Montenegro Health Ministry Defends €3.63m Transfer After Adverse Audit

Montenegro's Ministry of Health faces a November 19 deadline to submit an action plan after state auditors rejected its 2025 financial statements and compliance records, citing the accounting treatment of a €3.633 million transfer to the United Nations Development Programme (UNDP). The ministry has publicly challenged key findings and says it maintained oversight of the money.

The State Audit Institution (DRI) adopted its report on October 19 and published its findings on October 20. It found that €3,633,000 transferred to UNDP in December 2025 for the project Strengthening the Health System in Montenegro was recorded under "other transfers to institutions". Auditors said that classification did not match the economic substance of a project involving health information systems, software, equipment, digital services and consultants. This is an accounting finding, **not a finding that €3.633 million was stolen**.

The DRI also said it could not independently establish the actual project spending and unspent balance at the end of 2025 because it lacked direct access to the full underlying procurement, financial and contract documents held by UNDP. From 2017 to the end of 2025, the ministry had transferred a cumulative €8,227,736.72 to UNDP. Information supplied by UNDP during the audit listed €2,401,838 paid to suppliers and consultants and €5,825,898.72 not yet realised through completed activities. The latter figure is a reported project balance at the audit cutoff, not an adjudicated loss or allegation of embezzlement.

In its October 21 response, the ministry said it had provided extensive documentation and explanations to the auditors. It argued that the UNDP partnership operated under an agreed financing arrangement, that it directed project activities and approved payments, and that supplier contracts held by UNDP did not mean the ministry lacked financial oversight. It maintained that its transfer classification followed budget rules, while acknowledging that the auditors' guidance could inform improvements.

The ministry also said duplicate payments identified by auditors were isolated administrative errors that had been corrected, with no loss of public funds. It attributed delayed tax filings to technical problems with the new tax authority portal. These explanations represent the ministry's position and do not establish that the DRI withdrew its final audit opinion.

The auditors issued 32 recommendations: four from the financial audit, 27 concerning compliance and one systemic recommendation to the government and Finance Ministry. The ministry must deliver its corrective-action plan by November 19, 2026 and an implementation report by May 19, 2027.

The next public test is documentary: whether the ministry can reconcile transfer classifications, UNDP supplier payments and outstanding balances, and demonstrate corrective measures through records accessible to the relevant oversight bodies. A submitted plan alone would not prove implementation. The audit concerns public accounting and oversight; no criminal conviction, proven theft or definitive finding of unlawful diversion is established by these records.

This account independently compares the DRI's October 20 findings with the ministry's October 21 published response, preserving their disagreement rather than treating either side's assertions as a final adjudication.