USAID TRANSPARENT, PHOTO CREDITS: USAID TEAM EFFECTIVE AND ACCOUNTABLE MUNICIPALITIES ACTIVITY IN KOSOVO Annual Report January 11, 2019–January 10, 2020

i USAID TRANSPARENT, EFFECTIVE AND ACCOUNTABLE MUNICIPALITIES ACTIVITY IN KOSOVO

Annual Report

January 11, 2019–January 10, 2020

Project Title: USAID Transparent, Effective and Accountable Municipalities (USAID TEAM) Activity in Kosovo Sponsoring USAID Office: USAID/Kosovo Contract Number: AID-167-C-17-00001 COR: Jeton Cana Contractor: DAI Global, LLC Date of Submission: February 11, 2020 Prepared By: USAID TEAM

DISCLAIMER The authors’ views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development (USAID) or the United States Government.

USAID TEAM Annual Report 2019-2020 | ii CONTENTS Acronyms and abbreviations ...... iv EXECUTIVE SUMMARY ...... 1 INTRODUCTION ...... 4 USAID TEAM Background ...... 4 WORK PLAN PROGRESS REPORT ...... 6 Component I: Develop, Refine and Roll Out Models for Transparent and Accountable Municipalities . 6 Component II: Engage the Central Level in Addressing Municipal Corruption within the Procurement Process...... 46 Component III: Enable Civil Society to Track and Expose Corruption ...... 59 CHALLENGES DURING REPORTING PERIOD ...... 81 MITIGATION MEASURES TAKEN TO ADDRESS CHALLENGES DURING REPORTING PERIOD ..... 82 ANNEX I: WORK PLAN SCHEDULE PERFORMANCE ...... 84

iii ACRONYMS AND ABBREVIATIONS AIS Agency for Information Society AKM Association of Kosovo Municipalities AMS Audit Management IT System CA Contracting Authority CFO Chief Financial Officer CHU Central Harmonization Unit CID Capital Investment Directorate CLA Collaborative Learning and Adapting COR Contracting Officer Representative CPA Central Procurement Agency CPE Contractor Performance Evaluation CSO Civil Society Organization D+ Democracy Plus EO Economic Operators EU European Union GLPS Group for Legal and Political Studies GOK Government of Kosovo HR Human Resources HRMIS Human Resources Management Information System IAU Internal Audit Unit IT Information Technology KDI Kosova Democratic Institute KIPA Kosovo Institute for Public Administration KPI Key Performance Indicators MAC Municipal Audit Committee MIAs Municipal Implementation Advisors MLGA Ministry of Local Government Administration MOF Ministry of Finance MOU Memorandum of Understanding MPA Ministry of Public Administration MPFC Municipal Policy and Finance Committees NAO National Audit Office NGO Non-Governmental Organization OCAT Organizational Capacity Assessment Tool OCDS Open Contracting Data Standard

USAID TEAM Annual Report 2019-2020 | iv OECD Organization for Economic Co-operation and Development OPDAT Office of Overseas Prosecutorial Development Assistance and Training OPTP Open Procurement Transparency Portal PPL Public Procurement Law PPP Public Private Partnership PPRC Public Procurement Regulatory Commission PRB Procurement Review Body PSE Public-Sector Entity RFA Request for Application ROGPP Rules and Operational Guidelines on Public Procurement SCC Special Conditions of the Contract SOP Standard Operating Procedure TEAM Transparent, Effective and Accountable Municipalities TOT Training of Trainers USAID United States Agency for International Development

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EXECUTIVE SUMMARY Building on the momentum of the public procurement breakthrough change in 2018, USAID Transparent, Effective and Accountable Municipalities Activity (USAID TEAM) continued to deliver high quality interventions in 2019. The project’s achievements in public procurement over the past year include: • On January 1, 2019, the Public Procurement Regulatory Commission (PPRC) made it mandatory for all economic operators (EOs) to submit their procurement bids electronically through the e- Procurement system. This was a major shift from the situation in 2017, when the e-Procurement platform was on the brink of being abolished. Currently, there are 12,282 contracts publicly available on the e-Procurement platform. The PPRC also started sharing all procurement data on the Government of Kosovo’s (GOK) Open Data Portal. • The Procurement Review Body (PRB) continued to implement new initiatives to modernize its operations and expand transparency of its decisions. In the beginning of 2019, the PRB made it mandatory for complainants to submit their bid protests or complaints electronically through a new e-Appeals module on the e-Procurement platform. During 2019, USAID TEAM assisted PRB in further promoting transparency by developing a livestreaming capability to broadcast all PRB’s hearings online. USAID TEAM also helped PRB develop an online invoice system and mandate the use of digital documents in the PDF format to enable electronic search function. • USAID TEAM’s civil society partners finalized and launched a number of new reports, adding new data about municipal procurement effectiveness and transparency into the national dialogue. For example, the Group for Legal and Political Studies (GLPS) launched their report on “Social Accountability Tools as Means for Accountability Success.” The Democracy Plus (D+) launched a second benchmarking report highlighting best practices, irregularities, and violations in municipal procurement. The Riinvest launched their “x-index” benchmarking tool for public procurement, which measures and evaluates the performance of Kosovo’s 38 municipalities across a range of data-driven indicators in public procurement. • The number of municipalities that published contracts on their municipal web sites expanded. Twenty-four municipalities, including all focus and second-tier municipalities, published all public contracts online. Citizens can now access 3,288 contracts in PDF format on their municipal web pages. • The Open Procurement Transparency Portal (OPTP) exceeded the life-of-project target for site visits reaching 18,319 visitors by September 2019, well above the original five-year target of 10,000 hits. Civil society, investigative journalists, businesses, and even GOK officials reported using OPTP as a starting point for investigations or business intelligence. • During 2019, the National Audit Office’s (NAO) new Anti-Fraud Unit identified 87 cases of potential fraud, which were forwarded for further investigation to the Office of the State Prosecutor. • The Kosova Democratic Institute (KDI) observed major improvements in the municipal procurement transparency. In their Public Procurement Transparency Index 2018, KDI reported that Kosovo witnessed significant progress in public procurement transparency at the local level. The overall volume of published contract notices and contract award notices on municipal

1 | USAID TEAM Annual Report 2019-2020 websites increased by 28 percent. KDI noted that the greatest achievement of 2019 was the publication of contracts on the e-Procurement platform. The report also mentioned that budgetary transparency increased by 16 percent compared to the previous year. According to the report, the top performing municipalities were Pristina, Vushtrri/Vučitrn, and Mitrovicë/Mitrovica. • Public perception regarding corruption in public procurement began to shift as businesses recognized major improvements in procurement transparency. During focus group discussions with businesses as part of USAID TEAM’s annual public perception survey, participants noted substantial improvements in public procurement over the past year, mainly due to the elimination of paper-based tenders and full functionalization of the e-Procurement platform leading to increased efficiency and transparency. They also pointed out that media has increasingly reported on procurement-related issues impacting the municipalities. This positive trend became key to higher levels of accountability. Participants observed that municipal transparency was also increasing through the online publication of municipal documents such as procurement plans and procurement contracts. • PPRC and the Kosovo Institute for Public Administration (KIPA) expanded their self-reliance capability by providing trainings in public procurement. With USAID TEAM’s support, the PPRC and KIPA developed online video tutorials for government officials engaged in bid opening and evaluation and for private sector EOs who wished to submit bids through the e-Procurement platform. During 2019, the business registration section registered 175 views, the bid preparation and submission section 563 views, the request for reconsideration section 129 views, and the complaints to PRB section 144 views. • Local civil society organizations (CSOs) strengthened their capabilities to investigate municipal procurement and report on their findings. As part of USAID TEAM’s Applied Learning Workshop, CSOs from Ferizaj/Uroševac, Peja/Peć, Prizren, Pristina, Gjilan/Gnjilane and South Mitrovica conducted informational interviews with relevant municipal officials and carried out field investigations. Their final reports focused primarily on irregularities in infrastructure projects and uncovered possible fraud and abuse. Likewise, USAID TEAM partner Çohu published reports identifying the cause of delays in public works and supply contracts. In one case, Çohu uncovered that a municipality built a bridge without going through any documented tender procedures. In another case, Çohu identified abnormally low pricing in a food supply contract for a public school. In a follow-up report and multimedia story, Çohu investigated delays in the construction of a wastewater treatment plant in the Kalabria neighborhood in Pristina due to unsolved property issues. This multimedia story was viewed approximately 13,000 times. • Focus municipalities modernized their procurement offices and records management capabilities. USAID TEAM, through its Support Fund interventions, helped co-finance the purchase of equipment and organized three events attended by high-level U.S. Government and municipal officials to inaugurate the upgraded procurement offices in Gjakova/Ðakovica, Gjilan/Gnjilane, and Vushtrri/Vučitrn municipalities. • The project supported a training-of-trainers program certifying 32 public procurement trainers. Under further leadership of KIPA and PPRC and without any additional support from USAID TEAM, this group of trainers coached 421 procurement officers on legally required Advanced

USAID TEAM Annual Report 2019-2020 | 2 Procurement Certification. This is an important step forward in Kosovo’s journey to self-reliance demonstrating its ability to provide sustainable training to procurement officers. • Based on the USAID TEAM’s Municipal Capacity Assessment, all focus municipalities improved their performance in public procurement, audit, financial management, and budgeting by an average of 33 percent and progressed along the graduation pathway. Peja/Peć improved its performance from 62 points in 2018 to 75 in 2019, Vushtrri/ Vučitrn from 73 points to 74, Gjilan/Gnjilane from 53 to 67, Gjakova/Ðakovica from 64 to 65, and Pristina from 51 to 61. Based on the graduation threshold of 80 points, two municipalities are nearing their graduation.1 USAID TEAM introduced a standardized package of diagnostics and technical interventions that include day-to-day coaching and mentoring from Municipal Implementation Advisors (MIAs). USAID TEAM’s assistance has been shifting progressively from transactional-level assistance to a monitoring role, with a greater focus on improving municipal scores against the graduation criteria through structured capacity building. MIAs have raised the capacity level of individual procurement officers while also upgrading the procurement system at the local level. Figure 1 illustrates progress against the graduation criteria for the five focus municipalities from 2017 to 2019.

75 73 74 80 67 67 69 64 62 64 61 60 57 61 60 54 51 55 53 51 51 51 44 44 44 39 40

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0 Pejë/Pec Vushtrri/Vucitrn Gjakovë/Ðakovica Gjilan/Gnjilane Prishtinë/Priština Average

Dec. 2017 Jun-18 Dec. 2018 Jun-19

Figure 1 Results Against Municipal Graduation Criteria, USAID TEAM Focus Municipalities, 2017–2019

1 These are 2019 semi-annual results. The annual results will be available during the first quarter of 2020.

3 | USAID TEAM Annual Report 2019-2020 INTRODUCTION The USAID TEAM Annual Report documents the progress made from January 11, 2019 to January 10, 2020, in compliance with section F.6.f. of the referenced contract. The report is divided into the following sections: • Introduction, giving 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 3 Work Plan; • Successes during the reporting period and best practices; and • Lessons learned, covering the difficulties and challenges encountered during Year 3 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 Adaptive 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 in a selected sub-set of focus municipalities. At the central level, USAID TEAM is working closely with national-level actors including the Ministry of Finance (MOF), PPRC, NAO, 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. IR1.4: Civil Society Strengthened to Increasingly Engage Constructively with Government. USAID TEAM is working with civil society to monitor municipal procurement.

USAID TEAM Annual Report 2019-2020 | 4 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 forward 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 increasing capacities of municipal procurement managers, contract managers, internal auditors, and other public officials involved in the procurement cycle. In addition, USAID TEAM supports five focus municipalities – Gjakova/Ðakovica, Gjilan/Gnjilane, Peja/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, albeit to a lesser degree of intensity than in the focus municipalities, to a group of six additional second-tier municipalities comprised of Lipjan/Lipjane, Istog/Istok, Ferizaj/Urošecav, Podujevë/Podujevo, Suharekë/Suva Reka, and Prizren/Prizren. 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 units (IAUs) to detect and address procurement weaknesses. In addition, the project is increasing the capacities of PPRC, especially its Information Technology (IT) team, to ensure the proper long-term and sustainable operation and maintenance of the e-Procurement system. USAID TEAM also works with 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 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, 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 in subcontracts with local organizations; ensuring flexible training and coaching approaches; coordinating with government systems and non-USAID

5 | USAID TEAM Annual Report 2019-2020 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 and the results the project achieved during Year 3.

COMPONENT I: DEVELOP, REFINE AND ROLL OUT MODELS FOR TRANSPARENT AND ACCOUNTABLE MUNICIPALITIES During the reporting period, USAID TEAM assisted municipalities in implementing major reforms to transform public procurement. The project team mentored and provided practical coaching to municipal staff in the focus municipalities, leading to new local solutions to mitigate corruption vulnerabilities in the municipal procurement process. Project advisors prepared municipal staff to undertake complicated procurement procedures and developed guidance documents to help municipalities continue implementing these procedures with decreasing levels of guidance from the advisors. The Component 1 team also focused its assistance on implementing effective enforcement mechanisms to ensure monitoring and oversight of the procurement cycle at the municipal-level. The project is now supporting the implementation of robust internal procurement controls to ensure procurement officers and other system users are following all legal, administrative, and financial procedures. Major 2019 achievements for Component I include: • Organizing three events featuring high-level representatives from the U.S. Government and municipal management to officially inaugurate the upgraded procurement offices in Gjakova/Ðakovica, Gjilan/Gnjilane, and Vushtrri/Vučitrn municipalities. • Finalizing the e-Procurement training videos. As part of the broader exit strategy, USAID TEAM developed e-Learning materials (training video tutorials) that will be hosted on the e-Procurement platform and available for all businesses and contracting authorities (CAs). USAID TEAM, in cooperation with PPRC, completed two sets of video tutorials which will enable private sector EOs and CAs to learn how to use the e-Procurement platform. With the project’s support, PPRC and KIPA officially launched the video tutorials. The event gathered major actors in public procurement, including representatives from PRB, the Central Procurement Agency (CPA), Procurement Collegium, business community, and CSOs. Media sources transmitted the event live (accessible here) and stories about the launch appeared in online portals (accessible here). Since their launch, the business registrations section had registered 395 views, the preparation and submission of bid tender dossier section 1,737 views, the request for reconsideration section 350 views, and the complaints to the PRB section 518 views. 515 views had been recorded on the tender opening process section and 386 views on the evaluation process section. • Launching the Contract Management Manual. Together with central-level GOK partners, USAID TEAM marked the completion of a major capacity building program certifying more than 450 public officials in contract management. This certification program promoted efficiency and accountability in the implementation of public projects in all municipalities. USAID TEAM and its GOK partners also launched the Contract Management Manual, a guide for public officials.

USAID TEAM Annual Report 2019-2020 | 6 • Supporting municipalities to effectively implement procurement contracts and, when necessary, advising them to terminate contracts of EOs that fail to implement the project as per the contract terms and conditions. Procurement Advisors also coached municipalities on the collection of tender insurance funds. Gjilan/Gnjilane, Gjakova/Ðakovica, and Peja/Peć municipalities undertook such actions for the first time for several unsuccessful contracts that were extended for many months and, in some cases, years. In addition, the project advised municipalities on the procedures to report such cases to the court. During the reporting period, the municipality of Pristina took a case to court for the first time. • Coaching and mentoring municipal procurement officers on the levels of municipal compliance with the Public Procurement Law (PPL) and vulnerability to corruption for tender dossiers (in 256 cases), bid opening (20 cases), bid evaluation (in 131 cases), and claims (61 cases). • Developing the Standard Operating Procedure (SOP) “Handling the Findings and Implementing External and Internal Audit Recommendations from the Audited Public-Sector Entity (PSE),” seeking to define the procedures that should be followed by PSEs during the process of external and internal audits upon receiving the audit file report and the final report. This SOP also outlines steps for developing the action plan for the implementation of recommendations. • Updating two volumes of the Internal Audit Manual in line with the changes in the legislation and international audit standards. The Internal Audit Manual focuses on the overall management of internal audit and provides the basis for managing internal audit activities in compliance with the Law on Public Internal Financial Control, the Standards for Internal Audit, and the Code of Ethics to generate benefits for each PSE and their clients (the citizens of Kosovo). • Supporting municipalities in addressing NAO recommendations. All municipalities saw on average a six percent increase in the number of recommendations in all review areas from the previous year, reflecting an increase from 26 percent to 32 percent. USAID TEAM’s impact is most visible when focusing on audit recommendations in public procurement: all municipalities improved from the baseline of 38 percent in 2016 to 64 percent in 2017, jumping to 67 percent in 2018. This represents an increase of 29 percent from 2016 levels in a two-year period. • Supporting KIPA and PPRC to deliver a training-of-trainers (TOT) program, equipping 32 trainers with necessary skills to deliver the Advanced Procurement Certificate Program for procurement officers without USAID TEAM’s support in the future. In addition, the project’s Procurement Advisors helped draft and update eight modules for the Advanced Procurement Certification Program and even served as trainers for one day each. • In collaboration with GOK, supporting certification programs that allowed approximately 650 procurement officers from all levels of the government to get certified to carry out basic procurement duties. During the reporting period, USAID TEAM supported PPRC and KIPA in certifying 32 procurement officers from Kosovo’s local and central-level institutions, independent agencies, and publicly-owned enterprises in Basic Public Procurement. This was an ad hoc training group, where trainees completed a 10-module course and passed a challenging examination prior to certification.

7 | USAID TEAM Annual Report 2019-2020 Component I Events Events/Groups Participants

Workshops 41 678 1.1.5. Presenting Semi-Annual Municipal Graduation Results 9 124 1.3.1. Capacity Building for Technical Specifications 6 110 1.3.1. Capacity Building of Members of Evaluation Commissions 9 137 1.3.4. Contract Management 2 26 1.3.4. Launching Video Tutorials 1 27 1.4.2. Improve Sustainable Internal Audit Practices 1 15 1.5.1. Code of Ethics 4 67 1.5.2. Development of Integrity Plan 2 32 1.6.3. Municipal Transparency Workshop 1 41 Develop and Implement Handbook on Internal Public Expenditure 1.7.1. 3 53 Management Process 1.7.2. SOPs for the Invoice Management 1 15 1.7.3. Municipal Budget Planning 2 31 Trainings 9 42 1.3.1. Procurement Training for Municipal Directors 1 10 1.3.5. Training-of-Trainers for Public Procurement 8 32 Roundtables 17 242 Learning Summits for Adaptive Management with Private Sector 1.1.6 1 5 Eos 1.3.6. Public Procurement Collegium 4 48 Challenges and Recommendations of PFC and Municipal Assembly 1.4.3. 7 30 in Increasing Transparency and Accountability 1.4.4. Auditing Processes - Sharing Experiences 2 40 1.7.2. SOPs for the Invoice Management 1 15 1.7.4. Sharing Best Practices in Municipal Finances 2 104 Launching Ceremonies 1 124 1.3.4. Launching Contract Management Manual 1 124 Total 68 1086 Despite these results, challenges in public procurement persisted. While the project’s five focus municipalities have reaped the benefits of increased transparency, efficiency, and effectiveness, other municipalities have yet to match the same pace of reform. A small number of municipalities have not been able to improve their performance at all. Although citizens, CSOs, and the private sector acknowledge and applaud the improvements in e-Procurement, they cite poor contract management practices as a persistent issue that affects the quality of goods, works, and services, and this continues to weigh on overall citizen satisfaction. For example, USAID TEAM identified in its 2017 Corruption Vulnerability Assessment that contract management was weak across all municipalities. USAID TEAM began strengthening contract management during 2019, but this will be a major, multi-year undertaking. Similarly,

USAID TEAM Annual Report 2019-2020 | 8 weak technical specifications in the tender dossiers were identified as a corruption vulnerability, and violations appeared in civil society monitor reports. Procurement officers must do more to instruct requesting units on appropriate technical specifications, and PPRC must use more effective means to select truly high-risk cases to monitor ex post facto. The project continued its support to all Kosovo municipalities to follow-up on NAO recommendations. Despite this assistance, municipalities must accelerate the pace at which they are addressing these recommendations and ensure there are systems and controls in place to prevent the same findings from recurring year after year. Related to this point, USAID TEAM strengthened municipal audit committees (MACs) and provided support to IAUs. However, there are still many gaps in terms of functionalization of the IAU. Mayors still do not fully grasp the purpose of internal audit; in a functional system of local governance, internal auditors should report to the mayor and support the proper functioning of internal controls to ensure compliance with the law and to improve municipal performance. This role, ideally, helps protect the municipality and mayors, but municipalities and mayors tend to have an adversarial or dysfunctional relationship with their own internal auditors. As a result, municipalities do not follow-up on internal audit findings or simply ignore them, to their detriment. During Year 4, USAID TEAM will continue to work with mayors, internal auditors, and municipal directors to enhance the functioning of internal audit and push for fuller implementation of internal audit and NAO recommendations. The public perception of PRB, PPRC, and the public procurement system as a whole is negative. While the general public does not know much about public procurement, USAID TEAM’s 2018 Public Perception Survey showed that people perceived the system as corrupt. To address this negative public opinion, USAID TEAM engaged communication experts to support PPRC, PRB, and municipalities and help these organizations communicate their achievements and tell their own story. USAID TEAM has already begun implementing with the project closeout in mind, promoting resilience and self-reliance of our GOK counterparts. The project is consciously working to support the GOK on their journey to self-reliance, ensuring that GOK counterparts are assuming full ownership of the technical interventions implemented by the project by integrating them into policies, rules and procedures of SOPs to ensure sustainability after USAID TEAM is completed. Highlights of such interventions include full transparency of procurement and appeal processes, contractor past performance and contract management modules, and invoice management system. In addition, USAID TEAM is exploring innovative mechanisms to mobilize public revenue to finance selected interventions, such as seeking central or municipal government funding to institutionalize these processes for CSOs monitoring and social auditing. USAID TEAM has set a goal to “institutionalize change” in every activity and sub-activity of this project. This means that it is not enough to draft new SOPs, new templates, or new manuals. Rather, the project must work with GOK counterparts to realize the full implementation of these new policies, procedures, or systems and then seek to institutionalize the change through revisions to primary or secondary legislation. As USAID TEAM seeks opportunities to institutionalize change and explore innovative funding mechanisms, the project also understands that the journey to self-reliance is, in fact, a journey; the project has realistic assumptions about the current starting point of the GOK. Indeed, GOK counterparts may not be able to fund certain interventions in 2020, but USAID TEAM will work to prepare the GOK to assume the fiscal responsibility for certain interventions in 2021 and beyond. In addition, USAID TEAM has set out principles for information and communication technology interventions with the explicit purpose to maximize positive change and institutionalize that change,

9 | USAID TEAM Annual Report 2019-2020 through policy development, sharing guiding principles and approaches. For example, when introducing IT interventions, USAID TEAM will seek out opportunities to build-in mandatory compliance, conditionalities, and internal controls and automate business processes, making it impossible to bypass steps in the procurement process. USAID TEAM will help GOK counterparts use IT solutions to automatically and proactively share information with citizens. Further, USAID TEAM in 2020 will continue to promote maximum interoperability with other government systems to ensure compliance and streamline user experience. Through IT interventions, USAID TEAM will seek to minimize chances for human error, inaction, or abuse, and to eliminate dependence on the elusive “will for reform.” Finally, USAID TEAM will make these IT changes and automated business processes hard to reverse. Below is a list of activities from the Year 4 work plan that will promote the GOK’s journey to self-reliance. 1.1. CONDUCT ANNUAL ASSESSMENT, SURVEY, AND PLANNING ACTIVITIES Every year, USAID TEAM carries out a capacity assessment of the focus and second-tier 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, CSO monitoring, and other assessment tools to tailor and refine technical support to all municipalities to increase their organizational capacity. 1.1.1. Assess organizational capacity of municipalities. USAID TEAM conducted the annual municipal performance evaluation for focus and second-tier municipalities in public procurement, finance management, audit, municipal transparency, and publication of key municipal information employing an organizational capacity assessment tool (OCAT). Following the collection and analysis of OCAT data, the project developed a Municipal Capacity Assessment Report. Based on the report, USAID TEAM found that focus municipalities improved their performance by an average of 33 percent. Illustration of Vushtrri Municipality improvements over a year.

