The priorities on the development of Public Administration Reform in Albania

The priorities on the development of Public Administration Reform in Albania May 2004

Content 1. Introduction 2 2. The Institution involved in the public administration reform 3 3. Public Administration Reform priorities 4 4. Public Administration Reform Achievements 6 - Budget formulation 6 - Budget execution 7 - Affordable Human Resource Management. 7 - More attractive employment conditions 8 - More Meritocratic and Depoliticized Civil Service Management 8 - More Contestable Policy Formulation Practices 9 5. Major challenges facing the reform effort 9 - Implementation of Civil Service Law 10 6. Conclusion 11

1.Introduction The reforms in Albanian public administration are developed through continuous processes of institutional reforms which aim the establishing and functioning of legal state and increasing the responsibility toward the public institutions. The institutional reforms has been the top priority of Albanian government aiming at establishing the democracy and the rule of law and reforming public administration as the bases to pave the way for a stabilized and sustainable process towards the market economy. The public administration of Albania during the post communism of 90 years started of being violated from some new factors never tried before: people were being discriminated because of their politic convictions; public administration began to suffer a difficult transition period, characterized from non stability in the personnel structures, which was associated with real problems in the implementation of the goals. The reform in public administration started with the reformation of civil service. The first efforts to establish a civil service in Albania were noticed by the approval of the law no. 8095, dated 21.03.1996 For the civil service in the Albanian Republic. The intention of the law was to end politicization of the administration and to set up a civil service based on the merits. At the same time, a division was proposed between the political officers and technical-professional ones. The amendment of legal framework in the field of civil service is another important step toward the establishing of a modern state of the law. Compilation and approval of the Law no.8549, dated 11.11.1999 Status of the civil servant is the main moment in the establishing of the state based on the law, for the creation of a stable, effective public administration based on merits. The law Status of Civil servant is conceived as a law, which regulates the management of civil service: judicial work relations of civil servants; their duties and rights; recruiting, promotion, job performance, disciplinary measures processes etc. This law makes possible the legitimization of the public administration based on the merits and professionalism. So it will be able to serve each one government elected, putting the national interests on the foreground. 2. The Institution involved in the public administration reform With aim to enforce the implementation of the law, were created several new institutions, and were strengthened the existing ones. Among them was the Department of Public Administration (DoPA) within the Council of Ministers, with the following competencies: - Develops, implements and oversees the implementation of the Government s policies on the civil service and other personnel issues. - Prepares an annual report on the general situation of the civil service and presents it to the Government. - Exercises any competency on personnel matters not expressly attributed by law to the institutions of the central administration.

During the same time it was established the Civil Service Commission (CSC) as an independent institution, with the task of solving the complaints and to supervise the implementation of the law. Civil Service Commission is an independent institution charged with supervisory responsibility over the management of the civil service at all the institutions falling within the scope of this law. It is the administrative resort for appeals in matters related to the civil servant. The Civil Service Commission has the following competencies: - Resolve individual appeals of decisions concerning hiring in the public service, probationary periods, promotions, lateral transfers, appraisals, disciplinary measures and the rights of civil servants. - Monitor the management of the civil service in all the institutions under the scope of this law. When irregularities are uncovered, the CSC warns the incumbent institution giving a term of up to two months to correct the illegality. At the expiration of this term, the CSC can take the matter to court. - Any other competency deriving from this law or from normative legislation set forth for its implementation and on the basis thereof. Both, Department of Public Administration and the Civil Service Commission are considered as two pillars of the reform of public administration in Albania. One of the most important components of the Public Administration Reform is the human resource management, and increasing the professional capacities by the support of Training Institute of Public Administration (TIPA). The main objective of TIPA will be to support the implementation of Public Administration Reform by improving professional skills and qualifications, in order to increase the efficiency of the public service. In this view trainings intend to adapt competencies and qualifications of civil servants to changes in the public service, aiming to improve and enhance their performance. The reforms developed within the public service and public administration require new training needs approach and should be supported by training actions aimed at making officials capable of working with public administration structures and implementing laws adopted by the government. It is necessary for the public administration employees to have the required skills and capabilities, in conformity with the job they have to perform. 3. Public administration reform priorities Albania has chosen the institutional reforms to open the way to a sustainable long-term economical and social development aiming at: - Increasing the strength of law enforcement bodies and policy development capacities. - Improving democratic governance and delivery of public services. - Focusing attention on the poor and the social cases in order to enable their participation in decision making. The institutional reforming process includes The Council of Ministers, other ministries and central institutions. Reforms are designed to ensure a more effective division among policy-making, policy execution, the executive, evaluation and audit structures and their decentralization to the regions.

