United Nations Public Service Awards Case Studies

CPC has gathered data about all payments of the public sector bodies for the period 1 January 2003 till 31 December 2010 and analysed them. The analysis had shown some controversial practices in budget expenditure – and proved systemic corruption risks in terms of "hijacking state" (state capture), political and systemic corruption. The data revealed that the Slovenian business environment is not transparent. There are too many privileged actors, whose financing are conducted in accordance with the non-negotiable mechanisms but arising from links of interest groups. Otherwise legitimate capital, political and interest-based network connections play major role in Slovenia due to its small size and present a particular problem. There were also growing indications that this pattern has now descended to the level of senior and somewhere even middle management.

Therefore CPC recognized there is a lack of proactive approach towards transparency of public finances. There was only minimal or no data about public expenditures accessible to the public and there has been no freedom of information request made on a public spending data.

For the reasons described above, CPC acknowledged a need for publishing data about public expenditures on the internet, making it available to everybody.

What is the initiative about? (the solution)
Supervizor is an online application that (by clicking) provides information to users on business transactions of the public sector bodies – all, direct and indirect budget users (the bodies of all three branches of power, independent judicial and state bodies, local communities and their parts with legal personality, public institutes, public funds, public agencies etc.). The idea arised among some CPC’s enthusiastic employees, which in cooperation with external partners prepared it for free. Application has been developed in less than a month. The data are daily updated and provide the general public with proactive transparency in the field of public sector spending. It combines relevant data from different sources (Ministry of Finance, PPA, etc.) in a more user-friendly format and represents an important step towards more transparent state operations. Still, Supervisor did not require any law modifications. It allows oversight over the average EUR 4.7 bn a year used for goods and services by the public sector and indicates contracting parties, all recipients of funds, related legal entities, date and amount of transactions and also purpose of money transfers (for all the services and goods payments over 2.000 EUR). It also enables presentation of data using graphs as well as printouts for specified periods of time and other. Supervizor was launched on 23th of August 2011. Already during the first day, there were around 1.200.000 page views and raised up to 2.616.000 within only 6 days – bearing in mind that Slovenia is a country with only 2 million inhabitants and also access from abroad was limited for the first few days! There was a significant interest by the public and mostly positive response from other budget users, local level and abroad. We were aware, that the launch of such project will result in significant interest by the public, but we were nevertheless struck by the amount of it. Luckily our IT infrastructure was designed to sustain such traffic as well as numerous hackers' attacks in the first days. In November 2012 Supervizor also received Slovenian NETKO award for the best digital project of public administration. At the end of 2012, Supervizor was importantly upgraded – now data are updated daily and there are also additional graphic visualisation available – in following months we will continue with the upgrade. Application also shows ownership and management structure of the Slovenian companies and some data from their annual reports. It enables insight in financial flows among the public and private sector not only to the public, media and profession, but – and this is an important added value – also to regulatory and supervisory bodies. Supervizor implements the primary purpose of the CPC's mission: strengthening the rule of law, integrity and transparency, mitigation of corruption risks and conflicts of interest. Moreover, transparency of financial flows among public and private sector achieved through this application increases the level of responsibilities of public office holders for effective and efficient use of public finance, facilitates debate on adopted and planned investments and projects as well as decreases risks for illicit management, abuse of functions and limits systemic corruption, unfair competitiveness and clientalism in public procurement procedures. In short: the principle of proactive transparency – provided by Supervizor – is strengthening the accountability of the public sector.