USAID TEAM Annual Report 2019-2020 | 10 1.1.2. Create custom work plans with focus municipalities. USAID TEAM, in coordination with focus municipalities, developed the Custom Work Plans for Year 3 of the project. The custom work plans were developed based on the updated OCAT data (Sub-activity 1.1.1), recommendations from CSO reports and assessments (from Component III), feedback from adaptive learning sessions, and other inputs, including the experience of the project’s advisors working in partner municipalities. Custom Work Plans outline the timeframe for achieving results for the respective municipalities, set performance targets linked with “graduation” achievements, and provide a clear understanding of what each partner will contribute to USAID TEAM in terms of staff commitment and other requirements. These work plans were adapted and supplemented with activities that improve transparency, efficiency, and accountability in the focus municipalities, especially in the field of public procurement. Municipal management (including mayors), procurement officers, finance officers, auditors, and public information officers were integrally engaged in the development of these work plans in the focus municipalities. Finally, the mayor and assembly chairperson Pristina Municipality Custom in each of the five focus municipalities approved and signed off on the Work Plan plans. 1.1.3. Conduct citizen perception survey. USAID TEAM conducted its annual citizen perception survey collecting information from CSOs, the private sector, and individual citizens to measure their satisfaction with public procurement and their perception of the level of transparency in the procurement process at the municipal level. This is the third annual Citizen’s Perception Survey that USAID TEAM conducted since the project started. This year’s survey targeted a sample of 2,125 citizens from all municipalities, including urban and rural areas, and gathered in-depth feedback through eight focus groups with businesses and CSOs from focus and second-tier municipalities. Focus groups conveyed their perception that there have been substantial improvements in public procurement over the past year, mainly due to the elimination of paper-based tenders and full functionalization of the e-Procurement platform leading to increased efficiency and transparency. They also said that media has increasingly reported on procurement-related issues impacting the municipalities and this is a positive trend leading to higher accountability. Participants observed that municipal transparency is increasing through the online publication of municipal documents, such as procurement plans and procurement contracts. Despite these positive observations, the focus groups also recommended that municipalities document poor performing EOs. Also, the groups observed that contracting authorities are often late in initiating new projects, especially in the first half of the year; consequently, municipal officials rush to fully implement the procurement plan in the second half of the year. The survey results and conclusions from the focus group discussions shaped the design of the project’s work plan for the year. Some key findings are presented in the graphic:

11 | USAID TEAM Annual Report 2019-2020 1.1.4. Measure and report on the annual municipal graduation plan. USAID TEAM anticipates that at least two focus municipalities will make sufficient progress in addressing corruption vulnerabilities and enhancing transparency, accountability, and effectiveness of the procurement process to “graduate” from project assistance by the end of Year 5. To objectively measure this, USAID TEAM developed a Graduation Readiness Measurement Tool that includes quantitative and qualitative achievement measures. These measures are linked to the custom work plans of focus municipalities (see above sub-activity 1.1.2.) so that as USAID TEAM supports municipalities to implement their custom work plans, this support helps them advance along the path to graduation. In Year 3, the project collected, processed, and analyzed data from all focus municipalities and drafted the Municipal Graduation Report for 2018 for the five focus municipalities. Based on the report data, in 2018 the Municipality of Vushtrri/Vučitrn showed robust growth from 57 points in 2017 to 73 points; followed by Gjakova/Ðakovica from 51 to 61 points; Peja/Peć from 60 to 63 points; Gjilan/Gnjilane from 44 to 55 points; and Pristina from 44 to 51 points. The data shows that improvements are mainly in the areas of: (1) implementation of annual procurement plans; (2) percentage of implementation of unplanned activities;

USAID TEAM Annual Report 2019-2020 | 12 (3) the publication of financial, procurement, and audit documentation; (4) addressing NAO recommendations, and (5) Municipal Effectiveness and Corruption Vulnerability Index indicators.

MUNICIPAL GRADUATION DATA FOR 2017 AND 2018

Baseline 2017 Results 2018 % increase/decrease Trend Municipality score score 2017 vs. 2018 2017/2018

Vushtrri/Vučitrn 56.65 72.78 28.47%

Peja/Peć 60.35 61.88 2.53%

Gjakova/Đjakovica 50.75 63.88 25.87%

Gjilan/Gnjilane 43.67 53.28 22.01% Pristina 44.18 50.88 15.17%

USAID TEAM also prepared a comparative analysis for all Kosovo municipalities by grouping them into three categories: focus, second-tier, and non-focus municipalities. The results are presented in the charts below:

% of publication of contracts on municipal % implementation of the procurement plan web sites 80.00% 70.63% 93% 100% 70.00% 90% 57.30% 59.70% 80% 72% 60.00% 53.25% 70% 50.00% 60% 53% 40.00% 50% 30.00% 40% 28% 30% 20.00% 20% 10% 10.00% 0% 0.00% All Kosovo Non-partner Secon-tier Focus All Kosovo Non-partner Secon-tier Focus municip. municip. municip. municip. municip. municip. municip. municip.

USAID TEAM adapted the Municipal Graduation Plan based on feedback and learning from the focus municipalities. According to the municipalities, some indicators measured outcomes that are not in the municipality’s full control, especially in the field of bid protests and review. Also, during 2018, the project identified that some of the data points previously reported by the focus municipalities turned out to be inadequate for some of the graduation indicators. The data inaccuracies and errors impacted the formulas used to calculate graduation scores. Aiming to measure and report more realistic municipal performance, the project corrected these errors and the changes were incorporated into the revised and approved municipal graduation plans for 2019. The report reflects baseline changes for the following five indicators: • Percentage of implementation of municipal annual procurement plan, • Percentage of implementation of unplanned procurement activities, • PRB’s decision in favor of contracting authority (CA), • Percentage increase of implementation of internal audit recommendations related to finance management, public procurement, mayor’s office, and Human Resources (HR), and

13 | USAID TEAM Annual Report 2019-2020 • Percentage increase of implementation of NAO recommendations related to finance management, public procurement, mayor’s office and HR. USAID approved these revisions to the plan. At the mid-year point, the project again measured the graduation indicators for the first six-months of 2019. At mid-year, the project is only able to measure the first seven indicators, while the remaining five will be measured in the beginning of 2020 when the project prepares the annual graduation results report. Data for this period show that all focus municipalities progressed along the graduation path: Peja/Peć increased its performance from 62 points in 2018 to 75 in 2019; Vushtrri/Vučitrn from 73 points to 74; Gjilan/Gnjilane from 53 to 67; Gjakova/Ðakovica from 64 to 65; and Pristina from 51 to 61points. The report shows that improvements are mainly in the areas of (1) number of municipal procurement activities canceled; (2) percentage of implementation of unplanned activities; and (3) publication of financial, procurement, and audit documentation. The project carried out this mid-year evaluation for internal purposes to help the project plan, implement, and adapt its assistance in the focus municipalities. The project shared the data with all municipalities through workshops in each of the five focus municipalities. The tables and graphs below present 2017 baseline data, annual data for 2018, and semiannual data for 2019:

MUNICIPAL GRADUATION DATA FOR 2018 & 2019 Baseline 2017 Results Results Trend Municipality (score) Jan. – Dec. 2018 Jan. – Jun. 2019 2017/2018

Gjakova/Đjakovica 51 64 65

Gjilan/Gnjilane 44 53 67

Peja/Peć 60 62 75

Pristina 44 51 61

Vushtrri/Vučitrn 57 73 74

1.1.5. Present municipal graduation and organizational capacity assessment results. USAID TEAM continuously works with the five focus municipalities to ensure they achieve tangible results against the graduation criteria. As such, USAID TEAM holds internal sessions with mayors, chairpersons of municipal assemblies, chief financial officers (CFOs), finance directors, procurement managers, HR

USAID TEAM Annual Report 2019-2020 | 14 managers, heads of IAUs, and related stakeholders to present and discuss issues related to the results from the graduation indicators as well as the OCAT results from Sub-activity 1.1.1. In Year 3, USAID TEAM hosted nine working sessions with mayors and other representatives of the focus municipalities to address the issues related to performance in terms of Municipal Graduation results. The problems that municipalities face vary; for instance, the Municipality of Pristina performed well in transparency but did not show significant results in other areas of public procurement. Based on measurements at the beginning of 2019 for previous year, the municipality had implemented only 50 percent of its procurement plan. Also, the municipal IAU planned 10 audits for the year but had completed only one audit by the time of the working session. Participants discussed the results, particularly the cancelation of procurement activities and the need to align the procurement plans with the approved budget, as well as, improving oversight of projects and improving contract management, which was identified as one of the weakest points in all focus municipalities.

USAID TEAM discussed with the focus municipalities the municipal graduation and organizational capacity assessment results for 2018. Throughout the year, the project continuously worked with the five focus municipalities to improve the graduation criteria. The project team held sessions with municipal officials including the mayors and chairpersons of municipal assemblies to present and discuss issues related to improving results from the graduation indicators. As such, during this year, the project also gathered data again and presented the 2019 semi-annual municipal graduation results of management for focus municipalities. Generally, mayors encouraged municipal directors to use the graduation tool and results as an incentive mechanism to improve performance. During the meetings, municipal directors interactively discussed results and explored the reasons for underperformance in some cases (i.e. implementation of procurement plan), and lessons learned regarding alignment of the procurement plan with the approved budget, contract management, NAO recommendations, and internal audit recommendations. In Gjilan/Gnjilane, it is worth noting that the mayor committed to periodically review the performance of graduation indicators, which resulted in a Board of Directors’ meeting held on August 9 to analyze the indicator results and take actions to further improve the municipality’s performance.

15 | USAID TEAM Annual Report 2019-2020 During the presentation of the graduation results, municipal officials stressed the challenges they continue to face regarding PRB decisions and NAO recommendations. In their view, PRB decisions are not always consistent and sometimes create confusion and delay. For several NAO recommendations, especially those that are repeated every year, municipal officials argue that action needs to be taken at the central-level, especially by MOF, not at the municipal-level; in these cases, municipalities do not have the technical mandate to address The Municipality of Pristina increased from 51 to 61 points towards graduation. these NAO recommendations. To help municipalities manage these challenges, USAID TEAM Component 1 and II advisors organized meetings with PRB, PPRC, NAO, Treasury, and MOF. The workshop discussions held in focus municipalities grabbed media attention, like the one in Gjakova/Ðakovica (accessible here) and in Gjilan/Gnjilane (accessible here). 1.1.6 Activities serving the Adaptive Management Plan. Activities during the reporting period included a learning summit with central level institutions including PPRC, PRB, NAO, and MOF/CHU; a focus group with the NAO Anti-Fraud Unit; a meeting with partner CSOs such as FOL, CiviKos, and D+; individual meetings with non-partner local-level organizations including Polisi based in the Lipjan/Lipljan municipality, Kosovo Center for International Cooperation based in Gjilan/Gnjilane, George Williams Youth Association based in Gjakova/Ðakovica, Let’s do it Peja/Peć, ERA based in Peja/Peć, KOHA based in Kline, Iniciativa per Progres (INPO) and LDA based in Ferizaj; and “After-action reviews.” Through the implementation of these adaptive management tools, the project was able to gather important feedback and recommendations that informed iterative shifts in project implementation. The table below presents Adaptive Management activities conducted during 2019:

ADAPTIVE MANAGEMENT CONDUCTED DURING 2019 Meeting with Applied Learning Workshop facilitators First Quarter Individual meetings with municipal representatives First Quarter Focus group discussion with businesses and CSOs First Quarter Learning summit with private sector EOs Second Quarter Review of the municipal custom workplan activities, graduation Second & Third Quarters plan targets achieved Solicit feedback from partner CSOs Second & Third Quarters Learning summit with central level institutions Third Quarter Focus group discussion with NAO Antifraud unit Third Quarter Meeting groups with CSOs that are not supported by the Third Quarter project Most significant change stories Ongoing basis After Action Review Ongoing basis

USAID TEAM Annual Report 2019-2020 | 16 Additionally, during Year 3, USAID TEAM developed a tracking data tool, the so-called Collaborative Learning and Adapting Map (CLA Map) that contains feedback, findings, and recommendations provided through adaptive management activities and CSO reports, as well as actions taken to address those findings and recommendations. The CLA Map serves as a source of information for the project to adapt its approach and upcoming activities. 1.2 AWARD AND IMPLEMENT IN-KIND GRANTS TO FOCUS MUNICIPALITIES THROUGH THE SUPPORT FUND USAID TEAM continuously works with focus municipalities to help them address specific corruption vulnerabilities and to increase accountability, efficiency, and transparency in public procurement. Through the Support Fund, the project supported municipalities to procure new equipment to enable municipal staff to do their work in a new transparent way in the fields of public procurement, internal audit, public financial management, public information, and human resources. Focus municipalities benefitted from Support Fund activities by funding a series of targeted interventions to promote breakthrough change and address corruption vulnerabilities. 1.2.1. Identify, develop, and implement Support Fund projects. The main objective of this round of Support Fund activities in the focus municipalities was to promote the proper storage and archiving of procurement documents from the evaluation and implementation process; promote the security and integrity of the procurement process; and provide adequate space to enable a transparent working environment during the bid opening and evaluation process. Moreover, implementation of these projects will improve the working efficiency of municipal staff, enabling them to comply strictly with the timelines in carrying out procurement activities, auditing, and HR by minimizing procedural costs and increasing transparency and efficiency.

USAID TEAM officially inaugurated the upgraded procurement offices in Gjakovë/Ðakovica, Gjilan/Gnjilane, and Vushtrri/Vučitrn municipalities, featuring high-level representatives from U.S. Government and municipal management.

USAID TEAM furnished focus municipalities with archiving and security systems to control access to sensitive procurement documents, as well as, new equipment to increase the efficiency of processes related to procurement, finance, human resource, and project design. The state-of-the-art archiving system delivered through the Support Fund provides much-needed security to important and confidential municipal procurement documents. Participating municipalities originally pledged a minimum cost-share of 20 percent but contributed 32 percent of the funds for these activities demonstrating their commitment to and ownership of these projects. The table below presents the project values and contributions from the municipalities:

17 | USAID TEAM Annual Report 2019-2020 Municipal Municipal USAID TEAM USAID TEAM Municipality contribution participation Total contribution (€) participation (%) (€) (%) Gjakova/Ðakovica € 34,267 69% € 15,220 31% € 49,487 Gjilan/Gnjilane € 50,410 70% € 21,562 30% € 71,972 Peja/Peć € 44,717 79% € 11,955 21% € 56,672 Pristina € 61,523 56% € 48,934 44% € 110,457 Vushtrri/Vučitrn € 30,365 79% € 8,208 21% € 38,573 Total € 221,282 68% € 105,879 32% € 327,161 During the reporting period, the project also organized three inauguration events featuring high-level representatives from the U.S. Government and municipal management. In Vushtrri/Vučitrn, U.S. Ambassador Philip Kosnett, joined by USAID Mission Director Lisa Magno, and Mayor Xhafer Tahiri, inaugurated the upgraded Procurement Office. During this event, the U.S. Ambassador emphasized that the municipality of Vushtrri/Vučitrn should serve as a model for other municipalities in terms of transparency and the fight against corruption. In Gjakova/Ðakovica and Gjilan/Gnjilane municipalities, USAID Director for the Democracy and Governance Office, Christina Davis, joined the mayors of the respective municipalities to officially inaugurate the new equipment. All three events received broad media coverage in central and local media outlets. 1.3 ENHANCE MUNICIPAL CAPACITIES ON PROCUREMENT CYCLE 1.3.1 Provide on-the-job coaching and mentoring for all municipal procurement activities. USAID TEAM’s procurement advisors continued to provide on-the-job coaching and mentoring in the five focus municipalities. The project provided transactional level assistance on topics such as implementation of procurement plans, design of procurement documents (including technical specifications), value-for- money procurements, releasing tenders, awarding contracts based on fair evaluations, auditing procurements, sharing data with the public (including publication of the contracts with EOs), and managing contracts and awards. More specifically, procurement advisors coached and mentored focus and second- tier municipalities about activities related to the graduation indicators. At the beginning of Year 3, USAID TEAM procurement advisors supported municipalities to develop specific, detailed, and legally compliant procurement plans for 2019 to reduce their exposure to corruption. Through improved implementation of the procurement activities, municipalities increased their accountability and transparency towards citizens and EOs. During the planning phase, Procurement Office at Pristina Municipality for the first time conducted a Public-Private-Partnership USAID TEAM procurement advisors supported activity. procurement officers of focus and second-tier municipalities 1) in grouping similar activities into one procurement activity to avoid duplication of procurement procedures and managing procurement activities efficiently 2) in restricting the number of lots to be awarded to one EO to foster the involvement of small and medium-sized enterprises in the national public procurement market. These comprehensive procurement plans eliminate the necessity of

USAID TEAM Annual Report 2019-2020 | 18 emergency procurements and waivers, aggregate the requirements wherever possible to obtain value for money, reduce procurement costs, and avoid splitting of procurement activities which are broadly similar. By making this happen, each municipality reduced the possibility for bribes, fraud, or other forms of corruption. In addition to developing comprehensive plans, during the reporting period, procurement advisors worked with procurement offices of the focus municipalities to identify activities that were scheduled to be initiated for which the procurement office did not receive requests for initiating of activities. As such, procurement advisors recommended to the procurement officers to request all directorates to initiate their respective procurement activities, consequently increasing the percentage of the procurement activities initiated as per the plan. In this way, the project ensured better implementation of municipal procurement plans in 2019, which is described in the table below:

Municipality Pristina Vushtrri/Vucitrn Gjilan/Gnjilane Gjakova/Ðakovica Peja/Pec

Indicator 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019

Implementation of the 52% 81% 89% 91% 61% 66% 91% 92% 87% 90% plan as per value

Implementation of the 50% 77% 89% 88% 51% 78% 84% 86% 75% 79% plan as per number

Implementation of the not planned activities 32% 20% 18% 16% 36% 16% 8% 1% 13% 4% as per value

Implementation of the not planned activities 53% 26% 5% 5% 31% 16% 9% 4% 22% 5% as per number

The procurement advisors worked with focus and second-tier municipalities on a day-to-day basis to improve the quality of tender dossiers, bid openings, and bid evaluations, reducing vulnerabilities to corruption. The advisors provided extensive on-the-job coaching and mentoring in the focus and second- tier municipalities in procurement processes. The advisors systematically checked levels of municipal compliance with the PPL and vulnerability to corruption for tender dossiers (in 256 cases), bid opening (in 20 case), bid evaluation (in 131 cases), and claims (61 cases). USAID TEAM also provided professional advice to ensure that processes follow the PPL and Rules and Operational Guidelines for Public Procurement (ROGPP). USAID TEAM procurement advisors supported procurement officers of the focus and second tier municipalities to draft tender dossiers that minimize opportunities for manipulation; specifically, they supported municipalities when drafting the special conditions of the contract (SCC), contract award criteria, and qualification criteria, and helped develop spreadsheets with locked formulas when calculating the prices in the bill of quantities to avoid user error. Initially, when preparing the tender dossiers, the municipalities did not compile SCCs; they prepared SCCs only after selecting the winning bidder while drafting the contract. USAID TEAM changed this practice; going forward, focus and second-tier municipalities prepare SCCs while drafting the tender dossier. Once they select the bidder, they prepare the contract based on the terms and conditions specified in the tender dossier.

19 | USAID TEAM Annual Report 2019-2020 During the reporting period, procurement advisors introduced a mechanism for avoiding arithmetic errors in the bids submitted by EOs. Based on CSO observations, EOs tend to adjust, change, or delete Excel formulas in the tender documents leading to bids containing arithmetic errors. In many cases, the contracting authorities had to select the second-best bidder due to arithmetic errors of the first-ranked bidder’s price list. As a result, municipalities are forced to select a more expensive bidder as the awardee. In one case in Pristina, this cost the municipality more than 71,000 EUR. Considering this, USAID TEAM procurement advisors developed a spreadsheet with locked formulas to calculate the price list. From now on, EOs will need to write only prices per unit, and the protected spreadsheet will automatically calculate the price without allowing EOs to intervene. USAID TEAM also mentored the focus municipalities and advised the second-tier municipalities on the selection criteria and encouraged municipalities to pay due attention to minimum qualification requirements to ensure that only EOs possessing certain professional, financial, or technical abilities participate in the competition for the contract. USAID TEAM worked with municipal officials to ensure they formulated required qualifications in a way that did not exclude newly-established EOs with reasonably sufficient economic, financial, and/or technical capabilities. In 2018, due to a misunderstanding between the Procurement Department and the Capital Investment Directorate (CID) within the Pristina municipality, the percentage of the implementation of the activities planned for this Directorate was very low. In addition, there was poor communication between the two Departments regarding the qualification criteria. Under the old process, CID sent the procurement department qualification criteria going against the provisions of PPL and thus the procurement department deleted those criteria. In order to communicate better and thus implement procurement activities in time and in compliance with the procurement law, the Gjakovë/Ðakovica Municipality bid evaluation committee members procurement adviser provided on-the-job efficiently conducting evaluation using new equipment. training to CID about the qualification criteria and drafted a template for the determination of the qualification criteria. Since the project’s intervention, CID has prepared qualification criteria in compliance with PPL and the procurement department no longer needs to intervene in the requirements but publishes them as they were written. To date, CID has initiated 52 out of 53 planned activities (or 14,927,192 Euro out of 16,427,192 Euro) and had only two complaints in PRB (with one determination in favor of the municipality and one in favor of the complainant EO). This represents a significant improvement in processes and systems. USAID TEAM also mentored the focus municipalities and advised the second-tier municipalities in unit price contracts where the contract award criteria was ‘lowest price tender with scores’. Initially, when preparing a tender dossier, municipalities did not determine the weight based on the importance of each “service category” or each “item” to identify the lowest bid. USAID TEAM changed this practice: now, focus and second-tier municipalities, whenever they do not have the quantities, determine the weight based on the importance of each “service category” or each “item.”

USAID TEAM Annual Report 2019-2020 | 20 USAID TEAM assisted municipalities to adopt other new procurement procedures based on municipal needs. One such procedure is the ‘negotiated procedure without publication of the contract notice.’ Since PPRC has not adopted a standard form for this procedure, the e-Procurement platform does not generate the tender dossier for negotiated procedures. Therefore, procurement advisors supported the municipalities in drafting tender dossiers and outlined the steps to record the use of this procedure in the e-Procurement platform. In addition, to promote sustainability, the municipal procurement advisors drafted a standard tender dossier for the negotiated procedure without publication of the contract notice for additional works/supplies/services, which has now been disseminated to all Kosovo municipalities through the regular meeting of the Procurement Collegium organized by the project in cooperation with the Association of Kosovo Municipalities (AKM) and PPRC. In another case in Pristina, a procurement advisor supported a procurement officer to conduct a design contest procedure to “draft the Conceptual Architecture for the Family Medicine Center in New Pristina Neighborhood.” This was the first time that the municipality conducted a design contest as part of a public procurement activity. As such, the USAID TEAM Procurement Advisor assisted the procurement officer to test the functionality of the procedure on the e-Procurement platform. The procurement officer did encounter a few technical difficulties when conducting the procedure on the platform. To address these difficulties, the USAID TEAM Procurement Advisor liaised with PPRC. Another case is the consultancy service procedure in Pristina. The procedure used is a restricted procedure, and the contract award is the most economically advantageous tender. During the reporting period, the municipality of Pristina reached the second stage of the contract award phase. The USAID TEAM Procurement advisor assisted the procurement officer to test the functionality of the procedure on the e-Procurement platform. The procurement officer encountered a few technical difficulties when conducting the procedure through the platform. Again, the USAID TEAM Procurement Advisor liaised with PPRC to fix these technical problems. USAID TEAM procurement advisors continuously monitored the publication of procurement-related data on the e-Procurement platform and the municipal websites. Currently, Pristina is a leader in municipal transparency and to further advance and fulfill the requirements from civil society on transparency, the municipality started to publish Requests for Review, accessed here, and PRB decisions, accessed here, on the municipality’s website. Based on the Procurement Law, the procurement offices should prepare and publish the Indicative Notices for all procurement activities with a value greater than €500,000.00. USAID TEAM advisors worked closely with focus and second-tier municipalities regarding the publication of the indicative notices. The

21 | USAID TEAM Annual Report 2019-2020 advisors also drafted a document in the form of a manual explaining the steps to be followed to prepare and publish the Indicative Notices.

The Municipality of Gjakovë/Ðakovica published all Indicative Notices at the e-Procurement platform. USAID TEAM ensured that municipalities apply effective procurement evaluation procedures. Failure to follow effective evaluation procedures was also identified as an extreme risk in the Corruption Vulnerability Assessment that the project conducted in Year 1. USAID TEAM advised the municipalities to evaluate the offers in the subsequent order: first evaluate all offers on an administrative basis, continue with the qualification requirements and fulfillment of the technical specifications, and last evaluate the financial offers. Through the Support Fund equipment, municipalities are now able to conduct more than five concurrent evaluation sessions at a time, where in the past they were limited and could hold only one session at a time. In addition, during the reporting period, USAID TEAM procurement advisors conducted nine workshops with bid-evaluation committee members from the five focus municipalities. At these workshops, the project explained in detail the role of evaluation committee members, selection and evaluation criteria, and the evaluation process using real cases to make the workshops directly relevant and interesting. In Gjakova/Ðakovica, Mayor Ardian Gjini visited the workshop and this event was also covered on the municipality’s Facebook page, accessible here. Since municipalities receive complaints in the contract award and very rarely in the tender dossier, the project advised procurement officers from focus municipalities to follow the appropriate steps during the complaints period and technically demonstrated on the e-Procurement platform the procedure to suspend the procurement activity in case a complaint is sent to PRB. Failure to suspend the procurement activity

Interactive workshops with bid-evaluation committee members of focus municipalities to discuss the role of evaluation committee members, selection and evaluation criteria, and the evaluation process while using real cases.