Improvements have been made in inter-institutional relationships meanwhile the delegation, and decentralization of authority has begun to show positive results. The continuation and deepening of public administration reform will remain a priority among institutional reforms, being at the same time a key point for all governmental institutions. The areas of reform are clearly expressed at the priority actions programme 2003-2006, which has two main objectives: Strengthening of the administration s stability. The main actions here refer to a) improvement of the legal and institutional regulations defining the division between the political and the administrative level including the rights and obligations of each; b) strengthening of the Civil Service Commission s role as an instrument to reduce abuses in the framework of the Civil Servant Status; c) insuring the full implementation of the Civil Servant Status and other principles of public administration in the units of regional governance, where problems most occur, and the expansion of the principles of the Civil Servant Status in other government institutions like fiscal institutions, the customs and the diplomatic service,; d) promotion and education of stakeholders to the importance of strengthening administrative stability versus political imperatives. A detailed programme of activities supports the main areas of these measures. Increase in the performance of the public administration and civil servants. This is presently a problem area, and will require greater attention during the medium run (2003-2006). Civil service stability and high performance are closely related. According to the evaluations made, there is the risk that the performance of the civil servant degenerate which would put into danger the whole process of reform and cause needless bottlenecks inside the administration. The objective of increasing public administration performance is supported by an entire set of mid term measures that will be concentrated on the improvement of the system of high performance through motivation, discouraging poor performance and the abrogation of professional responsibilities in the administration and among civil servants. The main elements consist of: a) structural improvements, clarification of mandates, responsibilities and authority inside the ministries and at the inter ministerial level. b) adoption of a clear and monitorial scope of work for each civil servant c) initiating objective performance evaluation instruments. d) Adoption of appropriate motivation instruments, such as bonuses, and disciplinary actions. e) The above-mentioned approaches will be supported by expanding training opportunities and other activities that will increase the managerial capacities, including human recourses management capacities, in the administration, where the TIPA will play an important role. 4. Public Administration Reform Achievements There has been some progress in public administration reform, but sustained efforts remain necessary. The adoption of the law on control of officials assets in April 2003, the adoption of anew Code of Ethics, the recovery by the DoPA of its competence on fixing public administration s salaries have all been positive steps. Steps toward improving the career and salaries system, as well as the various training organized by the ITAP are also positive elements. Measures have been taken aimed at extending the scope of Civil Service Law, in order to create an overall legal framework with common principles for all civil servants. The Public Procurement Agency and tax Administration is now covered by the law of civil servant and steps are being taken to apply Civil Service Law principles even for custom officials.

The development objectives of the Public Administration Reform Project are to improve key dimensions of public sector institutional arrangements and practices in Albania, including: - Budget formulation practices that more effectively support rational budget allocation decisions - Budget execution practices that better support effective management by budget institutions - Continued affordable human resource management - Employment conditions within the civil service that make it easier to attract, retain and motivate qualified civil servants - More meritocratic and depoliticized management of the civil service - Policy formulation deliberations that are more contestable To this end, the Government has undertaken a series of actions and has also monitored a variety of indicators of the extent to which each of these six development objectives is being achieved. Progress in achieving these development objectives is summarized as follows. - Budget formulation. The Government is commencing its fifth iteration of a Medium Term Expenditure Framework budget formulation process, which has now be renamed a Medium Term Budget Process. This budget formulation process appears to be becoming institutionalized. Ministry of Finance has made important progress in initiating far reaching initiatives for a more strategic budget formulation process. They have not only successfully introduced the Medium Term Budget Process and now make it a systematic approach for the preparation of a medium term budget strategy and the annual budget, but have also made a serious effort at linking this with the governments National Strategy for Social and Economic Development (NSSED). The year before last the annual budget preparation process became subject to transparent debates and analysis in mass media, NGO community and Parliament. The government completed a simple Budget Guide, which is distributed to the public to provide information on the budget in an understandable language for all. - Budget execution. The Medium Term Budget process is contributing in at least two indirect ways to improved budget execution. First, the multi-year focus provided by that process is helping the Ministry of Finance to ensure that budget allocations are more thoroughly agreed among central authorities and line ministries, thereby building greater commitment by both parties to effective execution, since both have taken clearer responsibility for the budget allocation decisions each year. Second, that same process has given the Ministry of Finance a forum within which it has been able to stress to line ministries the importance of effective execution. The initial treasury modernization contract has laid the groundwork for modernization of budget execution processes, but actual modernization awaits the computerization of the Treasury system, which is expected to begin to occur on a pilot basis in early 2004, and throughout the Central Administration over the 2004-2006 period Substantial progress has been made in the area of public procurement reform in Albania. In particular, progress has been achieved toward completing the legislative framework for public procurement, with an amendment to the Law on Public Procurement in 2003 and the promulgation of a User s Guide and a comprehensive set of standard bidding documents. Transparency has also been improved by the regular publication of the Public Procurement Bulletin, including a digest of statistics on procurement operations and expenditures. The

