/Vučitrn Municipality to address challenges related to accounts receivable and obligations. The audit advisors suggested sending notifications to businesses that are using municipal services, however they received only a few payments from 400 notices sent. They further advised the Finance Directorate and CFO to follow up on the progress and provide these businesses another opportunity for payment before beginning the debt collection process. Additionally, advisors supported the Municipality of Lipjan/Lipljane’s IA Unit in developing a contract management template for the public services department, in order to address the NAO recommendation on contract management. This template defines contract managers, budgets for contracts, and other specifics of contract management. As the municipalities of Istog/k and Gjilan/Gnjilane are facing issues with registration, evaluation and depreciation of Municipal inventory, the advisors shared a model of the Regulation for Managing Municipal Assets. The advisors also shared a matrix for reporting the subventions by beneficiaries and a template for reporting liabilities with the finance directors of those municipalities. In Deçan/e, Junik, Lipjan/Lipljane, Podujevë/o, Prizren, Rahovec/Orahovac and Suhareka/Suva Reka, support was provided to the IAU in drafting the Checklist of Audit Activities, reviewing the allocation of effective working time and reviewing the progress audit activities in the new conditions created by COVID-19. With this project’s support, the Statute of the IAU was approved by the Mayor and the Chairman of the Audit Committees in Junik, Podujevë/o, Prizren, Rahovec/Orahovac and Suhareka/Suva Reka municipalities. The Audit Committees (AC) of the Municipalities of Deçan/e and Suhareka/Suva Reka advised the Mayor to pursue concrete commitment of the municipal directors in implementing the recommendations provided by the NAO and IA.

54 | USAID TEAM ANNUAL REPORT 2020 In Hani i Elezit/Elez Han, the Director of Budget and Finance was advised on the process of reviewing the List of Municipal Risks for the municipality for 2021 - 2023, which was subsequently reviewed by the board of directors and approved by the Mayor. The municipalities of Podujevë/o, Prizren, Suhareka/Suva Reka were supported in preparing their Strategic Plan for 2021-2023 and their Annual Plan for 2021, based on high, medium, and low-level risk scenarios. Furthermore, the project engaged several audit advisors to support all non-focus Kosovo municipalities in addressing NAO and IA recommendations through the engagement of the short-term Audit Experts. Among other support in addressing audit recommendations, during the reporting period, the project’s audit advisors highlighted: In , they supported development of an annual subvention plan for the directorate of Youth and Sports due to its weaknesses in subvention management and trained the staff of the property tax department in generating and tracing missing data from the property tax department at the MOF. In Kamenica, they introduced a practice of continuous harmonization and consolidation of disclosures with the CFO and other directories – aiming to avoid potential mistakes in annual financial reporting. Additionally, in a joint effort with the procurement office, advisors ensured that all capital investments are followed by executive projects. In Viti/, advisors supported a complete registration of assets (schools) financed by the Ministry of Education. In Kaçanik/Kačanik, they supported development of an internal procedure regarding short term renting of public premises and spaces, also established a practice of continuous harmonization/consolidations within the revenue office and other directories. In Mitrovica, MAC was established with the help of advisors, and was provided with all the necessary legal framework and other documents for it to function. In Partesh/Parteš and Zveçan/Zvečan, project advisors supported the municipalities in establishing a process for conducting internal audits from the government since they are not entitled to IAU’s because their operating budget is less than 3 million. In Graçanica/Gracanica, Zveçan/Zvečan, and Partesh/Parteš, advisors facilitated workshops on the registration of assets in e-asset system, in coordination with the Finance Directory and the Agency of Information Society.

Municipal Visits by STTA Audit Advisors on Non-Focus Municipalities Dragash/Dragaš, Fushë Kosovë/, and Obiliq/Obilic were supported by advisors to set criteria for the application for subsidies in accordance with MOF regulation no. 04/2017 on the Criteria, Standards and Procedures for Public Funding of NGOs.

USAID TEAM ANNUAL REPORT 2020 | 55 /Glokovac and Shtime/Štimlje municipalities were supported by advisors on entering into the system capital investments as well as in developing regulations. Additionally, to avoid the recommendation they were addressing being repeated, the Mayor decided that all investments must be signed off by the asset officer before final payment is executed, in order to ensure that these assets are registered in the appropriate system. In Novobërda/, the Finance Directory, under Audit Advisors monitoring, regularly reported their outstanding liabilities and appointed members of evaluation committee in accordance with Public Procurement Operational Guideline. In Municipality of Kllokot/, outstanding liabilities are regularly being reported. In Mamusha/Mamuša, an Internal Regulation on Asset Management was drafted and subsequently approved, in accordance with a recommendation of NAO and Internal Audit. In /Srbica, with the support of an audit advisor, all Municipal assets have been registered in Free Balance. In Skenderaj/Srbica, Fushë Kosovë/Kosovo Polje, and Obiliq/Obilic several contract management recommendations related to delays in the implementation of contracts, exceeding costs for framework contracts, lack of approvals in case of extension or changes in contract conditions, and improper segregation of duties were addressed. c) Quarterly evaluations for addressing NAO and IA recommendations in 15 focus municipalities. Project Audit Advisors continuously supported focus municipalities to increase their ability to address IA and NAO recommendations. During the presentation of municipal graduation results (sub-activity 1.1.5), the audit advisors discussed the results of the implementation of the NAO and IA recommendations in detail. As appropriate, considering changing COVID-19 restrictions throughout the year, face-to-face meetings were held with the 15 focus municipalities. In these meetings, municipal management (Mayors, Deputy Mayors, directors), NAO process coordinators and working groups

discussed NAO recommendations, The NAO Coordinator, Internal Auditor and Municipal Director their implementation, and related discussed NAO Recommendations. challenges with project staff. Additionally, during the first part of Year 4, USAID TEAM audit advisors updated the reporting template for MACs as well as the MACs’ self-assessment checklist and delivered these documents to the heads of 15 focus municipalities’ IA Units of 15. d) Support implementation of SOPs and manuals in 15 focus municipalities. During Year 3, USAID TEAM, in coordination with CHU, developed a Standard Operating

56 | USAID TEAM ANNUAL REPORT 2020 Procedure (SOP) for performance audits and updated the Internal Audit Manual. During Year 4, the MoF/CHU, officially endorsed SOPs for Handling Findings and Implementing External and Internal Audit Recommendations from the Audited Public-Sector Entities (PSEs) and shared Central Harmonization Unit published the these with all relevant public institutions, including Standard Operating Procedure developed with the heads of organizations, directors, heads of the support of USAID TEAM units, and managers. The document was also published on the CHU’s website, available here. Following the publication of the SOPs on CHU’s website, and the completion of the audit process by NAO, USAID TEAM audit advisors shared the SOPs with all focus municipalities and monitored their implementation. All 15 municipalities appointed an audit process coordinator and a team responsible for commenting on the NAO Financial draft Audit Report and shared the draft Audit Report with the relevant departments. Furthermore, the project focused on implementing the SOP for the audit process, ensuring that municipalities have shared the draft audit report for comments from all relevant parties on the NAO audit findings and recommendations; the mayors appointed process coordinators and working groups, and municipalities developed Action Plans to address these NAO recommendations based on the SOP requirements. 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 facts and arguments regarding a finding in the NAO Draft Audit Report. The project supported focus municipalities in commenting on draft reports. As a result of project support, municipalities were able to improve their progress against these findings by the final report stage. For instance, in Gjilan/Gnjilane, the number of recommendations was reduced by two, as a result of comments provided to NAO. In Pristina, the draft report was relatively unfavorable returning qualifying opinion, while after the commenting phase which was supported by USAID TEAM, Pristina received an unmodified opinion. Further, in Podujevë/o, the number of recommendations was reduced from 16 on the draft report, to 15 on the final published report. This process was closely monitored by the municipal working group coordinator. In addition, in response to the pandemic situation, USAID TEAM Audit advisors prepared a check list of things to consider during the commenting phase, and delivered it to municipal management (Mayors, CFO, IA Units, and Budget directors), with the intention of increasing critical thinking about whether or not the NAO draft report findings are balanced, objective, and supported by facts. 1.4.2. Enhance the performance audit methodology for internal auditors. In Year 3, USAID TEAM developed a Performance Audit Manual. The purpose of the Performance Audit Manual is to serve as a methodology to support public sector internal auditors to provide an independent, objective, and reliable assessment of the organizations being audited. During Year 4, the project organized a training session on the Performance Audit Methodology for all municipalities to formally introduce this audit approach. The objective of this training was to present the aim and methodology of Performance Audits, describing the

USAID TEAM ANNUAL REPORT 2020 | 57 definition of audit objectives, audit questions, and audit criteria, etc. USAID TEAM also presented the forms and templates that may be used during the planning stage as well as a template for drafting Performance Audit reports. These audits aim to measure the economy, efficiency, and effectiveness of the audit processes. Through this activity, the project is supporting the CHU to establish minimum standards for IA Units to conduct such audits. This event gathered 25 municipal officials and CHU internal auditors who participated in two-day working sessions. Furthermore, USAID TEAM introduced Performance Audits in the Municipalities of Vushtrri/Vučitrn and Gjilan/Gnjilane which empowers internal auditors to develop analytical and critical thinking skills necessary to conduct Performance Audits. IA Units, assisted by the Audit Advisors, defined the objective, scope, and audit risks of these audits. The Municipality of Gjilan/Gnjilane used this approach to assess the efficiency of property tax collection, whereas in Vushtrri/Vučitrn, auditors focused on the procurements. With the support of USAID TEAM Project Audit Advisors, both municipalities have prepared an initial framework for conducting pilot audits. The COVID-19 pandemic has affected the implementation of this activity. Municipal officials were unable to conduct in-person meetings, and it was decided the necessity of conducting business virtually significantly limited the possibility of conducting qualitative pilot audits that could serve as a model for other municipalities. Therefore, USAID TEAM in conjunction with the pilot municipalities of Vushtrri/Vučitrn, Gjilan/Gnjilane, and the subcontractor KPMG, decided to postpone this activity to Year 5. 1.4.3 Development of action plan for addressing NAO recommendations. USAID TEAM provided intensive support to the original five focus municipalities in reviewing and advancing municipal action plans to address NAO audit recommendations and develop a risk registry. The project is also sharing this practice with the ten new focus municipalities, focusing on setting clear timelines and defining which officials are responsible for implementing the recommended actions. In 2020, the USAID TEAM Audit Advisors organized online workshops with all new focus municipalities to support them in preparing Action Plans to address NAO recommendations. Advisors also closely monitored the five original focus municipalities as they developed their own Action Plans. During the workshops, interventions were made directly in the Draft Action Plans which were approved by the mayors and submitted to the NAO. The USAID TEAM Audit Advisors supported the municipalities on common issues related to the Action Plan’s focus on defining giving a timeline for each step in addressing the NAO recommendations. All focus municipalities submitted their Action Plans within the required time period. 1.4.4. Build capacities of Municipal Policy and Finance Committee in audit and financial control processes in 15 focus municipalities. The USAID TEAM Audit Advisors prepared a template for preparing briefings to the Municipal Policy and Finance Committee (MPFC) related to the NAO Audit Report. The template consists of an analysis of the recommendations implemented and a comparison of the progress with the prior year,

58 | USAID TEAM ANNUAL REPORT 2020 grouping the recommendations into new, repeated, and partially repeated, and preparing key and follow-up questions to be asked by the MPFC when the NAO report is sent for discussion at the Municipal Assembly. USAID TEAM held a series of Workshops with the Municipal Policy and Finance Committees (MPFCs) of the ten new focus municipalities to discuss issues and challenges in public procurement, financial management and auditing. During the workshops, USAID TEAM advisors presented recent developments regarding the e-Procurement platform, while MPFC Building Capacities of Municipal Policy and Finance Committee in Audit and Financial Control Processes discussed the main challenges regarding procurement, budgeting, and auditing. In addition, participants discussed the importance of financial oversight in improving municipal governance, MPFC’s role, opportunities and challenges for effective oversight by the Assembly. 1.4.5. Disseminate internal audit processes to build capacity of IA Units and MACs to all municipalities. To share practices developed in the original five focus municipalities, USAID TEAM and CHU conducted joint summits with the heads of the municipal IA Units and MACs. USAID TEAM organized an IA Roundtable gathering CHU, MLG, and municipal internal auditors to discuss issues, share experiences, and identify challenges in the internal audit area, internal audit recommendations implemented during 2019, the functionality of the audit committees during 2020, the monitoring of IA Units conducted by CHU, the monitoring of financial management and controls, improvements by IA Units over the last two years, and the implementation of the SOP on Audit Processes. Several challenges which require attention to strengthen the role of municipal IA Units and increase the quality of the IA Unit strategic plan and work were identified at the roundtable, including: Improvements in drafting IA Unit Action Plans by the audited directorates, Establishment of a sustainable system for risk assessment and management, Improvements in communication between the IA Unit, MACs, and the municipality management, and Improvements to the quality of internal audit reports. 1.5. SUPPORT MUNICIPAL HUMAN RESOURCES MANAGEMENT. In Year 4, USAID TEAM continued to support all focus municipalities in human resource (HR) management, enforcing ethical standards, and reducing opportunities for corruption and nepotism through the adoption and implementation of the Codes of Ethics and other related activities.

USAID TEAM ANNUAL REPORT 2020 | 59 1.5.1. On-the-job coaching/mentoring of municipal HR offices. Project advisors continued to monitor the five original focus municipalities as they implemented the municipal code of ethics and other HR management best practices. As a result of USAID TEAM assistance, all new focus municipalities approved the Code of Ethics. In addition, municipalities conducted public discussion to explain key elements of this document to and solicit feedback from the general public. The project continued its regular activities to support municipal HR management in the new focus municipalities. Visits and meeting were held in the ten new focus municipalities and the existing situation was analyzed. Coaching on HR procedures was provided, including advice on new legislation and the best ways of adhering to new procedures, including the Personnel Planning Process for 2021. USAID TEAM also provided support on finalizing and approving municipal Codes of Ethics, and addressing NAO recommendations on HR.

On-the-job Coaching of HR Offices on New Focus Municipalities

One of the main developments during 2020 was the entry into force of the New Law for Public Officials (Nr. 06/L-144). Getting municipalities to adhere to this new legislation and procedures presented many challenges. HR and personnel related procedures have not been immune to disruptions caused by the COVID-19 pandemic. Additionally, while the new Law has been approved, legal changes are not yet reflected in the Human Resources Management Information System (HRMIS). This has affected the implementation of many HR procedures, as most of the policies described in the new law must implemented electronically through HRMIS. Adding to the disruption in implementation and adherence to the new legislation are several redundant procedures and practices already identified in the new law. The project also provided recommendations to all ten new focus municipalities to improve their HR operations. These recommendations included; all staff members working in personnel units should undergo training on the new law and its regulations; practical training should be provided on HRMIS use for each category of users including heads of personnel, certifying officers, heads of directorates/sectors; detailed guidelines, visualizations, and infographics on recruitment procedures should be created; infographics on the online application procedure should be provided to interested applicants, covering all key steps and details; and that Regional Testing Centers should be established, especially for smaller municipalities where there are presently no logistics and/or venues for the written test to be held. Furthermore, with the approval of the new Law for Public Officials, the project received a request from the Ministry of Internal Affairs - Department for Civil Service Administration to develop a video tutorial for the HRMIS. This sub-activity was initially planned for Year 3, but as the law was disputed in the constitutional court the sub-activity was postponed. In order to adapt to changing in-country needs, the project progressed with the request from the

60 | USAID TEAM ANNUAL REPORT 2020 Department for Civil Service Administration for the HRMIS video tutorial, which is expected to be completed and published in the beginning of Year 5. 1.5.2. Assist development of Municipal Code of Ethics. Following the development and update of the Code of Ethics in previous years, USAID TEAM has shared a Model Code of Ethics with the ten new municipalities. The objective of the Code of Ethics is to serve as a guide for municipal officials and to promote their ethical decision-making both within and outside the exercise of their official duties, in accordance with the laws and regulations of the Republic of Kosovo, and to act with integrity, impartiality, responsibility, professionalism, effectiveness, objectiveness and political neutrality. This activity addresses the growing need among all Kosovo municipalities to embrace accountability and integrity by adopting codes of Suharekë/Suva Reka - One conduct for municipal staff, members of assemblies, and local of Municipalities that Approved the Municipal boards. However, due to COVID-19, it became necessary that Code of Ethics USAID TEAM facilitate this activity remotely, instructing new focus municipalities on implementation steps and approaches virtually. Despite situational difficulties, all new focus municipalities finalized and approved Municipal Codes of Ethics.

The advisors’ work during this period was mainly focused on motivating and coaching municipal teams on how to implement a Code of Ethics. Based on project experiences with the original focus municipalities, the advisors provided relevant information on establishing working groups, including the tasks and responsibilities of these groups. Additionally, the advisors provided materials and templates that were user-friendly and ready-to-use to HR and other municipal officials.

Approved Code of Ethics of New Focus Municipalities

1.5.3. Engage all municipal HR managers through learning summits to roll-out solutions. USAID TEAM, in coordination with the Ministry of Internal Affairs/Department of Civil Service Administration (DCSA), organized a learning summit with the Heads of HR Units from all Kosovo municipalities. During this learning summit the recruitment and personnel planning procedures in HRMIS were presented, illustrating how to complete internal recruitment and personnel planning in the updated HRMIS system. Additionally, USAID TEAM supported focus municipalities in adopting and implementing Municipal Codes of Ethics and

USAID TEAM ANNUAL REPORT 2020 | 61 provided support to focus municipalities on specific challenges that HR units are facing in HR management, and the implementation of the new legislation for public officials. 1.6. INCREASE MUNICIPAL TRANSPARENCY. USAID TEAM continued to encourage focus municipalities to use government systems to publicize all non-confidential procurement and financial management data on municipal websites in formats that can be readily used by civil society, media, and the public for analysis. As a result, all focus municipalities increased the data they make available, with all focus municipalities publishing an Roundtable with Human Resource units average of 91% (97% five original municipalities, while from all Kosovo Municipalities 87% the ten new ones) of non-proprietary data on municipal websites. In addition to this, USAID TEAM provided technical and professional support to the new focus municipalities in drafting three-year communication strategies. 1.6.1. Monitor and advise municipalities on transparency and enhance public relations efforts. USAID TEAM continued to assist all focus municipalities in the use of instruments such as municipal websites to publicize all non-confidential procurement and finance management data on municipal websites in formats that can be readily used by civil society, media, and the public for analysis. USAID TEAM actively provided support to the ten new focus municipalities on increasing transparency in procurement, public finance management, and auditing. Through this activity, the project advisors instructed the heads of finance/CFOs, procurement managers and mayor’s cabinet representatives on transparency and publication of information. The project advisors utilized the know-how accumulated from the original five focus municipalities to analyze and assess the websites of each focus municipality. The advisors then shared the results with each focus municipality providing detailed instructions on what exactly to publish and how to publicize non-confidential information on finance, audits and executive activities on municipal websites in an easily accessible format. Many of the municipalities expressed readiness to adopt these changes and a willingness to publish documents and reports per the proposed scheme. Among the first, were the municipalities of Hani Elezit/Elez Han, Istog/k, Prizren/Prizren, Rahovec/Orahovac, and Suharekë/Suva Reka, who prepared and published monthly time-series data of their own-source revenues and expenditures according to the templates provided by the project. The original five focus municipalities are only being monitored for compliance, because of their excellent past performance against this metric. Based on preliminary analyses of 2020 results as can be seen in the chart below, despite the pandemic the focus municipalities consistently published higher levels of information on municipal websites than the non-focus municipalities.

62 | USAID TEAM ANNUAL REPORT 2020

USAID TEAM completed an assessment of the general state of the new municipalities’ public presence. This indicated that most municipalities have recently updated their municipal regulations on transparency to harmonize them with the newest amendments in the MLG’s Administrative Instruction 04/2018 on the Transparency of Municipalities. All municipalities have approved their Transparency Action Plans for 2020-2023. USAID TEAM supported MLG to conduct a comprehensive analysis of documents and acts published on municipal websites, following a structured monitoring of the latter, and produced a consolidated report highlighting any shortcomings and recommendations for enhancing municipality transparency. This document, “Analysis of the structure of documents published on municipal websites” contains analysis of municipal acts and documents published on official websites during the first half of 2020, coupled with recommendations for more effective organization and structuring of these websites in order to enhance compliance with the transparency requirements envisioned in the legislation. Regarding enhancement of public relations efforts, USAID TEAM supported the new focus municipalities in drafting three-year communication/public relations strategies and associated action plans, a process that was coupled with tailored on-the-job training and materials designed to enable public information officers to address specific municipal needs. The aim of the strategic Cover Pages of Municipal Communication Strategies communication documents was to increase awareness of the achievements of the municipalities, to improve performance in relation to communication with various audiences, to enhance transparency and accountability, to consolidate internal communication mechanisms, and to increase the potential for marketing municipalities and their assets.

USAID TEAM ANNUAL REPORT 2020 | 63 Support to new focus municipalities in enhancing their strategic communication practices started with the establishment of core working groups (comprised of 4-5 members) tasked by the respective mayors with managing the drafting process. Half-day workshops were held with the respective working groups to introduce them to methodologies and operational aspects related to the drafting process, as well as to share findings desk review findings on municipal performance. Work in this arena continued with structured analysis of communications situations in individual municipalities by employing relevant tools, including situational assessment questionnaires on internal communications, media relations, transparency and accountability. During the months of November and December, the draft strategies were finalized and handed over to senior municipal officials for further consideration and approval. While supporting the development of three-year communication strategies at the municipal level, USAID TEAM provided tailored on-the-job capacity development support to designated officials. This coaching program was used to increase the internal capacity of information officers and was based on an assessment of the state of communications, media and public relations, the effectiveness of social media interactions, and internal communications in individual municipalities. To assess the transparency indicator, advisors reviewed the number of contracts published on municipalities’ websites as compared to the number of signed contracts, noting that over the life of the project, the percentage of contracts published has increased. The average percentage of publications across all focus municipalities as of December 2020 was 91% (with the original five municipalities publishing 97%, and the ten newer municipalities publishing 87%). As a product of the project sharing best practices with non-focus municipalities, 28 out of 38 municipalities in Kosovo have published a total of 2,484 procurement contracts in their websites. 1.6.2. SOP for standardized municipal web publications and dissemination of practices. USAID TEAM shared best practices uncovered during their work with the five focus municipalities with the ten new focus municipalities covering how best to publish information on public finance, procurement, and auditing. The project currently supports all 15 focus municipalities as they publish non-confidential procurement and financial management data. USAID TEAM has also reached an agreement with MLG to create a working group to draft an SOP for standardized municipal web publications. Because of the COVID- 19 pandemic, and the change in government officials, the designated working group was able to complete a finalized SOP by the end of Year 4. The draft SOP includes a description of procedure, roles and responsibilities of municipal actors, and provides recommendations to municipalities on how best to structure municipal websites to enhance easier ease-of-use, as well as tips for the proper naming of published documents. Specifically, the manual focuses operation procedures for timely and correct publication of documents for public consultation, publication of acts and documents generated by municipal assemblies, publication of Mayoral decisions, publication of Mid-term Budget Frameworks, publication of documents related to municipal finances and budgeting, and the procurement and publication of documents related to spatial planning.