USAID TEAM Annual Report 2019-2020 | 22 on the platform may result in the expiry of the deadline for the bid opening and may therefore result in loss of access to documents in the system, thus hampering the procurement officer’s ability to continue the procurement activity. The procurement advisors also worked with municipal officials to increase the quality of the overall procurement process leading to a higher number of PRB decisions in favor of CAs, including an emphasis on improved technical specifications and bid evaluations. To mitigate corruption vulnerabilities, USAID TEAM advised requesting units to develop draft technical specifications in compliance with the legal requirements so that procurements do not come under protest and escalate to the PRB. It is worth highlighting the Pristina municipality’s case, which received a PRB decision requesting the municipality to cancel the procurement activity for the “Construction of the underground parking – Public Private Partnership (PPP) procedure.” The municipality was certain that the procedures for this activity were based on the procurement rules, even though the PRB’s decision was against them. The Mayor of Pristina called a meeting with USAID TEAM and informed the project of the steps the municipality intended to take. The project discussed the decision with PRB and encouraged them to review the relevant laws and reconsider their decision. Shortly after the negotiations, the municipality received a new decision from PRB admitting that it had made a mistake and the new decision was in favor of the municipality. The procurement was back on track and Pristina finalized the procurement processes and signed the contract. The contract is currently in its implementation phase. This is the second “PPP- Concession contract” concluded in Kosovo. The first was the Concession of the Pristina International Airport. In a procurement protest involving the municipality of Peja, PRB confiscated the appeal fee of an EO whose appeal proved groundless. This is among the first times that PRB fully confiscated the fee; in the past, PRB typically found that the complainant was at least “partially correct” in their complaint, even in cases where PRB found in favor of the CA and returned the full fee to the complainant. In this case, the EO filed a complaint with PRB regarding the Procurement Activity “Clamp/block/tow for illegal parking.” The PRB Review Panel issued a decision that the claim was without grounds and confiscated the appeal fee. Based on the graduation report results, all focus municipalities face difficulties in managing public contracts.

It is among the first times and very rare that PRB confiscates the appeal fee of an EO whose appeal proved ungrounded. The project’s Procurement Advisors are now working with municipal procurement officers to ensure effective implementation of the procurement activities. For instance, in Pristina, the Advisor recommended that the Director of Capital Investment merge 22 procurement activities into three procurement activities, divided into several lots with the restriction of the contract award: one lot per EO. The municipality published the decision and no complaints were filed. This was due, in large part, to the well-drafted tender dossier and proper evaluation of the tenders received. The Advisor also worked with the contract managers and informed them about the new terms of the contracts and the sanctions that they must apply in case of delays as well as the percentage that will be kept by the municipality until the final acceptance certificate is issued. In another example from Gjilan / Gnjilane, the Adviser recommended that the Director of Public Services merge seven procurement activities into one procurement activity, divided into lots with the restriction

23 | USAID TEAM Annual Report 2019-2020 of one lot per EO. The municipality published the decision and only one complaint was filed for one lot; PRB found in favor of the CA. This was due, in large part, to the well-drafted tender dossier and the SCC that enabled the proper evaluation of the tenders received. MIAs also discussed the issue of service contracts. It generally takes five-to-six months from the initiation of the tender to contract award for service contracts even though most service contracts are repeated each year. In Pristina, Vushtrri, and Gjilan municipalities, the project advised the requesting units to conclude framework agreements with a duration of up to 36 months. Through this method, the municipalities will avoid emergency procurements or unplanned activities due to complaints filed. Theoretically, the municipalities will also receive better prices for longer-term contracts and this will reduce the number of complaints at the PRB. The municipalities took into consideration the project advice and during 2019, Pristina concluded 25 service contracts, Vushtrri concluded 12, and Gjilan concluded 23 with a duration of 36 months. To further ensure effective implementation of public contracts, the procurement advisors convened a meeting of procurement officers and contract managers to outline the project managers’ responsibilities as per the procurement legislation, specifically in imposing penalties and terminating contract. There are many contracts in focus municipalities that have not been implemented in accordance with the dynamic plan. As a result, the advisors prepared a Notice of Contract Termination for EOs who did not meet the deadlines as per their dynamic plan. Municipalities adopted the template and immediately started to terminate contracts due to non-performance. For instance, in Gjakova/Ðakovica, the municipality terminated the contract of an EO consortium (Bereqeti-Ing LLC and Kema Company sh.pk) who were implementing the procurement activity “Road repair with granite cubes” and failed to deliver works as per the contract. USAID TEAM coached the municipality as they initiated the termination of the contract and advised the municipality to confiscate the tender insurance funds. In addition, USAID TEAM advisors introduced this procedure for the first time in Peja/Peć and Gjilan/Gnjilane. The Procurement Advisors, supported by the project’s Audit Advisors, ensured that the municipalities are addressing NAO findings and avoiding a repetition of past findings. In the auditors' reports for Gjilan/Gnjilane, Vushtrri/Vučitrn, Podujevë/Podujevo, and Prizren/Prizren, the project advisors detected a recurring finding: the procurement registers (procurement records) lack a copy of the contract management plan, a document required by law and approved by PPRC. To avoid the recurrence of this finding in the audit reports and to comply with the public procurement legislation, the project advised municipal procurement officers to request the relevant documentation from the project managers. Also, in Vushtrri/Vučitrn municipality, the project Audit Advisor supported the payment officer and certification officer to address the recommendation related to the “weaknesses in managing contracts.” This recommendation suggests that there are cases where payments are executed without a report from the contract managers. The municipality immediately acted upon this finding and returned four such cases requesting to add contract managers’ reports to the dossier. The officer executed the payment only after the dossier was completed. At the central level, USAID TEAM’s procurement advisor assisted PPRC to amend the Rules and Operational Guidelines on Public Procurement and changes came into force on April 10, 2019. The project’s procurement advisors distributed the rules and most essential provisions to all focus and second- tier municipalities and advised them regarding the implementation. One major change made in ROGPP was regarding contracts for works that take less than 365 days to implement but, for some reasons, were

USAID TEAM Annual Report 2019-2020 | 24 broken across multiple years. Municipalities previously carried out these works spanning two or more years even though it required less than 365 days to implement largely due to budgeting purposes. After the revision to the ROGPP halting this practice, the project’s MIAs guided Gjakova/Ðakovica and Peja/Peć because they had ongoing procurements that were impacted by this change. USAID TEAM advised the municipalities to publish activities as per the updated rules and regulations. The project organized a series of capacity building workshops focused on improving technical specifications with the objective to address the vulnerabilities identified by the project, including: lack of capacity to draft precise requirements and specification of the object adapted to the characteristics of a specific tenderer. The project held six USAID TEAM organized a series of capacity building workshops workshops with officials from requesting on technical specifications with the aim to address the units in focus municipalities. The vulnerabilities identified by the project. workshop topics included: technical specifications and terms of reference (ToR), types of specifications and their standardization, writing the terms, and problems related to specification; and each topic was followed by discussions and group exercises. In addition, project procurement advisors provided an opinion to PPRC on article 65.4.8 of PPL which relates to the eligibility requirements of the EOs, more specifically to the debts owned by EOs to tax authorities. PPRC had drafted an interpretation and had sent it for USAID TEAM’s review. The project’s procurement advisors did not think that the interpretation was in compliance with the provision, so they provided their opinion. PPRC accepted USAID TEAM’s advice, and the new rule was published on the PPRC’s website under Frequently Asked PPRC adopted USAID TEAM’s interpretation of the Questions. procurement law regarding the EOs’ debts to the tax authorities. 1.3.2. Roll-out practices, processes, and forms from focus municipalities to second-tier municipalities. USAID TEAM shared local solutions and mechanisms first implemented in the focus municipalities with the second-tier municipalities. In Year 3, procurement advisors continued to deliver critical templates and guidelines, including support to develop and implement comprehensive procurement plans in second-tier municipalities. For municipalities to implement these practices and improve the procurement process, the advisors now conduct on-the-job coaching and mentoring with second-tier municipalities, spending a minimum of two working days per month at each second-tier municipality, and providing professional advice remotely. USAID TEAM shared best practices and mechanisms implemented in the focus municipalities with the second-tier municipalities, such as the tender dossier for the procurement activity for towing services. The tender dossier for this activity was developed during the procurement advisor’s support to the

25 | USAID TEAM Annual Report 2019-2020 Pristina Municipality. The project has now shared this with Ferizaj/Uroševac and Istog/Istok municipalities. Other examples include the tender dossier drafted by Vushtrri/Vučitrn Municipality for the procurement activity “Supply with oxygen” and “Project Design” which was then shared with Podujevë/Podujevo and Prizren Municipalities as a best practice. USAID TEAM shared a mechanism to effectively manage framework contracts with the second-tier municipalities. The Procurement Advisor, while supporting the Municipality of Gjilan, noticed that audit reports often identified weak management of framework contracts and, because of this weakness, the municipality frequently exceeded the contract quantities and values. The Advisor observed that the municipality lacked a mechanism to document the quantities spent; therefore, she developed a form in Excel with protected formulas as a control mechanism to maintain framework USAID TEAM demonstrating the preparation and publication of the indicative notice on the e-Procurement platform. contract quantitates and contract values. After testing it in Gjilan, the project disseminated the form to the Municipality of Lipjan which adopted it immediately. USAID TEAM procurement advisors continuously reviewed the transparency indicator for second-tier municipalities and initially noticed a very low level of publication of the procurement documents. The project advisors held several meetings with the procurement officers and the responsible IT officer to encourage increasing the publication of the procurement notices. USAID TEAM also technically supported the municipal officials and demonstrated the steps to extract data from the e-Procurement platform to publish on the municipal website. For instance, one of the project’s partners, Levizja FOL, informed USAID TEAM that the Municipality of Suhareka/Suva Reka failed to publish 42 contracts between September 2018 – January 2019 on the municipal website. USAID TEAM addressed this issue with the procurement manager and advised that this is a violation of article 22 of ROGPP. The manager immediately addressed the issue by publishing them all on their municipal website. In addition, the advisors supported municipalities regarding the access to public documents. For instance, in Novobërdë/Novo Brdo, Istog, and Podujeva/Podujevo, EOs requested access to the financial offers of the competitors but the procurement manager considered this information confidential. The project advised the procurement manager that such information is not necessarily confidential. As per the procurement law, the technical capability and financial standing are considered confidential only if the offeror specifically labels the documents as such. The project also supported the procurement officers of the second-tier municipalities in drafting tender dossiers that minimize opportunities for manipulation and in managing procurement procedures including price criteria, abnormally low prices, and technical specifications. USAID TEAM assisted the focus and second-tier municipalities in issues related to the usage of the e- Procurement platform. The municipalities are legally obliged to submit annual reports of signed procurement contracts to PPRC. As such, the project guided the procurement officers to generate the

USAID TEAM Annual Report 2019-2020 | 26 report using the e-Procurement platform. For most procurement officers, this was the first time they had issued the report using the e-Procurement platform. USAID TEAM monitored focus municipalities and supported the second-tier municipalities ensuring that all procurement officers knew how to use the e-Procurement platform effectively. USAID TEAM coached the procurement managers from the partner municipalities as they completed and uploaded the municipal

With the support of USAID TEAM, the Internal Auditors of second tier municipalities can audit the activities through the e-Procurement platform. procurement plan to the e-Procurement platform. In addition, the project provided on-the-job training to the internal auditors from second-tier municipalities on the use of the e-Procurement platform. They are now able to audit procurement activities through the platform.

The procurement advisors also supported procurement officers in the second-tier municipalities to manage complaints using the e-Appeals modules. For instance, in Skenderaj, Novobërdë/Novo Brdo and Dragash/Dragas, the project team advised the newly hired procurement managers, who had no previous experience dealing with complaints submitted by EOs, to manage the complaints in the e-Procurement platform. In addition to clarifying and demonstrating the procedure, the Advisor shared the project’s standard forms, including the decision on canceling the procurement activity notification, decision on suspending the procurement activity, bid evaluation committee decision, and request for reconsideration decision. USAID TEAM coached the second-tier municipalities to use the e-Procurement platform for various sub- processes of the procurement cycle. Such support covered the following cases: • Addressing EOs’ requests, • Creating the bid opening report for the restricted and negotiated procedure using the e- Procurement platform, • Drafting and publishing notices, including contract award notice (including procurement activities divided in lots), cancellation notice, and indicative notice, • Drafting and uploading the Correction of the Price List, • Initiating procurement activities as per the municipality’s needs, • Drafting tender dossier and advising on steps for the negotiated procedure, • Supporting procurement officers in their responses to EOs,

27 | USAID TEAM Annual Report 2019-2020 • Switching user roles on the e-Procurement platform when a procurement officer is promoted to manager, • Uploading the SCC for a procurement activity, and • Using Correction Form/Procedure to modify technical mistakes in the tender dossier and disseminate to EOs. This year, the project committed to provide on-the-job coaching to second-tier municipalities to conduct at least one procurement activity restricting the number of lots and one procurement activity using other evaluation factors besides lowest price. During the year, Ferizaj/Uroševac, Istog/Istok, Suhareka/Suva Reka, Prizren/Prizren and Podujeva/Podujevo used other evaluation factors besides lowest price (Ferizaj/Uroševac in one case, Istog in three, Suhareka/Suva Reka in two cases, Prizren/Prizren in two cases, and Podujeva/Podujevo in one case). All five municipalities have restricted the number of lots: Ferizaj/Uroševac in one case, Istog/Istok in three, Suhareka/Suva Reka in six, Prizren in two cases, and Podujeva/Podujevo in two cases. 1.3.3. Develop and introduce standard operational procedures, templates, and manuals for more transparent, effective procurement procedures. Although PPRC provides forms for several procurement activities, procurement officers still lack many standard public procurement forms and templates. In the absence of standard forms, officers may use their discretion, thus creating a corruption vulnerability. As a direct result of USAID TEAM technical assistance, focus and second tier municipalities adopted new procurement templates to formalize and improve multiple steps in the procurement process. During this year of implementation, USAID TEAM procurement advisors developed and introduced two manuals, namely: • Manual for negotiated procedure without publication of the contract notice for additional works/supplies/services - Annex Contracts. According to Article 35 of PPL, a negotiated procedure may be used for various cases i.e. due to exclusivity, for additional works, emergency etc. During Year 2, USAID TEAM developed a manual for the Negotiated Procedure without Publication, but municipalities also required a manual outlining the development of a Standard USAID TEAM developed the Tender dossier for Tender Dossier for Annex Contracts. In Year negotiated procedure without publication of the 3, the project modified the standard tender contract notice. dossier and shared this practice with all municipalities through the procurement collegium of AKM.

USAID TEAM Annual Report 2019-2020 | 28 • Spreadsheet with protected formulas for price calculation in the bill of quantities. As noted above, USAID TEAM drafted a manual and coached municipalities to lock the formulas in the tender documents, preventing EOs from changing the formulas. In the past contracting authorities had trouble in properly evaluating the offers, as some EOs had USAID TEAM developed the Spreadsheet with adjusted quantities and as a result, protected formulas for price calculation at the bill of quantities arithmetical errors happened frequently. This manual was designed to guide contracting authorities to protect quantity/price tables for needed items and minimize the evaluation risks. • System to effectively manage framework contracts. As noted above, the municipalities lacked a mechanism to track the quantities spent for framework contracts; USAID TEAM introduced a mechanism to effectively manage framework hence, the project introduced a contracts form, developed in Excel, with protected formulas, as a control mechanism to record and track framework contract quantitates and contract values. The The Municipality of Lipjan adopted the system to effectively manage municipalities, including the second- framework contracts. tier municipalities, adopted the form. Some of the municipalities appointed an officer responsible for financial management of contracts. The project MIAs also supported officers and mentored them during the initial implementation of the mechanism. • Procurement SOP. USAID TEAM is producing a SOP for all procurement implementation procedures. The project team discussed the SOP at a meeting of the Procurement Collegium and received valuable feedback and buy-in from municipalities. Following this feedback, the project developed the first draft of the SOP covering the full procurement cycle. Illustration of the draft Project of Procurement SOP

29 | USAID TEAM Annual Report 2019-2020 1.3.4. Support municipal mechanisms to enhance project management. To address the lack of supervision by CAs over the implementation of individual provisions of the contracts and to increase local capabilities in contract management, the project initiated a four-day training program for contract managers from all municipalities. The project, together with central-level GOK partners, marked the completion of this major capacity building program certifying more than 450 public officials in contract management. This certification program promoted efficiency and accountability in the implementation of public projects in all municipalities. The project also launched the Contract The Contract Management Manual Management Manual, a guide for public officials. developed by the project in cooperation with the Ministry for In addition, USAID TEAM engaged an expert to identify and propose Local Government Administration. models to effectively manage public contracts in focus municipalities. The expert analyzed the legal framework and municipal practices in project and contract management, researched other leading practices, and will finalize the assessment report with recommendations at the beginning of 2020. The project expert provided on-the-job coaching to municipal officers that are frequently involved in contract management activities. The expert provided recommendations for improvement noting consistent weaknesses such as lack of documentation, failure to secure the work perimeter, and other issues. The project prepared a Contract Management Assessment Report with findings regarding the 1) current situation in municipalities; 2) legal issues: contradictions, limitations and shortcomings; and 3) recommendations for improvement. Regarding the current situation, municipalities demonstrated weak planning for project / contract management, incompetent or poorly trained staff, and a lack of vision on how to improve contract management. In addition, directors are in highly politicized positions impacting their ability to carry out the work in a fair transparent manner and often lack the necessary capacity to oversee contract and project management. In general, the pre-contracting phase is underdeveloped and there is a lack of willingness to advance the system. Roles and responsibilities for contract management are undefined, and the current mix of responsibilities reflects a total disregard for the principle of segregation of duties, especially between the contract manager and EO supervisor. In the general aspect of construction, there is a lack of a unique construction code and standards to control service (design and execution). Technical specifications do not take into account operationalization (during implementation) but only material requirements. The level of design is very low due to the general regulatory requirements and internal disorganization. Finally, there is inadequate control of the quality of implementation and administrative process. Regarding the legal aspects, the Law on Construction lacks an operational aspect and a building code. The issue of professional supervision of construction has been completely overlooked in the municipalities and the necessary technical regulations have not been developed.

USAID TEAM Annual Report 2019-2020 | 30 In the next year, the project will continue to deal with these findings and recommendations and work towards implementation of efficient contract management in the focus municipalities.

Pejë/Peć Project: Asphalt pavement of the road Pristina Project: Construction of the water Dugajevë -Gunishtë-Shkrel in Rugova. collector of the Prishtevka water flow

1.3.5. Support GOK to strengthen sustainable and self-reliant training capabilities. As part of the project’s broader training exit strategy, USAID TEAM developed e-Learning materials including training video tutorials that are hosted on the e-Procurement platform and available for all businesses and contracting authorities. USAID TEAM, in cooperation with PPRC, completed two sets of video tutorials which enable private sector

EOs and contracting authorities to learn how Snapshot of the tutorial video on bid-opening to use the e-Procurement platform. They are organized as follows: • Training video modules for EOs and CSOs:  Registration for businesses and other interested parties,  Search, download, prepare, and submit a bid,  Request for reconsideration, and  Submission of the complaint.

• Training video modules for Contracting Authorities:  Tender opening process,  Bid Evaluation Process. All tutorial videos can be seen here.

31 | USAID TEAM Annual Report 2019-2020 To officially publicize the videos, with USAID TEAM support, PPRC and KIPA organized a launching ceremony attended by major actors in public procurement, including leaders from PRB, CPA, Procurement Collegium, the business community, and CSOs. Media sources transmitted the event live and covered the launch online.

From classroom training to online experience: PPRC and KIPA launched online video tutorials to guide businesses and public institutions with the e-Procurement platform. As part of developing sustainable mechanisms within central government institutions to roll out activities pertaining to training of officials, USAID TEAM supported PPRC and KIPA to prepare a regulation governing procurement training and establish the Advanced Procurement Certificate Program for procurement officers. The project drafted a tripartite agreement to clarify the roles and responsibilities for developing and delivering a TOT Program. Based on this agreement, KIPA issued the public call for application, accessible here. As a result, USAID TEAM, in coordination with KIPA and PPRC, hosted a training program for 32 trainers. Once this was completed, the group of trainers, under KIPA and PPRC direction, began to train 421 procurement officers in advanced procurement starting in September 2019. The advanced procurement training for this group continued through December 2019. On December 19

Future trainers of public procurement gained and exercised presentation skills through the Training of Trainers Program organized by the project. and 20, 2019, KIPA and PPRC tested 376 eligible procurement officials, resulting in 316 officials passing and receiving the Advanced Procurement Certificate in Public Procurement. The information regarding this training accessible here. The project supported its central government partners to develop and update training modules for this program. The project advisors drafted and updated the following eight modules: Design Contest, Risk in Pre-Tendering, Preparation of Technical and Functional Specifications, Risk Management in the Tendering Process, Most Economically Advantageous Tender Criteria, Tender Evaluation - Using Weighted Criteria, Contract Changes and Social and Environmental Impact. Project advisors also delivered sessions on Design Contest, Risks in Pre-Tendering Process, and Preparation of Technical and Functional Specifications.

