Chapter 4. The Slovak Republic’s structure and systems
Authority, mandate and co-ordination
The mandate and governance of each ministry involved in Slovak development co-operation is relatively clear, with the Ministry of Foreign and European Affairs (MFEA) clearly identified as the National Co-ordinator. In practice, however, each ministry operates independently and the MFEA has limited tools to carry out its co-ordination role. This leaves no clear point of accountability for delivering the mid-term strategy, which reduces learning among ministries and limits opportunities to consolidate the Slovak Republic’s limited resources to maximise its contribution to sustainable development outcomes.
Mandates and structures for co-ordinating development co-operation are in place but not yet effective
Since joining the DAC in 2013 the Slovak Republic has continued to strengthen its institutional system and structures to deliver quality development co-operation. These structures are appropriate to its size, but are not yet working effectively.
The Act on Official Development Cooperation designates the Ministry of Foreign and European Affairs (MFEA) as the National Coordinator for development assistance. Key to this co-ordination role is the Coordination Committee of the Slovak Development Co-operation, chaired by the Secretary of State of MFEA and bringing together a wide range of ministries. In practice, however, the committee meets rarely and each ministry works independently. This leaves no clear point of accountability for delivering the mid-term strategy. As is clear from a recent OECD public governance review, this situation is not unique to development co-operation. The review highlighted the need to strengthen co-ordination among the Centre of Government (CoG) institutions – the Government Office, the Ministry of Finance, the Ministry of Foreign and European Affairs and the Ministry of the Interior – and between these CoG institutions and line ministries and agencies across the public administration (OECD, 2015).
One consequence of this institutional autonomy, as discussed in Chapter 2, is that the 2014-2018 mid-term strategy is not seen as the framework for all ministries, in spite of extensive consultation during its preparation. The Ministry of Finance in particular manages the lion’s share of the Slovak ODA budget – EUR 68.4 million – compared to EUR 7.2 million managed by MFEA in 2016 (Table 4.1). However, 80% of the Ministry of Finance’s ODA consists of a direct transfer to EU institutions, without being involved in the decision making at the EU level on the use of these funds, which instead falls to MFEA. The Ministry of Finance does not link its portfolio with the SlovakAid brand or refer to the mid-term strategy as the basis for its strategic direction.
This lack of co-ordination undermines the effectiveness and coherence of the Slovak Republic’s efforts and is confusing for external partners. Building ownership of the next mid-term strategy across government will be essential to ensure that the government’s full resources are visible and deployed effectively. Newer structures introduced within the Office of the Deputy Prime Minister to oversee implementation of the 2030 Agenda could help to fill this co-ordination gap (Chapter 1), but they will need to demonstrate sufficient political weight to do so.
The MFEA has appropriate structures to deliver its own plans but lacks the tools and incentives to act as National Coordinator
The MFEA has very few incentives to carry out its role as the National Coordinator of development assistance. Accountability for delivering on the mid-term strategy takes the form of a retrospective annual report which is compiled by MFEA and presented to parliament before being made public. However, the MFEA has no role in each ministry’s annual ODA planning process, which limits the extent to which it can proactively ensure that the government is implementing the mid-term strategy effectively.
As mentioned in Chapter 3, as the Slovak government has no plan of action in place for meeting international commitments on ODA volumes, there is no overall accountability to MFEA or parliament for the amount of the national budget reported as ODA. The annual bilateral ODA plan submitted to parliament covers mainly the MFEA budget. Furthermore, the ODA budget is split across a number of budget chapters managed by different ministries and each ministry is expected to generate ODA increases from its overall budget allocation, but with few if any incentives to do so.
Identifying MFEA as the body accountable for planning for, and reporting against, specific ODA milestones may help to strengthen its mandate. MFEA could also play a central co-ordinating role in the Slovak Republic’s engagement with multilateral institutions – currently, 10 ministries and 3 central bodies liaise with 50 multilateral organisations.
In addition to its co-ordination function, the MFEA has its own budget for development co-operation which is largely disbursed through the semi-autonomous Slovak Agency for International Development Co-operation (SAIDC). In making decisions on programmes and policy issues, MFEA closely follows the mid-term strategy and annual spending plans and has defined a clear and appropriate division of labour between the ministry and the agency which is set out in a management contract, renewed on an annual basis.
Co-ordination at country level is effective
Within partner countries co-ordination works well. Although small, the Slovak embassies are recognised as the central point of contact for the Slovak government and, in Kenya and Moldova in particular, all ministries consult the embassy on their plans and keep them informed of their work. Similar to Bratislava, there is a clear division of labour between embassy and agency staff and appropriate decentralised decision-making and financial authority (Annex B).
