The oversight of the flow of public funds and the expenditure of public budget is common practice in most of the countries. Considering situation in Ukraine, specifically budget deficit and the fight against corruption, it is crucial to exercise professional audit of the State budget (expenditures and revenues) in accordance to the international standards. The sole responsible body that is competent to provide such an oversight is the Accounting Chamber of Ukraine, however today the Chamber doesn’t have necessary power to carry out its duties and depends on the political climate in the Verkhovna Rada and Government. With the purpose to bring the Ukrainian legislation closer to the best international practices, the draft Law of Ukraine #2072 “On Accounting Chamber” has been initiated. The bill takes into account international experience and is designed to meet the commitment taken by Ukraine vis-à-vis the European Union under the law ratified by the Rada on May 20, 2014 #1277-VII (on granting Ukraine macro-financial assistance from the European Union amounting to 1 Billion Euros).
The draft law proposes to consolidate the powers of the Accounting Chamber on examining performance and financial audit, in particular the flow of funds to the State Budget of Ukraine and their expenditure, including: – Appropriation of the funds by the local authorities in a form of transfers, and social obligations such as insurance and pensions; – Funding and implementation of national and other governmental programs; – Compliance with the budgetary legislation.
In addition, the bill determines the composition and structure of the Accounting Chamber, the legal status of its members and
officials, organizational work, the status of the Accounting Chamber and its relations with the other governmental agencies. The project allows competitive selection of the members of the Chamber and fair election of the Chairman and Deputy. The bill provides prerequisites for politically independence and competent agency which will monitor revenues and expenditures of the government. The Chamber will consist of 15 members with nine year term limit without reelection. The single term practice is designed in accordance with the experience of the European countries among which the UK and Germany.
To ensure transparency, the Accounting Chamber of Ukraine provides training in cooperation with the civil society Public Council. The organization’s goal is to ensure that effective external financial control becomes a key aspect of transparency in public administration. At the same time, the Accounting Chamber looks to strengthen the public’s confidence in government by ensuring that there are proper control functions in parliament. The role and importance of the Accounting Chamber of Ukraine is particularly important, as it is the only independent body with an external financial control.
The importance of the bill lies in urgent need for an external body to evaluate public finances. In spite of the bill’s importance, individual MPs have tried to block its passage. According to The Public Finance Expert Group, this indicates a broader lack of political will when it comes to reforming public finances. This leads to a very real concern that these MPs may derail Ukraine’s efforts to meet its obligations to the European Union. If that happens, the European Union may be tempted to cut off much needed financial assistance to Ukraine. The Reanimation Package of Reforms’ Public Finance working group considers this bill an extremely high priority and urges parliament to immediately pass the bill “On the Accounting Chamber”.
For further information please contact the following experts: Viktor Taran, Centre for Political Studies and Analysis, Reanimation Package of Reforms – Public Finance working (050 312 76 88) Victor Mazyarchuk, Reanimation Package of Reforms – Public Finance working (067 444 22 21)