Montenegro’s 2025 final budget accounts have come under scrutiny after the State Audit Institution (DRI) issued a negative compliance opinion, identifying weaknesses in Treasury accounting, expenditure controls and the implementation of previous audit recommendations. The DRI also issued a qualified opinion on the financial statements, highlighting discrepancies between the government’s reported fiscal figures and the results of the audit.
Budget Deficit Revised After Audit
The government initially reported revenue of approximately €2.87 billion and expenditure of around €3.19 billion, resulting in a cash deficit of €313.68 million. Auditors calculated a modified cash deficit of €320.53 million. Following certain audit corrections, the cash deficit was calculated at €306.32 million, reflecting the impact of accounting classifications and previously unrecorded transactions on the final fiscal figures.
The audit also identified approximately €7.76 million in previously unrecorded revenue associated with state-controlled companies Monteput and Airports of Montenegro. The negative compliance opinion concerns adherence to applicable laws and procedures and does not constitute a rejection of the entire set of financial accounts.
Most Previous Audit Recommendations Remain Unimplemented
The audit highlighted persistent weaknesses in institutional follow-through. Only 10.17% of recommendations from the previous audit had been fully implemented, while 61.02% remained unimplemented. These figures indicate that several weaknesses identified by auditors have continued across successive audits rather than representing isolated accounting issues.
Fiscal Controls Under Scrutiny Amid Infrastructure Spending
The findings come as Montenegro enters a period of substantial infrastructure expenditure and sovereign refinancing. The country is increasingly combining sovereign borrowing, EU grants and financing backed by international financial institutions (IFIs), making predictable public-finance management important to lenders and rating agencies. Weak expenditure controls can contribute to higher project costs, payment delays and less predictable budget outcomes, complicating the management of publicly financed investments.
2027 Budget Framework Faces Spending Pressures
Montenegro is preparing its 2027 fiscal framework amid pressure from wage reforms, pension proposals and an expanding capital budget. Strong revenue collection during 2026 has provided additional fiscal room. However, higher permanent expenditure increases the importance of reliable budget reporting and effective oversight of public spending.
Strengthening Treasury controls, improving the recording of transactions involving state-owned companies and accelerating the implementation of audit recommendations remain key challenges as Montenegro manages increasingly complex public-finance commitments.