Now the GOK has a group of qualified trainers, a training curriculum on basic and advanced procurement topics, and has already carried out a first round of trainings on their own. This was an important step

USAID TEAM Annual Report 2019-2020 | 32 forward in Kosovo’s journey to self-reliance in its ability to provide sustainable training to procurement officers going forward without funding or technical support from donor programs. 1.3.6. Support AKM Procurement Collegium as a venue for information exchange and roll- out of technical assistance. USAID TEAM, in coordination with AKM, organized four Procurement Collegium meetings, during which municipal procurement officers shared experiences and best practices to improve procurement processes. USAID TEAM used these forums to disseminate two procurement manuals, the “Negotiated procedure without publication – Annex contracts” and “Draft manual for protection of formulas in tender dossiers.” The project also presented six video tutorials on e- Procurement for contracting authorities and EOs. At the collegium, PPRC board member Sami Uka offered PPRC’s cooperation on several issues in the procurement cycle raised by municipal procurement managers and discussed what works and what needs to improve in the legal and regulatory environment for public procurement. During one of the working sessions, Collegium members discussed steps to increase the number of NAO audit recommendations addressed by municipalities, and the PPRC presented an update on Administrative Instruction No 01/2019 which went into effect on September 13, 2019 regulating PPRC and CA’s actions on public procurement procedures on the e-Procurement platform. At these Procurement Collegium meetings, procurement managers discussed the project’s procurement SOP. In the final periodic meeting for 2019, PPRC introduced the key points of the Regulation on Special Services - Consultancies, that emerged as a necessity stemming from the enactment of the Law on Public Servants requiring special service commitments to follow procurement procedures. This Regulation makes Procurement Managers of all Kosovo discussing concerns related it clear that it cannot be used for positions which to procurement procedures during the Procurement Collegium are in the public servants' catalog and that will be released to public consultation. Nonetheless, recently the Constitutional Court suspended this Law; as such, PPRC did not publish their regulation yet. Participants had questions about deadlines, value limitations, etc. It was also noted by PPRC that the number of NGOs monitoring procurement has increased, resulting in significantly greater transparency and accountability. At the Procurement Collegium, CPA presented the work plan for 2020, while participants had questions about current centralized procurements and how to improve them to fit the needs of smaller municipalities. Municipal procurement officers requested that CPA publish the procurement table for local and central level contracts. Finally, the project presented the draft Procurement SOP, which was well received by the participants. Additionally, the Collegium of Municipal Procurement Managers identified challenges and submitted requests for interpretation/clarification of public framework contracts with unit price, which are contract used whenever the Contracting Authorities do not know the indicative quantities. The Collegium addressed the issue to PPRC, who analyzed it and, given its importance, on October 12, 2019 issued the interpretation in the PPRC website. This issue demand clarification of Article 52, of PPL, as well as Section 56 of the Rules and Operational Guidelines for Public Procurement. PPRC explained (link here) that the

33 | USAID TEAM Annual Report 2019-2020 CAs should play an active role in determining, as accurately as possible, the estimated value of the implemented contracts, given the fact that weighing of the items should be done based on the weight and relevance of the categories provided in the tender dossier. For example, if the weight is given to the categories of items or services based on the quantitative ratios/significance of the category between them, then the costs per category should maintain the same ratio. Finally, the Contracting Authorities (contract implementing unit) remain responsible in each case to clearly demonstrate that the quantity ordered and spent is in accordance with the weight given and the actual needs of the Contracting Authorities. Therefore, based on PPRC interpretation: 1. Ceiling of +/- 30 percent is not applicable on unit price contracts; 2. There is no financial limit, but the substantially foreseen value cannot be exceeded; and 3. Quantities spent should be in relation to weight given in price list. This important result and shows proactive role of Procurement Collegium. 1.4. INCREASE THE CAPACITY OF MUNICIPAL IAUs AND MACs In previous years, USAID TEAM helped focus municipalities establish MACs. In 2019, the project worked to ensure these MACs are sustainable and able to improve their internal auditing processes and increase the level of implementation of NAO audit recommendations. USAID TEAM supported all Kosovo municipalities to improve their internal auditing processes and address NAO recommendations through the following sub-activities: 1.4.1. Provide on-the-job coaching and mentoring in auditing. The activity description is broken into five sub-sections: A - E below: a. Support municipal management to strengthen IAUs and audit committees. The project’s audit advisor worked with mayors, internal auditors, and municipal directors to enhance the role of internal audits and to emphasize the importance of implementing internal audits and NAO recommendations. The project conducted a series of activities with focus and second-tier municipalities to strengthen this relationship through on-the-job support. The audit advisor continuously provided tailored expertise based on municipal needs. For instance, in Gjilan/Gnjilane, the project supported municipal officials to use a new electronic asset registration system. Additionally, the project advised the municipality to officially appoint a coordinator who will lead the process of implementing NAO recommendations and establish a working group responsible for addressing the recommendations. In Vushtrri/Vučitrn, the project supported the IAU in drafting recommendations in the field of education, especially in procurement and recruitment of substitute teachers, and in Gjakova/Ðakovica, the project reviewed the internal audit recommendations regarding official use of vehicles and discussed processes and standard forms for the vehicle log and vehicle service history. In Pristina, the project team met with the Mayor and the Internal Auditor to discuss the establishment of the IAU and its functionalization. Shortly after this meeting, the Mayor officially appointed an acting Head of the IAU. The project advisor supported the newly appointed Head on internal audit steps and the initiation of three audits: budget execution in the administration, public services, and revenues from construction permits. The USAID TEAM Audit Advisor provided support to the MACs by participating in a meeting held in Pristina, during which the members discussed the audit plan (which was revised and approved), NAO 2018 audit report, and internal audit of the Directory of Finance. All other MACs in focus municipalities are conducting activities in accordance with the legal requirements, with the notable exception of Gjakova/Ðakovica. Gjakova/Ðakovica needs to revise the decision and complete its MAC by appointing two-thirds of its members from outside of the municipality and by appointing a MAC

USAID TEAM Annual Report 2019-2020 | 34 Head who is not engaged in municipal decision-making. This requirement has been transmitted to the mayor who is responsible for appointing the new MAC members. b. Support focus municipalities to address and implement NAO and IA recommendations. During this year, the project worked on audit recommendations dealing with the municipal risk register, e-asset system, accounts receivable, expenditures for capital investments, and procurement. USAID TEAM supported all focus municipalities to monitor the progress of implementation of NAO recommendations and conducted analysis and shared ideas in addressing recommendations. In addition, the project supported Gjakova/Ðakovica, Pristina, and Vushtrri/Vučitrn municipalities to update their municipal risk registers. The risk register is a tool for identifying, controlling, and managing risks that relate to the objectives of the process. The lack of a risk register has been identified by the NAO as a significant finding in their audit reports and is part of good governance and control. Most directories and units, along with the procurement office and the IAU, were engaged in the process to update the register. The other two focus municipalities, Peja/Peć and Gjilan/Gnjilane, compiled their municipal risk register on their own. The USAID TEAM audit advisor supported the second-tier municipality of Prizren/Prizren to draft and update their own risk registers. USAID TEAM analyzed municipal progress in addressing NAO recommendations, and the data showed that Kosovo municipalities improved from 24 percent in 2016 to 26 percent in 2017 and then to 32 percent in 2018. The project’s impact is more pronounced when focusing on public procurement recommendations. In this area, municipalities addressed 67 percent of recommendations in 2018. In addition, the Audit Advisor supported all focus municipalities to prepare the 2019 action plans addressing NAO audit recommendations. The NAO published a regulation governing the conduct of audits and implementing action plans in line with the SOP for audit activities developed by the project. The NAO has also developed a template for reporting on the implementation of NAO recommendations, as the regulation requires all budgetary organizations to report twice a year. c. Support to second-tier and non-focus municipalities addressing NAO procurement recommendations. USAID TEAM engaged five audit experts to support 33 non-focus municipalities to improve the implementation of NAO recommendations. Initially, the project held coordination discussions with experts and contacted the target municipalities to inform them about this activity. These audit experts worked daily with non-focus municipalities to address all NAO recommendations by revising municipal action plans, including the dates for implementation, steps to be undertaken, and officials in charge. As their key activity, advisors worked with municipalities in addressing these recommendations: • Low percent of budget execution, which mainly relates to the time of initiation of procurement activities and regular payment of obligations for capital investment. Advised the procurement

35 | USAID TEAM Annual Report 2019-2020 offices to perform risk assessment during planning stage of each project and identify and mitigate the risks prior to project start to prevent delays in execution. • Budget execution through court decisions. Advised the CFOs to increase the awareness of all municipal directorates to report any contingent liabilities during the budgeting process and to plan for possible liabilities related to retired teachers based on data that would be collected from the personnel directorate. • Delays in project execution. Advised the procurement offices to request mandatory regular reports from contract managers on execution of contracts as per defined timeframes and plans. This allows the procurement office to gain an overview of the current implementation status or any delays from EOs. • Non-applicability of e-Asset system has improved with advisors’ support as municipalities drafted a manual on property inventory and appointed a property officer for assets below 1,000 Euros. • Risk register. With the support of Audit Advisors, municipalities compiled municipal risk registers addressing weaknesses in managerial controls and risk management. • Reduced delays in payments as invoices are now tracked through a protocol book that is used by the directory of finance. • Delays in depositing cash in bank accounts. The cashier deposits the funds every day at the end of working hours. Reconciliation is done between Cashier's Report and Deposit Sheets. d. Support MACs in focus municipalities to increase their impact. USAID TEAM’s Audit Advisor, through on-the-job coaching and mentoring, supported the IAUs and MACs of partner municipalities to increase their impact. Through project assistance, municipal MACs addressed issues that relate to the better overall functioning of IAUs such as staffing, work conditions, assessment of IAU’s performance, and issues related to external audit like cooperation with municipal management and officials. In Year 3, the audit advisor prepared and delivered an annual report template for MACs of focus municipalities. The annual report template emphasizes the role of MACs in improving internal controls and increasing the level of NAO and IAU recommendations implemented. In addition, the project’s Audit Advisor, in coordination with the Heads of IAUs of focus municipalities, agreed that MAC meetings should conclude with recommendations addressed to the mayor and they should include a follow-up activity on their implementation.

USAID TEAM Annual Report 2019-2020 | 36 The USAID TEAM audit advisor also developed a checklist covering MAC key activities. The aim of this checklist is to assess whether MACs, as an external municipal body, are being efficient and effective in accordance with their role prescribed in the administrative instruction. e. Roll-out. The Audit Advisor also supported second-tier municipalities to establish MACs in municipalities that do not have one in place, like Prizren/Prizren. The Advisor shared the template of MAC annual reports to all heads of IAUs in second-tier municipalities. This template enables IAUs to effectively report to MAC’s checklist to conduct activities and assess their their respective mayors. performance. 1.4.2. Improve sustainable internal audit practices. In order to develop sustainable mechanisms to address NAO and internal audit recommendations, USAID TEAM, in coordination with the CHU, developed and introduced internal manuals including manuals covering performance audit methodology. USAID TEAM developed the SOP: Handling the Findings and Implementing External and Internal Audit Recommendations from Audited Public-Sector Entities (PSEs). The objective of this document is to define the procedures to be followed by the PSEs during the process of external and internal audits upon receiving the audit file report and the final report, and developing the action plan for the implementation of recommendations. This SOP defines who will have what responsibility during the audit draft report, the final audit report, the action plan for the implementation of recommendations, and for observing the implementation of recommendations, as well as, how they will carry out the activities in relation to the procedure concerned. The document has been shared with the municipal IAUs and the NAO. The project will disseminate the SOP to all municipalities pending CHU approval. USAID TEAM also updated two volumes of the Internal Audit Manual in line with changes to the legislation and international audit standards. The Internal Audit Manual focuses on the overall management of internal audit and provides the basis for managing internal audit activities in compliance with the Law on Public Internal Financial Control, Standards for Internal Audit, and the Code of Ethics, to generate benefits for each PSE and their clients (the citizens of Kosovo). The first volume relates to managing the internal audit function, introducing the role of the main stakeholders, outlining the guiding principles and policies, and describing the important processes for developing strategic and annual audit plans. The second volume details the activities of the audit team as it proceeds through an individual audit and will be useful as a pocket guide to auditors as they work on their audit assignments. These drafts were shared, reviewed, and approved by the CHU.

37 | USAID TEAM Annual Report 2019-2020 The project also drafted a Performance Audit Manual for Internal Auditors to detail the methodology for providing an independent, objective, and reliable assessment of the audited systems, operations, programs, activities, or organizations regarding the principles of economy, efficiency, and effectiveness. This draft Manual supports the implementation of the national Public Internal Financial Control Strategy 2015-2019 which sets specific objectives about the internal audit function in the public sector of Kosovo. In particular, the internal audit function should add value to the accountable management by providing risk-focused assurance and advisory services, verifiable by economy, efficiency and effectiveness indicators, including expanding the scope of internal audits with performance audit. The manual provides a framework in performance auditing based on the fundamental principles of the International Professional Practices Framework and the International Standards of Supreme Audit Institutions for performance auditing (ISSAI 3000, 3100, 3200) which further develop the specific context in performance auditing in the public sector. 1.4.3. Build capacity of Municipal Policy and Finance Committees (MPFCs) in audit and financial control processes. USAID TEAM conducted a series of roundtables with members of MPFCs in all focus municipalities. The objective of these roundtables was to increase municipal accountability in implementing NAO recommendations through engaging MPFCs as the representatives of Municipal Assemblies. Members of MPFCs requested support with the process of preparing and analyzing procurement plans, budget planning, and external and internal audits. MPFCs in all focus municipalities noted that there were no procedures in place for prioritizing budget activities. The budgetary hearings were not conducted at the right time, and citizen participation was not at a satisfactory level mainly due to the lack of feedback mechanisms. Furthermore, no entity carried out an assessment of citizen feedback on municipal budgets and whether citizen requests were reflected in the budget. USAID TEAM has identified many challenges related to the MPFC’s functionality, including: • MPFC members are not informed about the content of the procurement plan. • In most cases, the municipal administrations do not share draft procurement plans with MPFCs, and MPFCs neither track nor follow-up on the implementation of these plans. • MPFCs typically learn about NAO audit recommendations once per year during the municipal assembly meeting, but they are not involved in the process of monitoring the implementation of these recommendations. • In accordance with the MPFC requirements, the USAID TEAM procurement, finance, and audit advisors held a second roundtable with the MPFC members of focus municipalities, covering topics such as the municipal budgeting process and planning, procurement plan and its correlation with the budget, e-procurement platform, internal and external audit processes, and the need for a revision of audit findings and recommendations.

USAID TEAM Annual Report 2019-2020 | 38 To address the above-mentioned challenges, USAID TEAM encouraged and facilitated constant feedback between mayors and municipal assemblies, especially through MPFCs.

To address the challenges related to municipal public finance committees, USAID TEAM facilitated communication between mayors and municipal assemblies, especially through MPFCs.

1.4.4. Disseminate internal audit processes to build capacity of IAUs and MACs. USAID TEAM conducted two roundtables with IAUs from all Kosovo municipalities. These roundtables provided an opportunity for municipal internal auditors to share local solutions such as increasing soft skills and focusing more attention on recurring audit recommendations. The project presented the standard operation procedures, which include handling the findings and implementation of internal and external audit recommendations. As an outcome of the first roundtable, participants formed a working group of internal auditors that will propose solutions to the recurring issues. During the second roundtable, USAID TEAM introduced the updated Internal Audit Manual and the Performance Audit Manual. Furthermore, USAID TEAM convened working group sessions to discuss audit objectives, criteria, and recommendations of the Performance Audit Manual. Each working group appointed a member to present the results of the exercise. Following this roundtable, the Head of CHU noted that in 2020, through USAID TEAM’s support, three pilot performance audits would be conducted, with the possibility of sharing knowledge with other IAUs through workshops. 1.5. SUPPORT MUNICIPAL HR MANAGEMENT USAID TEAM continued to support focus municipalities to enforce ethics and reduce corruption and nepotism through greater adoption of the Human Resource Management Information System (HRMIS), execution of codes of conduct related to recruitment, and implementation of the municipal code of ethics.

39 | USAID TEAM Annual Report 2019-2020 1.5.1. Facilitate implementation of municipal codes of ethics. USAID TEAM facilitated the implementation of the Code of Ethics following its development in Year 2. This 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. However, due to the changes in the civil service laws, the The Mayor of Vushtrri/Vucitrn officially approved the Ministry of Local Government Administration (MLGA) Municipal Code of Ethics and the Municipal Book of initiated a process to introduce a model for municipal Process supported by USAID TEAM. codes of ethics. The MLGA approached USAID TEAM to ask for support in implementing this activity. Since the project has already supported focus municipalities in preparing their codes of ethics, USAID TEAM, together with focus municipalities and the MLGA, started to draft the model municipal code of ethics in line with the new changes in the legal framework. In order to facilitate this Pejë/Pec Municipality official signing the Code of Ethics, developed by USAID TEAM. process, the project assigned an expert to work closely with the MLGA and the focus municipalities to accommodate their needs. During this engagement, the expert met with the designated MLGA working group and municipal working groups to discuss the steps needed to update the document. After intensive work, the expert completed the first draft and submitted it to the MLGA for their review. After careful reviews and analysis, the joint team finalized the model draft of the Municipal Code of Ethics, which will be shared with Kosovar municipalities for their official approval. The project organized four workshops to finalize the draft based on feedback and comments provided by all municipalities and the MLGA working group. Apart from the focus municipalities, the project, jointly with the MLGA, organized a roundtable discussion with the Heads of HR and Administration from all municipalities to share challenges and practices related to HR and to discuss in detail the latest model of the Code of Ethics with all municipal representatives to gather their opinions and feedback on this important document. 1.5.2. Establish municipal “integrity groups” in focus municipalities. Since the integrity plans for Pristina, Gjilan/Gnjilane, and Gjakova were outdated and Vushtrri/Vućitrn’s integrity plan was to expire at the end of 2019, USAID TEAM committed to support focus municipalities to update and implement their integrity plans. USAID TEAM discussed with the MLGA the need to jointly support the establishment of sustainable municipal “integrity groups.” Such integrity groups will consist of municipal departments’ representatives, who will be responsible for developing and updating the integrity plans, monitoring their implementation, and reporting to management on the progress.

USAID TEAM Annual Report 2019-2020 | 40 In this regard, the project engaged an expert who analyzed the expired Integrity Plans of Gjakova/Ðakovica 2015-2016, Gjilan/Gnjilane 2015-2017, Pristina 2014 – 2016, Peja/Peć 2017-2020, and Vushtrri/Vučitrn: 2016-2019. Only Peja/Peć’s Integrity Plan is in force until 2020, but the project will focus its support there on implementing the plan. USAID TEAM also conducted six workshops with MLGA and working groups from five focus municipalities and presented key documents related to the integrity plan, including the methodology for developing the plans for local governments, the integrity plan concept, and the questionnaire for collecting data to design the municipal integrity plan. As a result, Gjakova and Vushtrri organized public debates where all interested stakeholders could present and discuss their Integrity Plans and inform citizens accordingly. This makes these two municipalities the first focus municipalities to adopt the new approach to approving and implementing the new Integrity Plan. At the same time, Peja is drafting its own report on implementation of the Integrity Plan, having analyzed the questionnaire and the assessment document prepared by the project. For the first time, the project used questionnaires to obtain information from focus municipalities and MLGA, which should enable municipalities to have a better understanding of the Integrity Plans as well as to evaluate the level of their implementation and identify measures for their improvement. USAID TEAM performed this activity in close cooperation with other relevant partners such as AKM, Ministry of Public Administration (MPA), and the Anti-Corruption Agency’s representatives to solicit their feedbacks on developing the Integrity Plans. 1.5.3. Develop online training video for the HRMIS. Having provided the HRMIS training courses to the heads of units from all municipalities in Year 2, USAID TEAM, in cooperation with the MPA, committed to develop an online training video covering the online application for public vacancies, the recruitment evaluation process, civil servant leave requests, and performance evaluations. The Department for Civil Service Administration (DCSA/MPA) requested to postpone the development of these videos until HRMIS was updated. The new package of laws related to civil service (Law no. 06/l- 114 on Public Officials, Law no. 06/l-113 on Organization and Functioning of State Administration and Independent Agencies, and Law no. 06/l-111 on Salaries in Public Sector) will heavily impact this area, and HRMIS needs to be updated soon to comply with legal requirements. The suspension of this Law by the Constitutional Court was another reason to postpone this activity. 1.5.4. Engage all municipal HR managers through learning summits to roll-out solutions. USAID TEAM organized a learning summit with HR managers from all municipalities to share findings and best practices. The main topic was the support to municipalities and the MLGA working group on drafting the Municipal Model Code of Ethics. During this activity, participants reviewed and analyzed the changes made to the legal framework, comments made by key stakeholders, including other municipalities, MPA, AKM, and jointly finalized the Model Code of Ethics, which will be shared with the rest of municipalities for their official approval. Another important activity conducted by the project was the revision and implementation of the municipal Integrity Plans. USAID TEAM supported the focus municipalities working groups and the MLGA team to draft and introduce Integrity Plans. During the reporting period, the project organized two workshops to finalize the focus municipalities and MLGA’s Integrity Plans based on the feedback and comments provided

41 | USAID TEAM Annual Report 2019-2020 by all participants. After a thorough discussion and revisions made to all sections of the expired plans, the joint municipal and MLGA teams finalized the Integrity Plans. 1.6. INCREASE THE TRANSPARENCY OF MUNICIPAL PROCUREMENT USAID TEAM continued to assist focus and second-tier municipalities in the use of government systems to publicize all non-confidential details of procurements and finance management on the municipal websites in formats that could be readily used by civil society, media, and general public for analysis. 1.6.1. Monitor and advise municipalities on transparency. USAID TEAM’s procurement, public finance management, and audit advisors worked with mayors, heads of municipal departments, and public information officers in focus municipalities to make public all non-confidential information on procurements and to support a regular publication of periodic and annual financial reports, time series on revenues and expenditures, municipal annual planning documents, and reports. The table below shows the status of such publications as of December 31, 2019. While all focus municipalities performed well during the reporting period, the mayors from three focus municipalities have yet to publish their annual plans as well as semi-annual performance reports. By the end of the year, 24 municipalities published a total of 2,096 contracts and 88 financial reports.

Type of Publication Pristina Peja/Peć Gjakova/Ðakovica Gjilan/Gnjilane Vushtrri/Vučitrn

Budget 2019 ✓ ✓ ✓ ✓ ✓

MTBF ✓ ✓ ✓ ✓ ✓

Annual Financial Reports ✓ ✓ ✓ ✓ ✓ Periodic Financial ✓ ✓ ✓ ✓ ✓ Reports Monthly Financial ✓ ✓ ✓ ✓ ✓ Reports Mayor’s Annual Plan  ✓ ✓ ✓ ✓

1.6.2. Enhance public relations efforts of focus municipalities. USAID TEAM engaged a communications specialist to design communications and public relations strategies and assist focus municipalities to implement their plans. The consultant started by conducting a desk research, then summarized his findings in a comprehensive report that was shared with communications offices in focus municipalities. Peja/Peć already had a Communication and Contact Strategy in place adopted by the Assembly in late 2018. However, the strategy expires at the end of this year; therefore, USAID TEAM is working with municipal management to draft a new strategy. During the reporting period, the expert conducted two surveys: (1) staff satisfaction with workplace conditions and (2) communication practices, the results of which were relied on while drafting new strategies. To date, the project has developed communication strategies for Gjilan/Gnjilane, Gjakova/Ðakovica, and Vushtrri/Vucitrn. The project also supported focus municipalities regarding internal communications by defining audiences and key messages, outlining communication mechanisms, developing performance indicators, and assigning roles and responsibilities in the implementation process. In the Peja/Pec municipality with a current communications strategy, the support was customized and

USAID TEAM Annual Report 2019-2020 | 42 focused on monitoring its implementation. The project also coordinated with MLGA and focus municipalities to develop a handbook for minimal standards for public consultations. Once the communication channels were identified and performance indicators developed, the team proceeded with the creation of a 2020 action plan for internal and external communication. Having completed the final drafts, the municipalities of Vushtrri, Gjakova, and Gjilan undertook public consultations. This activity will pave the way for development of four-year transparency plans in adherence to the amended administrative instructions. The municipalities of

Peja and Pristina have already gone through this process and consequently Cover of the draft approved their municipal transparency plans. The final step is to develop key communication strategy – Gjilan Municipality performance indicators (KPIs) and action plans for the integrated communication strategy and consequent consolidation of the final draft of the document. 1.6.3. Disseminate tools, practices, and processes for municipal transparency in public procurement and financial management. In cooperation with MLGA, USAID TEAM organized workshops for Public Information Officers from all municipalities to introduce the Administrative Instruction on the Minimum Standards for Public Consultation and changes in the Administrative Instruction on Municipal Transparency. These administrative guidelines encourage citizen participation during the policy and decision-making process at the local level, promoting municipal transparency. Project disseminated communication strategies development and monitoring practices, Code of Ethics and Integrity Plans in focus municipalities. The three-year strategic communication strategies were coupled with the annual (2020) action plans and budgeting for interventions envisioned therein. From tactical perspective, the strategies addressed interventions and improvements to diversification of communication forms and channels, intensification of public relations, extended use of digital communications and social media platforms, increase of professional capacities with the municipal information offices, more extensive interaction and cooperation with academia, CSOs, professional associations and donor community, as well as preparations for launching the works to promote the image, reputation and resources of the municipalities, i.e. the branding and marketing aspect. The project engaged a communications consultant, who gave a presentation for municipal information officers on the USAID TEAM disseminated the practices in development and process of designing the monitoring communication strategies, Code of Ethics and Integrity Plans in focus municipalities. communications strategies, followed by a discussion on their successful implementation, including procedures for approval, rearrangement of human and financial resources, support from senior management, and monitoring and evaluation. Additionally, the Communication Strategy 2020-2022 was submitted to the Pristina municipality. MLGA presented the Handbook for organization and conduct of public consultations in municipalities (based on MLGA AI 06/2018 on minimum standards of public consultations in municipalities), which was

43 | USAID TEAM Annual Report 2019-2020 developed with the support of USAID TEAM, concluded the consultation cycle and received its final version. The MLGA officials submitted the final version for further publication procedures. 1.7. ENHANCE MUNICIPAL FINANCIAL MANAGEMENT AND CONTROL USAID TEAM, through on-the-job coaching activities, supported focus and second-tier municipalities to strengthen systems for financial management and control. 1.7.1. Develop and Implement the Handbook on Internal Public Expenditure Management Process. Following the completion of the Handbook on Internal Public Expenditure Management Processes (locally known as the “Book of Processes”) in two focus municipalities (Gjilan/Gnjilane and Vushtrri/Vučitrn), USAID TEAM and the MLGA initiated the second phase of the Book of Processes with working groups in Gjakova/Ðakovica, Peja/Peć, and Pristina municipalities. After several rounds of workshops and on-the- job demonstrations with the designated working groups, USAID TEAM completed the draft Handbook for the three focus municipalities. The coordinator of the designated municipal working Municipal Book of Processes for groups organized a detailed presentation with municipal management Managing Public Expenditures to explain the importance of this document. In addition, the mayors of Peja/Peć and Gjakova/Ðakovica have officially mandated that all employees must follow these SOPs in day- to-day activities. In the case of Pristina, the working group coordinator submitted the final draft of the document to the mayor. The mayor’s office has yet to respond. The MLGA is currently reviewing the draft document. Per the official request of the CFO from the Shtime/Štimlje Municipality, USAID TEAM delivered a tailored presentation on the Public Expenditure Management Process and disseminated the Handbook for Public Expenditure Management Processes to key municipal directors. In addition, USAID TEAM, as part of its ongoing support to second-tier municipalities, and following CHU’s communication with municipalities, disseminated the Handbook for Public Expenditure Management Processes to all key municipal directors and managers in second-tier municipalities. 1.7.2. Develop the municipal invoice management system. USAID TEAM supported the focus municipalities to assess and establish the internal SOP on the municipal invoicing mechanism. Project experts conducted an overall background and legal review of the Regulation on Municipal Invoice Processing, obtained information on the existing invoice processing practices, and analyzed several invoices processed annually in the five focus municipalities. Based on the consultant’s observation, Pristina uses a different – and more complex – system of invoice processing as opposed to Gjilan/Gnjilane and Vushtrri/Vučitrn. Pristina, for example, makes use of the intranet to process invoices and currently uses up to nine officials at its main office building and three staff at the new municipal building, who are responsible for receiving, among other requests, invoices. Peja/Peć and Gjakova/Ðakovica rely on a manual process to process invoices. Gjilan/Gnjilane has a software for invoice processing, but this software is not being fully utilized by the municipality; it is mainly used for capital projects. Vushtrri/Vučitrn relies entirely on a manual process for recoding payments in Excel spreadsheets. After the assessment, USAID TEAM is continuing to support focus municipalities to establish a municipal payment mechanism to enable them to address issues with execution of payments as well as to record and report all municipal payments in a

USAID TEAM Annual Report 2019-2020 | 44 timely manner. During this period, the project, in cooperation with focus municipalities, drafted the first version of a SOP, which consist of four parts, including: a narrative description of the invoice processing, description of the recording and reporting the unpaid obligation sub-process, flowchart illustration of invoice processing and of the subprocess on reporting unpaid obligations. This SOP stipulates that invoices from EOs shall be processed by each municipal directorate. Thus, invoices will be accepted by the relevant municipal directorates, verified, and submitted to the CFO/Director of Budget & Finance for recording in the ‘book of invoices’ (as required by Regulation 01-2013 MF). The project organized four workshops in focus municipalities with working groups and the heads of finance, CFOs, and other officials from all focus municipalities, MOF Department of Treasury, and MLGA. The goal was to discuss in detail the SOP. Since all parties agreed on the approach, the project will draft a ToR for future automatization of this mechanism. Based on the request from the Treasury of Kosovo to get involved and regulate the area of invoice processing, the project’s coordination on this activity will continue into Year 4. 1.7.3. Provide on-the-job coaching on Public Finance Management. To address municipal challenges with the budget planning process, USAID TEAM started a new activity to provide on-the-job support for the budget planning processes for two municipalities - Peja/Peć and Vushtrri/Vučitrn. This budget planning process needs to be aligned with Proposed Flow Diagram of Invoice the government budget circular. The project Processing at the Municipality advised municipal departments to prepare a sustainable budget proposal. USAID TEAM engaged the Directors of Finance, Public Services, Agriculture, Education, Cadaster and other departments in both municipalities to discuss strategic planning, budgeting methodology, budget planning templates, and regulations that can impact the budgeting process. The project also presented USAID TEAM supported Vushtrri/Vucitrn and Pejë/Pec municipalities to address challenges the budget template to the key department and unit related to the municipal budgeting process. representatives. The latter populated the budget template with data on strategic objectives, budget drivers, historical expenditure and revenue information, and plans and forecasts for the next three years. Upon approval of the municipal Mid-Term Budgetary Framework, the project held two one-day workshops with the municipalities of Peja/Peć and Vushtrri/Vučitrn. USAID TEAM presented to all department directors best practices and facilitated a discussion to identify main challenges in budgeting as well as the next steps in this process. The workshop participants identified several issues, including: • The new payroll law will have a major impact on the next year’s budget. The MOF has not assessed the budgetary impact of implementing this law. This law may impact the funds allocated to capital investments. • According to the Director of Finance, about 80 percent of citizens' requests were considered when compiling the budget last year; however, citizens’ participation was not at a satisfactory level during public budget hearings. • Agriculture, culture, and sports sectors face challenges in planning and managing subsidies.