Systems
The Slovak Republic has invested in professionalising its systems, processes and mechanisms since joining the DAC in 2013. These are particularly well developed in the SAIDC, where there is a good balance between rigour and flexibility. However, there is scope to further consolidate funding instruments, draw on external expertise and reduce the bureaucratic burden on both the agency and implementing partners. There is also room for improvement across government as there are no independent audit and oversight functions for development co-operation and there is a reliance on control rather than risk management.
SAIDC is evolving into a capable implementing body
SAIDC is evolving into a capable implementing body with solid procedures and good project management, drawing on the Slovak Republic’s experience of managing grants from European institutions. Recent improvements include:
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An updated financial handbook to simplify the budget structure for applications
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new templates for funding applications, monitoring and reporting, including a revised logical framework
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the introduction of new project selection criteria.
The agency’s plans to develop a procedures manual and to re-shape its team to combine programming and financial management functions will help to ensure a systematic and transparent approach. The agency has the capacity to absorb a larger staff and aid budget but it would be prudent to first consolidate its existing portfolio.
There are too many programme and project instruments and procedures given the small Slovak ODA budget
The agency disburses funds through three main channels – financial contributions for humanitarian assistance, project grants (for NGOs and private start-ups), and technical assistance co-ordinated through the Centre for Experience Transfer from Integration and Reforms (CETIR). SAIDC has recently been tasked to enter into contracts with the private sector for defined services, but has not yet developed the systems or expertise to execute this role.
The vast majority of grants administered by the agency are awarded through competitive calls for proposals. Each call for proposal addresses a theme or country, with the result that there are up to a dozen calls per year, each comprising small grants. The paperwork involved in each application could be reduced, for example by pre-screening implementing partners using an organisational assessment every two or three years. Once projects are screened against approved criteria, the decision for each project lies with the Supervisory Board comprised of Directors from relevant departments of MFEA. Each project approval and contract are then signed by the Minister for Foreign Affairs. Again, this process could be rationalised if the agency could recommend a list of the grants to be awarded based on agreed criteria. The Supervisory Board could then play a more strategic role in scrutinising elements such as whether the overall portfolio reflects the mid-term strategy objectives, represents an acceptable level of risk, etc.
Importantly, the current SAIDC systems are more conducive to funding discrete activities rather than longer-term partnerships focused on shared development outcomes. A smaller number of calls for proposals with larger allocations for longer-term partnerships would increase effectiveness and further reduce the transaction costs for the agency, ministry and implementing partners. Opportunities to consider more programmatic approaches are explored further in Chapter 5.
Independent audit and oversight functions are not yet established
The annual ODA report is a good example of transparent and comprehensive public information on the whole of the Slovak Republic’s development co-operation programme. In addition to describing programme and policy developments and reviewing progress against the commitments set out in the 2014-2018 Mid-Term Strategy, the report identifies areas of success and challenges (MFEA, 2018; MFEA, 2017).
The 2015 DAC mid-term review (OECD, 2015) noted that the Slovak Parliament could play a stronger role in overseeing the ODA strategy, annual plan and results reporting. The supreme audit office has yet to carry out an audit of the development co-operation budget or systems in MFEA and the other ministries. More robust external checks or balances would add weight to the structures intended to shape Slovak development co-operation – the mid-term strategy, co-ordination committee, annual ODA plan and report – and counter-balance the autonomy of each ministry described above.
Within MFEA, an internal audit function is in place and has helped to identify a number of irregularities in individual project grants. However, it has not yet carried out a functional or systems audit of the ODA budget managed by the ministry. Finally, there is no clear mandate for MFEA to oversee financial reporting to the OECD DAC by other ministries to ensure that all items are eligible to be reported as ODA.
Financial control measures are in place but do not extend to risk management
The Slovak Republic has well-developed centralised procurement and financial control systems which follow EU norms. Risk management is less well developed – reputational, financial, operational and institutional risks are not identified and monitored in a formal way in order to shape strategic decisions. While individual project proposals include a risk matrix covering mainly financial and operational risks, it is not apparent that this risk assessment is taken into account for project management, particularly compared to the high level of monitoring and the flexibility given to the implementing partner. Moreover, there are few measures in place to deal with social and governance risks, including corruption challenges in the execution of Slovak grants. In working to strengthen guidance in this area for itself and its partners, the Slovak Republic could learn from other development partners, including through GOVNET (the OECD-DAC network on governance). This will also help the Slovak Republic in implementing the OECD recommendation on managing the risks of corruption (OECD, 2016).
