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Why are important the annual financial reports of the parties?

The expiry of the deadline for submitting the annual financial reports of political entities (April 18th 2017) is an opportunity to remind that Serbia has not yet amended the Law on Financing Political Activities. If this was achieved, it would provide incomparably greater publicity of campaign finance data as it lasts and solves a number of other problems that unfortunately have shown at this year’s election. Otherwise, the mentioned changes were foreseen by the anti-corruption strategy of 2013, the action plans Serbia brought in the process of Euro integration (Chapter 23), and they are also included in the recommendation our country received from OSCE/ODIHR Monitoring Mission and TAIEX Experts in 2016.

This year’s financial reports of political parties are important because they will find not only those revenues and expenditures that the parties had at their regular expenses during previous 2016. year, but also revenues and expenses that also relate to the election campaign.

According to the fact that parliamentary, provincial and many local elections were held last year, the reports submitted to the Anti-corruption Agency will also include data on incomes and expenditures of these election campaigns, for which special reports were submitted in late May 2016. The benefit of these double reporting on the same thing lies in the fact that the campaign financing reports have shown that the significant part of the costs have not been paid from real sources. Namely, as Transparency Serbia has shown in the context of last year’s report on the monitoring of election campaign financing, which was published under the title “Campaign on the Cost of Citizens – when published does not mean visible”, even 287 million dinars costs of the campaign for parliamentary elections was funded by loans and 254 million dinars of expenses were simply not paid to suppliers. The annual financing statements should show whether these costs have been settled by the end of 2016 and from which sources.

Another important piece of information that citizens will be able to find out from the annual financial report is the extent to which they themselves finance parliamentary political parties over actual party need. Namely, financing the regular work of parliamentary parties from the budget, which is done in proportion to the number of votes won, in some situations enables the creation of “surplus”. This may occur when a party has a significantly greater support than its competitors or when the parliamentary party enters and exercise the right to budget revenues a party that does not have a diversified infrastructure to keep up with money.

Based on amendments to the Law on Financing Political Activities, adopted at the end of 2014, the parties to whom this money extracted from the budget for funding their regular activities can use this money for a completely different propose – financing of the election campaign, although to receive money from a special budget line. So people actually pay twice to watch TV commercials, newspaper ads, billboards and mass rallies, except in one case as source of income the budget is indicated, and in the second so-called “Own funds” in fact, the money also comes from the budget.

We recall that non-election year 2015, according to financial reports of the parliamentary party ended with a surplus of about 500 million dinars, which is mainly for SPP (425 million) and PUPS (65). A significant portion of these funds was used for the subsequent election campaign (“own funds” are listed as source of income for the coalition around SPP on parliamentary elections in the amount of million dinars, but with all the parties 389 million). Based on the above, our organization believes it is necessary to amend the Law and order n the context of these changes should establish a model which would, among other things, eliminate the current irregulations in the system of party financing from the budget.