Who proposed the solution, who implemented it and who were the stakeholders?
The Supervizor is a project, conceptually designed and prepared by CPC in cooperation with an independent expert and assistance of other bodies, providing relevant data and cooperated in its presentation and interpretation (the Slovenian Ministry of Finance, Public Payments Administration (PPA), the Agency of the Republic of Slovenia for Public Legal Records and Related Services (AJPES). PPA is providing payment services for direct and indirect users of central and local government budgets; It streamlines and records the flows of public finance within the single treasury system. PPA maintains a register of budget users, manages budget user accounts and performs the tasks of payment service provider on behalf of budget users. For the purpose of Supervizor application they provided the CPC with data on all payments among the public sector bodies and public sector to private companies from 1 January 2003 till present. AJPES is keeping records on business entities in Slovenia and manages the Slovenian Business Register as a central public database on all business entities, their subsidiaries and other organization segments located in Slovenia which perform profitable or non-profitable activities. They are also in charge of managing annual reports of Slovenian business entities. In Slovenia companies (including banks, insurance companies, investment funds and co-operatives), sole proprietors, legal entities governed by public law, non-profit organizations and associations have to present their annual reports to AJPES for the purpose of presenting them publicly and for tax and statistical purposes. For companies with a mandated statutory audit, AJPES publishes audited annual reports. Database of public procurements in Slovenia as the third main source of data. It is maintained by the public company Official Gazette and Ministry of Finance and contains information about all public procurements and small value public procurements including companies which received public procurement and the financial value of certain business. There was no need for legislative changes, since all relevant data were already accessible to the public through the freedom of information legislation. The web application has been written in cooperation with an independent expert and is using open source technologies (PostgreSQL database server, operating system Debian Linux, web server Nginx and open source JavaScript libraries for visualisation of data).

Describe how and when the initiative was implemented by answering these questions
a. What were the strategies used to implement the initiative? In no more than 500 words, provide a summary of the main objectives and strategies of the initiative, how they were established and by whom.
In Slovenia, PPA is providing payment services for direct and indirect users of central and local government budgets and streamlines and records the flows of public finance within the single treasury system. PPA manages budget user accounts and performs the tasks of payment service provider on behalf of budget users. By other words – all data about financial transactions from public sector bodies to private companies are registered in one central database. Therefore CPC asked the PPA to provide the data on all payments of the public sector bodies for the period 1 January 2003–31 December 2010. Later the agreement with PPA was signed to provide CPC with data about financial transactions on a monthly basis. CPC also signed an agreement with AJPES for providing records on business entities in Slovenia, their subsidiaries and other organization segments located in Slovenia which perform profitable or non-profitable activities (on a monthly basis). AJPES is also providing database of companies’ annual reports. In this period CPC also requested and gathered the database of public procurements in Slovenia from the public company Official Gazette. All these data were requested by the CPC on the basis of Article 16 of the Integrity and Corruption Prevention Act, which gives the CPC powers for acquisition of data and documents. Records on business entities, annual reports and information about public procurements were completely public at that time, however data about financial transactions had not been published, since public institutions have always lacked a proactive approach towards transparency of public finances. However, financial transactions gathered by CPC contained all transactions, including those containing personal and classified data. CPC developed algorithms for detection and elimination of those data and decided to use proactive approach towards transparency of public finances. Then CPC analysed gathered data and discovered some controversial practices in budget expenditure – and proved systemic corruption risks in terms of "hijacking state" (state capture), political and systemic corruption. The data revealed that the Slovenian business environment is not transparent. There are too many privileged actors, whose financing are conducted in accordance with the non-negotiable mechanisms but arising from links of interest groups. Otherwise legitimate capital, political and interest-based network connections play major role in Slovenia due to its small size and present a particular problem. There are growing indications that this pattern has now descended to the level of senior and somewhere even middle management (already described above under question What was the situation before the initiative?). That was CPC’s main motive – to perform proactive approach towards transparency of public finances and publish that data on the internet, where anyone can see it and be a supervisor of public spending. In final step there has been written web application (in cooperation with an independent expert) which aim is to visualise data about public expenditures and ownership and management structure of the Slovenian companies in a simple and understandable way. The application also provides simple user interface for searching information about public expenditures and companies/recipients of public funds.

