Montenegro’s State Audit Institution (DRI) gave the Ministry of Health a double-negative opinion on its 2025 annual report, finding that it could not establish the actual spending or unspent balance of 3.633 million euros transferred to the United Nations Development Programme (UNDP). The ministry made the two payments in December 2025 to continue the second phase of the Strengthening the Health System in Montenegro project, according to the DRI.
The DRI issued 31 recommendations, four relating to the financial audit and 27 to the regularity audit. Vojislav Šimun heads the Ministry of Health, and the report was signed by Siniša Čađenović, president of the DRI Senate.
Controls and tax records
Alongside the project accounting, the DRI found weaknesses in controls over employee salaries, allowances and other payments. The audit identified issues with keeping procedures up to date, the reliability of working-time records, variable-pay calculations and the reconciliation of tax records. It also found that the ministry’s procedure for calculating and paying salaries was not aligned with regulations in force.
The ministry had not set internal criteria and procedures for variable-pay allowances, the DRI found, creating a risk of non-transparent and inconsistent decisions. Auditors also found discrepancies between ministry records and those of the Tax Administration. At 31 December 2025, the taxpayer’s analytical account showed an overpayment of 3,938,858 euros, but the DRI said this did not reflect the actual position because data were inconsistent and IOPPD forms from earlier periods had been amended.
According to the audit, IOPPD forms for January–April 2025 were submitted late, while forms for May–December 2025 were not submitted. The DRI also found that some supplementary contracts had been signed retroactively. Its review of official travel identified weaknesses in applying regulations and in controls over allowance calculations, document checks and record-keeping.
Project accounting and oversight
The DRI found that the December transfers to UNDP were recorded in the wrong account. As a result, auditors could not establish the amount of project expenditure actually incurred or the balance of any funds left unspent at 31 December 2025. The report also identified a risk that the same accounting method had been used in previous years.
The project has been carried out in Montenegro since 2017 under an agreement and related annexes. An amendment to the agreement in November 2025 increased its value by 3.63 million euros. By the end of 2025, the Ministry of Health had transferred 8,227,736 euros to UNDP, which implements the project through a direct implementation model.
UNDP data showed that activities worth 3.22 million euros had been contracted by the time of the audit. Payments to suppliers and consultants amounted to 2.4 million euros, equal to 74.5% of the contracted activities’ value. The DRI said 5,825,898 euros transferred for the project had not yet been spent through completed project activities and remained available for activities planned for a later period.
Cooperation between UNDP and Montenegro is defined through relevant strategic documents until 2027, according to information available to the auditors. The DRI could not determine from the documentation presented how unspent, contracted and available funds, or project, financial and other documentation, would be handled if the implementation model changed or ended before the project was complete. It also found no clear designation of who would take over remaining activities, manage available funds and assume responsibility for completing the project in that situation.