45 | USAID TEAM Annual Report 2019-2020 • Revenues collected from building permits will affect the municipal budget and are not predictable. As a result of these activities, USAID TEAM finalized the new budget document for 2020 for Peja/Peć and Vushtrri/Vučitrn, which was shared with the general public. These important documents were prepared in close cooperation and coordination with the municipal departments, including the mayor’s office. The municipal budget document contains a message from the mayor, including priorities, actions, and a summary of the proposed budget and the budgeting process, as well as legal requirements for submitting budget tables from the budget management software to the MOF. The added value provided by the new proposed structure lies in presenting the municipal priorities and actions to which the municipality commits, as well as the resources needed for implementing such priorities. Finally, it is important to stress that for both municipalities, it was the first time that preparation sessions were led by the mayors who, jointly with their office, discussed priorities and actions for finalizing the budgeting process. For the first time, municipalities designed and approved budget lines based on priorities. According to the mayors, the new approach to budget planning ensures better transparency as it provides a link between municipal priorities and the way in which they are financed and contributes to better governance and accountability. 1.7.4. Disseminate the handbook, SOPs, templates, codes, and practices for public financial management and control. To share best practices, USAID TEAM conducted roundtables with Finance Managers from all Kosovo municipalities. These events provided an opportunity for municipal budget and finance directors and CFOs to identify challenges and share best practices in municipal public finance management. Discussions covered the municipal budget planning process, salary planning for the next year (due to the new payroll law), jubilee wages of education workers, contingent liabilities, etc. In addition, the participants discussed NAO recommendations, as well as registration of assets. USAID TEAM, jointly with the MOF Department of Treasury, organized another two-day workshop with the heads of finance of the municipalities, ministries, and government agencies, with the aim to discuss the financial performance and opportunities for budgetary organizations. Kosovo Treasury shared several important initiatives to be implemented in 2020, such as addressing the issue of obligations where budgetary organizations will not be allowed to enter into new obligations unless the old ones are cleared, commitments of the funds will relate to the e-Procurement platform so no budgetary organization will be able to initiate a procurement procedure unless the funds are committed, and the Treasury will continue monitoring the progress of implementing NAO recommendations as foreseen in the National Action Plan regarding recommendations issued in the 2018 NAO Annual Audit Report. Some of these priority initiatives are related to financial management and procurement, such as developing a financial module within e-Procurement to prevent public procurement activities without commitment of funds.

COMPONENT II: ENGAGE THE CENTRAL LEVEL IN ADDRESSING MUNICIPAL CORRUPTION WITHIN THE PROCUREMENT PROCESS In Year 3, Component II continued to strengthen systems at the central level to solidify gains in transparency achieved in Year 2, while building effective accountability mechanisms. Project interventions significantly contributed to increased transparency of the public procurement process nationwide.

USAID TEAM Annual Report 2019-2020 | 46 Furthermore, component advisors monitored the implementation of mechanisms previously established by the project to ensure that past interventions were sustainable and promoted GOK resilience and self- reliance. Major achievements in 2019 for Component II include: • PPRC is successfully implementing full electronic public procurement for all contracting authorities and EOs and is advancing e-Procurement usage with online tutorials. • PRB introduced major transparency measures, including processing all appeals through the e- Appeals module, livestreaming appeal hearings, and publishing all decisions in a machine-readable format on their new database. • NAO’s Anti-Fraud Unit continued to improve its performance and identified 49 new cases with fraud elements in 2019 in addition to the 38 cases identified in 2018, its first year of operation. All such cases were forwarded and are being handled by the State Prosecution. • NAO has mapped-out business processes for the upcoming Audit Management System. • NOA is equipped with templates to supplement their Performance Audit Manual, focusing on risk assessment in the individual performance audit. • CHU introduced guidelines on the risk-based planning for areas vulnerable to fraud and the Quality Assurance and Improvement Plan methodologies. • Procurement institutions began efforts to align with the Open Contracting Data Standard (OCDS). PPRC began to publish procurement notices and contracts in currently available formats (digital and pdf) in the government “open data” portal. • PPRC and MOF Department of Treasury, with the support of USAID TEAM and USAID Economic Growth Activity respectively, are enabling interoperability between the Kosovo Financial Management Information System and e-Procurement, which will enhance overall public finance management.

Component II Events Events/Groups Participants Workshops 6 69 1.1.6 A learning summit with central-level institutions 1 11 Support activation and upgrade of the E-Procurement 2.3.1 1 15 platform modules 2.3.2 Introduce an OCDS 1 12 Support the drafting process of a new procurement 2.3.8 law and monitor the adaption process at the GOK and 1 11 Assembly level Support PPRC in Drafting the E-Procurement 2.3.4 1 5 Enhancement Plan 2.4.5. Workshop on PRB rules and procedures 1 15

Trainings 2 98 Implement risk-based planning to audit areas that are 2.2.1 2 98 more vulnerable to fraud

47 | USAID TEAM Annual Report 2019-2020

Roundtables 1 12 2.5.1 Roundtable of the National Procurement Council 1 12

TOTAL 9 179 2.1. BUILD THE CAPACITY OF THE NAO IN THE AREAS OF FRAUD DETECTION AT THE LOCAL GOVERNMENT LEVEL USAID TEAM supported the NAO to establish a functional Anti-Fraud Unit and provided guidelines for auditors to detect fraud in public procurement. This year, NAO officially announced the establishment of the Anti-Fraud Unit through an event with the U.S. Ambassador as the keynote speaker. The event announcement is accessible here. The event grabbed major media attention where national TV networks announced the launch of the Anti-Fraud Unit. 2.1.1. Enhance NAO capacities to implement procurement audits through the e- Procurement system. NAO began auditing public procurement activities directly on the e- Procurement platform. USAID TEAM coordinated with NAO and PPRC on technical issues identified by the auditors in the process. PPRC has reviewed the issues and provided solutions through their contracted vendor, Infodom. In addition, USAID TEAM supported NAO’s legal department to amend Regulation No. 02/2016 on NAO Rules of Procedure. The objective of this regulation is to define a complementary provision to Law no. 05/ L-055 on the Auditor General and NAO for the purpose of exercising its audit mandate in accordance with the International Standard of Supreme Audit Institutions, specifically as it relates to conducting audits through digital platforms. 2.1.2. Support and coordinate with other United States Government agencies and local actors to develop guidelines for prosecutors and judges on handling procurement cases. USAID TEAM held meetings with the Office of Overseas Prosecutorial Development Assistance and Training (OPDAT) to coordinate the capacity building of prosecutors and judges in handling cases involving public procurement. USAID TEAM drafted training modules (guidelines) on public procurement and on handling fraud related to public procurement for future trainings of judges and prosecutors. OPDAT will support the administration of training sessions in the first quarter of 2020. Furthermore, OPDAT expressed their intention to develop “specialized prosecutors,” including prosecutors to handle procurement related cases only. A potential structured practice of seconding or otherwise engaging PPRC experts for the joint case build-up of procurement-related cases will be raised by OPDAT with the Special Prosecutor’s Office. The drafted guideline on handling fraud in public procurement provides direction to prosecutors and judges in the context of fraud, corruption, and other illegal activities in public procurement, which constitute a criminal offence according to the Criminal Code of Kosovo in the field of public procurement. USAID TEAM has already gained the support and commitment of the Kosovo Judicial Academy (the public institution responsible for all trainings in the justice sector) to turn the guideline into an e-Learning module in 2020. 2.1.3. Enhance operationalization of Anti-Fraud Unit. USAID TEAM worked with NAO to monitor and strengthen the role of the newly-established Anti-Fraud Unit. NAO has recruited two staff

USAID TEAM Annual Report 2019-2020 | 48 for this unit, and the project’s legal expert continuously coached them on the audit finding analysis and fraud detection. The Anti-Fraud Unit has reviewed all audit reports, identified 49 fraud cases, and submitted them to the State Prosecutor for further action. USAID TEAM has also initiated meetings with OPDAT to coordinate activities with the State Prosecutor’s Office in handling public procurement cases with fraud elements submitted by NAO. Regarding the Memorandum of Understanding (MoU) between NAO and the State Prosecutor’s Office, OPDAT recommended that the current informal system of submitting cases as ‘information’ should continue but will attempt to persuade SPO to make this a standard practice, instead of requiring them to come from NAO in the form of ‘criminal reports.’ Additionally, the new Criminal Code came into force on April 15, 2019. The new code foresees stronger measures against criminal offenses related to corruption by increasing the level of penalties. The new Criminal Code contains a new criminal offense regarding the Abuse and Fraud in Public Procurement. Finally, during the reporting period, USAID TEAM held a focused “Pause and Reflect” session with NAO’s Anti-Fraud Unit to discuss challenges and opportunities for improvement. The Unit provided ideas on how they can enhance their fraud detection activities, including: • “Treating” fraud cases while auditors are conducting audits, and not months later when they draft the reports. There are two advantages to treating fraud immediately, namely: cutting overall public losses and limiting ability of perpetrators to “fix” things by the time reports are published months later. An assessment will have to be conducted for this approach, as well as instructions and templates prepared, and training provided, in case of approval. • Although USAID TEAM has provided NAO auditors with a basic training program on identifying fraud in procurement, the Anti-Fraud unit requested support with a more advanced program for auditors in the future (perhaps only for Audit Team Leaders as a train-the-trainer session). These items are being reviewed as potential work-plan items for the next two years of project implementation. 22.1.4. Incorporate fraud detection in performance audit of public procurement and implement risk-based planning. USAID TEAM worked closely with NAO directors from the Performance Audit Department to incorporate fraud detection in performance audit of public procurement and implement risk-based planning. USAID TEAM, through its subcontractor KPMG, conducted focus group meetings with NAO representatives to review their current practices in risk assessment for performance audits and agreed on the needed developments of their methodology. The project introduced templates for the risk assessment process to provide NAO representatives with more insight as to the structure of the process and the level of detail in completing the risk assessment. As a result, USAID TEAM developed an Addendum with templates of working papers to supplement the NAO’s Performance Audit Manual, focused on risk assessment in the individual performance audit. 2.1.5. Support NAO on mapping business processes and develop ToR for an Audit Management IT System (AMS). To advance the principals of good governance such as rule of law, transparency, accountability, efficiency, effectiveness, and responsiveness, USAID TEAM supported NAO’s plans to implement a properly designed AMS. USAID TEAM engaged two expert consultants to map NAO’s business processes in audit. Support to implementation mechanisms within NAO will ultimately

49 | USAID TEAM Annual Report 2019-2020 facilitate the work of the recently established Anti-Fraud Unit. By getting involved at this stage of business process mapping, USAID TEAM will be in a better position to ensure that the future AMS technically and substantively sustains the activities of the newly established Anti-Fraud Unit, providing timely and complete files for review and lowering the risk of files being tampered with, since the system will have a digital audit trail enabled. USAID TEAM and audit experts involved in the AMS mapping activity at NAO completed the following: • Mapped Financial Audit Process at level 1, 2, and 3 (with description of activities), • Mapped Compliance Audit Process at level 1, 2, and 3 (with description of activities), • Mapped Performance Audit Process at level 1, 2, and 3 (with description of activities), • Mapped processes of Annual Audit Planning, Follow-up on Audit Recommendations and Audit Quality Assurance at level 1, 2, and 3 (with description of activities), • Mapped process of Collecting and Analyzing Data from Audit Reports at level 2, • Identified the AMS requirements as well their priorities (request, description, priority), and • Determined adequacy of the existing templates of audit documents regarding audit methodology and created a plan with deadlines for creation of new templates. NAO has assumed ownership of these mapped processes and performed a feasibility study on the best approach for acquiring the AMS. Currently, NAO has completed procurement procedures for developing the AMS and is expected to deploy its first version by the second quarter of 2020. 2.2. BUILD THE CAPACITY OF THE MOF’s CENTRAL HARMONIZATION UNIT TO OVERSEE AND DIRECT MUNICIPAL IAUs. In addition to providing CHU with guidelines on detecting fraud in performance audits of public procurements in Year 3, USAID TEAM also supported this institution with the automation of semi-annual reports submitted by all internal auditors via the CHU Intranet System as well as introducing the Quality Assurance and Improvement Program. 2.2.1. Implement risk-based planning to audit areas which are more vulnerable to fraud. USAID TEAM supported this process by drafting an addendum to the Audit Manual to cover detection of fraud in public procurement contracts. The performance audits, which include the detection of fraud, waste, and abuse of public funds, help to improve sound financial management in vulnerable to fraud areas. USAID TEAM, in coordination with CHU Director and Internal Audit experts, coordinated the implementation of risk-based planning in vulnerable to fraud areas. CHU appointed a working group of internal auditors and CHU representatives to cooperate with USAID TEAM on the implementation of this activity. The project prepared two questionnaires on the current practices of risk-based planning to gather information on the three planning stages – strategic, annual, and individual audit, as implemented by the internal auditors. The information was used as a reference to prepare an assessment report on the current selection method implemented by the auditors and areas for improvement. Finally, the project developed and shared with CHU a guideline on risk-based planning for areas vulnerable to fraud. A workshop sought to introduce the risk-based planning tool to all heads of IAUs at the local level. Furthermore, CHU, with minimal logistical support from the project, introduced the same tool to the heads of IAUs at the central level.

USAID TEAM Annual Report 2019-2020 | 50 2.2.2. Implement automated semi-annual reports through the CHU Intranet System. USAID TEAM engaged an IT developer to assess the current reporting system followed by a proposal on quantifying information from internal audit reports. The consultant then developed a software to enable automation of semi-annual reports. The automation of semi-annual reports is a tool that enables CHU to quickly gather statistical data and make informed decisions accordingly. For example, the system will now enable CHU to gather information instantly on the number of audit cases performed and whether they are in line with the initial audit plan prepared by IAUs. 2.2.3. Build CHU capacities to develop and implement a quality assurance and improvement program in municipal IAUs. During the reporting period, the project assessed CHU’s current practices regarding self-assessment and IAU’s KPIs. In addition, USAID TEAM analyzed the: • IAU’s annual plan and implementation report for focus municipalities for 2018, • IAU’s strategic plan for the current period, and • CHU’s annual report on the complete activity of the CHU and IAUs for 2018. This information helped the project to upgrade the self-assessment questionnaire and KPIs including establishing a measurement tool for their performance. As a result, the project developed guidelines on implementing internal and external assessment of the Internal Audit function, which was also shared with the central government partner. The project also supported CHU in organizing a one-day workshop with two sessions on the Quality Assurance and Improvement Program with practical exercises for local-level IAU heads. Furthermore, CHU, with minimal logistical support from the project, introduced the same tool for the heads of IAUs at the central level. 2.3. ENHANCE PPRC INSTITUTIONAL CAPACITIES TO INCREASE TRANSPARANCY, EFFECTIVENESS, AND ACCOUTNABILITY USAID TEAM supported the PPRC in transforming from an institution that was on the brink of deactivating the e-Procurement platform to a body that now has complete ownership, internal mechanisms, and capacities to operate the platform. USAID TEAM is now supporting PPRC to implement the modules of the e-Procurement platform through the following sub-activities: 2.3.1. Support activation and upgrade of the e-Procurement platform modules. As envisaged in the PPRC e-Procurement Operational Plan, USAID TEAM is supporting PPRC in the process of activating and/or upgrading modules within the e-Procurement platform. This year, the project supported PPRC with the changes required in the Contract Management Module, including planning for integration of the Contract Performance Evaluation and webservice development. As part of the deliverable, the project drafted requirements for the development of an application program interface/webservice that will enable communication and interoperability with other GOK systems. USAID TEAM contracted a software development company to update the Contract Management Module, which is still an inactive module, and to develop the Contractor Performance Evaluation (CPE) function. There are two key objectives for the activation of the CM module, 1) to integrate the Contract Management Plan and all related documents, which will allow for better monitoring of contract management and 2) to feed with objective information the CPE function. On the other hand, there are two modules that remain inactive within the e-Procurement platform, namely the e-Auction and e-Reverse Auction modules. This is due to the lack of legislation to regulate related processes, such as “self-

51 | USAID TEAM Annual Report 2019-2020 declaration”, which is essential for the activation of these modules. PPRC Board insists that the introduction of self-declaration, which allows EOs to confirm that they meet tender requirements without submitting proof prior to winning the bid, is a major step forward for PPRC. As such, the Board has proposed to regulate the issue with a new law on public procurement, which is currently in the drafting phase. 2.3.2. Introduce OCDS. Working across all three components, USAID TEAM engaged an international expert from the Open Contracting Partnership to present the Standard to GOK stakeholders. It should be noted that the international expert’s daily rate was covered by the Open Contracting Partnership, so this assignment came with significant cost USAID TEAM expert from the Open Contracting Partnership during savings for the U.S. the workshop identified system pitfalls and opportunities to make the Government. This cross- procurement system entirely digital. component activity provided a roadmap defining: 1. where Kosovo is now with respect to the OCDS; and, 2. where Kosovo needs to be and how to get there (and who, exactly, are the appropriate stakeholders). During this activity, the project organized two workshops, one with central level institutions and the other with local level partners, as well as individual meetings with various relevant stakeholders, described below. The first workshop “Changes at the source of digital contracting towards making Kosovo a leading country in implementing open data standards” gathered representatives from focus municipalities, the Agency for Information Society (AIS), and MLGA. The international expert from the Open Contracting Partnership identified system pitfalls and opportunities to make the procurement system more open and interconnected. Municipalities requested that governments systems communicate with each USAID TEAM organized the workshop “Roadmap to making Kosovo a leading country in implementing open data standards” with other to avoid multiple entries of the same data representatives from central level institutions and CSOs. in municipal and government webpages, systems, and platforms such as the PPRC e-Procurement platform, the treasury system, HRIMS, open data platform, and others. The second workshop “Roadmap to making Kosovo a leading country in implementing open data standards” gathered representatives from central level institutions (including the Office of the Prime Minister, MOF, Ministry of Economic Development, PPRC, and European Union (EU) Public Administration Reform Project) and CSOs (D+, Riinvest, KDI, and Levizja FOL). The participants highlighted the need to move towards fully digital procurement and provision of data in a machine-readable format which can be re-used. The workshop also concluded that different government agencies already

USAID TEAM Annual Report 2019-2020 | 52 own a large amount of data, which can be easily published using the OCDS. The participants noted that this is one of the first times that they have thoroughly discussed open data and intergovernmental data integration at a policy and technical level. Some of the takeaways from this workshop were: each government institution should make a commitment and assume responsibilities that lead to a collective achievement of the OCDS; government institutions can use OCP’s free-of-charge advice on developing or adapting system data based on the OCDS. PPRC immediately engaged an IT developer to move toward developing OCDS for the e- Procurement platform. Nevertheless, due to a moratorium issued by the GOK during the second half of the year on hiring experts, PPRC was unable to extend the engagement of the IT expert to finalize the implementation of OCDS. Since the GOK moratorium was lifted in December, PPRC moved ahead with re-engaging the expert and is committed to complete this task during the first quarter of 2020. PPRC published contract data on the Open Data Portal. Now, procurement data are freely available for use without restrictions In the meantime, USAID TEAM’s IT expert and in a machine-readable format. finalized the general requirements for developing the e-Procurement API to publish releases and records about contracting processes in real time as per the OCDS (related to item 2.3.1 above). The Open Contracting Partnership provided valuable input on the project’s draft plan. The project shared this draft with PPRC to ensure that the data standard is implemented in the process of advancing e-Procurement system functionalities. In addition, USAID TEAM coordinated the publication of PPRC’s e-Procurement data on the GOK Open Data Portal maintained by the Agency of Information Society within the MPA. As of May 15, 2019, the PPRC is continuously publishing contract data on the portal. This initiative is extremely important as procurement contract data will be finally available for use without restrictions and in a machine-readable format. Furthermore, the project anticipates that the publication of procurement data will play a major role in Kosovo’s Open Government Index rankings in the future. USAID TEAM followed up with meetings and coordination with USAID Economic Governance Activity (EGA) regarding interoperability between the e-Procurement platform and the Kosovo Financial Management Information System (FreeBalance). The projects jointly drafted a concept note to present to the MOF’s Treasury Department, which identifies opportunities for improvement of public finance management within the GOK, including: electronic validation of contract, funds availability verification, vendor registration, and submission of electronic invoices. USAID TEAM, in coordination with USAID EGA, organized a high-level workshop with the MOF Treasury and Budget Department, PPRC, and AIS on “Improving overall public finance management by introducing interoperability between Kosovo Financial Management Information System and e-Procurement.” This was the first workshop of its kind attended by senior and technical-level representatives from the above- mentioned institutions. All institutional leaders (PPRC, Treasury, Budget, and AIS) agreed to support the interoperability initiative. Several smaller workshops with PPRC and Treasury technical-level staff were organized by USAID TEAM and EGA to clearly define the system software enhancements required to

53 | USAID TEAM Annual Report 2019-2020 enable interoperability opportunities. The two USAID projects will continue to work with respective partners on the development of software to begin data-sharing between the two systems. 2.3.3. Develop and implement software tool to automatically publish tenders and contracts from e-Procurement platform on official municipal websites. The project met with MLGA to discuss technical requirements for the Content Management System of the municipal websites to enable the future e-Procurement OCDS API to publish contracts on their websites. USAID TEAM drafted general requirements for the "Municipal Website Widget" that MLGA assumed ownership of and agreed to include in their follow-up maintenance and advancement contract with their vendor in 2020. This presented not only a cost saving opportunity for the project, but also an initiative for self-sustainability by MLGA. Thus, the project will shift its focus to monitor the development of the tool by MLGA in 2020. 2.3.4. Build PPRC IT team capacities to operate and maintain the e-procurement platform. USAID TEAM is continuously supporting the PPRC IT team capacities to operate and maintain the e- procurement platform and acts as a liaison between the local and central level stakeholders to monitor the proper implementation of procurement processes. In Year 3, USAID TEAM coordinated with the PPRC Board to prepare a plan for advancing the e- Procurement platform in the next three years. Despite some initial reluctance, claiming that Kosovo has already made sufficient advancements in the use of e-Procurement, the Board agreed to jointly organize technical meetings on e-Procurement enhancements. The project supported the PPRC IT department with the details of a proper plan, which also includes activities to increase PPRC capacities for operating and maintaining the e-Procurement Platform. USAID TEAM also organized a workshop in cooperation with PPRC to present high-level activities for the 2020-2022 e-Procurement Enhancement Plan. Participants included the PPRC Board President, IT Manager, and other PPRC IT staff. As a follow up, USAID TEAM assisted the PPRC IT team in developing a first draft of the work plan based on the IT maturity model consisting of core IT pillars including: Strategy, Organization, Processes, Technology, and Culture. In addition, the project completed all training activities for PPRC IT staff. Now PPRC is better prepared to maintain the e-Procurement platform on a daily basis. 2.3.5 Develop and implement a risk-based selection tool to monitor procurement activities more effectively. Given that the PPRC Monitoring Department monitored all procurement activities in the country rather than doing so based on a case selection method, this reduced the quality of monitoring to a minimum. USAID TEAM worked together with the Monitoring Unit staff to develop the criteria for a risk-based case selection tool. This process involved several meetings with the monitoring unit staff to assess the current system prior to establishing a risk-based selection method for cases to be monitored. Although a paper-based model has been developed, the project will continue in the upcoming year to develop an automated system for the selection of cases to be monitored based on risk criteria. 2.3.6: Enhance PPRC capacities to enforce Regulation on Performance of Procurement Officers. PPRC, under the guidance of USAID TEAM, further strengthened mechanisms on taking measures against non-performing procurement officials. During Year 3, PPRC revoked six certificates from poor performing procurement officers. To make this process more transparent, USAID TEAM plans to review the enforcement regulation in Year 4 to include measurable performance evaluation criteria for

USAID TEAM Annual Report 2019-2020 | 54 procurement officers, as well as a performance improvement plan prior to revocation of procurement certificates. 2.3.7. Develop and implement the CPE System (within the e-Procurement Contract Management Module. As already mentioned in sub-activity 2.3.1, USAID TEAM is supporting PPRC to implement the changes to the Contract Management Module, including the integration of the Contract Performance Evaluation and API/webservice development. The project concluded the procurement process of “Upgrading the Contract Management Module and developing the CPE functionality/module,” and selected the vendor Komtel to implement the activity. A first version of both modules has been developed and is currently being tested by PPRC IT and the project IT consultant. Activation and piloting of the two modules will begin in the first quarter of 2020. 2.3.8. Support drafting process of new PPL and monitor the adoption process at the GOK and Assembly. The project has already supported the process by drafting the concept note required to initiate the new legislation. USAID TEAM monitored the progress to ensure that the draft concept note was adopted by the working group. The Government/MOF established a working group to draft the law and set deadlines for the process. USAID TEAM initially engaged a senior procurement consultant, Mr. Ilaz Duli, to support the working group on drafting the PPL concept note. Also, the project proposed to the working group to develop a public consultation plan to ensure broad participation and input from all stakeholders, including all contracting authorities, businesses, and CSOs. The working group held several meetings, which were attended by representatives from the Office of the Prime Minister, AKM, civil society (KDI), PRB, Ministry of European Integration, MOF, EU, Swedish

PPRC and USAID TEAM hosted roundtable with international stakeholders on PPL Concept Note.