recent launch of an Albanian-language public procurement website has further enhanced public access to procurement information, though the English-language version will not be launched until early 2004. Evidence on procurement quality suggests that procurement practices are becoming moderately more competitive, due surely in part to the reductions in discretion facilitated by the standard bidding documents, as well as the increased transparency ensured by the regular publication of both tender announcements and data on tender procedures. - Affordable Human resource management. In a broader analysis of the reform performance in civil service, we observe the implementation and refinement of a series of principles widely accepted for the proper function of public administration, principles which are resulting effective in enhancing the public administration capacities to face the reform challenges. In the third year of the reforms implementation it is clear that the idea of creating a professional and public oriented civil service has been fairly achieved. The recruitment of the civil servants through open and competitive procedures, in accordance with the equality of chances and candidates professionalism, are now the rule for the employment of civil servants. The increasing number of the competitions has been followed by an improvement in the procedures, which is directly reflected by the low number of competitions declared null by Civil Service Commission. With aim the improvement of implementation capacities of the administration and the attraction of valuable elements in it, an initiative to attract the students that have accomplished their studies abroad has been undertaken. To strengthen the capacities of public administration has contributed the trainings organized by the Training Institute of Public Administration (TIPA). TIPA has organized several trainings during 2003 which trained approximately 1167 civil servants, on 14 different topics. In its activity TIPA was supported by different donors, where a major role was played by EU. - More attractive employment conditions. The increases in salary levels significantly enhanced the attractiveness of employment within the civil service and in the teaching profession and health care professions. This already appears to be leading to larger numbers of qualified of applicants for civil service positions. Evidence on the extent of the improvement in the attractiveness of public employment is unequivocal. Average central government wages have risen steadily since 1998 until 2001 relative to average enterprise wages: this ratio rose from 1.92 in 1998, to 1.88 in 1999, to 2.24 in 2000, to 2.42 in 2001. Within the civil service, a survey of salaries in the public and private sectors, conducted in 2000, found that the ratio of salaries within the civil service to salaries of comparable positions in the Albanian private sector fluctuated between about 0.4 and 0.6. As the revised civil service salary scale has been implemented, these ratios have risen to around 1.0; suggesting that the roughly doubling of civil servants salaries should have made these positions considerably more attractive. Applicants per advertised position

within the civil service are steadily rising; reflecting, in part, the substantially more competitive salaries provided with implementation of the new civil service salary structure in 2002, but reflecting, as well, the enhanced respect for civil service positions engendered by the progress in establishing a more professional, meritocratically managed civil service. These are impressive achievements, which put Albania ahead of virtually all of its Balkan neighbors on this front. - More Meritocratic and Depoliticized Civil Service Management. Progress on institutionalizing more meritocratic and depoliticized civil service management is mixed. Serious sources of resistance to this effort have been encountered since the initial efforts to implement the Law on the Status of the Civil Servant. To its credit, DoPA with the support of the Prime Minister, assiduously sought means to overcome those pockets of resistance. The first victory in this effort was the recruitment of 50 civil servants under transparent and competitive recruitment and selection procedures in 2000, despite serious resistance from many Ministers. DoPA noticed a tendency for Ministers to seek exceptions to the Civil Service Law recruitment and selection procedures, proposing to hire such staff under "contracts" rather than as regular civil service appointments, on the grounds of emergency staffing needs. In response, DoPA began monitoring and publicizing the extent to which such exceptions are granted, and also increased the care with which it reviews such requests. With support from the Council of Ministers, DoPA was able to limit the extent of this behavior. Other elements of the institutional underpinnings of a meritocratic and depoliticized civil service need strengthening as well. The position evaluation and classification exercise is still of questionable quality in many ministries, leaving uncertainty about which positions are covered by the Civil Service Law as well as about the accuracy of any given position's classification. Personnel performance appraisals within the civil service have now been undertaken for most Civil Service positions; by 2002:4, fully 45% of CS positions had been subjected to a performance appraisal. Unfortunately, but entirely unsurprisingly, most of those performance appraisals yielded either "very good" (57.8%) or "good" (36.0%) ratings in 2002; meaning that only 4.5% of appraised civil servants were rated as "sufficient" or "insufficient". In short, the performance appraisal process is not yet sorting personnel by performance. Promotion procedures remain less clear than they should. The various indicators of whether the civil service is being managed on the basis of merit rather than political considerations is mixed. Overcoming the sources of resistance to the institutionalization of meritocratic, depoliticized civil service management practices remains one of the most fundamental challenges to the public administration reform. - More Contestable Policy Formulation Practices. The budget formulation reforms being undertaken, as well as the National Strategy of Social Economic Development (NSSED) process are helping to create some of the preconditions for more contestable policy formulation practices. 5. Major challenges facing the reform effort - Implementation of Civil Service Law. Despite all the above mentioned progress made towards implementing on-going reforms in public administration, Albania s civil service reform effort is finding it difficult to get key elements of those reforms to function as well as intended. Despite the good progress made so far, some issues still require particular