64 | USAID TEAM ANNUAL REPORT 2020 USAID TEAM continued to disseminate best practices to enhance transparency. In cooperation with the MLG, the project gathered the heads of municipal information offices for a roundtable discussion on transparency. The participants had the opportunity to learn about the amendments to the MLG/Administrative Instruction Nr.01/2018 on Transparency of Roundtable on Transparency Municipalities, which increases opportunities for citizen engagement, sets deadlines for urgent municipal assembly meetings, and provides clearer definitions and provisions for access to public documents. Additionally, MLG informed participants that there has been an increase in transparency across all municipalities, with an exception in the publication of Mayoral reports and decisions. Participants also used this venue as a forum to discuss their confusions surrounding publication requirements, website structure, and inadequate document placement, all of which play a vital role in evaluating municipal performance. USAID TEAM shared the project’s experiences supporting municipalities in designing their three-year communication strategies. At the conclusion of the round table, USAID TEAM briefed the participants about the content and provisional structure of the SOP Manual for Publication of Municipal Acts on Municipal Websites. 1.7. ENHANCE MUNICIPAL FINANCIAL MANAGEMENT AND CONTROL. USAID TEAM continued to support the original five focus municipalities and expanded its support to ten new focus municipalities to help them strengthen their systems for financial management and control. 1.7.1. Provide on-the-job coaching on public finance management. Working in all focus municipalities, the Public Financial Management (PFM) Advisor coached finance directors, CFOs, and other financial officers on performance-based budgeting and financial management controls, including: a) CHU Self-Evaluation Questionnaire. The project provided on-the-job coaching to the Gjilan/Gnjilane and Pejë/Pec municipal officials on the CHU Annual Self-Assessment Questionnaire, addressing municipal debts (receivables owed by local business and individuals) and NAO actions on municipal finance. In addition, the advisor helped Gjakovë/Ðakovica municipal officials to address several planned activities for this period. Specifically, they focused on the CHU Annual Self-Assessment Questionnaire, problematic municipal debts (receivables owed by local business and individuals), and NAO actions on municipal finance. b) Addressing NAO and IA recommendations on municipal finance. Following the publication of the NAO Audit Reports, the USAID TEAM advisors intensified their support to all focus municipalities to help them address the 2019 NAO recommendations. The PFM advisors analyzed the NAO Audit Reports and identified actions and recommendations related to the financial workings of the municipalities. According to the 2019 NAO

USAID TEAM ANNUAL REPORT 2020 | 65 Reports, in the 15 focus municipalities, there were 138 recommendations relevant to the execution of the budget, accounting, reporting, and subsidies, etc. The goal of this activity was to categorize the findings and recommendations according begin the process of implementation. This activity has engaged not only financial departments in the focus municipalities, but all the municipal officials involved in operations that were emphasized as problematic in the NAO reports. According to the preliminary results presented by municipality staff, it can be concluded that there has been positive progress, particularly related to the full implementation of finance recommendations that were the sole responsibility of the municipalities such as: improper documentation of pre-emptive payments for services; registration and assessment of all assets owned by the municipality and preparation of a final report on the state of assets harmonized with the accounting records of the municipality; forwarding decisions to taxpayers following review of complaints; updating property tax data; and ensuring advance payments are in accordance with the budget law, etc. In addition, it should be highlighted that as a result of the project’s support, some of the municipalities have managed to achieve considerable progress in implementing more difficult to implement finance recommendations, including those that rely on the support of other central government institutions and related entities. For example, the municipality of Prizren made significant progress in decreasing its level of accounts receivable, while the municipalities of Hani i Elezit/Elez Han, Junik and Rahovec/Orahovac, reported zero cases of misclassification of expenditures in 2020, indicating that they have made adequate budget allocations for municipality expenditures, and their payment and recording of expenses is accurate and in keeping with economic codes. c) Municipal budget planning - promoting comprehensive municipal budget planning. During Year 3, USAID TEAM, and its subcontractor KPMG, piloted a budget planning activity in two focus municipalities (Pejë/Peć and Vushtrri/Vučitrn) which focused on employing best practices and comprehensive tools in municipal budget planning. During Year 4, USAID TEAM PFM advisors continued to enhance capacity in this area by providing budget documents and templates (designed in Year 3) to all focus municipalities, aligning them with MOF budget circulars. Upon approval of the Municipal Mid-Term Budgetary Framework (MTBF) for 2021-2013, USAID TEAM began to support the focus municipalities to address challenges in the budget planning process. USAID TEAM provided support to finance officials on municipal budgeting in the remaining 13 focus municipalities, 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 hearings with the general public, private sector, and CSOs where mayors and heads of departments presented municipal projects planned to take place in 2021. During this process, municipalities faced several difficulties as a result of the COVID-19 pandemic restrictions, and some municipalities, including Prizren, also faced political difficulties during the budget approval process. Despite these challenges, all focus municipalities managed to approve their budgets. At the national level, the budget for 2021 has also been approved. According to projections, the budget for 2021 is expected to be over 2.412 billion euros, with total

66 | USAID TEAM ANNUAL REPORT 2020 budget revenues projected to be 1.886 billion euros, while expenditures are projected to be 207.6 million euros lower than the previous year. At the municipal level, the budget for 2021 will be 546,801,286 euros, 21,411,432 euros (3.8%) lower than in 2020. 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 original five focus municipalities, USAID TEAM rolled out this activity to the ten new focus municipalities. The standardized processes outlined in the Book of Processes became mandatory based on the MoF Regulation MOF-No. 01/2019 on Financial Management and Control. The project has already developed five draft SOPs that cover the main municipal revenue streams, two SOPs for registering and managing non-finance municipal assets and updated the sub-procedures for Financial Management Control Manual that are under review by relevant institutions, including the Central Harmonization Unit, Treasury and MIA-Agency for Information Society. Finalized versions are expected at the beginning of Year 5. a) Monitor implementation of Handbook on Internal Public Expenditure Management Process. USAID TEAM supported the new focus municipalities providing guidance on PFM performance, accountability, processes, and operating procedures. After designing and developing a template document of the Book of Processes on Managing Public Expenditures, USAID TEAM shared this template with all focus municipalities, requiring they establish designated working groups to review and adapt the Mayor’s decision on approving the Municipal Book of Processes for their own use at the Book of Processes for the municipality of Rahovec municipal level. USAID TEAM PFM advisors continued to support focus municipalities that had already established these working groups, to finalize and approve the Book of Processes. In Year 4, the PFM advisor held meetings with Mayors and the working groups of the municipalities of Junik, Prizren and Hani i Elezit/Elez Han. These allowed the Mayors to highlight the benefit of the project’s support in developing and approving the Book of Processes, to officially approve this significant document, and show their commitment to its proper and effective implementation. As a result, nine out of ten of the new focus municipalities have officially approved this document: Lipjan/Lipljane, Podujevë/o, Suharekë/Suva Reka, Rahovec/Orahovac, Junik, Prizren, Hani i Elezit/Elez Han, Ferizaj/Uroševac, and Istog/k.

Approval of the Book of Processes by the Mayors of Junik, Prizren, Hani i Elezit/Elez Han.

USAID TEAM ANNUAL REPORT 2020 | 67 b) SOP/Manual for registering and reporting municipal revenues. In close cooperation with the municipalities and relevant stakeholders, USAID TEAM developed draft SOPs and Manuals addressing key challenges regarding registering and reporting municipal revenues, managing non-finance municipal assets, and created an updated Financial Management Control Manual. The initial assessment of this activity identified many challenges, including misclassification of the non-financial assets, incomplete asset registers (above 1,000 Euros and below 1,000 Euros), and inconsistent use of the E-Pasuria module for asset registration below 1,000 Euros, as well as the absence of a strategic framework for real revenue base planning, poor planning metrics used to plan revenues, and the failure to distribute revenues according to needs and objectives identified by citizens, among others. USAID TEAM organized a session on financial management, gathering representatives of CHU and municipal assets and revenue officials to present the findings of the initial evaluation on Municipal Asset Management, Recording and Reporting of Municipal Revenues, and Financial and Control Manual. During the roundtable, participants discussed issues and identified potential solutions. Based on the discussions, the project will develop procedures for revenues and assets and update the Financial and Control Manual. The project has already developed five draft SOPs that cover the main municipal revenue streams: 1. SOP for Revenues from Property Tax. 2. SOP for Revenues from Cadastral and Geodesy. 3. SOP for Revenues from Construction Permits. 4. SOP for Revenues from Civil Status Documents. 5. SOP for Revenues from Renting Municipal Real Estate. All these procedures include flow-charts and have been shared with municipalities and central level stakeholders for comments. They are expected to be finalized during the first quarter of Year 5. c) SOP/manual for registering and managing non-finance municipal assets. This sub- activity addressed the growing need among focus municipalities to embrace accountability and integrity by adopting sustainable instruments and enables focus municipalities to properly register and manage municipal non-financial assets. The project has already drafted Procedures for Managing Assets, which identifies that there is a need to develop two sub-procedures, one for non-financial assets below 1,000 Euro and another procedure for non-financial assets above 1,000 Euro. These procedures are being discussed with the municipalities and have been shared with central-level stakeholders for comments. They are expected to be finalized during the first quarter of Year 5.

68 | USAID TEAM ANNUAL REPORT 2020 d) Update the Financial Management Control Manual. Due to changes in Kosovo’s legal framework, it was identified that the existing Manual for Financial Management Control needed to be amended in order to reflect new circumstances in the public finance sector. USAID TEAM agreed with CHU that it would create a working group to coordinate activities and update this manual. The project met with the Ministry of

Finance/CHU several times to discuss Discussing Financial Control Manual with CHU. actions for implementing joint activities in the field of financial controls. Both groups agreed on next steps related to updating the Financial Control Manual in order to harmonize it with international best practices. Furthermore, the project shared the SOPs on Asset Registration and Own-Source Revenue Registration, and CHU expressed its commitment to engage its staff in their implementation. The project has updated the Financial Management Control Manual, which is being reviewed by CHU. They are expected to be finalized in the first quarter of Year 5. e) Municipal invoice management system. USAID TEAM developed an SOP for standardizing municipal payment processes, intending to increase municipal transparency, accountability, and fiscal prudence, in reports with stakeholders. This was shared with the focus municipalities. However, due to circumstances created by COVID-19 and the change in government, the MOF-Treasury has put their participation in this activity on hold. Therefore, this activity has been postponed for Year 5. 1.7.3. Disseminate handbook, SOPs, templates, codes, and practices for public financial management and control. USAID TEAM continued to encourage all municipal directors of finance to share common findings with their counterparts in other municipalities and supported efforts to produce local solutions in municipal financial management and control. USAID TEAM, in cooperation with the Association of Kosovo Municipalities, MLG, and MOF – Property Tax Department, conducted a roundtable discussion with the Finance Directors of Kosovo municipalities. During the event, MLG presented their report on “The Impact of the Pandemic on Budget Execution for January-June 2020,” which reports that the COVID- 19 pandemic affected the budget and reduced the own source revenues and expenditures across all economic categories. The roundtable also discussed the implementation of NAO recommendations in all municipalities, and USAID TEAM presented the audit opinions of all municipalities during 2018 and 2019, categorizing the recommendations in three groups: new findings, repeated findings, and partially repeated findings. The project also provided an analysis of the recommendations that are challenging to implement, such as: challenges in managing accounts receivable - with an emphasis on property taxes and bad debts; execution of payments by court decision and collective contract issues - payment for meals and the costs that arise as a result of jubilee salaries, implying additional budgetary implications for

USAID TEAM ANNUAL REPORT 2020 | 69 municipalities which may be followed by the execution of court decisions due to a lack of municipal funds.

COMPONENT II: ENGAGE THE CENTRAL LEVEL IN ADDRESSING MUNICIPAL CORRUPTION WITHIN THE PROCUREMENT PROCESS At the central level, the project achieved significant breakthroughs over the last four years and expects to continue to generate improvements at the same pace over the remaining life of the project. With the support of in-house experts and professional short-term advisors, Component II helped to technically stabilize the e-Procurement platform, allowing the PPRC to mandate full electronic procurement for all Kosovo institutions (paper-based procurements are no longer permitted). The PRB has also made significant and sustainable advances under the project’s support, such as moving from paper-based to 100% electronic appeals, live-streaming their hearings, and launching a new user-friendly website and database of its decisions with machine-readable documents. The project also introduced the PPRC to the Open Contracting Data Standard (OCDS) within the e-Procurement system, which the PPRC IT began developing in Year 4 under USAID TEAM guidance. OCDS will further increase the transparency of the procurement process and bring Kosovo up to par with the highest international transparency standards for public procurement. In Year 4, the project focused on using OCDS to further the interoperability of e- Procurement system with other government systems, such as the Kosovo Finance Management Information System (FreeBalance). In addition, the project worked closely with the PPRC and during the past year has implemented the Contract Management (CM) and Contractor Performance Evaluation (CPE) modules, which have been integrated to the e- Procurement system. The gradual implementation of this contractor evaluation system will feed the Contractor Past Performance (CPP) Database with information on the prior performance of economic operators who have executed public contracts in Kosovo and enable the CA to eliminate poorly performing economic operators, thus enabling better quality service for the citizens. The project’s support to enable 100% online procurement procedures proved to be essential in allowing Kosovo to continue with procurement procedures and procurement appeals without interruption throughout COVID-19 pandemic-related restrictions throughout 2020. As gatherings were restricted heavily throughout the first half of the year, Component II leveraged 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 focusing most strongly on those that could be carried out online during the government state of emergency. This enabled Component II to focus its efforts on supporting the PPRC to develop the OCDS Application Program Interface (API) within the e-Procurement system, using the international standard set by the Open Contracting Partnership (OCP). API enables Kosovo to make procurement data available online for monitoring analysis by the public or private sector. OCP has confirmed that the PPRC OCDS API is far more advanced than that used by many other countries around the world. The digitalization of procurement processes supported by the

70 | USAID TEAM ANNUAL REPORT 2020 project helps Kosovo to be recognized as a regional pioneer and an important member of the international community implementing open and transparent procurement data in line with 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. Major achievements in 2020 for Component II include: The implementation of the e-Procurement platform continues to be a success. By the end of 2020, 25,414 procurement activities have been initiated through the e-Procurement platform, 20,900 of these have been concluded, processing over 1.75 billion euros of procurement contracts. Despite pandemic restrictions, PRB is successfully implementing 100% of procurement complaints through the e-Appeals Module as well as the new website and database of decisions developed by the project. During Year 4 1,184 appeals have been submitted through the e- appeals module, which is around 9% more than Year 3. PRB has enacted the new rules of procedure, which regulate stricter withholding of fees for unsuccessful complaints about economic operators, as well as the implementation of transparency measures across their website and database, among others. With project support PRB has implemented online tele-conferencing using the Zoom Application. This ensures that hearings can continue to be open and transparent to all parties despite limitations imposed by the pandemic. The project, in coordination with OPDAT and the Kosovo Justice Academy, has transformed the guidelines for judges and prosecutors on handling fraud in public procurement into practical training modules. The Anti-Fraud Unit established with USAID TEAM support and continuing to operate under project guidance continues to play an important role in anti-fraud efforts. To date it has referred 141 cases to the Kosovo State Prosecutor. In the future, the AMS will be able to serve as a repository for information and facilitate the work of this unit and other law enforcement agencies. In cooperation with the PPRC, USAID TEAM developed the Contract Management (CM) and Contract Performance Evaluation (CPE) Modules and ensured that they were both integrated within the Kosovo e-Procurement system. The project initially organized an online training session for the six PPRC IT staff who will administer the two modules, which was followed by trainings for selected municipalities and central-level authorities involved in the pilot implementation of the new functions. The project developed a compendium of good practices based on the Supreme Audit Institutions (SAIs) to support the prioritization of performance audits. It also developed a scoring matrix with criteria, factors, and risk scores to support case selection.

USAID TEAM ANNUAL REPORT 2020 | 71 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.

Events/Group Participant Component II Events s s Workshops Contract management and Contractor performance evaluation 2.3.1 1 6 modules - PPRC Contract management and Contractor performance 2.3.2 1 25 evaluation modules – government officials 2.3.7 Risk Case selection - PPRC Monitoring Department 1 12 Total 3 43 2.1. BUILD THE CAPACITY OF THE NAO IN THE AREAS OF FRAUD DETECTION AT THE LOCAL GOVERNMENT LEVEL. Having established the foundation for a functional Anti-Fraud Unit and provided guidelines enabling auditors to detect fraud in public procurement, USAID TEAM continues to work with the NAO to strengthen and improve the role of this unit. A total of 141 such cases were submitted to the prosecution over the last three years, and several formal proceedings have been initiated based on them. Nevertheless, the lack of enforcement of sanctions in fraud cases identified by NAO continues to be an issue. USAID TEAM is coordinating with the US Department of Justice OPTAD, USAID Justice System Strengthening Program - JSSP, and other relevant actors in the justice sector, to provide effective guidelines to judges and prosecutors responsible for fraud in public procurement. In addition to the Anti-Fraud Unit, the project 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 Anti-Fraud Unit. As part of updating the guidelines of the Anti-Fraud Unit, the project supported the NAO in developing internal procedures and the required templates for dealing with potential fraud cases during audit execution. Additionally, the project 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. In Year 4 alone, 54 cases with fraud elements were forwarded to the State Prosecutor. 2.1.2. Guideline on Detecting Fraud becomes regular part of NAO internal training curriculum. USAID TEAM supported the establishment of the Anti-Fraud Unit to support the Head of the Anti-Fraud Unit in reviewing and updating the guideline on fraud detection and making the guideline an integral part of the induction/refresher training curriculum for NAO internal training.

72 | USAID TEAM ANNUAL REPORT 2020 2.1.3. Further improvement of the selection process of priority audit areas for performance audits of the NAO. The project cooperated with the NAO’s Head of Performance Audit Department to analyze current NAO practices prioritizing of sectors/industries (e.g. education, social welfare, procurements, etc.) for audit. As per the original work plan timeline, the project continued to develop a matrix with the criteria and steps to be performed by the NAO. In addition, the project developed a compendium of best practices based on the International Standards of Supreme Audit Institutions (SAIs) to serve as a benchmark Scale with weighting and scores against other SAIs, including an example for specific to evaluate each of the seven sectors/industries, and prepared a Scoring Matrix with case-selection criteria. criteria, factors, and risk scores to be used in the process. The Compendium provides a sample of a strategic plan for an audit activity in performance auditing and recommendations for areas for improvement related to the strategic planning framework of the NAO. The Scoring Matrix, based on the INTOSAI standards and methodological guidance, will assist the NAO in the process of prioritizing performance audit topics. 2.1.4. Develop an online database with NAO recommendations and track the level of implementation. NAO presented the need for this database to several donors towards the end of Year 3, including USAID TEAM. The project included this in its 2020 Work Plan proposal; however, by the time the proposal was approved, NAO received a commitment from another donor (the Supreme Audit Institution of Poland) to implement this database. Given the new circumstances, the project recommended removing this activity from its work plan. 2.1.5. Disseminate a Guide on Handling Fraud in Public Procurement. USAID TEAM developed guidelines for judges and prosecutors in handling fraud in public procurement. In coordination with OPDAT, during the reporting period, the guideline was disseminated to the Kosovo Justice Academy (KJA) as well as selected judges and prosecutors who will use the guideline as the basis for future trainings on handing fraud in public procurement in the justice sector. 2.1.6. Development of an online training module for judges and prosecutors based on the guideline. USAID TEAM, as previously mentioned, has continuously coordinated with OPDAT on the activities related to training on handling fraud in public procurement for judges and prosecutors, based on the guidelines that the project has prepared. The project agreed to turn the current guidelines into a practical training guide, which includes clear learning objectives, practical exercises, case studies, and quiz questions and answers.

USAID TEAM ANNUAL REPORT 2020 | 73 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 USAID TEAM supported the process of adapting the guidelines for online training delivery on the conducted in June as part of the KAJ Specialized Training Program on Public Procurement. Continuous Training Program. 2.2. BUILD THE CAPACITY OF THE MINISTRY OF FINANCE'S CENTRAL HARMONIZATION UNIT TO OVERSEE AND DIRECT MUNICIPAL INTERNAL AUDIT UNITS. To date, the project 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, the project further enhanced the performance audit methodology for internal auditors and jointly with Component 1 supported CHU to roll out the automated report system to internal auditors initially at the municipal-level, and subsequently at the central-level. 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 the CHU to develop an audit quality assurance program and associated Key Performance Indicators (KPIs). In the first quarter of this year, USAID TEAM conducted an assessment and provided recommendations to the CHU on annual reporting templates with integrated tools for measuring KPIs. In coordination with the CHU, the project has provided the revised annual reporting templates and developed tools for measuring KPIs. Methodological guidance for the IT implementation of reporting on the QAIP self-assessment questionnaire and KPIs will be implemented in Year 5 as other sub-items of this activity are completed, ensuring more comprehensive guidance for the IT implementation. In selected municipalities, the project also began implementing a pilot project, benchmarking selected KPIs, aligning objectives and the work plan for the pilot implementation of agreed KPIs. This pilot included an analysis of KPI- related information from selected IA Units and defined a baseline for the indicators. The pilot process generated a report, and Guidelines for Benchmarking KPIs. This activity was followed by a workshop on the results of KPI analysis and the benchmarking guidelines. 2.2.2. Roll-out automated semi-annual reports to municipal and central level internal auditors. USAID TEAM developed a tool within the CHU’s Intranet to automate the semi-annual reports, enabling the CHU to gather statistical data very quickly and make informed decisions accordingly. Additionally, the project conducted a focus group training for CHU technical staff on the use of the semi-annual reporting tool within SharePoint Intranet. The staff is now equipped with the necessary skills related to its functionalities including columns, lists, views, data entry, views control, and export of reports in excel format. However, due to COVID-19, the roll-out of semi-annual reports for both local- and central- levels have been postponed to the next round of reporting for semi-annual report from IA Units to CHU in the first quarter in Year 5.