SEEDA, and USAID TEAM. Several substantive issues came up in terms of the draft concept note, such as the need to define responsibilities for the contract management, the possibility to modify the contract during its implementation, VAT purchases in public contracts, and regulation in the field of security, among other topics. As part of the drafting process of the PPL concept note, the project facilitated PPRC’s meeting with local business associations to discuss new PPL’s main principles and provisions that will facilitate procurement procedures for EOs. PPRC allowed for an additional week for business associations to submit recommendations in writing, seeking to incorporate the most relevant ones into the concept note. USAID TEAM engaged an outreach specialist to assist PPRC in the process of drafting the new procurement law ensuring that the process is transparent and inclusive of all stakeholders, including public

55 | USAID TEAM Annual Report 2019-2020 and private sector stakeholders and the international donor community. The project assisted PPRC in organizing a consultation meeting with the international community. The purpose of this meeting was to open an early dialogue with international stakeholders for the upcoming public procurement legal reform. Representatives from USAID, EU, Council of Europe, various USAID and EU-funded projects, and embassies of EU countries attended the event. Some of the key takeaway points from this session include: • The law should be oriented toward improving public service for citizens. • The future law should be simplified, and details should be captured in secondary legislation, thus avoiding the need to modify the law whenever new procedures or systems come into force. • Article 9.4 of the Law on Public Procurement regarding “in-house procurement” should be reviewed. • Established mechanisms of transparency should be safeguarded within the new Law. • The monitoring mandate of PPRC should be defined and increased to achieve proper contract implementation. • The PRB board structure should be reformed to address the increasing number of complaints. The USAID TEAM Outreach Specialist also supported the working group on the initial draft of the concept document, addressing some of the input received from various stakeholders, including Organization for Economic Co-operation and Development (OECD)/Sigma, the Prime Minister’s Office, and other agencies. The Concept Note is now being consolidated and finalized and will be submitted to the new GOK, once it is formed. The project will continue to support the drafting and adoption of the new law on public procurement in Year 4. 2.3.9. Build PPRC capacities to implement communications strategy. USAID TEAM supported PPRC to draft a communications strategy that will empower them to communicate with the public in a systematic way about achievements as well as new procurement rules and notifications. USAID TEAM engaged a short-term communications expert to work with the PPRC’s communications staff on finalizing the communication strategy and action plan, which was adopted by PPRC’s leadership. USAID TEAM continued throughout Year 3 to coach and mentor PPRC’s communications staff through the implementation of the action plan. This included communication and outreach activities with stakeholders on drafting the new PPL, communication with members of the National Procurement Council, communication with other institutions and CSOs on procurement data sharing efforts, as well as communication with the media. 2.4. ENHANCE PRB CAPACITIES TO FULLY IMPLEMENT TRANSPARENCY MEASURES USAID TEAM continued to support in line with the overall organizational improvement plan, specifically as it relates to transparency and consistency in handling procurement appeal cases through the sub- activities listed below. 2.4.1. Monitor and support PRB to implement 100 percent of procurement reviews through e-Appeals. Kosovo has entered a true electronic procurement environment, which also includes the procurement appeal process. As of January 1, 2019, PRB issued a decision mandating the use of the electronic appeals (e-Appeals) module. During Year 3, PRB confirmed that it has gradually managed to implement 100 percent of its appeals online. Furthermore, PRB confirmed that the online invoice system prepared by USAID TEAM is fully functional and effective, allowing complainant EOs to pay appeal fees in

USAID TEAM Annual Report 2019-2020 | 56 any payment institution throughout Kosovo, instead of obliging them to come to the PRB offices in Pristina, as was the case before.

List of complaints in the e-Appeals Module In addition, USAID TEAM, in coordination with the PPRC, supported PRB IT with difficulties accessing specific compressed files within the e-Appeals module of the e-Procurement platform. During this process, the project raised the need for an MOU and a Service Level Agreement between PRB and PPRC, which sets the rules and procedures for communication between the two institutions on issues related to the use of the e-Procurement platform. The UK Embassy project supporting the PRB has envisaged a cooperation MOU between PRB and PPRC in their plan. USAID TEAM will coordinate with the UK project to ensure that regular communication on technical improvements to the e-Appeals module are also included in such an MOU. 2.4.2. Monitor and support the PRB to implement the new database of appeal decisions, including a link to the database of the Kosovo Judiciary. USAID TEAM supported PRB to establish a database of decisions taken in past appeals, available to staff and panel members (and publicly available on the PRB website), to promote consistency in decisions. In order to make the database fully functional, PRB has committed to use digital versions of PDF files (no more printed and scanned PDFs) for all of its issued documents, including panel decisions, expert recommendations, opinions, etc. This step will greatly reinforce the new database, as it will facilitate the production of searchable documents, thus enhancing overall search functions.

57 | USAID TEAM Annual Report 2019-2020 USAID TEAM, through the local IT vendor Cacttus, delivered the final version of PRB website and decisions database. Cacttus also trained PRB staff on the use of the platform. AIS within the MPA, which hosts the new database and website, tested the security issues and initially found ‘medium’ risks that needed to be addressed by the vendor prior to the official launch. USAID TEAM requested Cacttus software developers demonstrating database the vendor to perform a similar scanning reports to PRB staff within their own servers and submit a more secure version to avoid further back-and-forth delays. The final iteration of the website and database was submitted in the first week of October. As a part of the Anti-Corruption Week activities, on December 12, USAID TEAM, in coordination with PRB, officially launched the database on promoting consistency and transparency in the decisions of this institution. The new database enables easy search of PRB past decisions to compare/contrast appeal cases, better understand legal precedence, and provide data for statistical and analytical purposes, as well as overall institutional performance.

As a part of the Anti-Corruption Week 2019, on December 12, USAID TEAM, in coordination with the PRB, officially launched the database on promoting consistency and transparency

2.4.3. Monitor and support implementation of livestreaming of PRB sessions. USAID TEAM throughout Year 3 supported the PRB in livestreaming their sessions online. Since the old website presented technical difficulties to livestream hearing sessions, full implementation of this activity was enabled with the development and launching of a new website that enables direct integration and streaming capabilities. The project has proposed a clause in the new PRB Rules of Procedure mandating the use of streaming media to ensure that livestreaming of sessions becomes a standard procedure and a sustainable practice. 2.4.4. Build PRB capacities to implement communications strategy. In Year 3, USAID TEAM engaged a short-term communications expert and supported the PRB working group to draft a communications strategy which provided them with a systematic approach to inform the public on their accomplishments and announcements. The project also provided coaching and mentoring to the PRB’s dedicated communications officer to implement the communications strategy with the goal to improve the PRB’s public outreach efforts resulting in an enhanced public image. For example, the launching of the

USAID TEAM Annual Report 2019-2020 | 58 PRB website and decision database. PRB was in the driver’s seat in organizing the launch event; nonetheless, the project supported PRB with preparing supporting documents like invitation and participant list, agenda, media invitation and statement, and so on. The project will continue to monitor and support PRB on implementing the communications strategy and action plan in year 4. 2.5. ENHANCE COORDINATION BETWEEN CENTRAL LEVEL INSTITUTIONS TO REGULATE PUBLIC PROCUREMENT USAID TEAM has noted, as have civil society observers, that several central-level institutions are involved in oversight of public procurement cases, and that their mandates may overlap. To address this perception of overlapping mandates, the project intends to bring all stakeholders together to clarify each institution’s authority. 2.5.1. Clarify roles in procurement regulation. USAID TEAM has presented to various public procurement stakeholders the urgent need to clarify the roles and responsibilities of each institutions to eliminate overlapping competencies. As a result, USAID TEAM supported government partners to organize the National Procurement Council, a roundtable event to discuss such PRB, PPRC, D+, and USAID TEAM discuss operational challenges overlapping issues and ways to improve at the PRB cooperation in public procurement moving forward. Other issues raised included lack of training for prosecutors in public procurement, improvements needed in investigation processes involving procurement and possible (or perceived) police intimidation of PRB. The representatives of the Council have committed to reviewing their roles for overlapping activities with other institutions and meet on a semi-annual basis to evaluate progress and discuss new challenges. USAID TEAM will continue to support PPRC in Year 4 to fully support this council reaching its full potential. Furthermore, to ensure that this council becomes functional and sustainable in the future, the project has proposed a clause envisioning the Council in the new PPL concept note. 2.5.2. Implement a joint case build-up mechanism. USAID TEAM collaborated with Department of Justice Office of Overseas Prosecutorial Development, Assistance and Training (DOJ OPDAT), USAID Justice System Strengthening Program (JSSP), and other relevant rule of law actors, to assess and introduce a joint case build-up mechanism. USAID TEAM initially recommended an MOU between PPRC, the State Prosecutor, and other relevant institutions, but OPDAT recommended the parties gradually establish a structured practice with respect to joint-case build-up. USAID TEAM and OPDAT will further advance this structured practice and collaboration in 2020, following the training for judges and prosecutors on handling fraud in public procurement.

COMPONENT III: ENABLE CIVIL SOCIETY TO TRACK AND EXPOSE CORRUPTION

59 | USAID TEAM Annual Report 2019-2020 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 focused on monitoring corruption in public procurement at the municipal level. To increase capacities 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. In 2019, USAID TEAM enhanced capacities of local-level CSOs to monitor procurement. USAID TEAM, working with its subcontractor CiviKos, tapped into Kosovo’s existing active network of CSOs to promote transparency and accountability and raise awareness of citizens. In Year 3, USAID TEAM concluded a series of Applied Learning Workshops with local-level CSOs, which saw an improvement of CSO capacities to monitor procurement activities and disseminate the findings. Forty-one representatives from 36 local-level CSOs are now able to monitor procurement and coherently communicate findings and recommendations to the public and stakeholders. This number is in addition to the number of CSO representatives based in Pristina who have provided the bulk of monitoring reports over the past few years. 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 procurements and hold local governments accountable. At the central-level, UASID TEAM-funded monitoring at PRB has resulted in a full mapping of intuitional gaps, 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 OPTP is making monitoring activities easier and more sustainable, while flagging new issues such as awarding of contracts to blacklisted companies. Highlights from empowering civil society activities during Year 3 include: • Published the report on “Social Accountability Tools as Means for Accountability Success: Two Municipal Case Studies in Kosovo,” which presents efforts and findings from the deployment of social accountability tools in Pristina (covering a park and public transport) and Vushtrri/Vučitrn (dealing with construction of schools in three villages and provision of health services). • Published the Second Benchmarking Report in Public Procurement highlighting best practices, irregularities, and violations while focusing on developments in public procurement at the local level. • Published the Annual Monitoring Report in Public Procurement with focus on procurement procedures at the municipal level and analyzing the transparency of contracting authorities with regards to access to procurement information. • Published “x-index Benchmarking Tool for Public Procurement in Kosovo” which measures and evaluates the performance of Kosovo’s 38 municipalities in public procurement. • Organized two workshops on the “Use of Facebook for dissemination of messages” with participation of representatives from 14 CSOs.

USAID TEAM Annual Report 2019-2020 | 60 • Published four investigative reports, four follow-up reports, and one follow-up multimedia story prepared by subcontractor Çohu and its consortium members Zeri and Insajderi. • Completed all planned Applied Learning Workshops with representatives of local-level CSOs in Ferizaj/Uroševac, Pristina, Mitrovica e Jugut/South Mitrovica, Prizren, Gjilan/Gnjilane, Peja/Peć, and North Mitrovica on building their capacities to monitor municipal procurement and report on irregularities and best practices. • Completed seven Applied Learning Workshops with representatives of local CSOs from Ferizaj/ Uroševac, Peja/Peć, Prizren, Pristina, Gjilan/Gnjilane and Mitrovica South region in cooperation between civil society and media on dissemination of information. • Launched Transparency Index in Public Procurement report. • Launched “The role of PRB in public procurement inefficiency report” prepared by D+. • The project established six social audit groups in three focus municipalities: Gjakova/Ðakovica, Gjilan/Gnjilane, and Peja/Peć through “Promoting Civic Activism in Monitoring and Keeping Local Governments Accountable through Social Accountability Tools.” • Published follow-up investigative story focused on the current situation related to the construction of several roads in Oblic Municipality. The article has been forwarded to the prosecutor’s office for further investigation. • Organized an adaptive management learning summit with USAID TEAM civil society partners. Most Component III activities are interlinked and support interventions of other Components. Below is a list which shows the linkage of cross-component activities.

Supports interventions of other Activity Deliverable Components by Activity Sub-activity 3.1.2. Provide Summary of notes and visualized Activity 1.6.1. Focus municipalities subcontract funding to CSOs to facts sheets on budget hearings for regularly publicize Procurement, monitor three phases of six second-tier municipalities Audit and Finance related procurement for period of two information/reports (C1) years Published report “Public financial management through the eyes of Activity 1.5.4. Developing municipal auditor general” action plans for the Addressing the NAO findings/ recommendations (C1) Sub-activity 3.1.4. Support activities Published Transparency Index in Activity 1.1.4. Municipal Graduation of procurement transparency Index Public Procurement for 2018 Plan – monitoring of implementation

Activity 1.6.1. Focus municipalities regularly publicize Procurement, Audit and Finance related information/reports (C1) Sub-activity 3.1.6. Exposing Published report “Towards Activity 1.3.3. MIAs will continue to corruption through active municipalities with open, provide on-the-job coaching and monitoring and comparison of five accountable and efficient public mentoring for all municipal municipalities procurement” procurement activities (C1)

61 | USAID TEAM Annual Report 2019-2020 Sub-activity 3.1.8. Establishment of Established Open Procurement Activity 2.3.4. Advise and support public procurement transparency Transparency Portal the PPRC to strengthen portal information systems security (C2)

# Component III Events Events/Groups Participants Workshops 30 407 Workshop on the “Use of Facebook for dissemination 3.3.2 2 26 of messages” Applied Learning Workshop on monitoring public 3.2.1 9 41 procurement 3.3.1 Applied Learning Workshop on use of media 10 47 3.1.6 FOL Hapur workshop 6 256 3.1.6 FOL workshop with CSOs 1 14 3.16 FOL workshop with journalist 2 23 Meetings 2 42 Meeting with USAID TEAM civil society partners 2 42

Launching Ceremonies 8 252 Launching Transparency Index in Public Procurement 3.1.4 1 40

3.1.8 Launching of semi-annual report on monitoring PRB 1 10 First anniversary of the Open Procurement 3.1.6 1 17 Transparency Portal 3.1.5 Launching x-Index report 1 21 Launching Second Benchmarking Report 1 42 Launching “Social Accountability Tools as Means for 3.1.7 Accountability Success: Two Municipal Case Studies in 1 43 Kosovo.” Launching of Annual Monitoring Report in Public 3.1.3 1 52 Procurement Launching “The role of PRB in public procurement 3.1.8 1 27 inefficiency report”

TOTAL 40 701 3.1. ENHANCE NATIONAL-LEVEL CSOs ABILITY TO MONITOR MUNICIPAL PROCUREMENT With this activity, USAID TEAM aimed to support national-level think tanks and CSOs to analyze municipal procurements and other spending and recruitment actions, and to support the development and use of tools, such as municipal scorecards, reports, databases, and other materials that would help these organizations expose corrupt practices. This activity also incentivizes cooperation and transfer of knowledge from national-level CSOs to local-level CSOs.

USAID TEAM Annual Report 2019-2020 | 62 3.1.1. Host annual CSO Challenges to foster innovative ideas. Activities initiated at the end of Year 2 regarding the release of a Request for Application (RFA) for CSOs on the “Use of innovative solutions to strengthen internal controls and reduce vulnerability to corruption, particularly in procurement and/or municipal staff recruitment and promotion” has continued in Year 3. Under this RFA, six CSOs (D+, Levizja FOL, GLPS, Balkan Investigative Reporting Network (BIRN), Open Data Kosova, and Women Organization “Zana”) submitted proposals. Chief of Party for USAID Transparent, Effective and Accountable Municipalities Stephen Carpenter signing the grant agreement with Valmir Upon completion of the procurement Ismaili, Executive Director of D+ processes, D+ was selected to implement the “Digital Solution for Integrity in Public Procurement.” Under this project, D+ intends to develop a set of eight red flags for the procurement processes which will highlight potential violations and adapt the already existing OPTP platform – www.prokurimihapur.org – developed by Levizja FOL to expose procurement red flags. The red flags module will empower CSOs to efficiently target irregularities for further investigation and strengthen their advocacy efforts. Citizens will be better informed about how their taxes are used in procuring public services by public authorities, and informed citizens are empowered to raise their voices and demand accountability. During Year 3, D+ developed eight red flag indicators which will use algorithms to build the red flags platform. These flags include: lowest responsive bid is not the winner, contract awarded to blacklisted companies, contract awarded through a negotiated procedure, failure to publish the contract, winning bids exceeds projected value, standards of other countries used in the tender requirements, only one responsive bid in procurement activity, and division of request for the same procurement activity. D+ then developed the technical specifications for an open bid for companies to develop the web-based system and signed a contract with the EO BBros to implement the red flagging system. D+ then met with Levizja FOL to discuss integrating the red flags platform within prokurimihapur.org. D+ also met with the OPTP developer Kutia to discussed technical issues pertaining to the adaptation of red flags into the portal. Both organizations agreed that from a technical point of view, such integration is possible within the existing platform. Additionally, representatives of D+ met with PPRC IT staff to discuss the idea of building the platform and the information needed from the e-Procurement platform. During the construction of the web-based platform, BBros faced technical difficulties obtaining data from PPRC. Two options were proposed to overcome this issue: in option one, PPRC would populate an Excel file with requested data drawn from the GOK’s Open Data platform; in option two, PPRC would provide D+ direct access to the e- Procurement platform servers to download files. BBros software can read the information from each tender in the e-Procurement portal, but for the indicators to function, it is necessary to access the information generated by the platform which is currently saved in a PDF format (Contract Notice, Contract Award Notice, etc.). Right now, those files cannot be downloaded because those are generated by the platform each time there is a click to download the file. Meanwhile BBros has continued to work on the design of the webpage, while D+ continued to coordinate with the Chief IT official at PPRC on the

63 | USAID TEAM Annual Report 2019-2020 best way to address these issues. The PPRC is working on publishing the Application Programming Interface (API) using the OCDS which is expected to be completed by end of end of February 2020. An API ensures that the platform will collect data automatically from the e-procurement platform without the need of human intervention to compile an Excel list and then publish that to the state Open Data Platform. Since this application will help D+ in process of collecting data, D+ requested a No-Cost Extension (NCE) which has been approved. 3.1.2. Provide subcontract funding to CSOs to monitor all three phases of procurement for a period of two years. On August 2018, USAID TEAM subcontracted KDI to implement a two-year project and carry out activities to build capacities of four local CSOs to monitor all stages of public procurement (budget preparation, procurement planning, procurement procedures, contract management, and municipal response to audit findings). KDI together with its consortium members YAHR, ISDY, Syri i Vizionit, and Ekovizioni, completed several activities. • Through a press conference, published the analytical report on “Public Financial Management through the eyes of the Auditor General” targeting the six second-tier municipalities. The report highlights ongoing and systematic problems in budget execution, public procurement, capital investments, KDI, through a press conference, published the report on Public financial management, functioning of the Financial Management through the eyes of the Auditor General IAUs, and implementation of NAO recommendations from the previous years, as recorded in the Auditor General’s report for the six municipalities of Ferizaj/Uroševac, Lipjan/Lipljan, Istog/Istok, Podujevë/Podujevo, Prizren/Prizren, and Suharekë/Suva Reka in 2017. • Developed and submitted report on monitoring the process of preparation and approval of the municipal budget in six second-tier municipalities (Ferizaj/Uroševac, Istog/Istok, Lipjan/Lipjane, Suhareka/Suva Reka, Prizren/Prizren, and Podujevë/Podujevo.) The report contains information related to the legal framework for the budgeting process, identifies best practices used by those municipalities, highlights challenges faced during the process, and provides recommendations to improve the entire process and ensure greater involvement of citizens in planning.