attention and serious engagement from all relevant structures as well as political leadership of the government, in order to be adequately addressed: a. Job descriptions (standardization of common function positions) do not always fully reflect the requirements of the positions they are describing. One of the main shortcomings in the implementation of the CSL is the continued weak capacity in line ministries to clearly define and draft job descriptions. This is a very important element of the entire process, because of the advantages of defining clear job descriptions, which would lead to (i) improved understanding of the work of each civil servant and (ii) clarification of who does what in each respective unit. An accurate and well defined job description will also help to redefine the responsibilities of each job and ensure congruence between the perception of individuals on how they see their respective job role and their actual responsibilities. In addition an accurate job description is required in order to specify performance criteria for assessing how an individual performs his or her tasks. Unclear descriptions of specific tasks to be performed in a given position are negatively affecting both recruitment and performance evaluation processes, as preparation of job descriptions is crucial for both these processes. Standardized job descriptions, including the job qualification requirements, should be prepared for common functions, and should then be applied to such positions throughout Albania s central public administration. Such standard job descriptions should then also support a parallel effort to establish standardized organizational structures throughout the State administration for common functions, including budget and financial management, human resource management, and policy development and monitoring of its implementation and impacts. b. Job classification. Finalization of this process is very important, because it affects both the performance evaluation process as well as efforts to keep civil servants motivated. c. Performance evaluation process. The Performance Evaluation Process continues to function far from perfectly. In particular, attention is needed to ensure a normal distribution of performance ratings. In order to make the performance evaluation process more responsive, DoPA and line ministries would need to address a number of issues, including: (i) the performance evaluation criteria need to be better tailored to particular job descriptions; (ii) the guidelines for the performance evaluation process should be reviewed and possibly revised, to ensure that they (a) are more helpful to users, and (b) are better designed to ensure that actual performance ratings reliably distinguish between good, average and below average performing staff, rather than being concentrated in the highest rating category; (iii) staff in line ministries (both those doing performance evaluations and those being evaluated) should be further trained in both the objectives and details of the performance appraisal process; and (iv) DoPA s capacity to enforce the requirements of the performance appraisal process need to be strengthened. Actually, an improvement of the existing legislation is seen as necessary, which will consist in the enlargement of the civil service scope of law, transparency and objectivity. The changes will affect

the law Status of the civil servants and its by-laws. The draft-law is foreseen to be presented to the government for approval within April 2005. The by laws, will be presented in a package and will accompany the draft-law, and are foreseen for approval in November 2005, certainly depending on the approval of the draft-law. With aim to improve the public administration institution s efficiency, an inventory screening activity has been made for all institutions subordinated to the executive and independent ones. The scope of this inventory is to enterprise at a later stage their functional and structural review, along with their mission review. Another initiative that serves to enhance the policy making and implementing capacities of the administration is connected with the establishment of a governmental network for information exchange between the Council of Ministers and line ministries. For the implementation of this network, is foreseen the creation within the Council of Ministers of a special unit for the informatization of public administration. 6. Conclusion Over the proceeding years, Albania has been developing a quite comprehensive and relatively modern legal framework. However, in most cases, laws are not properly implemented and enforced. The lack of an implementation capacity is a serious handicap for the development of the Albanian society and economy. The main objectives of the public administration reform will still remain on: - Strengthening of the administration stability - Increase in the performance of the public administration and civil servants. These objectives require the strengthening of the key institutions for the reform implementation, which are the Department of Public Administration and Civil Service Commission. The specific areas in which will be focused the increasing of administrative capacity are: management of public finances, including the sectors of customs, taxation and financial control with the objective of increasing revenue collection, fighting against fraud and corruption; public procurement; statistics with the objective of ensuring the availability of sufficient, accurate data for the use of the public sector. The law of Civil Servant is under an amendment process, which will consist in the enlargement of the civil service scope of law, transparency and objectivity.