74 | USAID TEAM ANNUAL REPORT 2020 2.3. ENHANCE PPRC INSTITUTIONAL CAPACITIES TO INCREASE TRANSPARENCY, EFFECTIVENESS, AND ACCOUNTABILITY. USAID TEAM has successfully managed to shift the mindset and capacities of the PPRC from an institution that was on the brink of deactivating the e-Procurement platform due to massive instabilities, to one that is not only committed to enabling 100% online public procurement in Kosovo but has become a change agent and a leading institution in implementing transparency measures in public procurement across the region and beyond. PPRC, by enabling the use of the e- Procurement platform, has to date initiated 25,414 procurement activities, concluded 20,900 procedures with contracts, and processed over 1.75 Billion euros of procurements. As the pandemic enforced restrictions throughout Year 4, the project focused heavily on supporting the PPRC’s IT department as the completed the development and integration of the CM and the CPE modules into the e-Procurement system. In addition, USAID TEAM supported the PPRC to enhance transparency in public procurement through the development and implementation of the OCDS API. 2.3.1. Support implementation of Contract Management Module. The project closely coordinated with PPRC and the subcontractor Komtel throughout the development of the upgraded CM as well as the development of the CPE module. During the development

phase, the project reviewed all 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 requested that the vendor to develop a Dashboard functionality, a powerful tool for monitoring contract progress. This will give the CA management (i.e. mayors, contract managers) a holistic view of all contracts, enabling easy monitoring of contract implementation and rapid detection of any potential risks, e.g. delayed deliverables, overdue contracts, poor performance, and financial disbursements.

The roll-out of the CM Module to the focus municipalities has already begun and is successfully being piloted. Initially, the project conducted online training of the PPRC e-Procurement System Administrators and Help Desk staff on the CM and CPE system modules. The PPRC reported that the PPRC IT staff are pleased with the progress and impressed by its functionality. USAID TEAM continuously coordinated with the PPRC and its subcontractor Komtel to adjust and ensure that the training for pilot organizations was fully effective. Consequently, the project organized a four-day pilot training for select contracting authorities on the two new modules of the e-Procurement platform. Participants included selected staff, both contract managers and procurement officers, from the five original focus municipalities

USAID TEAM ANNUAL REPORT 2020 | 75 (Gjakovë/Djakovica, Gjilan/Gnjilane, Pejë/Peć, Pristina, and Vushtrri/Vučitrn) and from the central-level (Ministry of Health, Ministry of Infrastructure, Ministry of Local Governance). Participants gained access to the e-Procurement Demo environment where the new functionality is deployed so that they can test and validate the new functionality with support from both the PPRC and Subcontractor (Komtel) Help Desk teams. Roll-out to the remaining municipalities and all contracting authorities is expected to be completed in quarter one of Year 5. The project supported PPRC in updating the Rules and Operational Guidelines of the Public Procurement (ROGPP), to support and clarify the CM and CPE processes. Training of PPRC e-Procurement System Related to this activity, the project developed Administrators and Help Desk staff on CM video training materials for end-user auditors, and CPE system modules. contract managers, on CPP usage within the e-Procurement Platform. 2.3.2. Support implementation of Contract Performance Evaluation Module. This activity runs parallel to the above-mentioned activity (2.3.1). 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 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, the PPRC has sufficient capacity for the foreseeable future to serve the needs of both economic operators and contracting authorities. The project will continue to work to improve the availability and capacity of the e-Procurement platform to meet the needs of the PPRC, especially with the new modules and functionality related to the 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 with detailed configuration and setup maps which provided valuable information for the e-Procurement infrastructure migration planning. Furthermore, a by-product of the 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 the PPRC IT developer staff. With these tools and information, the PPRC IT staff are well equipped and informed on the needed New Server infrastructure. changes and managed to perform the server migration independently. During a meeting with PPRC, a Board Member pointed out that they were extremely satisfied with the process, and that PPRC managed to complete the infrastructure

76 | USAID TEAM ANNUAL REPORT 2020 migration without any dependence on the subcontractor. This is a great achievement and a positive change in terms of stakeholder (PPRC) self-reliance. With the implementation of the CM/CPE, it is anticipated that the e-Procurement user count will increase significantly, and the new infrastructure should accommodate the increased workload without any issue. Furthermore, the new infrastructure has released some of the old servers that the PPRC agreed to consider to be used for other services, such as monitoring tools. The implementation of proactive system monitoring tools will be postponed to the first half of Year 5. 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 the 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. As mentioned above, the implementation of contract data per OCDS standards will mean that most data are machine-readable, and the project will be in a better position to make assessments and necessary recommendations for improvement. In the interim, USAID TEAM also conducted remote meetings with the Open Contracting Partnership (OCP) Senior Program Manager Mr. Karolis Granickas, and the Community and Capacity Building Manager Mrs. Andie Okon. The purpose of the meeting was to coordinate USAID TEAM and the OCP support activities related to the upcoming PPRC Open Contracting and the OCDS API publication and the possibility of delivering the training by OCP concerning OCDS USAID TEAM during the meeting with OCP Senior Program Manager and and API, tailored towards: Community and Capacity Building Manager • Government/publishers with a focus on: Introduction to OCDS, Open Contracting Reform Design and Management, OCDS Implementation Guidance, and best practices gleaned from other countries' experiences. The primary targets of interoperability with OCDS and primary stakeholders are PPRC, Treasury and Budget Department. • CSOs and media with a focus on: OCDS, Data Usage Training and Red Flags Training, and • Private sector/economic operators with a focus on: Introduction to OCDS and Data Usage Training.

USAID TEAM ANNUAL REPORT 2020 | 77 In Year 5, the project will continue to work with the OCP and PPRC to make the best use of the OCDS. 2.3.5. Support implementation of a tool to automatically publish tenders and contracts from e-Procurement platform to municipal official websites. The MLG initially committed funds to finance changes in their Intranet which will enable automatic publishing of contract data. USAID TEAM supported the MLG in drafting the technical requirements for the development of the tool and monitored the vendor contracting process. Despite the initial commitment of funds, during the mid-term budget review, the allocated funds were transferred to other priorities. Consequently, the MLG has postponed this activity to 2021. As a result, the project will support MLG with the implementation of this item in the first half of Year 5. 2.3.6. Enable interoperability between e-Procurement system and KFMIS. In Year 4, USAID TEAM coordinated with USAID Economic Governance Activity to enhance interoperability between their project partners, the PPRC, and MOF Treasury. Both USAID projects discussed the request of the Treasury Director to acquire donor funds to finance identified upgrades in the KFMIS that will support data sharing with the e-Procurement system. PPRC has already allocated the necessary funds for the e-Procurement system upgrades as part of their annual budget. USAID TEAM supported the PPRC to identify and develop the points of communication between the two systems (e-Procurement system and KFMIS). During the reporting period, the MOF Transfers and Treasury IT Department was able to provide the interoperability requirements documentation for the advancement of the PFM, specifically as it relates to communication with the e-Procurement system. This marks an important step in the process of enabling interoperability between the two systems, as the required changes in the two systems are now properly documented. USAID TEAM will coordinate with the USAID Economic Growth Activity to implement this activity and allow the vendors of the respective platforms to implement the necessary changes in both systems. Although USAID TEAM is closely coordinating with the USAID Economic Growth Activity for the developments to happen from the MOF side, delays due to COVID-19 restrictions have necessitated the postponement of full implementation of this activity to Year 5. 2.3.7. Support implementation the risk-based selection tool to monitor procurement activities more effectively. The Monitoring Department implemented an assessment of the current practices of case selection and developed recommendations and criteria for further improving the case selection tool. Furthermore, the project established clear business processes for the Monitoring Department and developed a methodology for risk-based selection of procurement cases for monitoring. In Year 5 the project will support PPRC as it digitalizes the paper base methodology as a tool. The tool will feed itself with information from the e-Procurement system, using the OCDS API, in order to automatically identify high-risk cases for the PPRC to monitor. 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

78 | USAID TEAM ANNUAL REPORT 2020 procurement officers. Implementation of this activity began during Year 4, as the project began conducting remote meetings with the PPRC Monitoring Department to define current practices on sanctioning poorly performing procurement officers. USAID TEAM will continue to support PPRC by introducing practices that enhance the current mechanism to improve and/or sanction the work of poorly performing procurement officers. To ensure that the improved mechanism will be enforced, the project worked with the PPRC Board and supported the update of the current instruction which regulates the performance of procurement officers. 2.3.9. Support drafting process of new procurement law and monitor the adoption process at the GOK and assembly level. The PPRC’s working group has finished drafting the concept note on the new PPL. USAID TEAM has provided thorough inputs to the final version of the note. The work on drafting the law has been affected by delays in the formation government as well as by COVID-19 restrictions. During this reporting period, the Kosovo Government approved the Concept Note on the PPL, which paves the way to draft the new PPL. The key changes in the concept document supported by the project include: Sami Uka, PPRC Board Member, announcing the • Formalization of the use of the e- approval of the Concept Note Procurement system. as a result of the advancements made in public procurement in Kosovo • Introducing the concept of self-declaration where bidders declare that they meet the minimum bidding requirements and must provide proof only in the case that they win. • Introducing the CPE function as part of contract management. • Increasing the number of PRB Board Members from five to seven; and • Harmonization with the EU directives on public procurement. However, changes in the government resulted in a review of the prioritization of drafting the public procurement law. After a few months the new government did form the necessary working group and set very tight deadlines for drafting the new PPL. USAID TEAM mobilized experts to assist the PPRC in drafting the first version of the law and met the deadlines set by the new government. Now the first draft is with the legal office of MOF, which will review it and recommend further adoption before it moves to the government for approval. 2.3.10. Support the PPRC to develop and implement a procurement case management process. This is an ongoing activity implemented by USAID TEAM. An initial assessment of the case management technical requirements as well as the current and potential Monitoring Unit business processes has been completed on time.

USAID TEAM ANNUAL REPORT 2020 | 79 2.4. ENHANCE PRB CAPACITIES TO FULLY IMPLEMENT TRANSPARENCY MEASURES. USAID TEAM continued to support PRB in line with the overall organizational improvement plan, specifically as it relates to transparency and consistency in handling procurement appeal cases. During the reporting period, PRB has confirmed that its new Rules of Procedure have finally been approved by the Board and have entered into effect. One significant achievement with the new Rules of Procedure is the requirement to withhold the fee of appealing economic operators when the PRB decision is in favor of the contracting authorities. Until now, PRB would return the fee in almost all cases they handled, deciding that economic operator appeals were ‘partially right,’ even though the decision was in favor of contracting authorities. With the new rules, the economic operator appeal fee is returned only if the decision is in favor of the appealing economic operator. 2.4.1. Monitor and support PRB to implement 100% of procurement reviews through e-Appeals. Despite COVID-19 restrictions, PRB reported that the work of their appeal review panel continued without any interruption as a result of USAID TEAM's support in fully implementing the online appeals module. The PRB confirmed that complaints from economic operators were received seamlessly using the e-Appeals module of the e- Procurement system. The generation of online payment slips for appeal fees, supported by USAID TEAM in Year 3, allowed complainant businesses pay the fee using online banking applications, without the need to physically obtain payment slips from PRB offices. So far this year, the PRB has received a total of 1,184 appeals, all through the e-Procurement appeal module, and has made decisions on over 1,107 of them. 2.4.2. Monitor implementation of new database of appeal decisions. USAID TEAM supported the PRB to establish a new database of decisions taken in past appeals, available to staff and panel members, and publicly available on the PRB’s website to promote a greater level of consistency and predictability of the PRB’s decisions. Such a database will help inform economic operators of the necessary grounds for appeal or protest based on past cases. Furthermore, it will help watchdog groups more easily monitor the PRB’s decisions. Although the project initially planned to hire two interns to support the PRB to migrate and digitize past decisions (from the old database to the new one), the PRB is implementing this activity on their own, with minor supervision from the project. USAID TEAM will continue to monitor the use of the database and work with the PRB, the Judiciary (through the Office of Overseas Prosecutorial Development Assistance and Training – OPDAT), municipalities (through Component 1), civil society (through Component III), and other stakeholders to ensure the database serves the needs of multiple audiences and improves the level of transparency and consistency of the PRB’s decisions. With greater data input provided by the PRB, the website is now able to produce data in a graphical format that can be easily analyzed by stakeholders monitoring the their work, which is accessible here. 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 to remotely conduct review sessions with economic operators and experts, the ability to live stream was limited to sessions held in the PRB offices. Nonetheless, USAID TEAM enabled PRB to resume livestreaming using the ZOOM platform, and at present they are again able to

80 | USAID TEAM ANNUAL REPORT 2020 conduct all sessions online. PRB committed to take over all the expenses for the ZOOM platform by the end of June 2021. 2.4.4. Build PRB capacities to implement communications strategy. In Year 3 USAID TEAM supported PRB to draft a communications strategy, which provides them with a systematic approach to inform the public of their accomplishments and announcements. In Year 4 USAID TEAM provided PRB with a communications activity plan, a monitoring framework, and tailored templates for PRB press releases and event checklists. Additionally, the project held a coaching session with the PRB staff in charge of communications and public relations on their newly developed communications strategy. 2.4.5. Strengthen PRB capacities to address CSO findings related to deficiencies in the work of PRB. USAID TEAM continues to support PRB as they implement recommendations from CSOs. For example: Following the D+ score and a media announcement that PRB was using the pandemic situation to avoid conducting open sessions. PRB acknowledged the situation and worked with the project to find a solution so that they could again offer open sessions, now through electronic platforms. Currently PRB is using the ZOOM platform again make hearing sessions available to the public in real time.

COMPONENT III: ENABLE CIVIL SOCIETY TO TRACK AND EXPOSE CORRUPTION Civil society plays a key role in providing oversight and checks and balances, serving in a watchdog function to expose corrupt practices and malfeasance. USAID TEAM’s civil-society component focuses on monitoring corruption in public procurement at the municipal level. To increase the capacity of Kosovo’s civil society, the project provided grants to national- level CSOs to monitor all 38 municipalities in procurement-related areas, while ensuring greater citizen engagement. In addition, the component is increasing skills of local-level CSOs to engage with media and expose corruption at the local level. Through USAID TEAM interventions, including through 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, USAID TEAM-funded PRB monitoring has resulted in a full mapping of shortcomings in this institution, including providing data on the inconsistency of PRB decisions, and this analysis points to the need for change. CSO procurement monitoring activities and indices on municipal performance continue to inform the public and drive USAID TEAM technical assistance (through Component 1 and Component II advisors) and adaptations. The use of new technology tools like the Open Procurement Transparency Portal (OPTP) is making monitoring activities easier and more sustainable, while flagging new issues such as the awarding of contracts to blacklisted companies. USAID TEAM partner CSOs, during Year 4, published 38 infographics, posted or aired 22 videos, drafted 29 reports, sent 13 cases to the state prosecutor, established 12 social audit teams; prepared three guidelines, broadcasted three radio debates, and aired or posted two televised debates on national broadcasters. Highlights from empowering civil society activities during Year 4 include:

USAID TEAM ANNUAL REPORT 2020 | 81 • The launch of three reports targeting new focus municipalities and the provision of recommendations to address shortcomings: − Report on the Municipal Budget Development Process for former second-tier municipalities

− Report on the Process of Developing Municipal Procurement Planning in Kosovo for former second-tier municipalities

− Municipal Challenges in Conducting Tender Procedures – KDI in consortium with local-level CSOs

• Developing and publishing six citizen priority cards for former second-tier municipalities, listing the requests of citizens during budget hearings. • Conducting social auditing for infrastructure on selected projects in six second-tier municipalities (Prizren, Suharekë/Suva Reka, Ferizaj/Uroševac, Lipjan/Lipljane, Podujevë/o and Istog/k). • Designing an infographic illustrating repeated and partially repeated issues identified by the National Audit Office findings for six municipalities (former second-tier municipalities). • Preparing and publishing two infographics and two factsheets on selected procurements procedures targeting former second-tier municipalities. • Finalizing and publishing the Public Procurement Barometer – x-Index for 2018 and another report for 2019. • Preparing and publishing two videos and two infographics showcasing the performance and progress of 38 municipalities in “X-index: Barometer for Public Procurement.” • Drafting and publishing the Municipal Governance Transparency Index for 2019 capturing the performance of 38 municipalities on 41 indicators across six thematic pillars: public procurement, budget transparency, access to public documents, public participation, grants and funding and professional ethics. • The Open Procurement Transparency Portal (OPTP) exceeded the life-of-project target site visits. − During 2020, the portal (www.prokurimihapur.org) has recorded 20,735 visitors; and throughout the life of the project there have been 43,768 total users. CSOs, investigative journalists, businesses, and even GOK officials reported using the OPTP as a starting point for investigations or business intelligence. • Organizing three radio debates with the heads of municipal procurements in Vushtrri/Vučitrn, Podujeva/o and Kaçanik/Kačanik to promote the OPTP. • Supporting municipalities with budget hearings by organizing eight online discussions with citizens and Municipal Assembly members from municipalities of Vushtrri/Vučitrn,

82 | USAID TEAM ANNUAL REPORT 2020 Gjakovë/Đjakovica, Pejë/Peć, Pristina, Gjilan/Gnjilane, Junik, Deçan/e, and Rahovec/Orahovac. • Producing and publishing a video focused on the importance of informing citizens on budget hearings and their role in the decision-making process and budget planning for 2021. • Producing and publishing a video to encouraging ordinary citizens to monitor the implementation of works and projects in their municipalities. • Preparing and publishing an infographic depicting the effects of repeated decisions at PRB. • Organizing a TV debate with mayors, central government representatives, CSOs and citizens to discuss the municipal budget planning process. • Organizing a TV debate on the Law on Public Procurement in Kosovo and the reforms that need to be made. • Organizing a two-day training with new law graduates on public procurement procedures, to build the skills of future lawyers and judges in understanding the procurement procedures in Kosovo making them more ready to address judicial cases of this nature. • Developing and publishing nine visualizations on citizens’ priorities for the 2021 municipal budget. • Developing a guideline on monitoring public procurement that will be used as part of the CiviKos activities for the peer-learning workshops. • Developing the Guideline on Policy Communication to support CSOs to address their needs for strategic communication planning. • Conducting an 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). • Developing reports from the monitoring of procurement activities as part of the Peer- Learning Workshop on monitoring public procurement. Local-level CSOs, with support from CiviKos, drafted 23 reports covering different municipal procurements. Based on these reports, 9 infographics were developed and published. • Developing an online sharing platform to support local-level CSOs who do not have a webpage - https://monitoro-raporto.net/. • Publishing four investigative articles, accompanied by infographics, and sending three letters to the State prosecutor on these cases. • Preparing and publishing an investigative video highlighting potential malfeasance. According to BIRN – the investigative media group supported by USAID TEAM – at

USAID TEAM ANNUAL REPORT 2020 | 83 least 120,000 Euros were lost in the tender awarded to a company which is owned by the brother of the current Minister of Trade and Industry. • Conducting eight hands-on trainings for CSOs on how to prepare and refer cases to enforcement mechanisms, including police and prosecutors. Ten letters were sent to prosecutors proposing further investigation. • Facilitating meetings between municipal representatives and social audit teams to improve the performance of capital investments in selected projects and preparing an informational video and a comprehensive report with recommendations on the work of Social Audit Teams. • Developing the Practical Toolkit for Local Civil Society Organizations Conducting Social Audits in Kosovo. • Preparing and publishing 13 videos with mayors, encouraging and instructing citizens to report corruption if they encounter it, as part of the awareness-raising for Anti- Corruption week. Preparing Component III - Event Events/Groups Participants and publishing four videos, and four infographics depicting the effects of corruption during procurement processes. Roundtables 3 50 3.1.4 Let’s talk with investigative 2 41 journalists Virtual - Feedback from CSOs 1 9 Trainings 9 46 3.3.2 Initial hands-on training for CSOs 7 20 on how to prepare and refer cases to enforcement mechanisms, including police, prosecutors Monitoring Public Procurement - 1 6 Training of the Newly Law 1 20 Graduates Workshops 21 154 3.1.1 Social auditing in selected 7 46 infrastructure projects in six second-tier municipalities 3.1.6 Meeting with the Social Audit Team 1 14 - Construction of city park / Renovation of the River Krena - second phase, Gjakovë/ Đjakovica and municipal representatives 3.1.6 Meeting with the Social Audit Team 1 5 - Construction of the Art School,

84 | USAID TEAM ANNUAL REPORT 2020 Pejë/ Peć and municipal representatives 3.1.6 Meeting with the Social Audit Team 1 7 - Construction of the Elderly House, Pejë/ Peć and municipal representatives 3.1.6 Meeting with the Social Audit Team 1 13 - Revitalization and construction of the park near the Morava river in the city of Gjilan/Gnjilane Construction of the sports field in Pogragja and municipal representatives 3.2.1 Applied Peer Learning workshop for 6 43 CSOs on monitoring public procurement 3.2.1 Applied Peer Learning workshop for 4 26 CSOs on Policy communication Grand Total 33 250

3.1. ENSURE SUSTAINABILITY AND ENHANCE CSO’S ABILITY TO MONITOR PROCUREMENT. Through this activity, the project supported national-level think tanks and CSOs to analyze municipal procurements and other spending and recruitment actions as well supporting the development and use of IT tools such as municipal scorecards, reports, databases, and other materials that would help these organizations expose corrupt practices. This activity established mechanisms to ensure the sustainability of results in monitoring procurement by CSOs. Additionally, this incentivized cooperation and knowledge transfers between national- level CSOs and local-level CSOs. To achieve all these objectives, several sub-activities were undertaken. Highlights of civil society empowerment during Year 4 include: Social Auditing questionnaire. 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) conducted meetings with municipal representatives from the following six second-tier municipalities (which are now