b. What were the key development and implementation steps and the chronology? No more than 500 words
In the beginning of the 2011 CPC asked PPA to provide the data on all payments of the public sector bodies for the period 1 January 2003–31 December 2010. In the second quarter of 2011 the agreement with PPA was signed to provide CPC with data about financial transactions on a monthly basis. Data were requested by the CPC on the basis of the Article 16 of Integrity and Corruption Prevention Act, which gives the CPC powers for acquisition of data and documents. Then they were analysed and there has been discovered some controversial practices in budget expenditure and proved systemic corruption risks in terms of "hijacking state" (state capture), political and systemic corruption. Also in the second quarter of 2011 CPC made an agreement with AJPES for providing records on business entities in Slovenia, their subsidiaries and other organization segments located in Slovenia which perform profitable or non-profitable activities on a monthly basis. AJPES also provides CPC with a database of companies’ annual reports. CPC also requested and gathered the database of public procurements in Slovenia from the public company Official Gazette. Data were imported into the internal CPC’s database server and linked in an internal relational database. Financial transactions gathered by CPC contained all transactions including those containing personal and classified data. After receiving all the data, CPC developed algorithms for detection and elimination of those protected data. In the final step the web application was written (in cooperation with an independent expert), main aim was to graphically visualise data about public expenditures, ownership and management structure of the Slovenian companies in a understandable format. Then application and final version of the database has been put on a public web server. Before the public launch CPC asked Information Commissioner for opinion related to the protection of personal data in an application. CPC followed the Information Commissioner’s recommendations and performed some small adjustments. After that, application was published on the internet (23 August 2011).

c. What were the main obstacles encountered? How were they overcome? No more than 500 words
The biggest obstacles for realisation of the project were relatively long period of time needed for all the arrangements related to receiving data (making the agreements with different institutions) and, secondly, elimination of personal and classified data from the financial transactions. Money flows from public to private sector were already accessible to the public through legislation on access to public information – although it took more time to receive data. However public institutions have always lacked a proactive approach towards transparency of public finances in Slovenia. In the past there has been no freedom of information request made on a public spending data. CPC therefore requested data on a basis of Article 16 of Integrity and Corruption Prevention Act, which gives the CPC powers for acquisition of data and documents. After CPC had received data based on that legal basis, they were examined and CPC developed algorithms elimination of personal and classified data from the databases. By doing that, all remaining data became public information and could be released and accessible to anyone – or by other words – anyone can be a supervizor of government expenditure. The removed data were transactions related to physical persons (salaries, expenses related to salaries, etc.), transactions to accounts of health insurance companies containing personal data, transactions from deposit account of the Customs Administration of the Republic of Slovenia, transactions to Central Securities Clearing Corporation for the purchase of debt securities and payments of PPA for the repayment of debts, transactions to intelligence and security services, transactions to banks, returns of taxes, etc. During the performed analysis CPC received some additional data on financial transactions (statistical code of transaction and SEPA code of the transaction purpose). These data also helped CPC to remove transactions containing personal and classified information. The first version of the web application did not contain transactions among the budget users, but CPC is planning to include these transactions in the future versions of the Supervizor. Because of the Slovenian tax legislation (tax secrecy), CPC cannot publish transactions from the companies to the budget users. However, in future versions of Supevizor CPC will try to distinguish between transactions containing payment of taxes and other transactions, which are not protected as a tax secrecy, i. e. returns of incorrect payments (those made by mistake etc). By using open source technologies CPC reduced the costs of software (operating system, database server and web server). Selected technologies have high performance for carrying out a lot of database and web requests from the end users.

d. What resources were used for the initiative and what were its key benefits? In no more than 500 words, specify what were the financial, technical and human resources’ costs associated with this initiative. Describe how resources were mobilized
The idea arised among some CPC’s enthusiastic employees, which in cooperation with external partners prepared it for free.The whole project was carried out with almost no costs in cooperation with an independent expert and an effort of the CPC’s employees. CPC used open source technologies (PostgreSQL database server, operating system Debian Linux, web server Nginx and open source JavaScript libraries for visualisation of data), which require no licence fees. The key benefit of the project is that money flows from the public to private sector are accessible to the public quickly, simple and free. This proactive approach towards transparency of public finances could lead to the strengthening of public integrity, transparency of public finances and accountability of public service and would have decreased risks of systemic corruption. Supervizor is making business environment more transparent and also revealing some controversial practices in budget expenditure and exposes systemic corruption. It represents an important step towards more transparent state operations. It is also important, that the application enables insight in financial flows among the public and the private sector not only to the public, media and profession, but also to other regulatory and supervisory bodies. As mentioned above, on basis of Supervizor data in 2012 more than 100 cases of suspected violations of restriction on business were discovered by CPC (mostly on a local level). Since financial transactions and financial flow analyses are a vital part of the evidence-gathering process when investigating economic crime, public finance crime and corruption, is the use of a tool where information on business transactions of public sector bodies as well as other information regarding recipients of public funds is in one place, extremely welcome and we got a lot of positive responses. Supervizor implements the primary purpose of the CPC's mission: strengthening the rule of law, integrity and transparency and mitigation of corruption risks and conflicts of interest. Moreover, transparency of financial flows among the public and the private sector achieved through this application increases the level of responsibilities of public office holders for effective and efficient use of public finance, facilitates debate on adopted and planned investments and projects as well as decreases risks for illicit management, abuse of functions, and above all, limits systemic corruption, unfair competitiveness and clientalism in public procurement procedures.