USAID TEAM Annual Report 2019-2020 | 64 • Developed and submitted Citizen Priority Cards. Those cards present a summary of citizens’ priorities, as voiced in public discussions in the six second-tier municipalities which will be presented to local authorities. Additionally, these cards will be used to ensure that priorities are included in municipal annual budgets for 2019 or budget assessments for 2020-2021 pursuant to the requirements of the Mid-Term Expenditure Framework. This exercise will allow KDI to determine if the priorities in the adopted budget were determined through an inappropriate bias or political preference or reflect the needs of citizens regardless of political orientation. • Prepared a draft report on monitoring of municipal procurement planning for six second-tier municipalities. This report addresses two elements of procurement planning at the municipal level: (1) the legal framework of the Republic of Kosovo regulating public procurement planning procedures; and (2) the process of drafting procurement planning for six second-tier municipalities during 2019. While the six municipalities respected legal deadlines for drafting and submitting procurement plans to CPA, delays in budget approval for 2019 by the Kosovo Assembly caused KDI infographic on the Budget Drafting interruptions in initiating procurement processes in the Process municipalities. As a result, this led to delays in the tendering process, contract award, and performance of the contract, thus causing delays in supply of materials or delays in the execution of the Consortium members were present in 32 public hearings organized in six second-tier municipalities. • Prepared and published in newspaper Zeri an op-ed highlighting the issue of involving citizens in capital investment planning. Lack of citizen engagement has resulted in implementation of many unnecessary high-value projects like the construction of a secondary school in Dragash. The municipality of Dragash, supported by Ministry of Education, constructed a school that is not functional due to lack of consultation with citizens. The value of this project is around two million euros. Citizens were not consulted about the location or the basic need for such a building. While the new building is not functional, the old building continues to be functional and serve students of this municipality. • Developed an infographic depicting citizen priorities in six second-tier municipalities. The infographic is based on the monitoring of budget hearings and analyzing the budget. It allows for mapping of citizen priorities at the initial stage of budget planning and provides a comparison if such priorities are included in municipal annual budgets for the consecutive year (2019) or mid- term budget framework. • Developed a summary report on monitoring the tendering process for 12 projects, two per each of the six second-tier municipalities. The same or similar projects were selected for comparison. Initial findings reveal that in some cases, municipalities did not comply with the legal provisions such as undertaking a proper feasibility plan related to the site of a project which latter resulted

65 | USAID TEAM Annual Report 2019-2020 in the need for an annex to the contract and which could have been avoided; such as failing to respect legal deadlines for submission of bids. 3.1.3. Provide seed funding to local CSOs to use data from the OPTP to identify potential cases of corruption and misuse of public funds. USAID TEAM anticipated awarding two small research grants to CSOs to use data from the OPTP as a source of information while investigating institutions and EOs in municipal procurement and exposing those potential cases through media to the wider public. The Scope of Work for the RFA was developed, approved, and issued with the aim to provide seed funding to local CSOs for youth engagement, monitoring of procurement, awareness raising, and advocacy for legislative changes for transparent procurement. However, USAID TEAM did not receive any applications. Informal feedback from local-level CSOs participating in the Applied Learning Workshops suggests that local-level CSOs lack capacities to put together a proper proposal. The allocated funds will be used during Year 4 and comprise an overarching sustainable solution to fund CSOs jointly with Kosovo public funds. 3.1.4 Promote transparent and accountable municipalities through Transparency Index in Public Procurement for Municipalities. USAID TEAM grantee KDI, under the project “Transparency Index in Public Procurement for Municipalities,” developed and submitted 38 municipal fact sheets that visualize information related to transparency such as publication of notices regarding procurement and the budget. KDI prepared and delivered 38 recommendation letters for each Kosovo municipality on areas for improvement with a focus on transparency. These letters informed municipalities on areas which they have been evaluated and the score in each category. For those indicators in which a municipality scores poorly, the grantee recommended specific improvements to increase levels of transparency and accountability. In addition, prior to publishing the annual report, KDI prepared the Semi-Annual Report on Transparency in Procurement, with the aim to assess the level of procurement transparency in Kosovo municipalities during the first half of 2018. KDI shared with all 38 municipalities the database which contains data on transparency indicators. This led municipalities to add documents to their webpages to increase their performance.

USAID TEAM Annual Report 2019-2020 | 66 Then later in the year, KDI published the Transparency Index in Public Procurement for Municipalities of Kosovo for 2018. Component I compared data and assessed data quality. In the Public Procurement Transparency Index 2018, KDI reports that Kosovo witnessed significant progress in the transparency of public procurement at the local level. The Index shows significant progress in transparency of public procurement at the municipal level. The overall volume of published contract notices and contract award notices on municipal websites increased by 28% compared to 2017. The greatest achievement of 2018 was the publication, for the first time, of the actual contracts in the e-Procurement platform. The report also notes an increase in budgetary transparency by 16%, compared to the previous year. The top performing municipalities according to the report were Pristina, Vushtrri/Vučitrn, and Mitrovicë/Mitrovica. KDI launched the report through a roundtable event gathering key actors from Kosovo’s government and CSOs. 3.1.5. Expand the x-Index benchmarking tool for public procurement. On March 25, 2019, through a roundtable event, Riinvest published the “x-index Benchmarking Tool for Public Procurement in Kosovo”. To ensure fair representation of the municipalities, Riinvest divided the findings into three categories: large, medium, and small-sized municipalities. The division of municipalities into categories was conducted based on two criteria: the municipalities’ budget and the number of staff (excluding health and education employees, apart from those employed in the administration). This classification resulted in eight large-size municipalities, 18 medium-sized municipalities, and 12 small-sized municipalities. As part of the Year 3 Work Plan, USAID TEAM signed a follow-up award to Riinvest for implementation of a “Benchmarking Tool for Public Procurement Activities.” Riinvest will collect data for 2018 and 2019 and publish the x-Index report annually. Through the one-year project, Riinvest will continue to employ the x-Index as an educational tool, using illustrative comparisons to identify contracting authorities’ weaknesses and to use the results to educate contracting authorities on best practice and motivate them to manage public funds more effectively. The report aims to facilitate a better-informed discussion on public procurement based on objective information. The rating of the score of the x-index ranges from 0 to 1, where 1 means that the CA is conducting public procurement activities largely in line with best practices (i.e. a good conduct, as defined by international institutions). A low x-index rating, leaning towards 0, implies a deviation from best

67 | USAID TEAM Annual Report 2019-2020 practice. Contracting authorities with low x-index values (in comparison to similar institutions) are not necessarily more corrupt or less efficient; the low score simply indicates there is a greater vulnerability to corruption or inefficient practices in their procedures – but whether that opportunity has been exploited or not, it cannot be proven from these statistics. Riinvest submitted a draft of the first x-Index Report including database with data collected for January – December 2018. The report is currently under review and the preliminary findings show that out of the nine sub-indices, 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 out of 1. Meanwhile, the sub-index where municipalities have performed the worst is “Pro competitive tools (x6).” Regarding transparency and competition, municipalities performed well in the ‘Competitive contracting (x2)’ sub-index, with an average score of 0.82 out of 1. Apart from publishing their contract notices and contract award notices in the e-Procurement platform, municipalities are continuing with publishing their signed contracts on their website as well. Until now, 24 out of 38 municipalities published their contracts on their website and this is one more reason why municipalities should be encouraged to continue to publish their contracts. One of the recommendations from the draft report is that capacity building by PPRC, CSOs, and international organizations should be provided to small-sized municipalities to publish their contracts and update their municipal website. 3.1.6. Support expanded functionality of public procurement transparency portal. In December 2018, USAID TEAM provided additional funds to Levizja FOL to expand the functionality of the OPTP. This activity focused on upgrading the portal and promoting usage of the portal by CSOs, journalist, and citizens to identify potential corruption, waste, or abuse in public procurement. The process of upgrading the portal included incorporating additional data from the “contract card.” As a result, FOL upgraded the Portal by adding new features such as publication of the contract start and end date, a subscription module through which users can subscribe to a particular CA and receive notifications when new contracts are Gresa Smolica from Levizja FOL (in red shirt) presented the added from that institution, and a search OPTP at the Western Balkans Digital Summit in Belgrade option based on the owner's name enabling users to search for contracts based on the name of the owner of the contracted company. Along with work on upgrading the portal, Levizja FOL conducted a two-day workshop with journalism students from public and private universities in Kosovo on the use of OPTP. The aim of the workshop was to promote the portal among young people and encourage them to increase their research skills in identifying red flags and producing impactful articles with findings.

USAID TEAM Annual Report 2019-2020 | 68 In Year 3, Levizja FOL also marked the first anniversary of the OPTP through a roundtable event. Representatives from national-level institutions (such as PPRC, AIS, Kosovo Tax Administration), municipal procurement officials, civil society, and media discussed OPTP achievements, benefits, and opportunities to further upgrade the portal. Participants highlighted that OPTP shortened the time needed for research into specific public contracts, EOs, types of contracts, or timelines for implementation. Additionally, a representative from the Kosovo Tax Administration noted that they use the OPTP to track EOs and detect cases when businesses do not fully report their economic activities to the Administration. Representative from PPRC and AIS committed to support Levizja FOL in improving the portal to make it more user friendly and more informative. Students of journalism learn to research and prepare articles using technology during a Additionally, USAID TEAM grantee Levizja FOL presented workshop organized by USAID TEAM Grantee the OPTP to showcase the use of technology to fight Levizja Fol corruption at a Digital Summit in Belgrade through funding from the Open Contracting Partnership. Although FOL coordinated with USAID TEAM on the talking points for the event, USAID TEAM did not provide any financial support for this trip –representing cost savings for the U.S. Government. The presentation was part of the panel Beyond Digital Procurement: Open Contracting. Around 3,000 representatives from governments, CSOs, and companies that work in the technology sector attended the Western Balkans Digital Summit. During this workshop, Levizja FOL identified a need to raise awareness about the OPTP and procurement processes in general. In that regard, Levizja FOL approached USAID TEAM with a request to conduct an adaptive activity, shifting away from low-impact infographics, and instead engaging journalism students at Pristina University. In this new activity, Levizja FOL conducted procurement information sessions OPTP developed by USAID TEAM and Levizja FOL. with journalism students with the aim of increasing students’ knowledge about public procurement in Kosovo and promoting prokurimihapur.org as a platform they can use to track public procurement contracts in their research. During this workshop, students were encouraged to use the platform to identify red flags and prepare investigative articles based on those findings. Articles published by the journalism students can be found through the hyperlink here. This adaptive change was designed to increase the visibility of the OPTP and to empower open-minded students to demand accountability. Additionally, Levizja FOL published on social media one of the articles that was prepared by a group of journalism students during the workshop held in the previous quarter. Finally, as part of the activities to promote OPTP, Levizja FOL organized four FOL HAPUR events with citizens of Shtime/ Štimlje, Skenderaj/Srbica, Kamenica, and Klina/Kline municipalities. Participants at these

69 | USAID TEAM Annual Report 2019-2020 meetings had an opportunity to learn more about the portal and advantages that the portal offers for monitoring public procurement and public expenditure in addition to promotion of OPTP, Levizja FOL submitted the two ‘calls for action’ draft videos. The videos promote the OPTP and show how citizens can get informed about projects implemented by local authorities and how to report unfinished works to authorities. As of December 2019, there have been 21,354 visitors, with 11.8 percent returning users, to the prokurimihapur.org portal, well above the original five-year target of 10,000 hits. Civil society, investigative journalists, businesses, and even GOK officials report using the OPTP as a starting point for investigations or for business intelligence. This was a result of an aggressive promotion in online media outlets which evidenced 1,789,949 views (out of which 1.4 million were unique views) of OPTP promotional materials. 3.1.7. Support and expand deployment of social accountability tools to monitor public procurement and public expenditure. GLPS completed a nine-month project on “Use of Social Accountability Tools to Collect and Publicize Data on Potential Corruption,” which was marked by the launch of the research report: “Social Accountability City park construction in Gjakovë/Ðakovica Tools as Means for Accountability Success: Municipality. Two Municipal Case Studies in Kosovo.” This report presents efforts and findings from the deployment of social accountability tools in Pristina (covering a park and public transport) and Vushtrri/Vučitrn (dealing with construction of schools in three villages and provision of health services). The report also provides information on municipal response to the social audits. Representatives of Pristina and Vushtrri/Vučitrn municipalities, social audit team members from Pristina and three villages (Druar, Pantine and Maxhunaj) from Vushtrri/Vučitrn municipality, CSO representatives, and media participated in the event. Upon completion of the Pristina and Vushtrri/Vučitrn activities, in Year 3, USAID TEAM committed to expand deployment of social accountability tools to monitor public procurement and public expenditure in the three other focus municipalities of Gjakova/Đjakovica, Gjilan/Gnjilane, and Peja/Peć. As such, USAID TEAM evaluated and accepted the proposal from GLPS and issued a new grant agreement to implement a project to “Promote Civic Activism in Monitoring and Keeping Accountable Local Governments through Social Accountability Tools.” GLPS assembled social audit teams for all six projects in three focus municipalities (Gjakova/Ðakovica, Gjilan/Gnjilane and Peja/Peć). The projects include (1) Construction of secondary school and construction of house for elderly people in Peja/Peć, (2) Construction of the city park and revitalization of the space around River Krena in Gjakova/Ðakovica, and (3) Construction of the park alongside River Marash – Southern Part in Gjilan/ Gnjilane and construction of sports facilities in Pogragje village (Gjilan/Gnjilane municipality).

USAID TEAM Annual Report 2019-2020 | 70 GLPS conducted several meetings with municipal representatives to collect relevant information including the project design and information regarding the procurement processes which will assist social audit teams to monitor the ongoing work of selected projects. To support social audit teams, GLPS developed indicator-based matrices to assess the performance, transparency, and the progress of Social Audit team monitoring the work on a riverbed in implementation of all six projects. The Gjakovë/Ðakovica social audit teams have conducted preliminary site visits and started monitoring activities; they observed that in both projects in Peja/Peć municipality (construction of secondary school and construction of house for elderly people), there are delays in implementation. The social audit teams observed the opposite situation in Gjakova/Ðakovica: construction of the city park and revitalization of the space around River Krena are proceeding as planned on schedule. Construction of the park alongside the River Marash – Southern Part in Gjilan/Gnjilane is ongoing and social auditors will continue to monitor the works there. The construction of sports facilities in Pogragje village, according to village representative, is facing some issues because the project was not implemented as it was initially planned, and the area nearby was not properly treated. The social audit team members are working closely with municipal authorities on addressing issues identified during the auditing process of the selected projects. Along with the work with SA’s in three focus municipalities, GLPS continued to monitor the commitment of the Municipality of Pristina and Vushtrri/Vučitrn to address the issues that had been identified during the first phase of the project. The Municipality of Pristina issued a tender and awarded a contract to a new company for the “Bllok pas Blloku” project in Pristina to address findings of the social audit. Facilitated by USAID TEAM grantee GLPS, the municipality worked closely with the group of citizens (allowing them to draw and intervene in project designs) to address shortcomings identified. 3.1.8. Engage national-level CSOs to monitor PRB decisions with impact on local-level procurement. USAID TEAM subcontractor D+ continued to monitor the PRB’s work. During this period, D+ produced two documents: an online database as a monitoring tool and draft report on PRB monitoring for June - December 2018. The electronic database contains data on all PRB decisions from 2017 until present, where each complaint was analyzed in detail. This electronic database has been developed to facilitate the process of determining decisions to establish the basis for consistency in decision-making. The database may serve the review panels, PRB experts, complaining parties, contracting authorities, and researchers to easily find decisions and compare them to ensure consistency. D+ presented the database in a public event and provided a live demonstration of this platform at the PRB.

71 | USAID TEAM Annual Report 2019-2020 In addition, D+ finalized the report on Monitoring the PRB which investigates the PRB decisions and practices to assess the effectiveness of this institution and to see how impartial PRB is in administering justice to the parties. Additionally, D+ submitted a summary report on monitoring the PRB activities for the period January to May 2019. This report was intended only for use by the USAID TEAM project and for discussions with the PRB and not for public release. As such, D+ shared the findings with the PRB and USAID TEAM is helping the PRB to develop an action plan to address those findings. The PRB’s lack of consistency in decision making continued during the reporting period. The time it takes for the PRB to make a decision increased to 44.6 days – an increase of Cover page of the D+ PRB monitoring report seven days compared to the previous reporting period – while the legal limit is 34 days. On a positive note, the report notes an increase in the use of open hearing sessions and the release of timely information to all parties to participate in adjudication sessions. In discussions with USAID TEAM, D+ recommended four actions PRB could enact in the short-term to improve their performance. These are: • Compare earlier decisions about similar complaints and consult expert recommendations for similar cases. For example, the PRB panel should make consistent decisions about the Labor Law, or abnormally low prices. PRB can use am internal database or the database of D+; • Publish all complaints (required by Article 15 of PRB Work Regulation) and expert opinions in full in an electronically readable format; • Monitor and audit expert recommendations periodically; and • Change the interpretation of Article 99.2 of PPL regarding blacklisting of EOs. Throughout the implementation of this activity, D+ monitored hearings at PRB and populated the online database with information about the decisions of this body. D+ entered 3,480 decisions into the database to-date. During the reporting period, D+ also prepared a semi-annual report on the findings from the monitoring process for the period June - December 2018. D+ launched this report at a closed roundtable event with USAID, PRB, PPRC, UK Embassy, and USAID TEAM. In parallel, D+ developed an annual monitoring report at the PRB covering the period June 2018 – May 2019. The report focuses on the issue of inefficiency and the repetitive request for reevaluation of offers ordered by PRB. The report also analyzes the workload of PRB members, the inconsistency of PRB decisions, and expert recommendations. The number of complaints in 2018 increased significantly, with 210 more complaints filed than in 2017. This upward trend is expected to continue in 2019. This

USAID TEAM Annual Report 2019-2020 | 72 represents a 38 percent increase in the workload of PRB. In its four monitoring reports, D+ found that the biggest problem is the inconsistency in decision-making. Lack of an internal database resulted in the frequent inconsistency of decisions. For the period1 June 2018 to 31 May 2019, D+ monitored all open hearings of the PRB. A total of 779 decisions were taken during this period. Out of 779 decisions, 429 were in favor of the complainant EO. In 29 cases, the complaints were withdrawn; in 42 cases, the panel issued a notice; in 279 cases, the PRB found against the complainant EO. In 27 decisions in favor of complainant EOs, PRB also issued orders for failure to comply with previous decisions by contracting authorities. Review experts gave recommendations in favor of complainant EOs in 430 cases, and against them in 314. EOs typically file complaints citing errors or irregularities in the contract notice, contract award notice, and tender cancellation notice, with the largest number of complaints about the contract award notices. Type of complaint Cases Complaint against the contract notice 39 Complaint against the contract award notice 581 Complaint against the tender annulment notice 152 Complaint against the qualification notice 1 Complaint against the scoring notice 1 Complaint against the elimination notice 2 Complaint for failure to implement PRB decisions 3

Table: Breakdown of complaints by type of complaint for the period June 2018 - May 2019 D+ shared the draft report with the PRB for their review and comment. In addition, USAID TEAM Component II reviewed and fact-checked this report. The report has been launched through a roundtable event with participation from central and local-level institutions, CSOs and media. The report covers the period June 2018 – May 2019. Some of the key findings discussed were: • Inconsistencies in decision making, which undermine the trust in PRB’s decisions; • Inconsistent application of laws, such as the Labor Law, creating problems in tenders for security and cleaning of buildings where workers are underpaid and working overtime; • Issue of dealing with the ineffective blacklisting of companies that break the law. D+ found that even when companies are blacklisted, they were freely bidding on other tenders, while the law says that a blacklisted company cannot bid during the blacklisted timeframe. Some of the recommendations presented in this report are related to steps and measures that PRB should take in order to improve their decisions. D+ recommended PRB audit all expert’ recommendations, to create a database of past decisions and use the database from D+ in order to improve the situation regarding inconsistent decisions. Another recommendation was that PRB should publish all the complaints, expert’s recommendations and other documents.

73 | USAID TEAM Annual Report 2019-2020 3.1.9 Empower CSOs to prevent corruption in municipal public procurement in focus municipalities. USAID TEAM grantee D+ launched the Second Benchmarking Report on March 27, 2019. This report covers the period January 2018 - July 2018 highlighting best practices, irregularities, and violations and focusing on the main developments in public procurement at the local level. The aim was to assess the extent to which municipalities are operating according to the law, as well as to encourage officials to share good practices in public Launching of Second Benchmarking Report procurement. The findings in this report were collected through a qualitative and quantitative questionnaire, individual interviews with municipal officers, general discussions related to the public procurement system in Kosovo, and secondary sources from independent public institutions including the NAO, PPRC, PRB, Anti-Corruption Agency, and private companies. 3.2. ENABLE NATIONAL-LEVEL CSOs TO TRAIN LOCAL-LEVEL CSOs IN PROCUREMENT MONITORING Throughout the year USAID TEAM worked with 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. Engage national-level CSOs through CiviKos and Support Fund to provide knowledge and expertise to local-level CSOs on procurement monitoring. USAID TEAM subcontractor CiviKos continued with Applied Learning Workshops with CSOs from seven Kosovo regions. As reported previously, CiviKos, in coordination with USAID TEAM and its partners, shifted from classroom-based training to a more innovative approach – Applied Learning Workshops. This new approach is providing an opportunity for CSOs to directly apply knowledge they receive since they use real examples of municipal procurement activities. During Year 3, CiviKos completed the seven planned Applied Learning Workshops with CSOs from seven Kosovo regions. The CSOs from Ferizaj/Uroševac, Peja/Peć, Prizren, Pristina, Gjilan/Gnjilane, South Mitrovica and North Mitrovica completed the five-day workshop over the course of nine weeks and completed their draft reports with findings from the monitoring of selected procurement activities. The CSOs that participated in these workshops developed and practiced new skills to monitor, access, and analyze documents related to procurement procedures. With support from peer facilitators, they

USAID TEAM Annual Report 2019-2020 | 74 conducted informational interviews with relevant municipal officials as part of their investigations and carried out field visits. Their final reports captured findings and recommendations for improvement. The CSOs focused primarily on infrastructure projects such as rehabilitation of the Mirusha river bed (Gjilan/Gjnilane); construction of an indoor sport field in Gaqke/Gacka village (Ferizaj/Uroševac), construction of a roundabout in Lakrishte neighborhood in Pristina; construction of Olympic pools in Prizren; construction of streets in Vitomirica village (Peja/Peć); construction of a recycling center in South Mitrovica and construction of a fire station and sports hall in North Mitrovica. Through these investigative reports, the local-level CSOs uncovered possible fraud, waste, and abuse.

For example, some municipalities seem to have awarded CSOs monitor road construction in Vitomirica, contracts to bidders with much higher cost than the estimated Peja/Peć as part of the Applied Learning Workshop price reflected in the procurement plan, municipalities continue to award contracts to companies that propose abnormally low prices per position/items, some municipalities delayed the publication of notification for contract award, municipalities accepted irrelevant references for previous projects, and the PRB provided decisions that were inconsistent with previous decisions for similar cases. During the implementation of this activity, considering the specificity of the situation in the northern part of Kosovo, the Mitrovica North group faced challenges to access public information especially access to documents for the two contracts that were selected for monitoring. The selected projects for monitoring in this region were: construction of a fire station – phase two and construction of a sports hall – phase two. The CSOs from the north prepared a report with findings. Among other findings, the report highlights the lack of information regarding the funding since the projects were financed through the North Development Fund but without details regarding the process. Another finding is that North Mitrovica did not respect the legal provisions for potential complaints pertaining to the evaluation of bids. The contract was signed prior to publishing the notice for contract award on the e-Procurement platform. In the meantime, the CSO teams submitted their draft reports and the USAID TEAM procurement advisors and Component I staff reviewed and commented on the documents as part of regular cross- component interaction on the project. USAID TEAM also shared CSO findings with the municipalities under investigation for their comment prior to publication of the report. Reports prepared by CSOs from all six regions were published on the last day of the Applied Leaning Workshop on the use of media for publishing and disseminating key findings on monitoring performance of local authorities with a focus on public procurement and expenditure of public funds. The CSOs from North Mitrovica requested to publish the report anonymously citing CiviKos as the author of report without presenting the names of the organizations. 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

75 | USAID TEAM Annual Report 2019-2020 investigative reports to highlight shortcomings in managing public funds. To reinforce the impact of cooperation between CSOs and media, the following activities were undertaken. 3.3.1. Build capacity of municipal-level CSOs to utilize media to report corrupt practices. This is a follow-up to sub-activity 3.2.1. Once local-level CSOs prepared reports during the learning workshops to monitor procurement, USAID TEAM subcontractor CiviKos organized Applied Learning Workshops to utilize media to expose corruption. This activity has helped CSOs to increase their ability to message effectively to a wider audience. USAID TEAM subcontractor Civikos developed a manual on models that can be used by civil society to cooperate with media to address corruption in public procurement. The manual outlines the steps to be taken in organizing various activities in which media will be involved, including preparing and publishing reports and organizing public events (roundtables, press releases, conferences, etc.) for disseminating information to the wider public. During the reporting period, CiviKos initiated and completed the workshop with CSOs from all seven regions (Peja/Peć, Ferizaj/Uroševac, Gjilan/Gnjilane, Mitrovica e Jugut/South Mitrovica, Prizren/Prizren, Pristina, and North Mitrovica. Those events were a good opportunity for CSOs to demonstrate their knowledge gained from the capacity building activities both in terms of procurement monitoring and cooperation with the media. “As a result of the Applied Learning Workshop, we gained practical skills and knowledge through learning- by-doing. We are using these skills to hold municipalities more transparent and accountable,” stated Arbenita Topalli from local CSO INPO, while Qendrim Hoxha from LDA-Kosova said “Inclusion is crucial to increase municipal responsibilities towards its citizens. We did our first step in this direction, and we need more support in order to involve not only CSOs but citizens as well.” 3.3.2. Support national and municipal- level CSOs to utilize social media for dissemination of information to the public. The primary targets for this activity are the local- level CSOs participating in the Applied Learning Workshops. In January 2019, USAID TEAM hired a Social Media Expert to work with CSOs on outreach through social media. During the reporting period, the Social Media Expert Civil society employing features that Facebook offers for publication developed a guideline to assist CSOs and pave a and promotion of their work path toward the best and most efficient use of social media. The guideline also helps CSOs reach a larger audience when launching reports, events, roundtables, or conducting any other organization-related activity, by illustrating the most up-to-date and relevant social media actions to be taken in order to achieve results. In addition, USAID TEAM organized two workshops on the “Use of Facebook for dissemination of messages.” Fourteen representatives from local-level CSOs had the opportunity to learn about the benefits of Facebook for the publication and