USAID TEAM ANNUAL REPORT 2020 | 85 new focus municipalities) Ferizaj/Uroševac, Lipjan/Lipljane, Istog/k, Suhareke/Suva Reka, Prizren, and Podujeve/o, to present reports on the Municipal Budget Development Process and the Process of Developing Municipal Procurement Planning. Most of the discussions during these meetings were related to poor citizen participation in the budget preparation Kosova Democratic Institute in consortium with YAHR and Syri i Vizionit is supporting six partner municipalities to address process. Findings from the report on the NAO recommendations. budget development process show that the average civic participation in these hearings is only 0.26% of the population, and women's participation in public hearings remains even lower. While overall, municipalities adhere to the minimum legal requirements for the preparation of the budget plan, there is a lack of understanding of budgetary hearing responsibilities among the municipal executives and assemblies. The report and CSOs provided recommendations to overcome this challenge. Additionally, municipal representatives expressed the need for the option to revise legislation concerning procurement plans. Current legislation allows for a mid-year budget revision but does not allow changes to the procurement plan. The consortium also developed citizen priority cards for the six targeted municipalities, listing the requests of citizens during budget hearings. The consortium also prepared and published two infographics and two factsheets on selected procurements in the targeted municipalities. In addition, KDI, in coordination with its consortium members, ISDY, YAHR, Syri i Vizionit and Ekovizioni, monitored and analyzed 12 tenders announced by the municipalities of Prizren, Suharekë/Suva Reka, Ferizaj/Uroševac, Lipjan/Lipljane, Podujevë/o, and Istog/k in 2019. The findings from this monitoring process were presented in the “Municipal Challenges in Conducting Tender Procedures” report, highlighting some key findings: a. The ROGP for Public Procurement does not provide enough 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

86 | USAID TEAM ANNUAL REPORT 2020 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. Additionally, municipalities should seek to improve their planning in terms of demand and finances to avoid over or under budgeting and to avoid contract annexes. Further, KDI, under the activity “Empower local CSOs and citizens to prevent corruption in municipal public procurement in the former second-tier, current focus municipalities,” conducted social auditing of nine projects in the selected municipalities with citizens from the location where the projects have been implemented. To do this, KDI developed a questionnaire that was intended to collect information from citizens on the degree to which 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. During the reporting period, KDI and its consortium members observed that there has been an increase in municipal expenditures as a result of COVID-19. These procurements have been mainly related to social assistance and protective health material expenditures. This situation will impact the collection of municipal revenues which is expected to be lower than normal and consequently affect the implementation of budget and procurements plans. Finally, KDI, as part of their planned activities, organized a press conference publishing the audit findings for six municipalities: Suharekë/Suva Reka, Istog/k, Lipjan/Lipljane, Prizren, Podujevë/o, and Ferizaj/Uroševac. This publication captured the main findings from the process of monitoring the implementation of the audit recommendations for 2018. KDI, together with its consortium members, found that there were 33 issues related to the financial management that are repeated year after year. Additionally, KDI submitted and published the report on monitoring the tendering process for these six municipalities for 2019. Both reports, as per the original agreement, were planned to be published through a roundtable event. However, due to COVID-19, it was decided that the reports will be published through press conferences and social media and will be shared electronically with all six municipalities. Regarding capacity building, KDI was tasked to increase the capacity of local-level CSOs. KDI has applied an “open door policy” to all consortium members throughout the duration of the project. USAID TEAM was informed that KDI had continuous and almost daily

USAID TEAM ANNUAL REPORT 2020 | 87 communications with all consortium members via phone, e-mail and office visits. During this period, KDI mentored the consortium members on different aspects of project activities, activity related policies and procedures, the role of central institutions, central platforms and websites, etc. The consortium also organized shadow research sessions for local-level CSOs, depending on the type of monitoring they engaged in. These activities contributed to the sustainability of local-level CSOs. One of the consortium partners, ISDY, was awarded a grant to monitor procurement as part of the Balkan Tender Watch activity, funded by European Union. Procurement Monitoring Report 3.1.2. Promote transparent and accountable – KDI municipalities through Transparency Index in Public Procurement for Municipalities. 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 to increase citizen’s awareness of public spending. After the expansion of USAID TEAM to ten additional municipalities, this activity also supports procurement advisors to collect data for municipalities, which is necessary for the graduation plans. In the interim, USAID TEAM signed a grant agreement with KDI for the implementation of the Transparency Index in Public Procurement and approved the detailed work plan describing activities, including: 1. The updated methodology, points system, and weighted score, 2. Upgraded indicators that will be used for the Transparency Indexes for 2019 and 2020, and 3. Drafts 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. The requests for access to public documents and information were 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 USAID TEAM signed a grant agreement with Kosova Democratic Institute for implementation of might face during the process of gathering data Transparency Index in Public Procurement for from municipalities due to the pandemic Municipalities project. situation in Kosovo. During the process of data collection, KDI faced challenges such as a reduced number of municipal staff due to COVID-19, missing relevant information from the PPRC webpage, and a lack of responsiveness to requests for information by municipalities. Following challenges

88 | USAID TEAM ANNUAL REPORT 2020 with data collection due to the COVID-19 pandemic, KDI published the Transparency Index in Municipal Governance 2019 during December of 2020. The report is an 84-page comprehensive monitoring report of performance of all 38 municipalities on 41 indicators across six thematic pillars: public procurement, budget transparency, access to public documents, public participation, grants and funding and professional ethics. The report, a re- branded successor of Public Procurement Transparency Index, shows significant progress in the transparency of public procurements in Kosovo. KDI will continue this activity in Year 5, publishing an Index for 2020, by the end of the first quarter. 3.1.3. Promote efficient use of public funds through fair and transparent public procurement. USAID TEAM grantee Riinvest published the Public Procurement Barometer – x-Index for 2018 in the first months of Year 4 and published the Public Procurement Barometer – x-Index for 2019 in December of Year 4. The evaluation focuses on three main areas: transparency, competition, and efficiency. Some of the key findings of x-Index for 2018 were that out of the nine sub-indexes, findings reveal that municipalities have performed the best in the “Public procurement as a share of total purchases (x1)” sub-index, with an average score of 0.95 index points. Meanwhile, the sub-index where municipalities have performed the worst is “Pro competitive tools (x6).” Some key recommendations from this report include: • Municipalities should consider quality over price as a criterion when awarding their contracts, as suggested by the EU Directive on public procurement. • Municipalities should continue to publish their contracts. Capacity building by PPRC, CSOs and international organizations should be provided and focused on small-sized municipalities to publish their contracts and update their webpages, and • CSOs should continue to put pressure on PPRC to provide machine-readable data, rather than data published as pdf documents. The report for 2018 was planned to be published through a roundtable event with the participation of local- and central- level officials, CSOs, and media. Due to the pandemic, it was impossible to hold such an event; therefore, the report was published on Riinvest’s official website. Riinvest developed and submitted the x-Index report for 2019. In total, the data was collected from 7,142 notifications for contracts, and 5,961 notifications of awarded contracts. The sources for data collection were varied, but the main ones include the e-Procurement platform (contract notices and contract award notices), the PRB (decisions regarding the legality of municipalities’ procurement activities), the KBRA (name of economic operators), the Law on the Budget of the Republic of Kosovo, and the municipalities’ websites.

USAID TEAM ANNUAL REPORT 2020 | 89 The report for 2019 was published by Riinvest along with two video animations and two infographics showcasing the performance of 38 municipalities in “X-index: Barometer for Public Procurement.” The first video showed the municipalities with best and worst performance across the nine pillars whereas the second video highlighted where the greatest and least progress had been made by municipalities across the nine pillars. Infographics highlighted performance on pillar 4 (Winner’s Concentration) and pillar 5 (Bidders’ Participation), respectively, and made comparisons of municipal performance with 2018. Riinvest researchers also discussed the findings on the national broadcaster, KohaVision - KTV. 3.1.4. Support functionality and sustainability of public procurement transparency portal. In the beginning of Year 4, Levizja FOL upgraded the portal by adding new features for contracts and a subscription button that allows all users to subscribe to a contracting authority or economic operator and keep track of the projects that are planned to be implemented in their municipalities. This was done after interviews with users and a report prepared to improve usability of the Open Procurement Transparency Portal (OPTP). Levizja FOL conducted interviews with regular users of portal to find out the challenges they faced in navigating the portal and to collect requests for add-ons for the portal in order to increase ease-of-use, especially for persons who are new to the portal. Eleven recommendations for improvement of the portal were identified and listed on the report, which are planned to be implemented. The report is under review. Levizja FOL also updated the OPTP with a user interface in the form of a Kosovo map. The users can now click on individual municipalities and will be prompted with information about that municipality. In this map, each municipality user will see a Grant signing between USAID TEAM and clickable box that shows them Lëvizja FOL. the number of contracts that the municipality has in the portal and their total value. Clicking each municipality will direct the user to the official page of the respective municipality where they can find further information on its procurement activities. Additionally, Levizja FOL with the intent of promoting OPTP organized an online workshop with journalists and civil society activists who shared stories about their investigative work. USAID TEAM committed to support Levizja FOL in developing activities that will ensure functionality and sustainability of the public procurement transparency portal. As such, the project provided an additional grant to FOL aiming to ensure the sustainability of OPTP by establishing a partnership between Lëvizja FOL and an online media outlet. In addition, FOL continued to populate the OPTP with new contracts and in total 19,755 contracts have been added to the portal. Contracts have been checked manually to add their end dates.

90 | USAID TEAM ANNUAL REPORT 2020 In Year 4, Levizja FOL organized debates in local radio shows in Vushtrri/Vučitrn, Podujeva/o, and Kaçanik/Kačanik. The radio shows invited heads of municipal procurements to discuss with Levizja FOL researchers the function of the OPTP. They also aimed to promote the portal to the local communities as a tool for transparency and accountability in procurement. During Year 4, the OPTP exceeded life-of-project target visits on the website. From July 1, 2018, when the portal was launched, until end of 2020, the webpage hosted 43,768 total users of the portal, while only in 2020 there were 20,735 visitors recorded. 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. Levizja FOL also conducted a survey with frequent users of the portal, to assess how necessary it is to add new features or remove unnecessary information. Since the portal is built in a way that adapts to the changes made by any institution, FOL is gearing towards updating the portal with features that are user-friendly and necessary to conduct research on procurement. During Year 4, Levizja FOL completed its monitoring report for 2019 on annex-contracts published through the eProcurement portal (e-prokurimi) and municipal webpages. Monitoring was conducted for four municipalities, Prizren, Feriza/Urosevacj, Mitrovica and Kamenica. The report also offered options on ways that annex contracts could be published and made easily available, as this has been presented as a challenge in achieving full transparency of municipal contracts. 3.1.5. Digital Solution for Integrity in Public Procurement. USAID TEAM grantee Democracy Plus (D+) is in the process of developing a sub-system to the existing OPTP, accessible at www.prokurimihapur.org, to automatically apply red flags to procurement actions. In that regard, D+ has developed red-flag indicators that will be built into the red flags platform as algorithms. The D+ sub-system will flag transactions prior to signing the contract and, in that way, will make it possible for citizens and CSOs to raise any issues identified. PPRC’s Application Programming Interface (API), will allow the ‘red flags platform’ to call on data automatically from PPRC, thus enabling seamless communication between API and the platform. To avoid manual data entry which would take longer and require additional cost, D+ with USAID TEAM approval has put its project activities on hold until the API is completed. This activity was planned to be completed by the end of 2019, but it took longer than foreseen due to setbacks faced by the PPRC. As the PPRC announced that the API is complete, D+ will resume working on this activity in Year 5. 3.1.6. Support, expand, and seek opportunity for co-financing of social accountability tools to monitor public procurement and public expenditure. In the beginning of Year 4, USAID TEAM grantee Group for Legal and Political Studies (GLPS) continued organizing activities related to the engagement of social audit teams on identifying and addressing issues related to selected projects for monitoring. GLPS organized a round of meetings with six established Social Audit (SA) teams. Additionally, GLPS held a meeting of

USAID TEAM ANNUAL REPORT 2020 | 91 the social audit team and municipal representatives in Gjakovë/Đjakovica, Gjilan/Gnjilane, and Pejë/Peć to discuss findings from the monitoring of selected projects: Construction of the art school and Construction of the elderly house in Pejë/Peć; Construction and functionalization of the city park and Revitalization of the Krena River in Gjakovë/Đjakovica; and Construction of the promenade around River Morava in the city center of Gjilan/Gnjilane and Construction of a sports field in Pogragje village in Gjilan/Gnjilane municipality. During Year 4, GLPS prepared a comprehensive report on the findings and recommendations of each of the six social Manual on Conducting Social Audit in audit teams for the three municipalities. GLPS also prepared Kosovo by GLPS. a promotional video on the social audits conducted on six contracts of three municipalities (Gjakovë/Đjakovica, Gjilan/Gnjilane, and Pejë/Peć). The video follows the progress of conducting social audits, the capital projects under the social audit and the actions taken as a result of the social audits. Municipal officials from the three municipalities are featured in the video and all of them acknowledge the good work of GLPS with social audits. The issues identified during the monitoring process, such as delays in implementing projects, unforeseen work, lack of proper planning, and lack of financial means to complete the project, were communicated to the municipal officials of all three municipalities. During these meetings, citizens presented their concerns at not being consulted related to the above- presented projects because it rendered them unable to contribute to the improvement of project implementation. Members of social audit teams remained committed to closely following developments in this regard and advocating for a solution in order to avoid additional delays. The meeting in Gjakovë/Djakovica was covered by a local TV station, which also posted the news on their YouTube page.

USAID TEAM grantee Group for Legal and Political Studies reported on activities with social audit teams in three focus municipalities (Gjakove, Gjilan, and Peja)

Throughout much of Year 4, due to the pandemic Covid-19 and restriction measures taken by GOK and Kosovo Institute for Public Health, it was impossible to carry out monitoring activities in the field. 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.

92 | USAID TEAM ANNUAL REPORT 2020 Despite this, GLPS published and disseminated the Manual on Conducting Social Audit in Kosovo to the CSOs. GLPS reported significant challenges with the completion of field activities that involve engagement of the social audit team members due to COVID-19. As this activity relies heavily on face-to-face meetings, it faced the highest degree of difficulty in Year 4 because of the COVID-19 Pandemic. Nevertheless, the monitoring report was completed, with some delays. 3.1.7. Engage national-level CSOs to monitor PRB. In line with the Year 4 Work Plan, USAID TEAM developed a Scope of Work (SoW) and issued a Request for Proposals to engage national-level CSOs to monitor the PRB. In total, two project proposals (Democracy Plus and INDEP) were submitted. The evaluation committee completed the evaluation process and recommended Democracy Plus as a subcontractor to implement this project. The main objectives of the project were: • Monitor all decisions of PRB and assess consistency of such decisions using technology. • Continue to populate existing databases 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. Since all activities could be conducted online, no delay or obstacle was encountered in implementing this contract despite the pandemic. D+ signed a contract with a software company to update the platform and mine data from the PRB’s webpage. They also conducted testing of the data which is automatically mined from the PRB’s website and integrated it into the current version of the platform. As for the platform, all the indicators that were planned to be taken automatically are completed. The platform can be accessed here. The new PRB website has made it possible to extract such data automatically. Previously, mining data from the PRB webpage had to be done manually and this new development has reduced the time and efforts significantly. The automatic data mining also prevents human errors in data collection. In Year 4, Democracy Plus also published an infographic depicting the effects of repeated decisions at PRB. Adjudicating on multiple complaint on the same issue has caused significant delays in procurements. This activity is on track and will continue in Year 5. 3.1.8. Empower CSOs on monitoring public procurement and exposing malfeasance in focus municipalities and ensure sustainability. USAID TEAM has developed a Scope of Work for the of Request for Applications (RFA) for eligible CSOs or consortiums of CSOs to monitor nine municipalities on their compliance with the legal requirements for developing municipal budgets and municipal budget planning; the

USAID TEAM ANNUAL REPORT 2020 | 93 development of municipal procurement plans; identifying and monitoring tendering processes for a certain number of projects and monitoring implementation of those with a focus on contract management and the development of technical criteria. This is a bridging activity for nine months until local level CSOs, through the CiviKos subcontractor, can sustainably take over this type of monitoring for focus municipalities. 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. In Year 4, USAID TEAM grantee Kosovo Law Institute (KLI), together with its consortium member Iniciativa për Progres (INPO), submitted a detailed work plan as part of the first milestone. Additionally, they have completed several planned activities: Submitted and finalized the first informative video which is focused on the importance of informing citizens on budget hearings and their role in the decision-making process and budget planning for 2021. Prepared a video to encourage ordinary citizens monitor the implementation of works and projects in their municipality. The video instructs citizens on how to monitor implementation of a contract in a step-by-step manner and makes references to the e- Procurement platform and the open procurement platform managed by Lëvizja FOL under USAID TEAM. Organized a kick-off meeting with nine target municipalities (Vushtrri/Vučitrn, Gjakovë/Djakovica, Pejë/Peć, Pristina, Gjilan/Gnjilane, Junik, Deçan/Dečane, Hani i Elezit/Elez Han, and Rahovec/Orahovac). The online event gathered deputy-mayors, procurement officers, and financial officers to discuss the interventions of this grant. Municipal representatives received information and provided feedback on monitoring methodology and targeted fields. The Deputy Mayor of Pristina was interested to see more monitoring activities targeting the PRB decisions. Organized eight online discussions with citizens and Municipal Assembly members from municipalities of Vushtrri/Vučitrn, Gjakovë/Djakovica, Pejë/Peć, Pristina, Gjilan/Gnjilane, Junik, Deçan/Dečane, and Rahovec/Orahovac. In these discussions, citizens raised different issues such as a lack KLI, INPO Facilitated Discussions on of investment in schools, public lighting, road Budget Priorities with Citizens and pavements, etc. These online meetings Municipal Assembly Members discussed the draft budget for the year 2021 and deliberated the concerns of the citizens of the respective municipalities. These discussions were live-streamed on the KLI and INPO Facebook pages. Prepared two televised debates and broadcasted on RTK’s “Betimi për Drejtësi”. The first debate brought together mayors, central government representatives, CSOs and citizens to discuss municipal budget planning process. The second debate was on the

94 | USAID TEAM ANNUAL REPORT 2020 Law on Public Procurement in Kosovo and the reforms that need to be made. This TV debate included interviews with board member of PPRB, Sami Uka, the head of the America Chamber of Commerce in Kosovo, z. Arian Zeka, and the head of the public procurement office in the Municipality of Pristina, Zekë Bardhaj. Organized a two-day training with new law graduates on public procurement procedures. The purpose of the trainings was to build skills of future lawyers and judges to understand procurement procedures in Kosovo and be more ready to treat judicial cases of this nature. The trainings were held through the Zoom platform. The trainees had the opportunity to participate in practical activities, such as monitoring the meetings of municipal bodies and requesting access to public documents. Prepared three infographics to inform citizens on the process of municipal budgeting. One of the infographics shows the number of public hearings and the number of participants. Another infographic shows gender balance in the public hearings of the five municipalities in focus. The third infographic showcased the composition of the budget of Municipality of Pristina. The objective of the infographic was to inform citizens of the capital on how the funds for 2021 are planned to be spent and what share is going for capital investments on roads, health, education and administration. 3.1.9. Host annual challenges to foster innovative ideas which contribute to graduation of municipalities. This activity aims to collect and implement innovative and/or experimental ideas to track and expose corruption. Due to restrictions imposed by COVID- 19, USAID TEAM thought it best to collect such ideas during Year 5, as all stakeholders are currently operating in a quasi-emergency mode. The publication RFA for this activity is postponed for Year 5. 3.2. ENABLE NATIONAL-LEVEL CSOS THROUGH CIVIKOS AND 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. Creating a sustainable environment for civil society organizations working on monitoring public procurement and building bridges between CSOs and public institutions. In the beginning of Year 4, USAID TEAM subcontractor CiviKos developed and finalized the Work Plan for 2020 in line with the project Work Plan. The planned activities of CiviKos focused on ensuring the sustainability of activities beyond the life of the project. Upon the approval of the Work Plan, CiviKos developed and submitted two guidelines that will be used in their work with local-level CSOs: • Guideline on monitoring public procurement that will be used as part of the CiviKos activities for this year during the peer-learning workshops. The aim of the guideline is to provide a single source from which organizations can learn about all steps in monitoring public procurement, including on how to register on the e-Procurement platform, how to find procurement activities, how to download documents, what

USAID TEAM ANNUAL REPORT 2020 | 95 tenders to select for monitoring, where to pay more attention during the monitoring process and finally how to prepare a report on the monitoring process. • Guideline on communication developed with the purpose of supporting CSOs to address their needs for strategic communication planning. The focus of guideline is to empower civil society actors to effectively articulate, represent, and advance their interests in the policy-making process; provide instruction on how to use modern communication CiviKos finalized a guideline for methodologies to expand opportunities for participation on civil society on monitoring social changes; and increase the impact of local CSOs on public procurement. public procurement processes by creating content and messages that are easily understood by the general public, as well as those that could influence policymakers. Building upon last year's applied learning workshops, through this package, CSOs prepared short reports, articles, op-eds, and other communications materials to inform the public on findings from their monitoring efforts. Additionally, CiviKos held a focus group meeting with facilitators that will be engaged for workshops on “Monitoring Procurement” and “Policy Communication.” The facilitators were 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 anticipated challenges while monitoring institutional procurement activities 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, and six workshops were conducted with the participation of CSOs from six Kosovo regions: Ferizaj/Uroševac, Gjilan/Gnjilane, Mitrovica e Jugut/Južna Mitrovica, Pejë/Peć, Remote peer-learning workshop with local Pristina, and Prizren. In total, CSOs on monitoring public procurement online. representatives from 42 CSOs attended these online workshops. After the completion of the workshops, CiviKos, continued to support the engaged facilitators and participating organizations on developing reports from the monitoring process of selected contracts. Most of the organizations selected infrastructure projects but there were also service contracts monitored. The preparation of the report has been combined with field

96 | USAID TEAM ANNUAL REPORT 2020 visits. Parallel to that, CiviKos contacted all the organizations to get their feedback on the difficulties they are facing due to the pandemic. The major challenges were a reduction of staff in municipalities which is delaying the process of collecting relevant information for the selected contracts, restructuring of staff and delays on sending official emails (Prizren), COVID-19 infected staff in Ferizaj/Uroševac, documents not being published on municipal webpages, and delays in responding to the requests for access to information, etc. During Year 4, CiviKos submitted 23 reports draft reports prepared by local-level organizations from Prizren, Pejë/Peć, Mitrovica e Jugut/Severna Mitrovica, Gjilan/ Gnjilane, Ferizaj/Urosevac, and the Pristina region. 1. “Ec ma ndryshe” which monitored the contract for “Façade, Conservation and Revitalization of Old Houses in Prizren. 2. ISDY which monitored the “Renovation of Cultural Center in Ortakoll neighborhood. 3. PRAK which monitored the “Supply with sanitary material for the needs of health services for protection against COVID-19.” 4. KDI covered monitoring of the procurement procedure on “benches for the municipality of Prizren.” 5. KCIC in Gjilan/Gnjilane covered monitoring of the procurement procedure on supplying working clothes for municipal employees. 6. Network for Peace Movement in Kamenicë/Kamenica covered monitoring of the procurement procedure on Supply with Firewood purchased by the Municipality of Kamenica. 7. ERA in Pejë/Peč covered monitoring of the procurement procedure of Construction for the Road Peja – Lumbardh – Milishevc. 8. Solidar Suisse in Pejë/Peč covered monitoring of the procurement procedure for Water Canals of Nine Villages. 9. Syri i Vizionit in Pejë/Peč covered monitoring of the procurement procedure for Mammograms for Main Family Medical Center. 10. YMCA in Gjakovë/Đakovica covered monitoring of the procurement procedure for Construction of the Transit Road. 11. Zana NGO in Klinë/Klina covered monitoring of the procurement procedure for Medical Equipment for COVID-19 pandemic situation. 12. INPO in Ferizaj/Uroševac covered monitoring of the procurement procedure Road for Unification of the City. 13. LDA in Shtime/ Štimlje covered monitoring of the procurement procedure for Two Tennis Fields.