Is the initiative sustainable and transferable?
After the initial phase, when the main reason by most of the public for using an application was curiosity, the data are now used in a more analytical way, so the main aim of the CPC regarding use of Supervizor was achieved. It is used as an everyday tool by public, research journalists and regulatory and supervisory government when investigating economic crime, public finance crime and corruption. And most importantly – the web application enables the public, government and local authorities asking more qualitative questions regarding the use of public money and accountability of public service. This example of proactive transparency of public finances could be implemented in other countries too. The most important condition that must be fulfilled in this matter is the existence of the single treasury system, which records all public financial transactions in a centralized way, or a system, which gathers all records of government and local budget’s financial transactions in a single database. The next condition is the existence of the access to public information legislation and a political will towards transparency. Important prerequisite is also the existence of the business registry, containing data about ownership, management structure and company’s annual reports and a database of the public procurements. Technical aspects of the project are relatively easy to solve. The most important are the legislation and issues related to organisation of budget and public finance. The project had great media and European anti-corruption authorities’ impact. Experts from the field of preventing and investigating corruption expressed great satisfaction with the idea and the outcome of the project, while foreign journalists and general public also expressed their expectation that this kind of proactive approach towards transparency of public finances would be implemented in their countries too.

What are the impact of your initiative and the lessons learned?
The initiative had multiple positive effects in various spheres of public and civic life, law enforcement and strenghtening governance at state and local level. Supervizor has transformed the paradigm of transparency and accountability of public finances in the Republic of Slovenia – and by extension has a very positive impact on the more efficient use of public funds and prevention of systemic corruption in the country. CPC has received many positive feedback from several local authorities, law enforcement, government auditors and tax administration officers regarding usefulness of the data and analyses which could be performed by using the web application. They expressed satisfaction with the possibilities of using application in their everyday work. The tool has proved to be particularly useful at the local level, where people are using the information from Supervisor to actively participate in the creation of policies at the local level and in the allocation of public financial resources. This is especially important in the time of economic crisis and lack of public funds. Supervisor is used by municipality councillors, municipality’s supervisory committees, members of the various boards of schools and institutions – for opening discussions about the priorities of spending of public money at the local level. CPC is also using the application in its everyday work (especially within anti-corruption investigations) and is detecting new cases of alleged corruption by analysing the financial flows between public and private sector. The application is frequently used by journalists, which consider it as a valuable tool for asking focused questions to the authorities. There is also an important lesson of the whole project – the project has proved that it is possible to increase the transparency of public finance, facilitate the debate on adopted and planned investments and projects as well as decrease the risks for illicit management, abuse of functions and, above all, limit systemic corruption, unfair competitiveness and clientage in public procurement procedures. And most important, this can be done with a minimal financial input. The Supervizor project and its upgrade is showing us, that it is possible to achieve better transparency – with a good idea and devotion to the ideal of transparency.


Institution Name:		Commission for the Prevention of Corruption
Institution Type:		Public Organization
Contact Person:		Goran Klemenčič
Title:		Chief Commissioner
Telephone/ Fax:		+38614008483
Institution's / Project's Website:		http://supervizor.kpk-rs.si/
E-mail:		goran.klemencic@kpk-rs.si
Address:		Dunajska 56
Postal Code:		1000
City:		Ljubljana
State/Province:
Country:		Slovenia

The Problem

Solution and Key Benefits

Actors and Stakeholders

(a) Strategies

(b) Implementation

(c) Overcoming Obstacles

(d) Use of Resources

Sustainability and Transferability

Lessons Learned

Contact Information