The Slovak Republic’s relatively strong appetite for innovation would benefit from a sounder evidence base
The review found a number of examples of innovation in the Slovak Republic’s development co-operation system, especially new funding mechanisms. Examples include:
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an interesting model for funding environmental awareness in partnership with business, managed by the Ministry of Environment
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a UNDP-managed hub for financing innovation, including impact bonds, led by the Ministry of Finance (AltFin Lab) and efforts to launch a pilot project under the concessional loans scheme by EXIMBANKA SR
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a new proposal for Award of Contracts to involve the private sector in delivering specific development objectives, to be managed by SAIDC.
These initiatives are welcome and in line with the mid-term strategy and international commitments. They build on experience of similar initiatives managed by other donors, and adopt a learning-by-doing approach.
To increase demand for evidence by decision makers in development co-operation, the 2015 OECD public governance review made a number of recommendations for using analytical capacity more effectively in the Slovak administration, noting that “the use of robust evidence and sound evidence-based analysis in government decision making with respect to policies, legislation and spending appears to be limited when compared to other OECD countries” and that “many consultations take place solely on an informal basis or too late in the processes when it is rather difficult to change the policy or regulation substantively” (OECD, 2015). The review’s recommendations are relevant for, and would benefit, Slovak development co-operation.
Capabilities throughout the system
Small teams of young and dynamic individuals drive the Slovak Republic’s development co-operation system. However, their limited numbers are compounded by frequent turnover, particularly at senior management level, which affects continuity and institutional memory. Comparatively weak terms and conditions for agency staff affect their mobility and the agency’s ability to retain experienced staff, and constrain the ability of the government to realise its ambitions.
Human resources are a key constraint for expanding Slovak development co-operation
Fewer than 40 people work full time on development co-operation across the Slovak system (see Table 4.2). Individual officials regularly manage several demanding portfolios at the same time. Combined with the significant workload involved in engaging the political system and servicing national, international, EU and other processes, this reduces the Slovak Republic’s ability to achieve its ambitions and may also affect accountability and oversight.
SAIDC staffing levels and capacity are increasing however, with four additional posts approved in 2018. Two agency staff have been posted as development diplomats to embassies in Kenya and Moldova, which has increased the Slovak Republic’s credibility and capacity, and there are plans to expand this further. The plan is to rotate officials between SAIDC, the Department of Development Co-operation and Humanitarian Aid (DDCHA) and the embassies, which will make the most of the potential for cross-learning and relationships.
At present, SAIDC staff are classified as public servants, giving them less advantageous terms and conditions than the civil servants employed in the ministries. This undermines staff retention and morale and makes it challenging for staff to move between the agency and other ministries working on development co-operation.
Staff rotation within the Ministry of Foreign and European Affairs (MFEA) is still somewhat exceptional, with a total of 400 posts in headquarters compared to 700 abroad. This lack of rotation is a common feature of smaller administrations. There are significant financial benefits to overseas postings, so staff tend to only spend the required minimum of two years in Bratislava. Incentives are in place to encourage officials to take up posts in more challenging countries, including Kenya and Moldova.
As rotation is low, staff tend not to stay long within MFEA. This high turnover of staff, particularly at management level, reduces institutional memory and may affect the quality of relationships with other development partners.
Other line ministries also respond to demands from developing countries (and international organisations) for transition-related technical assistance. The Ministry of Finance has three people dedicated to managing its bilateral assistance, and two managing multilateral contributions, including to the international financial institutions. Its capacity in bilateral assistance – which has a strong focus on public financial management – is complemented by a partnership with UNDP (see Section 5.1) to manage the supply and demand of experts and a roster of public financial management experts from within government and externally. While the mid-term strategy 2014-2018 is clear that this type of technical assistance is central to the Slovak Republic’s development co-operation and comparative advantage, there is no plan in place for resourcing this work.
One way to improve relations between institutions would be to include more aspects of development co-operation in MFEA’s compulsory training modules and extend these to officials in other ministries.
References
Government sources
MFEA (2018), “Annual report of the development cooperation of the Slovak Republic” (provisional text, publication forthcoming), Ministry of Foreign and European Affairs of the Slovak Republic, Bratislava.
MFEA (2017), “Annual report of the development cooperation of the Slovak Republic”, Ministry of Foreign and European Affairs of the Slovak Republic, Bratislava, http://www.rokovania.sk/ Rokovanie.aspx/BodRokovaniaDetail?idMaterial=26455.
Other sources
OECD (2016), 2016 OECD Recommendation of the Council for Development Co-operation Actors on Managing the Risk of Corruption, OECD Publishing, Paris, https://www.oecd.org/corruption/anti-bribery/Recommendation-Development-Cooperation-Corruption.pdf.
OECD (2015), Slovak Republic: Better Co-ordination for Better Policies, Services and Results, OECD Publishing, Paris, https://doi.org/10.1787/9789264247635-en.