USAID TEAM ANNUAL REPORT 2020 | 97 14. Nisja/Zhvillohu in Ferizaj/Uroševac covered monitoring of the procurement procedure for Public Benches, Public Toilets, Garbage Bins and other Elements for Liria Park. 15. Kosovo Center for Security Studies in Pristina covered monitoring of the procurement procedure for Retail Prices of Municipality of Prishtina. 16. INPO covered monitoring of the procurement procedure for Revitalizations of stairs and construction of the bridge in the Arberia Neighborhood. 17. Democracy Plus covered monitoring of the procurement procedure for Hygiene in Schools and Kindergartens during Pandemic Times. 18. Open Data Kosovo covered monitoring of the procurement procedure for the Basement of the NewBorn Monument. 19. Levizja Fol covered monitoring of the procurement procedure for urgent supply of food-hygienic packages for families in need. 20. Democracy for Development covered monitoring of the procurement procedure for Supplies of medical equipment and food equipment during the Covid-19 pandemic. 21. CBM in Mitrovica South covered monitoring of the procurement procedure for Maintenance and Revitalization of Green Spaces and Parks in the City.” 22. Mundësia in Mitrovica South covered monitoring of the procurement procedure for “Food Packages for Pandemic Times.” 23. REC in Mitrovica South covered monitoring of the procurement procedure for “Repairing and Asphalting of Roads in the Periphery of the City.” As part of the planned activities, CiviKos delivered the questionnaire for certification of the CSOs on monitoring public procurement. This questionnaire will serve to test the knowledge of procurement monitoring by the CSOs. To draft questions, CiviKos drew on the expertise of the Pristina-based CSOs, who have extensive experience in monitoring public procurement. The questionnaire has been reviewed and approved by the USAID TEAM procurement advisors. To create a sustainable environment for civil society organizations working on monitoring public procurement and building bridges between CSOs and public institutions, CiviKos’ task was to “create a joint online sharing platform for all organizations to interact and network.” CiviKos will also upload and publish guides and methodologies prepared to date, on their CSOs from Mitrovica e Veriut/Severna website. To this end, CiviKos developed an Mitrovica participating in a training to online tool, that will be hosted on their monitor procurement webpage, https://monitoro-raporto.net/.

98 | USAID TEAM ANNUAL REPORT 2020 This tool will provide local-level CSOs space to publish their reports, since many don’t have working websites of their own. It will also serve as a resource for research on procurement, as it will contain guidelines and all necessary materials to monitor public procurements. 3.2.2. Provide seed funding in cooperation with Government of Kosovo institutions to ensure sustainability of CSO monitoring activities. During Year 4, USAID-TEAM actively worked with Ministry of Local Governance to ensure sustainability of efforts of local-level CSOs to monitor public procurement. As USAID TEAM is entering its final stages, MLG has committed to take ownership of and support these activities financially. Allocating funding to support local-level CSOs to monitor local procurement brings a lot of benefits for the citizens of Kosovo and will improve performance of municipalities. The COVID-19 pandemic has influenced implementation of activities foreseen for Year 4 and one of them is related to provision of seed funding envisioned to be implemented in cooperation with the Government of Kosovo. However, USAID TEAM initiated discussions with the Ministry of Local Governance related to the possibility of co- financing CSOs implementing activities focused on monitoring public procurement. The MLG wanted to allocate 50,000 Euros to support monitoring efforts of CSOs, but the Ministry of Finance rejected this allocation, since the funds were required to finance COVID-19 related expenses. 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. In Year 4, USAID TEAM signed a grant agreement with the Balkan Investigative Reporting Network (BIRN) aiming to encourage the civil society sector to cooperate with investigative media by not only publishing potential cases of corruption but also by conducting thorough research which leads to reported cases being sent to the prosecutor. Hereby, BIRN Kosovo, in consortium with D+, has been contributing to increasing transparency and accountability in public procurement by monitoring and producing investigative analyses and reports, identifying and reporting violations encountered in public procurement, submitting legal complaints to the State Prosecutor, and producing television broadcasts based on the monitoring findings. Keeping in mind that the pillar of this project will be the research and analysis of the procurement processes, exposing the potential violation of the PPL and other rules and regulations, USAID TEAM conducted a meeting with the grantee to redefine the expectations and the possible challenges during its implementation. In line with previous practices, the grantees will provide research topics for USAID TEAM’s approval, but afterward will maintain editorial independence, and will publish articles as soon as they are ready. To date, BIRN Kosovo has recommended five tender cases for further investigation which USAID TEAM approved.

USAID TEAM ANNUAL REPORT 2020 | 99 During Year 4, BIRN in consortium with D+ published three investigative articles, visualizations and sent three cases to the prosecutor. The first article “Extortion scheme through the purchase of light bulbs and electric poles in Novobërda/Novo Brdo municipality”, highlights alleged violations in the contract implementation phase of the tender. The second article, “The private business of Vetevendosje’s assembly member received six contracts from the municipality of Prizren”, alleges that political connections facilitated giving six tenders to the father of a Vetevendosje assembly member by the Municipality of Prizren. The third article, “The company that was awarded with 29 contracts from the Municipality of Drenas/Glogovac”, illustrates how the Municipality of Drenas awarded one single company 29 contracts, with a total value of 1.7 million euros over 28 months. The articles were published using initial research conducted in the Open Procurement Transparency Portal, without which, it would be practically impossible to uncover at least two of these instances (Drenas/Glogovac and Prizren). BIRN sent letters to prosecutors informing them about these cases of potential malfeasance. During Year 4, BIRN also, published an investigative article and video relating to a tender in the Municipality of Malisheva/Mališevo. BIRN estimates that at least 120,000 Euros were lost in the tender awarded to “Themeli”, a company which is owned by the brother of the current Minister of Trade and Industry. The article found that the head of municipal tender evaluation committee was also part of the company. PRB overturned the decision to award the contract twice. The Municipality did not obey the decision of the PRB. When the municipality decided for the third time to award the tender to “Themeli”, ignoring PRBs decision, the company which had submitted the initial complaints did not object, citing that it was tired of the process. The value of the tender is estimated at 400,000 Euros. 3.3.2. Build formal mechanism for CSOs and journalist to report cases of suspected corruption to the State Prosecutor. USAID TEAM engaged an STTA, Kreshnik Gashi, to develop a formal mechanism for CSOs and journalists to report cases of suspected corruption to the State Prosecutor. The draft Memorandum of Understanding (MoU) between CSOs, investigative media, and the Office of the State Prosecutor has been developed and shared with Kosovo Prosecutorial Council (KPC) and State Prosecutor's Office. Both institutions expressed some concerns with signing the MoU that formalizes communication standards between the two institutions and the civil society and the media. They are proposing to submit the potential cases of corruption in the form of criminal reports, which is almost impossible for most of the media and civil society since they lack the Remote practical training for CSOs: assisting them to refer cases professional capabilities (lawyers) to to enforcement mechanisms, including police, prosecutors. prepare such reports. USAID TEAM coordinated with OPDAT and agreed to organize a focus group between the KPC and the representatives of civil society and media to find the best solution. It should be noted that the MoU is not an end in itself, but rather a

100 | USAID TEAM ANNUAL REPORT 2020 facility for cooperation. And, if CSOs and KPC find a common understanding on how to address shortcomings in the quality of cases sent to the prosecutor by CSOs, and feedback to CSOs by KPC, USAID TEAM will facilitate this process without an MoU. In Year 4, USAID TEAM started to assist the CSOs to refer cases to enforcement mechanisms, including police, prosecutors, and the 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 of the organizations in order to facilitate the sharing of experiences and findings for cases that may be forwarded to law enforcement mechanisms. Upon the completion of training, the STTA shared the forms for reporting cases with participants and continued to work with them on formal letters. To date, 12 draft letters were developed with cases of violation of procurement procedures and legislation that are expected to be finalized and submitted to enforcement mechanisms in the upcoming period. Ten letters were sent to the prosecutor proposing further investigation. 3.3.3. Support CSO activities to demand accountability during Anti-Corruption Week. As in previous years, in Year 4 ideas to mark Anti-Corruption Week were solicited. However, due to the COVID-19 pandemic situation, ideas that involved online activities were encouraged with the aim of informing and encouraging citizens to be a part of exposing corruption. USAID TEAM received concepts from four grantees and supported two of the organizations, KLI and BIRN. The activities were planned to go beyond the week of Anti- Corruption, beginning on December 9, for the purpose of keeping the messages of anti- corruption in the spotlight for a longer period. KLI prepared and published thirteen (13) short videos with Mayors of Prizren, Ferizaj/Uroševac, Pejë/Peć, Gjakovë/Đakovica, Gjilan/Gnjilane, Vushtrri/Vučitrn, Podujeva/o, Lipjan/Lipljane, Deçan/Dečani, Suhareka/Suva Reka, Rahovec/Orahovac, Junik and Hani i Elezit/Elez Han. All thirteen videos were posted and promoted on social media by KLI and INPO. All the Mayors made the same call to their citizens to monitor public procurement, report corruption if they encounter it and to be a part of improving contract management in their municipality. The videos were published in Albanian, Serbian and English. As part of Anti-Corruption week activities, BIRN prepared and published video reports, infographics and photos to showcase mismanagement in two public procurement procedures. The first set of videos, infographics, and photos showcases the difference in prices negotiated by municipalities on pandemic protective gear. The second set of videos, infographics, and photos showcases the annex-contracts in the Municipality of Klina and some consequences of those municipal projects. They will be posted once they are cleared by TEAM and USAID. BIRN also submitted a set of videos, infographics, and photos for a water supply contract of fifteen villages of Dragash municipality and the contract in municipality of Peja/Pec for food supplies for people in need during the pandemic period. Once they are reviewed and approved by USAID TEAM, they too will be posted.

USAID TEAM ANNUAL REPORT 2020 | 101 CHALLENGES DURING REPORTING PERIOD USAID TEAM experienced several challenges and opportunities during this reporting period that required a flexible management approach. The COVID-19 situation and the decision of the GOK to work with limited number of remote staff affected some of the planned activities. Since the situation with COVID-19 remains unpredictable, and there are no indications on when it will normalize, during the reporting period the project implemented different methodologies to conducting activities virtually, and since the beginning of September has resumed limited in-person assistance. Some of the activities affected and the difficulties caused by this situation are: • USAID TEAM was not able to meet and present the graduation results in person to the focus municipalities as planned. Instead the project developed detailed reports for each of the 15 focus municipalities. In addition, USAID TEAM conducted online sessions to present the municipal graduation and annual baseline results. These meetings helped the project determine which activities would best support municipal management improve performance towards the path to graduation. • Roundtables planned for sharing best practices with all Kosovo municipalities in public procurement, public finance, internal audit, human resources and ethics, communication and transparency, were initially postponed, but were later implemented online during the reporting quarter. During the year, the project coordinated all planned activities with partners, including MLG, AKM, PPRC, and CHU, etc. • The frequent changes of Governments (three times within the year), with the most recent ‘resignation’ of the Government in November 2020, affected USAID TEAM activities, especially the reform process for project and contract management. • CHU with the support of USAID TEAM has finalized the update of semi-annual reports and has requested that the pilot municipalities conduct reporting using the new SharePoint portal in the next reporting phase in June 2020. Given COVID-19 travel restrictions, KPMG was unable to travel to Kosovo in Year 4, thus this activity was affected. • As a result of the pandemic situation, PRB was unable to hold open hearings with the parties and the public. The project’s grantee, D+, who monitors the work of PRB, has drawn our attention to this problem. We discussed this issue several times with PRB leading to the implementation online teleconferencing tools to facilitate online appeal sessions. Furthermore, the project performed an assessment of the online tools available and found ZOOM to be the best suitable application for PRB. Due to administrative issues, PRB has not been able to purchase a membership for this platform, and therefore, USAID TEAM continues to provide procurement support enabling the hearing sessions to be conducted online. • USAID TEAM supported the PPRC in drafting the concept document which precedes the drafting of the Law on Public Procurement. However, changes in the

102 | USAID TEAM ANNUAL REPORT 2020 government resulted in a reduced prioritization of the law. After a few months the new government did form the necessary working group and set very tight deadlines for drafting the new PPL, putting significant pressure on the PPRC. • USAID TEAM is closely coordinating with the USAID Economic Growth Activity to establish interoperability between the e-Procurement and FreeBalance platforms, but due to delays from the MOF caused by COVID-19 restrictions, this could not be finalized. However, during the reporting period, the MOF Transfers and Treasury IT Department was able to provide the interoperability requirement documentation for the advancement of the PFM, specifically as it relates to communication with the e-Procurement system. • Due to COVID-19, the Performance Audit could not be conducted in Year 4. • USAID TEAM faced minor issues in conducting on-line activities with some of the new focus municipalities due to the lack of equipment for the municipal staff There are many municipalities that are not well equipped and have no funds to upgrade their offices with the proper equipment such as laptops. During the reporting period, many of the focus municipalities also faced issues with their staff being diagnosed with COVID-19. As a result, entire offices were required to isolate for fixed periods, and consequently, not all municipal staff were able to cooperate and implement their activities as planned. As there is no clear end to problems arising from COVID-19, USAID TEAM proposed to support new focus municipalities through a cost share agreement providing necessary equipment such as laptops, allowing planned activities to be conducted virtually. • In some of the new focus municipalities, such as the Municipality of Deçan/Decane and Ferizaj/Uroševac, the project faced difficulties in cooperation in the field of audit and finance, which affected the preparation of the Action Plan and Periodic Report on the implementation of the NAO recommendations. The project overcame these challenges by coordinating with the municipal management. Nonetheless, the Municipality of Deçan/Decane is still behind in evaluating the implementation of the NAO recommendations, and financial management areas when compared to other focus municipalities. • Due to the current situation, the project had to postpone its activity to “Identify, develop, and implement Support Fund projects” to Year 5. Through this activity the project planned to upgrade procurement offices ensuring effective management of procurement activities. Based on project observations, there are many focus municipalities that are not equipped well and have no funds to upgrade their offices with the proper necessary to conduct these activities online. • Due to the COVID-19 pandemic, USAID TEAM could not conduct 15 workshops with the focus municipalities to introduce the new models for contract management, or the three workshops on sharing best practices in project and contract management and implementation of contract management model.

USAID TEAM ANNUAL REPORT 2020 | 103 • In Year 4, the project’s Public Financial Management (PFM) advisor re-distributed the templates for comprehensive budget planning to the directors of finance of new focus municipalities. In addition, the PFM advisor supported the directors of finance to better understand these templates and advised them to distribute such forms to all directorates so that the process is as comprehensive and accurate as possible. However, due to the pandemic situation, and the circumstances that throughout 2020, the MOF issued three budget circulars each lowering budget limits for municipalities, and as a result the municipalities found it difficult to apply the project’s provided templates in their budget planning process. • Change management issues in the municipalities of Prizren and Podujeva/o. In Year 4, the Municipality of Prizren has changed some of the existing directors by appointing new ones, including the director of finance. The new director of finance was not experienced, therefore extra effort and numerous meetings were required. These efforts, among others, supported the director of finance and the municipality as they approve their budget. In addition, last year, the extraordinary elections for mayor of the municipality of Podujeva/o took place. As a result of these election, the new mayor and the board of directors were appointed. These circumstances hindered the cooperation between the project and advisors. • Several municipality key staff were infected with COVID-19 or were in contact with someone who was infected. This was particularly evident in the municipalities of Junik, Suhareka/Suva Reka and Hani i Elezit/Elez Han. For example, in Junik due to the infection of the chief financial officer (CFO) with COVID-19, cooperation with the PFM advisor was suspended for three weeks, and the same issue arose in Suhareka/Suva Reka municipality where the director of finance was diagnosed with COVID-19 and was absent for the three weeks. • Due to the COVID-19 pandemic situation, institutional priorities changed, therefore the Treasury did not provide an opportunity for the project to cooperate in implementing the Municipal Invoice Management System to regulate invoice operating procedures. • The COVID-19 situation affected the budget allocation to support sustainability of the CSO monitoring procurement. While the MLG had allocated 50,000 Euros to support CSO monitoring efforts, the MOF rejected this allocation, as the funds were required to finance COVID-19 related expenses. During the mid-term budget review, USAID TEAM will seek to re-introduce this amount to ensure sustainability of these monitoring efforts. • CSOs are also facing difficulties with retaining staff. Staff contracts are usually project based, which reduces the appeal of CSOs as stable employers. During the reporting period, the project manager at KDI, which was tasked with completing the Transparency Index in Municipal Governance left the organization, which created slight delays in the implementation of this grant.

104 | USAID TEAM ANNUAL REPORT 2020 • The GOK, Ministry of Economic Development has been drafting the Law on “Electronic Identification and Trust Services in Electronic Transactions” for over a year. The new law is expected to set the stage for the implementation of core infrastructure services related to e-Signature, electronic identity and online payment for government services. The delay in approval of new law impacted project activities related to aiding the PPRC in adapting the e-Procurement platform for opportunities arising from this law. USAID TEAM proposed that activities related to e-Signature be postponed for Year 5, as the new law passed the first parliamentary hearing in November of 2020. • The expiration of the mandate of the two members of the board of the PPRC has created uncertainty in terms of the future of decision-making at PPRC. The project continues to monitor this situation carefully and has encouraged board members to continue working as the law allows them to, until new members are elected. In the meantime, the project coordinated with the Kosovo Senior Recruitment Project, financed by the British Embassy “encouraging the government to use merit- based criteria in selecting the new members. • Since USAID TEAM is entering the final year of project implementation, the project also faced staff retention challenges which affected the project in a very dynamic period of implementation. There are four staff in total that have left the project at the end of Year 4, including: The Component Three Senior Advisor, the Component Two Senior Advisor, the Monitoring, Evaluating, Learning and Adapting Specialist, and the PFM Municipal Advisor. Replacing these experts in this period was an additional challenge, in already challenging circumstances. Nonetheless, the project mobilized and has already recruited one of the staff members and anticipates hiring a second staff member very early in Quarter 1 of Year 5. USAID TEAM is also in the process of finalizing hires for the two remaining vacant positions.

MITIGATION MEASURES TAKEN TO ADDRESS CHALLENGES DURING REPORTING PERIOD USAID TEAM took the following mitigation measures to address challenges during the reporting period: • Although the situation with the COVID-19 pandemic significantly affected USAID TEAM planned activities for Year 4, the project was able to rapidly pivot to a virtual assistance model, and using online tools, was able to implement 88% of planned activities. In addition to shifting the project approach, USAID TEAM helped partners, including the central government, municipalities, and grantees/subcontractors, acclimate to a new method of work. • USAID TEAM was not able to conduct face-to-face meetings with municipal management due to COVID-19. To mitigate the situation, the project drafted Municipal graduation reports for all 15 focus municipalities and shared them with

USAID TEAM ANNUAL REPORT 2020 | 105 municipal management, additionally conducting virtual meetings with all focus municipalities. • USAID TEAM reached out to the USAID Economic Growth Activity to recommend ways on how to proceed with the interoperability initiative. The project relayed the message that PPRC is funding the changes in their system using their own budget. The USAID Economic Growth Activity will propose this recommendation of self-financing to the MOF leadership. • The project emphasized to PRB that hearing sessions must be public even during the pandemic and reached an agreement with them to procure and implement online teleconferencing tools in order to enable open online appeal sessions. Furthermore, the project performed an assessment of the online tools available and assessed ZOOM to be the best suitable application for PRB. Furthermore, the project performed an assessment of the online tools available and found ZOOM to be the best suitable application for PRB. Due to administrative issues, PRB has not been able to purchase a membership for this platform, and therefore, USAID TEAM continues to provide procurement support enabling the hearing sessions to be conducted online. • The project agreed with CHU that during the semi-annual reporting period for IA Units to CHU in the first quarter of Year 5, they will pilot the new templates for semi- annual reports. Additionally, they agreed to add the Quality Assurance and Improvement Program into the SharePoint developed by the project in Year 3. • USAID TEAM supported the PPRC in drafting a concept document which precedes the drafting of the Law on Public Procurement. However, changes in the government resulted in a reduced prioritization of the drafting of the law. After a few months the new government did form the necessary working group and set very tight deadlines for drafting the new PPL, putting significant pressure on the PPRC. Per their request, USAID TEAM mobilized experts to assist the PPRC in drafting the first version of the law, allowing them to meet the deadlines set by the new government.

106 | USAID TEAM ANNUAL REPORT 2020 ANNEX I: WORK PLAN SCHEDULE PERFORMANCE

Work plan Milestones Work plan task Status Comments due date A.1.1 After Action March, June, Completed MELA in coordination Review (AAR) - and with C1 will identify After every major September activities to be part of activity (training, AAR. workshop), USAID TEAM will undertake Reports with findings AAR to evaluate and recommendations assistance provided A.1.2 Conduct May-June Completed Reports with findings Activities completed individual meetings and and recommendations virtually with targeted September- - on semi-annual basis private-sector October economic operators experienced in public procurement processes A.1.3 Meetings with February- Completed Reports with findings Activities delayed as the municipal March and and recommendations meetings in person could management and July-August on semi-annual basis not be organized with the partner institutions’ municipal management representatives of due to COVID-19. five focus Instead, the project municipalities developed detailed reports and shared them with all municipalities during May and June. The virtual meetings were conducted between July and October to share 2019 Graduation Report and mid-year graduation results. A.1.4 Meetings with May-June Completed Reports with findings Activities completed local government and and recommendations virtually representatives September- on quarterly basis aiming to evaluate October project assistance provided to the focus municipalities A.1.5 Meetings with September Completed Five feedback working Activities delayed as in municipal sessions with 10 new person meetings could management and municipalities (one not be organized with the partner institutions’ session includes two municipal management representatives of 10 municipalities) due to COVID-19. new focus Instead, the project municipalities Reports with findings developed detailed and recommendations reports and shared them with all municipalities during May and June. The virtual meetings were conducted between July and October for 2019 Graduation Report baseline and mid-year graduation results.

