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Grants effectiveness in the Agricultural and Rural Development Agency

Audit Id 1593506811966
Title Grants effectiveness in the Agricultural and Rural Development Agency
Title in original language

Efektiviteti i Granteve në Agjencinë e Zhvillimit Bujqësor dhe Rural


Year 2017

Agriculture and Food



Type of performance

Performed by single SAI

Comments Agricultural development is an economic, financial and social issue with the widest geographical and demographic scope and that completely affects the well-being of Albanian citizens. In the period 2013 - 2015 the contribution of agriculture in the Albanian economy represents an average of 17% of GDP, the resident population in rural areas has shown a downward trend from 63.6% (1990) to 42.59% in 2016, and continues to remain the main employment sector for about 45% of total employees. In addition, the value of agricultural and livestock products in the period 2013-2016 occupies an average of 34% of imports and 2.28% of exports, which shows that our agricultural economy is not yet competitive with that of other countries.
Although the agricultural sector is included in the government’s strategic priorities for development, offering it procedural facilities, it is still one of the economy’s most informal sectors, as observed at different levels in all links of the production, collection chain, processing and marketing of agricultural and livestock products. Under these conditions, agriculture is considered one of the main and potential sectors for the economic and social development of the country, for which, among other supportive policies, it is financed from the state budget. So a number of farmers have benefited from grants (subsidies) of national schemes in order to stimulate production, processing, trading and increase competitiveness in the agriculture field. In this context, ARDA has the duty, among other things, to implement measures of agricultural policies and rural development, and is responsible for the administration of budget funds made available for this purpose. Increasing subsidies for agriculture and limited budgetary resources necessarily requires increasing the effectiveness of the use of funds in national schemes. This way, farmers' support and rural development require strong management and control systems. The need for good management and grants good management from ARDA becomes more necessary when our country’s agriculture still suffers from the consequences of land plots fragmentation, major property issues, lack of information and advice to farmers throughout the territory, removal of power active workers, etc., which all together require an increase in the grants effectiveness from ARDA. For the audited period of activity 2013-2017, the total number of types of measures is 23, but some of them have been alternated during the years of this period. Despite the fluctuation in the number of beneficiaries, budget funds for agricultural and regional development tend to increase, but the country's interests require continuous and rapid growth of agricultural financing in line with the cross-sectoral strategy for rural and agricultural development. The object of this audit consists of ARDA’s activity in the years 2013-2017 throughout the application process: information, acceptance, administrative control of applications, field control before and after funding; then monitoring the progress of financing over a period of time, in the good administration of state budget funds for the development of agriculture and regions. In conducting this audit, we have tried to answer the main question: How much has the ARDA’s performance contributed to the grants effectiveness in agricultural and rural development? The following message was issued: The Agricultural and Rural Development Agency has not achieved the management and administration effectiveness of the of budget funds for the national schemes, because: - Human resource management has shown shortcomings in organic structuring, basic training, recruitment, capacity building and evaluation of their performance, etc.; - The subsidy procedures for the national schemes analyzed in dynamics for the conditions and criteria of benefit, as well as their implementation by ARDA have shown shortcomings; - The funds provided for information have proved ineffective, as the means of communication have been limited, insufficient and non-qualitative information, has not been properly managed, etc.; - Funding for olive protection is not effective, as the procurement procedures have not been properly implemented, it has not been acted in accordance with the regulatory framework, verifications and monitoring for this scheme by ARDA have been deficient, increasing the premises for abuse by institution; - The benefited investment funds have not been used properly in economic terms, to then generate sufficient income to support the development of the value chain so that they can develop reliable financing projects; The monitoring sector has been absent for a period of 4 years, and consequently the monitoring of small national schemes and investments, significantly reducing the effectiveness of the funds provided for them. The following was recommended: ARDA should conduct analyzes, studies, design and implement action plans for the number of employees in its structure, types of professions, especially in the control and monitoring sector of national schemes, the selection and approval of projects sector to increase their performance as well as the grants effectiveness. ARDA should take the necessary measures to create a sector that serves to inform and advise farmers, in order to avoid mistakes, delays in the documentation and penalties preparation that occur during the control of applications. ARDA should design and implement a special investment program with identified priorities to provide the necessary infrastructure for the control and monitoring of national schemes such as: GPS, Odometer, first aid kit, etc., in order to increase the effectiveness of grants in agriculture. ARDA’s trainings should be all inclusive and not only in a concentrated number of employees. The regional inspectors should be given more attention in this regard. Also, the trainings should have a logical connection between the experience in ARDA, the performance evaluation and the need for trainings. Also perform performance evaluations and take the necessary measures for employees who have more than two disciplinary measures. The Ministry of Agriculture and ARDA should take the necessary measures to update the studies on which the regionalization maps are built, as well as to conduct annual analyzes on the progress of national schemes and their problems, in order to increase the grants effectiveness for agricultural development. The Ministry of Agriculture should take the necessary measures to update the livestock register, as well as create ARDA’s access in obtaining the necessary data, in order to avoid farmer’s excessive costs in the budget grants benefit application for the development of agriculture. ARDA should design, approve and implement the communication strategy, defining the objectives, target groups, tools, indicators, etc., as well as a set of indicators to measure the effectiveness of this important part of budget funds.





Performance Audit Department
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