USAID TEAM Annual Report 2019-2020 | 76 promotion of their work. Learning modules covered the best timing for publication, selection of target audience, preparation of posts for news, selection of photos and images that will accompany the news. USAID TEAM also provided on-the-job coaching to CSOs that launched reports through the Applied Learning Workshops. The support amplified the key messages of the report, which received good traction in the media despite the electoral campaign. Additionally, the consultant delivered 10 coaching sessions for 10 local-level CSOs. The one-on-one coaching sessions, held in the CSOs’ offices, focused on delivering the topics discussed in the workshop held earlier in the year, albeit with a more tailored approach for each individual organization. The individual coaching sessions clearly led to more information absorbed by the participants. 3.3.3. Provide grant funding to encourage partnerships between CSOs and investigative journalists. USAID TEAM subcontractor Çohu continued to monitor and prepare investigative reports, follow-up reports, and multi-media stories related to procurement processes. In Year 3, Çohu prepared and published four investigative reports, three multi-media stories, and two infographics. The focus of the investigative reports included (1) poor quality of work implemented in a road construction project in one of the Fushë Kosovë/Kosovo Polje neighborhoods, (2) property issues delaying construction of drainage in Kalabria neighborhood in Pristina, (3) building of elementary school in Llazice village without proper project design, and (4) construction of a bridge in Gjilan/Gnjilane city neighborhood without procurement procedures. A follow-up video story that highlights tendering issues regarding the construction of a memorial park by the Municipality of Istog/Istok attracted attention from the general public. The video shows how construction was delayed for two years and the municipality incurred the additional costs of 43,125 Euros due to poor construction which must be redone. In addition, during the reporting period, Çohu submitted four investigative reports, five follow-up reports, and one follow-up multimedia story, as follows:

• Çohu published an investigative report on construction of roads in three villages in the Municipality of Podujeva/Podujevo. The issues identified are mainly related to poor planning during the design phase; lack of consultation and coordination with residents of the villages during the pre- construction and construction phases; delays in completing works as a result of poor contract management; and delays by the municipality in providing information to the journalist’s questions; • An investigative report on construction of two roads in the Municipality of Mitrovica. This article, unlike others, has a more positive tone as Çohu did not find any major issue with the tender; • An investigative report on implementation of a road construction project for 17 villages in Vushtrri/Vučitrn municipality which, among others, is tackling unsolved property issues; • An investigative report related to the issue of low prices for certain items for food supply for some of the schools in Gjakova/Ðakovica, which is raising a concern about abnormally low prices and weighting of such prices by the CA;

77 | USAID TEAM Annual Report 2019-2020 • A follow-up report on construction of a bridge in one of the neighborhoods in Gjilan/Gnjilane municipality. In December 2018, newspaper Zeri published a story about the construction of a bridge built without proper procurement procedures. After the article was published, the Office of the Basic Prosecutor initiated a formal investigation (see decision to the right in Albanian);

• A follow-up report related to the previously published article to purchase a vehicle for the Family Health Center in Suharekë/Suva Reka, for which there were indications that the selection criteria had been fixed to favor one producer. The tendering procedures were completed in 2017 and the investigative report was published in 2018 highlighting the findings related to the criteria, the complaints from EOs submitted to PRB for review regarding the process, and actions undertaken by the municipality. Through the follow-up story, the investigative journalist tried to find out why the municipality or prosecutor did not take any measures to initiate a formal procedure for investigating the case for which there are clear indications for the violation of the PPL; • A follow-up story related to the previously published article for construction of road “Pajazit Ilami” in Fushë Kosovë/Kosovo Polje. The road, which was first constructed in 2017, was damaged shortly after the completion of work. The main reason for the damage, according to citizens, was poor planning and supervision of works during the implementation and lack of traffic signs to prevent the traffic of heavy trucks. When the first investigative report was under preparation, municipal authorities stated that additional work on the road should be undertaken including the widening of the existing road, construction of sidewalks, and installation of traffic signs. The follow-up report informs the public about the current situation including the municipality’s plan to launch road rehabilitation works this year; and a follow-up report and follow-up multimedia story about the construction of a wastewater treatment plant in Kalabria Snapshot of BIRN article about the neighborhood in Pristina due to unsolved property issues. indictment of the Head of the Procurement Office in Prizren This led to significant delays. This video, alone, has been viewed 13,000 times.

USAID TEAM Annual Report 2019-2020 | 78 Last but equally important, Çohu submitted the last follow-up investigative story focused on the current situation related to the construction of several roads in Obiliq/Obilic municipality. According to their follow-up story, the procurement activity has had serious issues such as delays of more than two years, subcontracting works against the regulations, poor quality of works which caused damage to the municipal budget and implementing works prior to signing the contract. In May 2017, the Basic Court in Pristina sentenced five managers and supervisors of EOs related to construction of these roads, among them the representative of Delta Ing company, which was one of the consortium members. According to article 65 of the PPL, paragraph 3, any EO with a director, manager, or supervisor convicted of such a crime is not eligible to apply for any public procurement activity for a period of 10 years. USAID TEAM procurement advisors reviewed the follow-up story, prior to publication. After publishing an article about suspicious tendering procedures for construction of a road in Obiliq/Obilic, Çohu decided to forward the article to the Prosecutor. Çohu alleges Obiliq/Obilic municipality violated provisions of the PPL. Additionally, Çohu submitted a revised version of the scenario for two follow-up stories: • A follow-up media story about road construction in Fushë Kosovë/Kosovo Polje. A year ago, Çohu published an article and multimedia story highlighting an issue with poor planning and implementation of the project which has caused damage to the newly contracted road in very short time. • A follow-up media story on construction of several roads in villages of Vushtrri/Vučitrn municipality. The story presents a positive example of implementation of projects that meet citizen expectations. In total during this project, the grantee prepared and published 12 investigative stories, six follow-up reports, six multi-media stories and three follow-up multimedia stories, reaching 140,488 viewers and shared (republished) by 131 media outlets. The four videos produced had a total of 94,000 views and reached 194,636 people. This reach only relates to the data provided by ÇOHU, and it does not include the reach of Zëri and Insajderi, since they did not disclose these data considering it a business secret. This intervention led to a number of notable actions by targeted institutions. A story about a memorial site in the Municipality of Istog led to allocation of additional funds by the Agency for the Management of Memorial Sites to finish the work. After the publication of the story about the Municipality of Gjilan, the Prosecution initiated investigations regarding the construction of a bridge in the Municipality. These works were done during the election campaign with no open tender. The roads that were poorly constructed in the Municipality of Obiliq and Fushë Kosovë – covered by two separate stories – led to reconstruction of the roads. In addition, as part of a Year 2 activity, USAID TEAM grantee BIRN launched its Annual Monitoring Report completing the project “Increasing civic oversight on public expenditure in Kosovo through publicly beneficial investigative reporting.” BIRN monitored procurement procedures at the municipal level and analyzed the transparency of contracting authorities regarding access to information in procurement. The report was launched in front of an audience comprised of representatives from central-level procurement oversight bodies, mayors, and representatives of CSOs in Kosovo, among others.

79 | USAID TEAM Annual Report 2019-2020 As a result of an investigative report published in February 2019 by former USAID TEAM grantee BIRN, the Basic Prosecutor of Prizren/Prizren filed an indictment against the Head of the Procurement Office of Prizren. The article alleges that the Municipality of Prizren entered into an illegal contract with an EO after PRB ordered the Municipality to cancel the contract. Based on current and public information, the procurement office of Prizren was against the signing of the contract for vertical road signs, but the Mayor disregarded this advice and went ahead with the signing. BIRN, following a lengthy investigation, sent a letter to the Prosecutor listing the alleged violations. USAID TEAM examined the steps taken by the municipality, PRB, and prosecutor and found missteps from all parties throughout this process. USAID TEAM is following-up with BIRN, PRB, and the Municipality, itself through a multi- component approach to help everyone learns from this experience. 3.3.4. Build formal reporting mechanism for CSOs and journalist to reports cases of suspected corruption to the State Prosecutor. USAID TEAM engaged a consultant, Kreshnik Gashi, to develop a formal reporting mechanism for CSOs and journalists to report cases of suspected corruption to the State Prosecutor. As a part of this activity, the expert consultant is helping to develop an MoU between CSOs, investigative media, and the Office of the State Prosecutor. The expert consultant is also preparing the reporting templates for CSOs and met with the Chairman of the Kosovo Prosecutorial Council to inform him about this initiative. The Chairman confirmed his readiness to provide support during the drafting of the MoU and reporting forms. Similarly, the expert consultant met with the Director of the KPC Secretariat to discuss the opportunity to digitize the process of civil society reporting. This initiative is also supported by the Director of the Press Council of Kosova. CROSS COMPONENT USAID TEAM Component III, during the reporting period, shared with Component I and project implementation advisors reports that have been prepared by CSOs: • Investigative reports prepared by CSOs through the CiviKos Applied Learning Workshop in five Kosovo regions (Pristina, Mitrovica/Mitrovica, Ferizaj/Uroševac, Gjilan/Gnjilane, Prizren/ Prizren, North Mitrovica, and Peja/Peć), • Investigative reports prepared by Çohu and its consortium members (Zëri and Insajderi), • Public Procurement Transparency Index report prepared by KDI, • Second Benchmarking report prepared by D+, • Analytical report on “Public Financial Management through the eyes of the Auditor General” prepared by KDI, • Monitoring of municipal procurement planning for six second-tier municipalities report, prepared by KDI,

USAID TEAM Annual Report 2019-2020 | 80 • Monitoring of municipal budget planning for six second-tier municipalities report, prepared by KDI, and • Draft of the first x-Index report including database with collected data for January – December 2018 prepared by Riinvest. USAID TEAM Component III shared with Component II the annual monitoring report at the PRB covering the period June 2018 – May 2019, prepared by D+. USAID TEAM Component I and II worked together to strength the sustainable and self-reliant training capabilities of the PPRC Training Department and KIPA. With project support, PPRC and KIPA launched video tutorials on the use of the e-Procurement platform, signed an MoU with each other clearly delineating roles and responsibilities for training in public procurement, developed a Training-of-Trainers program for Advanced Procurement Certification; and delivered the TOT on Advanced Procurement Certification to 32 procurement professionals. Now, PPRC and KIPA can conduct Basic and Advanced Procurement Certification for all procurement officers without USAID TEAM’s future support. CHALLENGES DURING REPORTING PERIOD Challenges during the reporting period include the following: • PRB expressed concerns regarding interference and pressure applied to the PRB Board by law enforcement institutions. Their main complaint was that police and prosecutors have been opening criminal investigations on certain PRB decisions. If an EO is not satisfied with the decisions of the PRB, the correct legal procedure is to appeal to the courts. This interference, coupled with Government talks from last year on abolishing the PRB, became a challenge for the project to continue investing normally in an institution facing such risks. • The new package of laws related to civil service and HR caused some delays in implementation of project activities related to HRMIS training. Additionally, the Constitutional Court temporarily suspended these laws. The Department for Civil Service Administration /MPA requested to postpone the development of training videos for use of HRMIS until the system is updated and the law comes into force. • DCSA/MPA, MLGA, and AKM requested USAID TEAM postpone a learning summit with all municipal HR managers until the civil service-related sub-legal acts are approved, including the municipal code of ethics and integrity plans. • Component II faced a significant challenge concerning the extended delay in the development of the PRB website, database of decisions, and livestreaming capacities. This activity was outsourced to a local company which initially provided, based on its own assessment, a two-month plan for the complete design and development process. Nevertheless, the vendor failed to provide the project with a working product during the envisaged period, and the period of performance had to be extended to seven months. • Lack of organizational capacity of local-level CSOs to absorb USAID funding is delaying partnership between local-level CSOs and municipal governments. No CSOs applied for the seed funding RFA issued by USAID TEAM. Informal feedback from local-level CSOs in the Applied Learning Workshops indicate that local-level CSOs lack capacities to put together suitable proposals.

81 | USAID TEAM Annual Report 2019-2020 • Staff turnover at partner CSOs (BIRN, D+, KDI, and Levizja FOL) is causing loss of knowledge in these organizations, which is resulting in extra efforts for USAID TEAM staff to ensure consistent quality. • Component I short-term audit advisors faced significant challenges approaching and supporting the northern Kosovo municipalities of Leposaviq/Leposavic, Zveqan/Zvecan, Zubin Potok and North Mitrovica. • Quality control measures of deliverables from CSOs are taking significant efforts and time from USAID TEAM, in particular for deliverables coming from local-level CSOs. • Due to a moratorium issued by GOK on hiring experts, PPRC was unable to extend the engagement of an IT to develop OCDS within the e-Procurement platform. As a result, although OCDS has been introduced, full implementation has been delayed. MITIGATION MEASURES TAKEN TO ADDRESS CHALLENGES DURING REPORTING PERIOD USAID TEAM took the following mitigation measures to address the challenges during the reporting period: • With the support of USAID and the U.S. Embassy, the project assisted PRB to organize a meeting with the National Assembly Committee on Budget and Finance, which supervises the performance of the PRB, to discuss the issue of interference by law enforcement institutions in the work of the PRB and to gain political support in overcoming such interference. This sparked the involvement of the Police Inspectorate and the State Prosecutor to investigate the matter. Consequently, PRB has confirmed that the level of interference and intimidation has declined. • Project worked more closely with DCSA/MPA to communicate changes and timelines for anticipated joint activities. • Given the constant delays by the local IT vendor on developing the PRB website, database and livestreaming capacities, the project invited vendor’s senior management to discuss the potential termination of the contract. The discussion, nevertheless ended in good spirit, with the vendor agreeing to allocate more resources to this activity and committed to provide a final version of the product by the end of June 2019, which they did. • USAID TEAM is factoring in the time requirements to thoroughly review products prepared by grantees and subcontractors. Implementation plans now allow for more time to review documents, videos, and other materials prepared by grantees and subcontractors. In addition, USAID TEAM adopted a new approach to review documents in the form of ‘red team’ reviews. A red team review is generally carried out by an independent group that challenges an organization to improve its effectiveness by assuming an outsider point of view, questioning all aspects of the work. • USAID TEAM explored new avenues to achieve the goal of attracting local-level CSO to apply and successfully implement activities related to monitoring of municipal expenditures. CSOs have sufficient capacity to monitor procurement. One idea was to simplify the application process, translate RFA documents, and make it possible for CSOs to apply in their local language.

USAID TEAM Annual Report 2019-2020 | 82 • USAID TEAM is ensuring staff replacements meet contractual criteria in terms of qualifications and experience. Nevertheless, procurement experts are lacking in Kosovo’s labor market. • The project accepted the DCSA/MPA request to postpone joint activities. • The project, with support from MLGA, established normal communication and cooperation with northern Kosovo municipalities to address NAO recommendations. Now, the audit advisors can work with the northern municipalities and are sending regular reports back to the project main office. • Given the early dissolution of Government and Parliament, concerns were raised in the working group drafting the PPL concept note on whether the new government will share the same commitment and support as the previous one. The working group members have agreed to continue finalization of the Concept Document, regardless of the risk. When the new government is in power, they will present a well prepared and comprehensive Concept Document, with inputs from all stakeholders, local and international. USAID TEAM will consider launching a rapid political economy analysis scan once the new government is in power. • The project, with support from MLGA, established normal communication and cooperation with northern Kosovo municipalities to address NAO recommendations. Now, the audit advisors can work with the northern municipalities and are sending regular reports back to the project main office. • USAID TEAM is continuing to work with CiviKos and KDI, as main contact points for capacity- building efforts to address shortcomings of deliverables by highlighting recurring issues. Nevertheless, high turnover of staff, low capacity of staff with advanced research and drafting skills within CSOs, and very limited financial sustainability of CSOs, will continue to impact the quality of deliverables and the timeline for their finalization. • With respect to engagement of the IT expert on developing OCDS for the e-Procurement platform, the Government has lifted the moratorium and PPRC will continue with the finalization of introducing OCDS in the first quarter of 2020.

83 | USAID TEAM Annual Report 2019-2020 ANNEX I: WORK PLAN SCHEDULE PERFORMANCE

WORK WORK PLAN TASK PLAN DUE STATUS COMMENTS DATE

1.1.1. Assess organizational March 2019 Completed capacity of municipalities

1.1.2. Create custom work March 2019 Completed plans with focus municipalities

1.1.3. Conduct citizen April 2019 Completed perception survey

1.1.4. Measure and report on the annual municipal graduation July 2019 Completed plan 1.1.5. Present municipal graduation and organizational August 2019 Completed capacity assessment results 1.1.6. Activities serving the Adaptive Management Plan December Completed (f) Reflect on the effectiveness 2019 of Component III activities 1.2.1. Identify, develop and December implement Support Fund Completed 2019 projects 1.3.1. Provide on-the job coaching and mentoring for all December Completed municipal procurement 2019 activities 1.3.2. Roll-out practices, processes, and forms from December Completed focus municipalities to second- 2019 tier municipalities 1.3.3. Develop and introduce standard operational procedures, templates, and June 2019 Completed manuals for more transparent, effective procurement procedures Due to complexity in the need for coordination with multiply 1.3.4. Support municipal December central and local institutions, mechanisms to enhance project Ongoing 2019 such as MLGA, MESP, PPRC, management. MOF and municipalities, this activity is still ongoing. Advanced Procurement Certificate Program completed. 1.3.5. Support GOK to December Training Regulation and Video strengthen sustainable and self- Partially completed 2019 tutorials are postponed on reliant training capabilities PPRC request, as they initiated the change of Procurement Law,

USAID TEAM Annual Report 2019-2020 | 84 WORK WORK PLAN TASK PLAN DUE STATUS COMMENTS DATE which will have impact on system and training regulation.

1.3.6. Support the AKM Procurement Collegium as a November venue for information Completed 2019 exchange and roll-out of technical assistance 1.4.1. Provide on-the-job December coaching and mentoring in Completed 2019 auditing

1.4.2. Develop SOPs and June 2019 Completed internal audit manual 1.4.3. Build capacity of Municipal Policy and Finance July 2019 Completed Committee in audit and financial control 1.4.1. Disseminate internal audit processes to build June 2019 Completed capacity of IAUs and MACs

1.5.1. Facilitate implementation July 2019 Completed of municipal codes of ethics

1.5.2. Establish municipal “integrity groups” in focus October 2019 Completed municipalities MPA requested that the project postpone this activity until 2020 1.5.3. Develop online training due to an upgrade to the HRMIS July 2019 Postponed to Year 4 video for the HRMIS and changes due to new laws, including the suspension of law by Constitutional Court. 1.5.4. Engage all municipal HR managers through learning June 2019 Completed summits to roll-out solutions

1.6.1. Monitor and advise December Completed municipalities on transparency 2019

1.6.2. Enhance public relations July 2019 Completed efforts of focus municipalities 1.6.3. Disseminate tools, practices, and processes for municipal transparency in October 2019 Completed public procurement and financial management

85 | USAID TEAM Annual Report 2019-2020 WORK WORK PLAN TASK PLAN DUE STATUS COMMENTS DATE 1.7.1. Develop and implement Handbook on Internal Public June 2019 Completed Expenditure Management Process Per Treasury of Kosovo’s request to assist in regulating 1.7.2. Develop municipal December Ongoing the area of invoice processing, invoice management system 2019 USAID TEAM is still coordinating on this activity. 1.7.3. Provide on-the-job December coaching on Public Finance Completed 2019 Management 1.7.4 Disseminate handbook, SOPs, templates, codes, and October 2019 Completed practices for public financial management and control 2.1.1. Enhance NAO capacities to implement procurement June 2019 Completed audits through e-Procurement system 2.1.2. Support and coordinate with other USG agencies and local actors to develop September Completed guidelines for prosecutors and 2019 judges on handling procurement cases 2.1.3. Enhance December operationalization of Anti- Completed 2019 Fraud Unit 2.1.4. Incorporate fraud detection in performance audit December Completed of public procurement and 2019 implement risk-based planning 2.1.5. Support NAO on mapping business processes March 2019 Completed and develop ToR for an AMS 2.2.1. Implement risk-based November planning to audit areas which Completed 2019 are more vulnerable to fraud 2.2.2. Implement automated semi-annual reports through August 2019 Completed the CHU Intranet System 2.2.3. Build CHU capacities to develop and implement a September quality assurance and Completed 2019 improvement program in municipal IAUs 2.2.4. Strengthen CHU December Completed capacities to enforce 2019

USAID TEAM Annual Report 2019-2020 | 86 WORK WORK PLAN TASK PLAN DUE STATUS COMMENTS DATE mechanisms against poor performing internal auditors

2.3.1. Support activation and December upgrade of the e-procurement Completed 2019 platform modules

December 2.3.2. Introduce OCDS Completed 2019 2.3.3. Develop and implement software tool to automatically publish tenders and contracts June 2019 Ongoing from e-Procurement platform on official municipal websites 2.3.4. Build PPRC IT team capacities to operate and July 2019 Completed maintain the e-procurement platform 2.3.5. Develop and implement a risk-based selection tool to October 2019 Completed monitor procurement activities more effectively 2.3.6. Enhance PPRC capacities to enforce Regulation on December Completed Performance of Procurement 2019 Officers 2.3.7. Develop and implement Development is completed; the CPE System (within the e- September Completed however, implementation is Procurement Contract 2019 ongoing in Y4 Management Module) 2.3.8. Support drafting process of new PPL and monitor the December This activity is planned to Ongoing adoption process at the GOK 2019 continue in Y4 and Assembly 2.3.9. Build PPRC capacities to implement communications June 2019 Completed strategy 2.4.1. Monitor and support the PRB to implement 100 percent March 2019 Completed of procurement reviews through e-Appeal 2.4.2. Monitor and support the PRB to implement the new database of appeal decisions, June 2019 Completed including link with database of Kosovo Judiciary 2.4.3. Monitor and support implementation of June 2019 Completed livestreaming of PRB sessions

87 | USAID TEAM Annual Report 2019-2020 WORK WORK PLAN TASK PLAN DUE STATUS COMMENTS DATE 2.4.4. Build PRB capacities to September implement communications Completed 2019 strategy 2.4.5. Strengthen PRB capacities to address CSO September Completed findings related to deficiencies 2019 in the work of the PRB 2.5.1. Clarify roles in December Completed procurement regulation 2019

2.5.2 Implement a joint-case December Completed build-up mechanism 2019

3.1.1. Host annual CSO September Challenges to foster innovative Ongoing, on track 2020 ideas 3.1.2. Empower local CSOs and citizens to prevent corruption in municipal public June 2020 Ongoing, on track procurement in second-tier municipalities No local-level CSOs applied. But, following a feedback session, the 3.1.3. Expose corruption and December Adapted and allocated funds will be used misuse of public funds through 2019 redesigned during Year 4 and comprise an use of technology tools overarching sustainable solution to fund CSOs. 3.1.4. Promote transparent and accountable municipalities through Transparency Index in May 2019 Completed Public Procurement for Municipalities 3.1.5. Promote efficient use of public funds through fair and June 2020 Completed New ad-on award issued transparent public procurement 3.1.6. Support expanded About 97 percent of activities functionality of public December are completed. Final report for Ongoing procurement transparency 2019 completion of this sub-activity portal delayed to January 2020. 3.1.7. Support and expand deployment of social February accountability tools to monitor Ongoing, on track 2020 public procurement and public expenditure 3.1.8. Engage national-level CSOs to monitor PRB June 2019 Completed decisions with impact on local- level procurement

USAID TEAM Annual Report 2019-2020 | 88 WORK WORK PLAN TASK PLAN DUE STATUS COMMENTS DATE Due to expansion, USAID TEAM 3.1.9. Empower CSOs to Initial activity did not award any grant to prevent corruption in municipal completed. Issuing of monitor focus municipalities. June 2019 public procurement in focus new grant adapted New activities planned for 2020 municipalities and redesigned to account for all 15 focus municipalities. 3.2.1. Engage national-level CSOs through CiviKos and Support Fund to provide May 2019 Completed knowledge and expertise to local-level CSOs on procurement monitoring 3.3.1. Build capacity of municipal-level CSOs to utilize May 2019 Completed media to report corrupt practices 3.3.2. Support national and municipal-level CSOs to utilize April 2019 Completed social media for dissemination of information to the public 3.3.3. Promote cooperation between CSOs and December Completed investigative media to expose 2019 corruption 3.3.4 Build formal reporting Project expert developed an mechanism for CSOs and MOU and basic reporting journalists to report cases of May 2019 Partially completed mechanism. Roll-out and suspected corruption to the implementation will continue in State Prosecutor Y4 3.3.5 Support CSO activities to December demand accountability during Completed 2019 the Anti-Corruption Week

89 | USAID TEAM Annual Report 2019-2020