USAID TEAM ANNUAL REPORT 2020 | 107 Work plan Milestones Work plan task Status Comments due date A.2.1 Meeting with September Completed Report with Activity completed NAO Anti-Fraud recommendations virtually Unit A.2.2 Convene September Completed Report with Activity completed learning summit with recommendations virtually central level institutions to address findings and recommendations for adaptive management A.2.3 After Action March and Completed Report with Review - after every October recommendations for major activity Activities: 2.3.6. (training, workshop), Under this activity will USAID TEAM will be conducted three undertake an “after- workshops. Adaptive action review” Management After (AAR) to evaluate Action Review tool assistance provided will be implemented. 2.3.7. Under this activity will be conducted three workshops. Adaptive Management After Action Review tool will be implemented. Report with recommendations. A.3.1 After Action March, June, Completed Report with Review - after every and recommendations major activity September (training, workshop), USAID TEAM will undertake an “after- action review” (AAR) to evaluate assistance provided A.3.2. Feedback from June and Completed Report with Activity completed CSO meeting November recommendations virtually A.3.3 Meetings with September Completed Report with Activity completed CSOs that are not recommendations virtually supported by the project for adaptive management A.3.5 Feedback from June and Completed Finding and CSO and other December recommendations reports 1.1.1 Expansion with January- Partially Selection criteria Selection criteria 10 New Focus March Completed developed; outreach developed, new focus Municipalities to short-listed municipalities selected, municipalities and project expanded conducted, focus with 10 new focus municipalities municipalities. selected.

108 | USAID TEAM ANNUAL REPORT 2020 Work plan Milestones Work plan task Status Comments due date MoU with 10 new focus municipalities Project received Commitment Letter for partnership, but MOU’s due to pandemic lockdown were not signed. 1.1.2 Assess February Completed 2020 OCAT 2020 OCAT completed. organizational completed; and capacity of 2021 OCAT initiated municipalities 2021 OCAT initiated 1.1.3. Create custom March Completed 15 Custom Work Slightly delayed - USAID work plans for focus Plans for Focus TEAM prepared custom municipalities Municipalities work plans in time for all approved. focus municipalities. In the interim, the format was changed and more tailored work plans were prepared from February – June, focusing on areas for improvement identified from the graduation results, and the Project prepared recommendations and activities that will help municipalities reach higher graduation indicator scores. 1.1.4 Conduct citizen January- Completed Survey report 2019 The survey was delayed perception survey April completed in March due to lockdown and had to Survey for 2020 change methodology from initiated face to face interviews to telephone interviews. Some focus group activities were conducted virtually. This year the project supplemented survey report with comparative data. Project already advertised for 2020 survey. 1.1.5 Municipal January- Completed Municipal Graduation graduation plan - December Plan is being Monitoring of measured/monitored implementation a. Measure and Jan-March, Completed Project indicator data Initially delayed due to report on the annual June-July, and Municipal challenges in data project and municipal and Graduation data for collection on 10 new graduation indicator December 2019 collected and focus municipalities. results. reported

Semi-annual data for 2020 collected

USAID TEAM ANNUAL REPORT 2020 | 109 Work plan Milestones Work plan task Status Comments due date Annual data for 2020 started to be collected b. Introduce March-April Completed 10 sessions Activities delayed as in municipal graduation and July- conducted person meetings could plan and present August not be organized with the municipal graduation Graduation and municipal management and organizational OCAT results due to COVID-19. capacity assessment presented to 10 new Instead, the project results in 10 new municipalities developed detailed focus municipalities reports and shared them Semi-annual with all municipalities graduation and OCAT during May and June. The results presented. virtual meetings were conducted between July Report with and October for 2019 recommendations Graduation Report baseline and mid-year graduation results. c. Present municipal February- Completed Five sessions Activities delayed as in graduation and March and conducted person meetings could organizational July-August not be organized with the capacity assessment Graduation and municipal management results in five focus OCAT results due to COVID-19. municipalities presented to five Instead, the project focus municipalities developed detailed reports and shared with Semi-annual all municipalities during graduation and OCAT May and June. The virtual results presented. meetings were conducted between July and Report with October for 2019 recommendations Graduation Report and mid-year graduation results. 1.2.1 Identify, March- Projects - invoice This activity foresaw develop, and December Postponed in system and eventually implementation of implement Support Y5 any project/contract innovative projects to Fund projects management decrease corruption vulnerabilities in project and contract management or projects to increase financial control in public expenditures. Due to the situation with COVID-19, where many municipal activities were halted, some due to the government decision, some due to the staff infected with COVID-19, the project was not able to conduct thorough assessment on the needs and propose activities that would be

110 | USAID TEAM ANNUAL REPORT 2020 Work plan Milestones Work plan task Status Comments due date implemented, and thus proposed this activity to be moved to Year 5. While working with new 10 new focus municipalities, the project discovered that municipalities lack proper equipment, such as computers, printers, etc. to continue their activities online, and they have no funds to upgrade their offices. Considering the above, the project will replace the activities that were planned though support fund in 2020, with equipment supply to new focus municipalities. 1.3.1 Provide January- Completed Improvement of Activity conducted monitoring and December procurement through on the job target assistance and indicators results coaching and mentoring - coaching for in person and virtually, as municipal the situation permitted procurement activities a. Implement public January- Completed As planned ten procurement December Ten workshops with workshops with directors activities for 2020 in directors of of departments with new accordance with the departments - on focus Municipalities were timeframe in the Implementation of completed procurement plan procurement plan b. Build the April- Completed Ten workshops As planned ten capacities of the bid September conducted with workshops with members evaluation committee members of of evaluation commission members evaluation with new focus commissions Municipalities were completed c. Build capacities April- Completed Ten workshops on As planned ten for drafting technical September drafting technical workshops on drafting specifications specifications technical specifications with new focus Municipalities were completed. The workshops were completed on November as they were postponed due to the COVID-19 situation. An extra one was held with the Pristina Municipality upon their request d. Procurement April- Completed 20 workshops As planned 20 workshops capacity building for September conducted on minimal value directors of (procurement plan, contracts and on basic requesting units of evaluation procurement rules with

USAID TEAM ANNUAL REPORT 2020 | 111 Work plan Milestones Work plan task Status Comments due date 10 new focus commissions and new focus Municipalities municipalities directors are completed. (departments, school (departments, The 10 workshops with directors, directors schools, and health the directors of of health centers) centers) Directorates were concluded on December whereas 10 workshops with the Directors of schools and health care were conducted in November as they were postponed due to COVID-19. e. Use of April-June Partially At least one 14 out of 15 procurement activity Completed procurement activity Municipalities used the restricting the restricting the procurement activity number of lots number of Lots restricting the number of concluded per focus lots. Junik Municipality did municipalities not use the restriction as the restriction is used mainly in similar nature contracts, whereas Junik is a small Municipality and did not have similar nature contracts f. Use of most September- Partially At least one 12 out of 15 economically October Completed procurement Municipalities used the advantageous tender activities using other MEAT criteria. Junik, Hani (MEAT) award evaluation factors I Elezit and Ferizaj criteria or lowest besides lowest price Municipality did not use price with scores per focus the MEAT criteria. award criteria, municipalities g. Development of October- Completed 15 Municipal draft 15 Municipal municipal December procurement plans procurement plans Procurement Plan for 2021 developed published for 2021. 1.3.2 On-the-job January- Completed 15 focus Activity conducted coaching/mentoring December municipalities are through on the job for municipal coached/mentored in coaching and mentoring - mechanisms to project and contract in person and virtually, as enhance project and cycle management. the situation permitted contract management. a. Implement January- Postponed to Establish formal This activity was affected Contract August Y5 contract/project by COVID-19. Management Model - management office in Nonetheless, to date, Establish formal two to three three mayors expressed contract/project municipalities their interest to work management office. with the project in 15 workshops establishing one of the conducted in focus models for the formal municipalities to contract/project introduce new management office. models for contract During this year, management municipalities shifted their priorities to fight pandemic, thus the

112 | USAID TEAM ANNUAL REPORT 2020 Work plan Milestones Work plan task Status Comments due date Three workshops – project started with sharing best practices implementing it as soon Exchange experience as the situation in project and permitted. contract management The project-initiated reform on project/contract management with central level institutions. Conducted meetings and discussions of municipal challenges on project/ contract management. Conducted discussion with Ministry of Economy and Environment, MLG, PPRC b. Share best April-June Due to COVID-19 and international restrictions on travel, no practices in contract international expert could management travel in country and conduct this activity. The situation with the pandemic is ongoing also next year, but the project is planning to conduct online workshop with Kosovo municipalities. 1.3.3 Support GOK January- Partially Training capacities to strengthen December Completed - increased sustainable and self- Ongoing reliant training capabilities a. Develop February- Partially Manual/Video training This activity slightly Manual/Video May completed - developed delayed and will be training tutorial on e- Ongoing completed in January Procurement for 2021. The contractor Auditors staff as well as PPRC staff were infected with COVID-19 affected the implementation dynamics. 1.3.4 Support March, June, Partially Three roundtables Two out of three planned Association of and October Completed conducted Roundtables were Kosovo conducted. Due to initial Municipalities (AKM) SOP and other delay because of Procurement practices used shared pandemic, and Collegium as a venue preparation of Kosovo for information Reports with municipal staff to exchange and roll- recommendations participate in virtual out of technical events. Nonetheless, the assistance project used these two online events to cover all the topics that were originally planned, thus not affecting the overall outcome.

USAID TEAM ANNUAL REPORT 2020 | 113 Work plan Milestones Work plan task Status Comments due date 1.4.1 Provide January- Completed Activity conducted mentoring and on- December through on the job the-job coaching in coaching and mentoring - auditing in person and virtually, as the situation permitted a. Support municipal February- Completed Quarterly meetings management to December with mayors in focus strengthen internal municipalities audit units and audit committees Periodical evaluations of implementing of action plan for addressing NAO and IA recommendations b. Support all January- Partially Increase NAO Municipalities addressed municipalities December Completed recommendations 37% of NAO addressing NAO and from 32% to 42% recommendations. Internal Audit (IA) recommendations c. Quarterly March, June, Partially Quarterly report with Due to lockdown, evaluations September, Completed - progress of NAO and quarterly evaluations in addressing NAO and and Ongoing IA recommendations the first half of 2020 were IA recommendations December not conducted. d. Support January- Completed Institutionalization of implementation of November SOP and manuals- the Standard forms developed as Operating Procedure CHU official (SOP) and manuals documents developed e. Assistance in May-July Completed Comments on the commenting on NAO reports NAO draft reports provided 1.4.2 Enhance the February- Working paper Due to COVID-19 performance audit September Partially templates developed restrictions on travel, the methodology for Completed - international experts internal auditors Ongoing Training materials and responsible for providing deliver one training the on-the-job support seminar on portion of the activity performance audit, were unable to travel to Kosovo to implement a Three working segment of this activity. session conducted The following portion of it has been postponed for Support two selected Y5 - support two selected IAUs on conducting IAUs (among the 15 focus performance audit. municipalities) to select an audit topic from the Annual Plan 2021 that will be audited through a performance audit. 1.4.3 Development July-August Partially Ten workshops Eight out of ten of action plan for Completed conducted workshops were addressing NAO conducted in online recommendations Ten action plans format. developed

114 | USAID TEAM ANNUAL REPORT 2020 Work plan Milestones Work plan task Status Comments due date All ten action plans were developed.

1.4.4. Build capacities April-May Partially Eight workshops Four out of eight of Municipal Policy Completed conducted workshops conducted and Finance were delayed due to Committee in audit COVID-19 and the and financial control activity was conducted processes in ten virtually. All ten new focus municipalities focus municipalities participated, but were grouped in four events, instead of initially planned eight events. The online format enabled to gather a group of Municipal Policy and Finance Committee members from different municipalities and exchange their experiences. 1.4.5. Disseminate March, June, Partially Three roundtables Two out of three planned internal audit and October Completed - conducted (two IAUs roundtables were processes to build Ongoing & one MACs) conducted virtually, due the capacity of to initial delays caused by Internal Audit Units SOP and other pandemics, Nonetheless, (IAUs) and Municipal practices used shared these two events served Audit Committees the project to cover all (MACs) Reports with the topics that were recommendations originally planned, thus not affecting the overall outcome. 1.5.1 On-the-job March- Completed HR officers coached Activity conducted coaching/mentoring December on code of ethics and through on the job of municipal Human use HRMS to avoid coaching and mentoring - Resources (HR) conflict of interest, in person and virtually, as officers nepotism, and the situation permitted corruption 1.5.2. Assist in the April-July Partially Ten learning summits Out of 15 focus development of Completed for development of municipalities, 14 adopted Municipal Code of municipal code of the Code of Ethics. Ethics ethics conducted Planned ten new focus - Code of Ethics municipalities approved developed Code of Ethics. Due to COVID-19, initially support was delayed. Ten Learning summits were replaced with on- the-job and online meetings, due to limits on gatherings. 1.5.3. Engage all May and Partially Two learning summits One out of two planned municipal HR November Completed conducted roundtables were managers through conducted virtually, due to initial delays caused by

USAID TEAM ANNUAL REPORT 2020 | 115 Work plan Milestones Work plan task Status Comments due date learning summits to SOP and other pandemics. Nonetheless, roll out solutions practices used shared these two events served the project to cover all Report with the topics that were recommendations originally planned, thus not affecting the overall outcome. 1.6.1. Monitor and January- Completed Procurement Activity conducted advise municipalities December activities regularly through on the job on transparency and published coaching and mentoring - enhance public in person and virtually, as relations efforts Financial documents the situation permitted a. Publishing January- Completed regularly published procurement December activities on the Mayors plan and municipal websites reports published b. Publishing Financial January- Completed reports and plans, December Municipal NAO financial time-series, Reports published mayors plan and reports c. Publish NAO June-July Completed Since NAO reports were report for delayed, this activity was municipalities slightly affected and was implemented during July- September d. Enhance public February- Partially Improve Due to delays caused by relations efforts of October completed - communication/public pandemic, this activity is 10 new focus Ongoing relations for new slightly delayed and will municipalities focus municipalities be completed by January 2021. Ten inter-municipal workshops conducted

Municipal strategies developed for 10 new municipalities 1.6.2 SOP for February- Partially Develop SOP for Due to delays caused by standardized April and completed - Web publications pandemic, where the municipal web October Ongoing main stakeholders from publications and Three working group the Ministry of Local dissemination of workshops conducted Government were practices infected by COVID-19, Institutionalization of this activity is slightly SOP developed as delayed and will be MLGA official completed by January documents 2021. In addition, one of the Two learning summits two planned roundtables conducted were conducted virtually, covering all the topics that were originally planned, thus not affecting the overall outcome

116 | USAID TEAM ANNUAL REPORT 2020 Work plan Milestones Work plan task Status Comments due date 1.7.1 Provide on-the- January- Completed 15 Focus Activity conducted job coaching on December Municipalities improve through on the job Public Finance completing coaching and mentoring - Management (PFM) performance related in person and virtually, as to CHU self- the situation permitted a. CHU Self January- Completed evaluation Evaluation February questionnaire Questionnaire b. Addressing NAO January- Completed Increased level of and IA December implemented NAO recommendations on and IA finance municipal finance recommendations c. Municipal budget March- Partially Due to Ministry of Providing 'know-how' planning September Completed Finance issuing three and budget planning budget circulars lowering templates for 13 focus budget limits for municipalities (10 new municipalities, focus municipalities municipalities found it and Gjilan, Pristina difficult to apply the and Gjakova project’s provided municipality) templates in their budget

planning process during 14 workshops this year. conduced Due to COVID-19, workshops were replaced with on-the-job and online support. 1.7.2 Develop and January- Partially Five inter-municipal Due to delays, few sub- implement SOPs and December completed - workshops conducted activities postponed due finance manuals Ongoing for Handbook on to the difficulties in Internal Public gathering the information Expenditure from the partners, as a Management Process result of COVID-19. a. Handbook on March- Partially for 10 new focus Due to delays, out of 15 Internal Public December Completed municipalities focus municipalities, 13 Expenditure adapted Book of Management Process 10 new focus Processes. Nine out of municipalities ten new focus developed Handbook municipalities approved on Internal Public the planned Book of Expenditure Processes. b. SOP / Manual for April-August Partially Management Process Due to delays, a virtual registering & completed - roundtable was reporting municipal Ongoing Two inter-municipal conducted. The SOP is revenues workshops conducted under development. Draft for SOPs and MFC is developed and awaiting manual final comments from CHU and municipalities. c. SOP / Manual for April-August Partially SOP / Manual for Due to delays, virtual a registering & completed - registering & workshop was managing nonfinance Ongoing reporting municipal conducted. The SOP is municipal assets revenues developed under development. Draft is developed and awaiting SOP / Manual for final comments from registering & CHU and municipalities.

USAID TEAM ANNUAL REPORT 2020 | 117 Work plan Milestones Work plan task Status Comments due date d. Update municipal March-July Partially managing nonfinance Due to delays, a virtual finance control completed - municipal assets was workshop (MFC) Manual Ongoing developed conducted. The Manual is being updated awaiting Update MFC Manual final comments from CHU. e. Municipal invoice January- Postponed to SOPs for invoice Since this activity is linked management system December Y5 management finalized with earlier request of the Treasury to develop Invoice management an integrated module for SOP approved by the invoice management municipalities system with the MoF Municipal invoice treasury department, it management system was very difficult this year implemented to make it as a priority for the GOK. The project Two learning summits will continue to liaise with conducted Treasury and USAID EGA on completion of this Reports with activity. recommendations 1.7.3. Disseminate May and Partially Two learning summits Due to delays, one out of handbook, SOPs, October Completed conducted two learning summits was templates, codes, and conducted online. This practices for public SOP and other activity was affected with financial management practices used shared COVID-19. It was and control sufficient in sharing all the Reports with good practices, recommendations handbooks, and other templates with the stakeholders. 2.1.1 Strengthen and January-May Completed AFU capacities The unit is completely enhance enhanced functional operationalization and capacity of Anti- Fraud Unit a. Develop internal February- Completed Internal procedures Internal procedures and procedures and May and required required templates in use required templates templates for dealing for dealing with with potential fraud potential fraud cases cases during the during the performance of the performance of the audit and before the audit and before the audit report is audit report is published are published designed b. Provide on-the-job February- Completed Capacity of auditors Auditors are able to coaching analyzing April in analyzing audit identify and analyze cases audit findings, legal finding are increased with fraud elements qualification, and preparation of cases with strong evidence for submission to law enforcement authorities, specifically for the

118 | USAID TEAM ANNUAL REPORT 2020 Work plan Milestones Work plan task Status Comments due date new staff to be engaged in this unit

2.1.2 Guideline on January-June Completed Guideline is part of Guideline is part of Detecting Fraud regular NAO trainings regular curriculum NAO becomes a regular trainings part of NAO internal training curriculum a. Review and update January- Completed Updated guideline on Guideline is updated the guideline March fraud detection b. Guideline is an April-June Completed Guideline is integral Guideline is part of integral part of the part of regular curriculum NAO induction/refresher induction/refresher trainings training curriculum training curriculum 2.1.3 Further April- Completed Advanced module Is in regular use improvement of December developed and selection process of delivered to select priority audit areas auditors for performance audits of the NAO a. Analyses of the April-June Completed Conduct analyses of NAO has the guideline current NAO the current NAO how to prioritize practice on the practice on the sectors/industries prioritization of prioritization of sectors/industries sectors/industries (e.g. education, social welfare, procurements, etc.) b. Develop matrix July- Completed Developed a matrix Matrix is in use with criteria and September with criteria and steps steps to be to be performed in performed in the the process process c. Develop August- Completed Developed a Compendium is compendium of good December compendium of good developed and in use by practices in the area practices in the area NAO based on the ISSAI to based on the ISSAI to serve as a benchmark serve as a benchmark against other SAIs, against other SAIs, including an example including an example for a specific for a specific sector/industry sector/industry 2.1.4 Database of April- Removed Recommendations This activity was removed NAO December database developed from the USAID TEAM recommendations and functional workplan since NAO, at and tracking level of the beginning of the year, implementation has tasked another donor (internal and to finance and implement external) the envisaged database, as

part of broader support a. Map out required April- Removed Business processes from the same donor business processes September are mapped

USAID TEAM ANNUAL REPORT 2020 | 119 Work plan Milestones Work plan task Status Comments due date b. Contract vendor October- Removed Vendor selected to develop the December system tool 2.1.5 Disseminate January- Completed Guide delivered to Guide delivered to Guide on Handling March prosecutors and prosecutors and judges Fraud in Public judges Procurement a. Coordinate with January- Completed Coordination is Guideline is disseminated OPDAT on March established with with OPDAT disseminating OPDAT guidelines 2.1.6 Development April-June Completed Online training Online training is of online training developed delivered module for Judges and Prosecutors based on guideline a. Coordinate with April-June Completed e-Learning module is e-Learning module is part KJA on turning on use from KJA of KJA curriculum guidelines into e- Learning module 2.2.1 Further support January- Completed Quality Assurance The QAIP is under the CHU in the December and Improvement implementation by CHU implementation of Program is the Quality implemented Assurance and Improvement Program of the Internal audit activity a. Revision of current January- Completed Revision is completed and annual reporting March Accepted by CHU templates b. Developing tools January- Completed KPIs developed KPIs are adopted by CHU for measuring the March KPIs c. Methodological April-June Completed Methodological The paper-base of QAIP guidance for the IT guidance for the IT is completed and its implementation of implementation of the digitalization will be the reporting on the reporting on the completed in Y5 QAIP (self- QAIP is on place assessment questionnaire and KPIs. d. Support the April-June Completed Kick-off two The two online implementation of a workshops with CHU workshops have been pilot project and and selected IAUs on delivered benchmarking of aligning objectives and selected KPIs. Kick- work plan for pilot off workshop with implementation of CHU and selected agreed KPIs IAUs on aligning objectives and work plan for pilot implementation of agreed KPIs.

120 | USAID TEAM ANNUAL REPORT 2020 Work plan Milestones Work plan task Status Comments due date e. Analysis of KPI- April-June Completed The analysis and the related available finalization of KPI is information at the completed selected IAUs and defining baseline for indicators. f. Workshop on July- Completed Two workshops defining target KPIs: September g. Methodological October- Completed Established The methodological guidance to CHU on December methodological guidance to CHU on benchmarking of the guidance to CHU on benchmarking of the KPIs KPIs benchmarking of the is developed KPIs 2.2.2 Roll-out January- Completed Automated semi- CHU adopted and automated semi- December annual reports mandated the automated annual reports to implemented for local semi-annual reports for municipal and central and central IAUs all IAUs level internal auditors. (Cross- cutting with C1) a. Roll-out the January-June Completed Sami-annual reports Sami-annual reports are automated semi- are automated automated annual reports to project’s partner municipalities b. Support CHU to July- Partially All municipal IAUs are This sub activity is roll-out the tool to December completed using new intranet for proposed to be remaining semi-annual reporting implemented by March of municipalities, Y5, due to restriction on including central level international travel for internal audit units experts to support this activity. The restrictions made it impossible to organize the work in the field. In addition, some of the CHU staff were affected with COVID-19 which affected the timely implementation of this activity. 2.3.1 Support January- Completed Contract management The module is completed implementation of December module is functional and tested. ToT took Contract place as well as video Management Module tutorials for using this module. PPRC made it mandatory to be used by all contracting authorities by 1 January 2021. There were slight delays of activities due to the situation with COVID-19 (PPRC staff were infected, as well as the contractor for developing video training, thus affected the

USAID TEAM ANNUAL REPORT 2020 | 121 Work plan Milestones Work plan task Status Comments due date originally planned dynamics). The new CM regulation imposed by PPRC will make using of CM module mandatory for all contracting authorities at both central and local levels and imposing a government wide roll-out happening at the same time.

a. Development of January- Completed Development of video Development of video video training for March training for end-users training for end-users end-users b. Roll-out to focus April-June Completed Roll-out to focus Roll-out to focus municipalities municipalities municipalities

c. Roll-out to July- Completed Roll-out to remaining Roll-out to remaining remaining September municipalities municipalities municipalities d. Roll-out to all CAs October- Completed Roll-out to all CAs Roll-out to all CAs December

2.3.2 Support January- Completed CPE is functional The module is completed implementation of December and tested. ToT took Contract Past place as well as video Performance tutorials for using this Evaluation Module module. PPRC made it mandatory to be used by all contracting authorities by 1 January 2021. The new CPE regulation imposed by PPRC will make using of CPE module mandatory for all contracting authorities at both central and local levels and imposing a government wide roll-out happening at the same time. a. Develop video January- Completed Video training for Video training for end- training for end-users March end-users is on use users is on use

b. Piloting CPE for April- Completed Piloting CPE for Piloting for CPE is limited number and September limited number and completed type of contracts at type of contracts at municipal level municipal level c. Piloting CPE for July- Completed Piloting CPE for Piloting for CPE is limited number and December limited number and completed type of contracts at type of contracts at central level central level

122 | USAID TEAM ANNUAL REPORT 2020 Work plan Milestones Work plan task Status Comments due date 2.3.3 Support PPRC January- Completed New server New server to migrate e- December infrastructure infrastructure migrated Procurement migrated platform to new server infrastructure a. Support PPRC IT January- Completed PPRC IT department PPRC IT department has department to March to develop developed infrastructure develop infrastructure migration plan infrastructure migration plan migration plan b. Monitor April-June Completed Monitor Monitor infrastructure is infrastructure infrastructure is happening migration happening c. Implement July- Completed Proactive system Proactive system proactive system December monitoring tools are monitoring tools are monitoring tools implemented implemented 2.3.4 Support PPRC April- Partially PPRC implement There have been to implement December completed - machine readable identified the machine readable Ongoing Digital Contract and specifications for Digital Digital Contract and enhance Contract and in Y5 will enhance implementation of be finalized implementation of open contracting data open contracting standard data standard a. Assess all digital April-June Completed Conduct assess of all Assessment is conducted data available and if digital data available they satisfy digital and if they satisfy contract data digital contract data requirements requirement b. Support PPRC to July- Postponed to Implement full digital This activity is postponed implement full digital December Y5 contract due to delays on Ministry contract pending e- of Economic signature Development Law on implementation electronic identification and trust services in electronic transactions. Agency of Information Society is also in the process of implementing some of the depending infrastructure in support of new Law consequently postponing these activities for Y5. This activity was already envisaged to have spill- over in year 5. c. Support PPRC to July- Postponed to Implement full online This activity is postponed implement full online December Y5 payment due to delays on Ministry payment pending e- of Economic payment Development Law on implementation electronic identification and trust services in electronic transactions. Agency of Information Society is also in the

USAID TEAM ANNUAL REPORT 2020 | 123 Work plan Milestones Work plan task Status Comments due date process of implementing some of the depending infrastructure in support of new Law consequently postponing these activities for Y5. This activity was already envisaged to have spill- over in year 5. d. Support PPRC to July- Postponed to Implement full digital This activity is postponed implement full digital December Y5 invoice due to delays on Ministry invoice pending e- of Economic invoice Development Law on implementation electronic identification and trust services in electronic transactions. Agency of Information Society is also in the process of implementing some of the depending infrastructure in support of new Law consequently postponing these activities for Y5. This activity was already envisaged to have spill- over in year 5. 2.3.5 Support January- Completed Contract data USAID TEAM support implementation of December automatically MLGA and PPRC to tool to automatically published on design infrastructure need publish tenders and Municipal Websites for this toll and Ministry contracts from e- of Local Government Procurement Administration (MLGA) platform on official committed to developing municipal websites. the tool to automatically publish tenders and contracts. But due to the mid-term budget review, the allocated funds were transferred for other priorities. As such, the MLGA has postponed this item until 2021. Consequently, the project will support the MLGA with the implementation of this item in Q1 and Q2 of Y5. a. Monitor vendor January-June Postponed Implementation of Due to Covid-19 MLGA contracting process wedged tool has revised their budget for 2020, and the allocated budged for this activity will be financed this year

124 | USAID TEAM ANNUAL REPORT 2020 Work plan Milestones Work plan task Status Comments due date b. Monitor July- Postponed to Implementation of Due to Covid-19 MLGA development and December Y5 wedged tool has revised their budget implementation of for 2020, and the tool allocated budged for this activity will be financed this year 2.3.6 Enable January- Partially Interoperability USAID TEAM supported interoperability December completed - enabled between PPRC to identify and between e- Ongoing KFMIS and e- develop the points of Procurement system Procurement communication between and KFMIS the two systems. Although USAID TEAM is coordinating with the USAID Economic Growth Activity for the developments from the KFMIS side, some sub- activities will need to be postpone. Delays due to COVID-19 restrictions will postpone full implementation to March of Y5. a. Monitor January-June Partially Development of API Slightly delayed development of API completed - for e-Procurement to implementation of this for E-Procurement Ongoing receive from KFMIS activity, due to several to receive from factors, including effects KFMIS relevant of COVDI 19 and financial data based infection of the staff. on commitment Although there were number, to confirm delays in implementing availability of funds this activity, it is entirely implemented by PPRC and only with the support of the projects technical staff. b. Monitor April- Postponed to Development of API This activity was foreseen development of API September Y5 for e-Procurement to for Y4 and Y5 while for e-Procurement receive from KFMIS COVID-19 slightly to receive from impacted coordination KFMIS invoice status and implementation and data based on delayed the contract number, to interoperability between allow Economic PRRC and Treasury. The Operators to see draft technical submitted invoice specifications, which were and track its status agreed at the technical level between institutions, foresee such integration and TEAM will continue meetings and monitoring during Y5. c. Monitor August- Postponed to Development of API This activity is linked with development of API December Y5 for e-Procurement to the activity above, thus is for KFMIS to receive receive from KFMIS affected as well. from e-Procurement contract data based

USAID TEAM ANNUAL REPORT 2020 | 125 Work plan Milestones Work plan task Status Comments due date on contract number, to allow KFMIS automatic population of their contract data form 2.3.7 Support January- Completed Risk-based selection Risk-based selection tool implementation the March tool successfully is on paper-based is in risk-based selection implemented use tool to monitor procurement activities more effectively 2.3.8 Enhance March- Completed Mechanism for non- Mechanism for non- mechanism for August performing performing procurement sanctioning procurement officers officers improved nonperforming improved procurement officers a. Assess current March Completed Assessment is Assessment is completed practice of completed sanctioning poor performing procurement officers and provide recommendations b. Enhance April-June Completed Mechanism to Mechanism to mechanism to improve/sanction the improve/sanction the improve/sanction the work of poor- work of poor-performing work of poor- performing procurement officers in performing procurement officers place procurement officers in place c. Update Regulation July-August Completed Regulation is revied Regulation is revied and and updated updated

2.3.9 Support April- Completed Law drafted and First draft of PPL is drafting process of December adopted by GOK and completed new procurement Parliament law and monitor the adoption process at the GOK and Assembly level a. Support draft law April- Completed Law drafted and First draft of PPL is and submission to September adopted by GOK and completed GOK Parliament b. Support October- Postponed to PPL is drafted The first draft of PPL was PPRC/working group December Y5 completed in Y4. to monitor the Nonetheless, the GOK adoption process at set the deadline for GOK and Parliament finalizing the new Law to 31 March 2021. This deadline imposes adaptation of TEAM activities. 2.3.10 Support the April- Completed Implementation a Procurement case PPRC to develop and December procurement case management process is implement a management process designed

126 | USAID TEAM ANNUAL REPORT 2020 Work plan Milestones Work plan task Status Comments due date procurement case management process a. Assess case April- Completed Identified technical Identified technical management September requirements for case requirements for case technical management management requirements as well as current and potential Monitoring Unit business processes b. Analyze and October- Completed Case management is Paper-based case propose the best December on place management is on place option for implementing the case management solution 2.4.1 Monitor PRB to January- Completed e-Appeals module e-Appeals module fully implement 100% of September fully functional and functional and 100% procurement reviews 100% implemented implemented through e-Appeals 2.4.2 Monitor PRB to January-June Completed Database is functional Database is functional implement the new and includes decisions and includes decisions database of appeal from past three years from past three years decisions (from old database) (from old database) a. Support PRB to January-June Completed Migration of data is Migration of data is migrate and digitize completed completed past decisions (from old database) new one 2.4.3 Monitor January-June Completed Livestreaming fully Livestreaming fully implementation of functional and 100% functional and 100% livestreaming of PRB implemented implemented sessions 2.4.4 Support PRB to January- Completed Comms Strategy Comms Strategy under implement new March under implementation implementation communication strategy 2.4.5 Support PRB to January-June Completed PRB regularly PRB regularly addresses address CSO findings addresses CSO CSO findings (also as part related to findings (also as part of Comms strategy) deficiencies in the of Comms strategy) work of PRB (cross- cutting with C3) 3.1.1 Empower local January-June Completed Activity began in Year Entire two-year activity CSOs and citizens to 2. Deliverables: completed with a six- prevent corruption month delay. in municipal public Deliverable 6: Apr. 20 procurement in Deliverable 7: Jun. 26 second tier municipalities 3.1.2 Promote February- Ongoing Publish Public A slight delay occurred transparent and December Procurement with the publication of accountable Transparency Index the Index, due to the municipalities for 2019 project manager through resigning. This is a multi-

USAID TEAM ANNUAL REPORT 2020 | 127 Work plan Milestones Work plan task Status Comments due date Transparency Index year activity running in Public through April 2021. Procurement for Municipalities 3.1.3 Promote January-July Ongoing Activity began in Year Entire activity completed efficient use of public 3. with a five-month delay. funds through fair Milestone 4: Feb 13 and transparent Milestone 5: June 25 public procurement. Milestone 6: July 25 3.1.4 Support January- Ongoing Identifying and signing This is a multi-year functionality and December agreement with activity running through sustainability of hosting media; May 2021. public procurement Transferring transparency portal ownership of the portal to Lëvizja FOL; Monitoring functionality of the portal 3.1.5 Digital Solution February- Postponed to Adaptation of the This activity is related to for Integrity in Public September Y5 red-flags platform into the evolving API and Procurement OPTP; Publishing of Open Data projects. articles Since PPRC slightly delayed development of the API, this activity is proposed to be moved to Y5 3.1.6 Support, January- Completed Activity began in Year Entire activity completed expand and seek December 3. with a five-month delay. opportunity for co- Milestones: Milestone financing of social 4: Feb 20 Milestone 5: accountability tools Apr 30 to monitor public Milestone 6: Jun 9 procurement and public expenditure 3.1.7 Engage March- Ongoing PRB electronic This is a multi-year national-level CSOs December monitoring tool activity running through to monitor PRB upgraded; October 2021. Infographics published. 3.1.8 Empower February- Ongoing Monitoring of public This is a multi-year CSOs on monitoring September procurement in all activity running through public procurement focus municipalities May 2021. and exposing malfeasances in focus municipalities and ensure sustainability of such activity 3.1.9 Host annual April- Postponed to Up to two grants This activity aims to challenges to foster December Y5 awarded for use of collect and implement innovative ideas innovative solutions innovative/experimental which contribute to to strengthen internal ideas to track and expose graduation of controls and reduce corruption. Due to the municipalities vulnerability to COVID-19 pandemic, corruption USAID TEAM thought it best to collect such ideas during Y5, as currently all stakeholders are

128 | USAID TEAM ANNUAL REPORT 2020 Work plan Milestones Work plan task Status Comments due date operating in a quasi- emergency mode. USAID TEAM focused on implementing current ongoing activities and reaching targets for 2020. 3.2.1 Creating a March- Partially Clearly defined Criteria to award grants sustainable December Completed criteria to award delayed. environment for civil grants to CSOs with society organizations Kosovo institutions The majority of working on milestones are monitoring public Certification/testing completed, except procurement and of CSOs system in awarding grants by building bridges place Kosovo institutions. between CSOs and public institutions Up to 40 representatives from 20 CSOs complete Peer to Peer Learning Workshops

Content creation and policy communication workshops completed 3.2.2 Provide seed June- Postponed to Local-level CSOs During Year 4, USAID funding in December Y5 monitoring municipal TEAM initiated cooperation with procurement discussions with the Government of Ministry of Local Kosovo institutions Government related to to ensure the possibility of co- sustainability of CSO financing CSOs on monitoring activities implementing activities focused on monitoring public procurement. The MLG had decided to allocate 50,000 Euro to support monitoring efforts of CSOs, but the Ministry of Finance rejected this allocation, since the funds were required to finance COVID-19 related expenses. 3.3.1 Support February- Ongoing Investigative reports This is a multi-year cooperation between December published activity running through civil society August 2021. organizations and investigative media to expose corruption 3.3.2 Build formal February- Partially Activity began in Year Almost all panned mechanism for CSOs September Completed 3: activities (9 out of 10) are and journalist to completed. However, a report cases of Workshops with workshop to bring suspected corruption prosecutors, CSOs together CSOs and KPC to the State and media was delayed due to Prosecutor COVID-19 restrictions.

USAID TEAM ANNUAL REPORT 2020 | 129 Work plan Milestones Work plan task Status Comments due date Legal opinions for ten This is one of the few reports prepared by activities, that due to CSOs and/or media sensitive nature, could not be completed online. Ten cases submitted to law enforcement authorities 3.3.3 Support CSO September- Completed Up to three grants activities to demand December awarded accountability during the Anti-Corruption Week

130 | USAID TEAM ANNUAL REPORT 2020 ANNEX I1: AMP INDICATORS TABLE

Annual Targets

Relation to Data Data

t t t t t t

Indicators Adaptive Definition of Indicator Source/Collectio Disaggregati ne Comments

ting

LOP LOP

ency

Baseli

Frequ Targe Targe Targe Targe Targe Targe

Repor

Actual 2 Year Actual 3 Year Actual 4 Year Actual 5 Year Management n Method on 1 Year

Cross cutting indicators

# of people USAID TEAM A count of officials from local and central Data will be Participant Quarter 0 900 1,076 995 1,702 1,045 1,489 1,095 1,195 645 4,680 trained from events are effective institutions, civil society, private sector and collected from data will be ly and local and in spurring media who participated in USAID TEAM participant sign-in disaggregated Annuall central desirable change. events (trainings, workshops, focus groups, sheets from each by sector y institutions, The project will round tables and launching events). conducted activity. (private sector 1 civil society, adjust its approach and civil private sector as needed to society), and media in promote greatest institution

USAID TEAM positive change. (central and events local level), and gender. Transparency USAID TEAM will Based on expert opinion from around the https://www.transp NA Annuall 36 (2016) – N/A 39 37 36 36 Attribution is weak or non- International’s collect data from world, the Corruption Perceptions Index arency.org/research y global average existent for this indicator; the Corruption the TI CPI and measures the perceived levels of public /cpi/overview was 43 project will track and report on Perception report on it to sector corruption worldwide. No country country performance in this area 2 Index influence positive comes close to top marks, while over 120 but will not be able to directly actions at the local countries score below 50 on the scale of 0 impact the score. Therefore, we and national level. (highly corrupt) to 100 (very clean). This have not set annual project means less than a third of countries are targets. above the midpoint.

World Bank USAID TEAM will Control of Corruption captures World bank NA Annuall 36.5 N/A -0.4 -0.5 -0.5 0.6 N/A Attribution is weak or non- Control of collect data from perceptions to the extent of which public (Worldwide y (percentile (2016) (2017) (2018) (2019) existent for this indicator; the Corruption the World Bank power is exercised for private gain. This Governance rank) (2015) project will track and report on Indicator and report on it to includes both petty and grand forms of Indicator) country performance in this area influence positive corruption, as well as "capture" of the http://databank.wor but will not be able to directly actions at the local state by elites and private interests. ldbank.org/data/rep impact the score. Therefore, we 3 and national level. Estimate gives the country's score on the orts.aspx?source=w have not set annual project aggregate indicator, in units of a standard orldwide- targets. normal distribution, i.e. ranging from governance- approximately -2.5 to 2.5. See indicators http://databank.worldbank.org/data/glossar ymetadata/1181/series/CC.EST

Component One

USAID TEAM ANNUAL REPORT 2020 | 131 Municipal USAID TEAM will Through this index indicator, USAID Project evaluation USAID TEAM Annuall 51 (2017) N/A 61 61 72 76 77 75 82 82 graduation monitor the TEAM will track municipal progress in is based on defined will present y Pristina 44 index indicator progress of focus addressing corruption vulnerabilities and graduation criteria disaggregated for five original municipalities enhancing transparency in public and analysis of data for each Gjilan 44 procurement to “graduate” from project of the five focus against graduation overall USAID Gjakovë 51 assistance. Indicator data will be collected, original focus 4(a) municipalities criteria and adjust TEAM data, technical analyzed and reported separately for each particularly the municipalities. Pejë 60 municipality. The detailed definition interventions to MPECV Index and promote greatest description is found in PIRS. other sources of Vushtrri 57 positive change. municipal data. Average 51

Municipal Same as 4(a) Same as 4(a) Same as 4(a). USAID TEAM Annuall Baseline N/A N/A Baseli 62 67 72 72 Baseline and targets for this graduation will present y 2019: 55 ne indicator were included in June index indicator disaggregated Decan 52 2019: 2020. for ten new data for each Ferizaj 48, 55 focus of the ten new Hani i Elezit 46 municipalities focus Istog 64 4(b) municipalities. Junik 42 Lipjan 71 Podujevë 60 Prizren 50 Rahovec 56 Suharekë 65 Average 2019: 55 % of USAID TEAM will The methodology for measuring this Municipal USAID TEAM Annuall 21.5% (PPRC 16.5% 8.5% 13 % 15.42 10.5% 6.4% 3.5% 4.0% 3.0% 3.0% In June 2020, Y4 and Y5 targets procurement monitor the indicator is the same as in the graduation procurement data, will present y report 2016) % were modified since the Y3 actual activities cancellation of plan. Public procurements are cancelled PPRC data disaggregated was 4% which exceeded original canceled due procurement for many reasons, such as: inadequate regarding municipal data for each target set which was 7% for Y4 to activities and adjust budget/investment planning, lack of procurements, of the five and 5% for Y5. irregularities in interventions as capacity to draft precise requirements, lack research and original focus

five original needed. of capacity to draft tender dossiers which interviews by municipalities. focus contain all relevant information. Article USAID TEAM

5(a) municipalities. 62.2.1 of the Public Procurement Law Municipal outlines the cases in which a contracting Implementation authority may legitimately cancel a Specialists procurement. This indicator measures the percent in bid cancellations for irregularities that are not covered by article 62.2.1. Indicators data will be collected, analyzed and reported separately for each municipality.

% of Same as 5 (a) Same as 5 (a) Same as 5 (a) USAID TEAM Annuall Baseline 2019: N/A N/A Baseli 4.5% 4.3% 3.5% 3.5% Baseline and targets for this procurement will present y 5.5 ne indicator were included in June disaggregated Decan 8% 2019 2020. 5(b) activities canceled due data for each Ferizaj 9% 5.5% to of the ten new Hani i Elezit irregularities in 10%

132 | USAID TEAM ANNUAL REPORT 2020 ten new focus focus Istog 9% municipalities. municipalities. Junik 9% Lipjan 6% Podujevë 0% Prizren 3% Rahovec 6% Suharekë 3% Average 2019: 5.5% % of municipal USAID TEAM will A municipality implements procurement Municipal USAID TEAM Annuall 60% 63% 75.53 68% 71.% 74% 82.1% 82% 74% 92% 92% procurement monitor the plans by carrying out procurement actions procurement plans, will present y % plans implementation of included in their plan. This indicator municipal disaggregated implemented municipal measures the percent of procurement plan procurement data, data for each in five original procurement plans activities implemented by focus PPRC data on of the five focus and adjust technical municipalities, expressed as an average. procurements in original focus 6(a) municipalities. approach to Indicator data will be collected, analyzed focus municipalities municipalities. promote fuller and reported separately for each implementation of municipality. the plans.

% of municipal Same as 6(a). Same as 6(a). Same as 6(a). USAID TEAM Annuall Baseline 2019: N/A N/A 68% 72% 75% 80% 80% Baseline and targets for this procurement will present y 68% indicator were included in June plans disaggregated Decan 82% 2020. implemented data for each Ferizaj 63% in ten new of the ten new Hani i Elezit focus focus 39% municipalities. municipalities. Istog 88% 6(b) Junik 53% Lipjan 84% Podujevë 60% Prizren 57% Rahovec 77% Suharekë 83% Average 2019: 68% % of USAID TEAM will The methodology for measurement of this Municipal USAID TEAM Annuall 33% (2018) N/A 33% 29% 16% 14% 16% 12% 12% In June 2020, Y4 and Y5 targets implementatio monitor the indicator is the same as in the graduation procurement plans, will present y were modified since the Y3 actual n of implementation of plan. municipal disaggregated was 16% which exceeded the data for each original target set which was 23% procurement planned procurement data, activities not procurement This indicator will measure the PPRC data on of the five for Y4 and 17% for Y5. planned in five activities and adjust implementation of procurement activities procurements in original focus 7(a) original focus technical approach that were not in municipal procurement focus municipalities. municipalities. plans. Activities that are the result of the municipalities. to implement procurement municipal budget review and activities that activities as are supported by ministries or potential planned. donor will not be counted as unplanned procurement activities. Indicators data will

USAID TEAM ANNUAL REPORT 2020 | 133 be collected, analyzed and reported separately for each municipality.

% of Same as 7(a). Same as 7(a). Same as 7(a). USAID TEAM Annuall Baseline 2019: N/A N/A Baseli 29% 28% 20% 20% Baseline and targets for this implementatio will present y 34% ne indicator were included in June n of disaggregated Decan 32% 2019: 2020. procurement data for each Ferizaj 40 % 34% activities not of the ten new Hani i Elezit planned in ten focus 50% new focus municipalities. Istog 15% 7(b) municipalities. Junik 39% Lipjan 12% Podujevë 37 % Prizren 56% Rahovec 36% Suharekë 12% Average 2019: 34% % of Economic USAID TEAM will Municipal procurement officials should Data on EO appeals USAID TEAM Annuall Baseline (2017) 11% 8.17% 9% 9.5% 7% 15.2% 6% 27% 5% 5% Note: this indicator tracks that # Operator monitor the prepare tender dossiers, design evaluation are extracted from will present y 11.5% of EO protests to PRB. USAID protests to process of criteria, and evaluate offers in compliance PRB disaggregated TEAM noticed that number of Public preparing tender with the legal requirements so report/database. data for each protests sent by the EO do not Procurement dossiers and adjust procurements do not come under appeal of the five measure municipal performance. 8(a) Review Body technical approach to PRB. This indicator will track original focus percentage of the EOs protests submitted municipalities. Until the PRB starts applying fees in five original to complete this as per the legal base, the EOs can focus process according to PRB for municipal procurement activities. Indicators data will be collected, protest in procurement activities municipalities. to the legal that they are not selected by requirements. analyzed and reported separately for each municipality. municipality. % of Economic Same as 8(a). Same as 8(a). Same as 8(a). USAID TEAM Annuall Baseline 2019: N/A N/A Baseli 12% 19% 10% 10% Baseline and targets for this Operator will present y 14% ne indicator were included in June protests to disaggregated Decan 12% 2019: 2020. data for each 14% Procurement Ferizaj 13% Review Body of the ten new Hani i Elezit 0% in ten new focus Istog 11% focus municipalities. Junik 15% 8(b) municipalities. Lipjan 18% Podujevë 7% Prizren 17% Rahovec 22% Suharekë 20% Average 2019: 14% % of USAID TEAM will The measurement methodology for this PRB USAID TEAM Annuall Baseline (2018) - - 37% 17% 45% 29% 52% 52% This is a new indicator which was Procurement monitor the tender indicator will be the same as in the report/database will present y 33% included in AMP in June 2020. 9(a) Review Body dossier process municipal graduation plan. disaggregated Nonetheless, the project was decisions in including tender The improved tender dossier including data for each favor of specifications and technical specifications and evaluation of the five

134 | USAID TEAM ANNUAL REPORT 2020 Contracting evaluation criteria criteria will increase the percentage of focus able to collect insert baseline for Authorities in and adjust its decisions made by PRB in favor of the municipalities. this indicator starting in 2018. five original approach if needed. Contracting Authority. focus Indicator data will be collected, analyzed municipalities. and reported separately for each municipality. % of Same as 9(a). Same as 9(a). Same as 9(a). USAID TEAM Annuall Baseline 2019: N/A N/A Baseli 43% 35% 52% 52% Baseline and targets for this Procurement will present y 35% ne indicator were included in June Review body disaggregated Decan 40% 2019: 2020. decisions in data for each Ferizaj 33% 35% favor of of the ten new Hani i Elezit focus 100% Contracting Note: Municipality of Hani i Elezit authority in municipalities. Istog 46% 9(b) Junik 0% has no complaints and as a result ten new focus of this there are no PRB municipalities. Lipjan 31% Podujevë 63% decisions, therefore received Prizren37 % 100%. Rahovec 20%

Suharekë 30% Average 2019: 35% % of contracts USAID TEAM will The methodology for measuring this USAID TEAM Annuall Baseline (2018) NA - 52% 43% 59% 53% 65% 65% This is a new indicator which was completed monitor the indicator will be the same as in the will present y 47% included in AMP in June 2020. within the time completion of the municipal graduation plan. disaggregated Nonetheless, the project was limit according contracts within This indicator measures whether the data for each able to collect insert baseline for to the contract the time limit and municipality is following the time limits to of the five this indicator starting in 2018. conditions in adjust approach to implement the contract as planned. original focus five original increase the According to contract conditions, contract municipalities. focus completion of the managers have the authority to extend the municipalities. contracts as deadline of contract implementation with planned with valid justification (atmospheric conditions, 10(a) municipal certain land/building disputes, etc.), and therefore contracts may have valid procurement plans. contract extension deadlines. However, not all justifications for extending the contract are valid such as some land/building disputes, budget issues, etc. Therefore, USAID TEAM will measure the start and end-dates of the contract and the actual completion date of the contract. Indicator data will be collected, analyzed and reported separately for each municipality. % of contracts Same as 10(a). Same as 10(a). Same as 10(a). USAID TEAM Annuall Baseline 2019: N/A N/A Baseli 45% 69.5% 52% 52% Baseline and targets for this completed will present y 40% ne indicator were included in June within the time disaggregated Decan 56% 2019: 2020. 10(b) limit according data for each Ferizaj 30% 40% to the contract of the ten new Hani i Elezit conditions in focus 73% municipalities. Istog 34% Junik 79%

USAID TEAM ANNUAL REPORT 2020 | 135 ten new focus Lipjan 57% municipalities. Podujevë 22% Prizren 25% Rahovec 69% Suharekë 35% Average 2019: 40% % of executed USAID TEAM will The methodology for measuring this USAID TEAM Annuall Baseline (2018) N/A - 73% 81% 85% 81% 89% 89% This is a new indicator which was payments monitor the indicator will be the same as in the will present y 69% included in AMP in June 2020. within the process of municipal graduation plan. disaggregated Nonetheless, the project was time-limit execution of This indicator will measure the extent to data for each able to collect insert baseline for according to payments and which a municipality applies time limits for of the five this indicator starting in 2018. the financial adjust its approach the execution of payments (allowed up to original focus 11(a) rules in five to increase 30 days after the receipt of the invoice). municipalities. Indicator data will be collected, analyzed original focus payment within the In June 2020, Y4 and Y5 targets municipalities. time limit. and reported separately for each municipality. were modified since the Y3 actuals was 81% which exceeded the original target set which was 78% for Y4 and 83% for Y5.

% of executed Same as 11(a). Same as 11(a). Same as 11(a). USAID TEAM Annuall Baseline 2019: N/A N/A Baseli 82% 71% 87% 87% Baseline and targets for this payments will present y 74% ne indicator were included in June within the disaggregated Decan 75% 2019: 2020. time-limit data for each Ferizaj 39% 74% according to of the ten new Hani i Elezit the financial focus 71% rules in ten municipalities. Istog 82% 11(b) new focus Junik 70% municipalities. Lipjan 72% Podujevë 70% Prizren 82% Rahovec 78% Suharekë 85% Average 2019: 74% % use of “price USAID TEAM will This indicator measures the percent use of Municipal USAID TEAM Annuall 22.5% 20% 14.5% 17% 17.5% 13% 15.09 9% 11% 6% 6% quotations low adjust technical the price quotations low value contracts. procurement data, will present y % value” assistance, PPRC data on disaggregated contracts mentoring, and The project will track procurement municipal data for each conducted by coaching in the activities from 1000 – 10.000E. procurements, of the five 12(a) original focus municipal municipalities to Indicator data will be collected, analyzed interviews with municipalities. departments in reduce the and reported separately for each municipal five original unfounded use of municipality. procurement focus these procedures. officials municipalities.

136 | USAID TEAM ANNUAL REPORT 2020 % use of “price Same as 12(a). Same as 12(a). Same as 12(a). USAID TEAM Annuall Baseline 2019: N/A N/A Baseli 20% 18.5% 12% 12% Baseline and targets for this quotations low will present y 25% ne indicator were included in June value” disaggregated Decan 24% 2019: 2020. contracts data for each Ferizaj 20% 25% conducted by of the ten new Hani i Elezit municipal focus 62% departments in municipalities. Istog 12% 12(b) ten new focus Junik 52% municipalities. Lipjan 31% Podujevë 25 % Prizren 24% Rahovec 33% Suharekë 7% Average 2019: 25% % of USAID TEAM will The methodology for measuring this USAID TEAM Annuall Baseline (2018) - - 92% 95% 95% 98% 97% 97% This is a new indicator which was procurement monitor indicator will be the same as in the will present y 90% included in AMP in June 2020. financial and publications of municipal graduation plan. disaggregated Nonetheless, the project was able audit required This indicator will measure the percentage data for each Pristina 98% to collect insert baseline for this documents documents. of documents that should be published of the five Gjilan 91% indicator starting in 2018. publicized in including approved budget (1 document), original focus Gjakovë 78% five original periodic financial reports (3 documents), municipalities. Pejë 77% 13(a) focus annual financial reports (1 document), mid- Vushtrri 97% municipalities. term budget framework, mayor’s plan, mayor’s reports (2 'documents), monthly financial time series (12 documents), NAO report, and all procurement activities. Indicator data will be collected, analyzed and reported separately for each municipality. % of Same as 13(a). Same as 13(a). Same as 13(a). USAID TEAM Annuall Baseline 2019: N/A N/A Baseli 70% 87% 85% 85% Baseline and targets for this procurement will present y 57% ne indicator were included in June financial and disaggregated Decan 26% 57% 2020. audit data for each Ferizaj 23% documents of the ten new Hani i Elezit publicized in focus 69% ten new focus municipalities. Istog 49% 13(b) municipalities. Junik 3% Lipjan 83% Podujevë 62% Prizren 49% Rahovec 87% Suharekë 82% Average 2019: 57% % of all USAID TEAM will This indicator measures the extent to NAO reports, USAID TEAM Annuall Baseline - - 30% 32% 42% 38% 55% 55% Note: This indicator is modified, National Audit monitor the which municipalities follow-up and address municipal audit will present y percentage is from measuring only procurement 14 Office findings percentage of NAO NAO audit findings. A finding listed in a reports, interviews disaggregated 26% addressed NAO findings to measuring all that are fully recommendations NAO audit report will be considered with NAO and data for each recommendati NAO findings. Following this addressed by implemented in all addressed when the municipality has acted municipal officials municipality ons for all change, indicator targets are Kosovo revised.

USAID TEAM ANNUAL REPORT 2020 | 137 all municipalities and on NAO recommendations by removing and also the municipalities This is a mission indicator, municipalities adjust its coaching obstacles or by putting in place sufficient average during 2017. reported on annual basis. and mentoring to controls or other administrative measures The data is

ensure that audit to ensure such findings will not arise in extracted from findings are follow-up audits. NAO report addressed published in effectively. 2018.

% of USAID TEAM will The methodology for measuring this Municipal Internal USAID TEAM Annuall Baseline (2018) - - 45% 41% 49% 61% 54% 54% This is a new indicator in AMP The implementatio monitor the indicator will be the same as in the audit unit report will present y 42% project will measure this indicator n of internal implementation of municipal graduation plan. disaggregated starting in Year Three. audit the internal audit This indicator will measure the percentage data for each recommendati recommendations of implemented internal audit of the five 15(a) ons in five and adjust its recommendations with the aim to increase original focus original focus approach to this percentage Indicator data will be municipalities. collected, analyzed and reported municipalities. increase the percentage separately for each municipality. implemented.

% of Same as 15(a). Same as 15(a). Same as 15(a.) USAID TEAM Annuall Baseline 2019: N/A N/A Baseli 50% 47% 54% 54% Baseline and targets for this implementatio will present y 47% ne indicator were included in June n of internal disaggregated Decan 52% 47% 2020. audit data for each Ferizaj 41% recommendati of the ten new Hani i Elezit ons in ten new focus 0% focus municipalities. Istog 40% 15(b) municipalities. Junik 35% Lipjan 55% Podujevë 70% Prizren 39% Rahovec 53% Suharekë 40% Average 2019: 47% % of citizen USAID TEAM will USAID TEAM will conduct a focused Citizen perception USAID TEAM Baseline (2016) 21.5% 17.45 21% 26.78 20.5% 21.9% 20% 16.3% 19% 19% The survey is not finished yet. perception of monitor the perception survey on an annual basis to survey report will present 22% % % corruption and citizens’ perception measure citizens’ perception of corruption. disaggregated Pristina 31%, transparency in on corruption data for each Pejë 15%, public through an annual USAID TEAM identified survey questions of the five Gjakovë 25%, procurement survey conducted on “perception of the presence of large- original focus Gjilan 30%, 16(a) and public by the project. scale corruption in municipalities,” as a municipalities. Vushtrri 9% finance at the measure of citizen’s perception of Average 22% municipal level corruption in the focus municipalities. in five original Indicator data will be collected, analyzed focus and reported separately for each municipalities municipality.

% of citizen Same as 16(a). Same as 16(a). Same as 16(a). USAID TEAM Annuall Baseline 2019: N/A N/A Baseli 14.5% 19.6% 14% 14% Baseline and targets for this 16(b) perception of will present y 15% ne indicator were included in June corruption and disaggregated Decan 9% 2019: 2020. transparency in data for each Ferizaj 15% 15%

138 | USAID TEAM ANNUAL REPORT 2020 public of the ten new Hani i Elezit The survey is not finished yet. procurement focus 8% and public municipalities. Istog 16% finance at the Junik 3% municipal level Lipjan 10% in ten new Podujevë 18% focus Prizren 20% municipalities Rahovec 34% Suharekë 17% Average 2019: 15% Change in USAID TEAM will The change in MPECV Index measures USAID TEAM USAID TEAM Annuall Average 60.94 66 56.81 67 75.78 75 86.26 84 93 91 91 Note: this is a mission indicator, Municipal identify priority improvement in municipal capacity to municipal advisors will present y reported on annual basis. Procurement areas for technical address the corruption vulnerabilities deployed in disaggregated Pristina 54.68 Effectiveness assistance and across six dimensions: (1) planning and municipalities will data for each Peja 66.67 and where to expand budgeting, (2) staff capacity, (3) contract collect data on an of the five Gjakovë 55.37 Corruption or reduce focus administration, (4) audit, (5) appeals and annual basis based original focus Gjilan 65.93 Vulnerability in over time. review, and (6) transparency, ethics, anti- on the OECD municipalities Vushtrri 62.04

17(a) five original corruption, and anti-fraud. Each dimension Methodology for focus is scored from 0-3, for a maximum Assessing municipalities possible score of 18, expressed in terms of Procurement 100. Exact methodology for the MPECV Systems (2009) Index is outlined in the PIIRS http://www.unpcdc. org/media/334159/ maps_bli_2009.pdf

Change in Same as 17(a). Same as 17(a). Same as 17(a). USAID TEAM Annuall Baseline 2019: N/A N/A Baseli 64 76 70 70 Baseline and targets for this Municipal will present y 60 ne indicator were included in June Procurement disaggregated Decan 55 2019: 2020. Effectiveness data for each Ferizaj 65 60 and of the ten new Hani i Elezit 48 Corruption focus Istog 64 municipalities. Junik 50 17(b) Vulnerability in Lipjan 69 ten new focus municipalities Podujevë 65 Prizren 67 Rahovec 53 Suharekë 65 Average 2019: 60 Transparent, USAID TEAM will The project will collect and compare data Municipal By Annuall Baseline for all N/A Baseli 55 57 63 64 70 70 USAID TEAM will collect, analyze effective, and track progress across all 38 municipalities in three main procurement plans, municipality, y – this municipalities ne 52 and report data for all 38 accountable made and adjust its areas (procurement, transparency and municipal and grouped indicato 2018: 52 municipalities. index indictor approach as audit), to show the impact of USAID procurement data, by five original r will be in all needed. TEAM activities through 9 sub indicators: PPRC data including focus reporte 18 municipalities, d municipalities e-Procurement Baseline for •Municipal procurement and all other through platform, Open five original Procurement municipalities. Q1 (Ind -% implementation of the procurement # 3 focus plan Transparency Portal data, within

USAID TEAM ANNUAL REPORT 2020 | 139 -% procurement activities implemented Municipal web sites, this municipalities that were not in the procurement plan NAO reports, index 2018: 71 municipal audit will -% of procurement activities canceled reports consist data •% of price quotations procedures used in Baseline for 10 from total, of procurement activities new the last municipalities •Municipal transparency available NAO 2019: 57 -% of publication of contracts on municipal report) web sites -% of publication of procurement activities on municipal web sites -% of publication of mayors reports and financial documents: MBF, budget, quarterly financial reports, annual financial report, monthly financial information’s, mayors annual plan, mayor reports and Municipal KNAO report •Municipal audit

-% of NAO recommendations implemented -% of internal audit recommendations implemented.

Component Two

# of modules USAID TEAM will The e-Procurement platform consists of PPRC e- NA Annuall 3 4 +1=4 7 7 11 11 12 13 0 12 The activation of the final 12th implemented adapt its technical 12 individual modules; however, only 3 are procurement y module, which includes the on e- approach at the currently operational. This indicator implementation Contract Management Module, procurement PPRC to ensure measures the roll-out of additional reports, Infodom was developed during 2020 but platform timely modules. A module will be considered reports, USAID activated in the beginning of 2021. implementation of “implemented” once it is online, TEAM IT STTA The Project has been able to additional modules. operational, and used by relevant assessment reports, 19 develop one more module, the government officials and economic interviews with 13th module, which was not operators and is not duplicated by a PPRC officials planned to consist the e- manual process. procurement platform, the Contract Past Performance Module., which is also activated on the beginning of 2021.

140 | USAID TEAM ANNUAL REPORT 2020 % of entries USAID TEAM will USAID TEAM plans to develop a Site host, PPRC USAID TEAM Quarter 0 0 0 0% 25% 0% 50% 50% The Contract Past Performance made in modify its approach Contractor Past Performance Database to annual report, will collect ly/ module is activated in the Contractor through coaching enable municipal contracting authorities to municipal reports disaggregated Annual beginning of Year 5. Based on the Past and mentoring capture the quality of goods and services data for each issued regulation of PPRC, all the Performance focus municipalities received. This indicator measures the of the 38 contracts will be entered and evaluated through this module Database in Year Four and 5 percentage of contracts for which 15 focus municipalities. (against total to ensure municipal municipalities entered past performance which is expected to be achieved 20 number of procurement information in the system against the total during Year 5. contracts) in officers are using number of contracts. This indicator 15 focus and benefitting measures entries for high and medium municipalities from the system. value contracts only.

# of fraud USAID TEAM will This indicator measures the number of NAO reports, NA Quarter 0 0 38 38 43 49 50 54 55 186 cases detected adapt our training fraud cases detected by the NAO Fraud interviews with ly/ by the technical assistance Unit and handed over to the prosecutor NAO officials Annual National Audit at the NAO based for action. Office Fraud on results under 21 Unit and this indicator to handed over to ensure NAO staff prosecutor are able to effectively detect fraud.

# of USAID TEAM will This indicator will measure correction PPRC monitoring Annual Baseline 2019: N/A N/A 42 58 79 75 75 correction monitor the PPRC letters sent by the PPRC Monitoring Unit unit 42 letters sent by monitoring unit and and will be reported disaggregated by Public adjust its approach contracting authority type (central, Procurement to decrease the municipal, or publicly owned enterprises). Regulatory number of USAID TEAM will specifically report and Commission correction letters disaggregate findings for 15 focus 22 monitoring with irregularities municipalities. unit regarding and red flags. public procurements with irregularities or red flags

Component Three

USAID TEAM ANNUAL REPORT 2020 | 141 # of hits on USAID TEAM will USAID TEAM will develop a municipal Data automatically NA Monthly 0 0 0 4,924 6,000 21,35 30,00 43,78 35,00 35,00 the adjust the procurement transparency portal that will generated by the 4 0 6 0 0 procurement transparency portal automatically mine data from the portal site host transparency user interface to electronic procurement system. This portal maximize the user indicator measures the number of unique 23 experience, and and non-unique visits or “hits” on the site. adjust our communications and outreach based on feedback users.

# of cases of USAID TEAM will This indicator will measure the number of CSO reports as NA Annual 2016: 8 8 8 9 10 12 17 18 12 25 80 This is a mission indicator, municipal modify its approach cases of alleged municipal procurement tracked by the reported on annual basis. procurement to training CSOs to fraud or other irregularities detected and project malfeasance ensure they are reported by civil society organizations communications reported by able to identify and through reports, web-sites, newspapers, expert 24 CSOs and effectively report social media, television programs, or other media on cases of forms of media. supported by procurement USAID TEAM malfeasance.

% of Civil USAID TEAM will This indicator will measure the number of N/A Annual In 2018 there N/A Baseli 75% 82% 80% 80% A red flag is defined here as an society monitor the recommendations deriving from reports were 57 ne indication of a behavior pattern, organization percentage of published by CSO and media that are recommendati 2019: as evidenced through data s and media recommendations supported by USAID TEAM, as well as ons provided 72% analyses or expert observation, recommend derived from CSOs number of addressed recommendations. by CSOs. reflecting corruption or fraud – ations on and media USAID TEAM will help municipalities, to but in and of itself, is not proof of corruption addressed by the address those recommendations. 41 out of 57 fraud or corruption. Patterns red flags and municipality and (72%) that have been red flagged irregularities adjust its approach recommendati warrant further investigation by in public to maximize the ons are researchers to determine if 25 procuremen percentage. addressed in malfeasance has, in fact occurred. t addressed 2019. by Irregularities are here defined as municipalitie patterns of behavior that are s unusual or deviate from usual practice. Such irregularities may reflect corruption or fraud and warrant further investigation to determine if malfeasance has, in fact, taken place.

142 | USAID TEAM ANNUAL REPORT 2020