Reanimation package of reforms > News > STATEMENT of the Group on “Public Finance” under the Reanimation Package of Reforms on the DRAFT LAW OF UKRAINE № 2072 – “On Accounting Chamber”

STATEMENT of the Group on “Public Finance” under the Reanimation Package of Reforms on the DRAFT LAW OF UKRAINE № 2072 – “On Accounting Chamber”

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 grant the powers to the Accounting Chamber for 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.

Ensuring effective external financial control over the public expenditures is paramount for transparency of public administration, and furthermore checks the oversight power of the parliament that in return strengthens the public confidence in public authorities. In this regards, the role and significance of the Accounting Chamber cannot be downplayed as it represents he single independent body entitled to the external financial control mechanisms.

Despite the fact that the adoption of the bill is urgent in order to ensure effective functioning of the sole body that evaluates the use of the budget, some of the MPs decided to sabotage it. The expert group on Public Finances under the Reanimation Package of Reforms has repeatedly stated that there is unwillingness to reform, and ensure transparent and efficient use of the budgetary funds among the certain members of the parliament and their reluctance demonstrates it.

The draft includes anti-corruption provision providing for a competitive selection of the members of the Accounting Chamber and allows for the election of the Chairman and Deputy from the members of the Chamber. The proposal to rely on competitive selection caused opposition among the MPs. The provision is vital as it creates preconditions for politically independent and competent body that will monitor revenues and expenses. Through rejecting the bill, the Members of the Parliament might prevent Ukraine to meet the EU conditions which will consequently lead to refusal to provide funds under the Macro-Financial assistance program.

To guarantee the transparency and accountability of the activities of the Accounting Chamber, a Public Council will be established with the participation of the civil society representatives.

                Expert Group on Public Finances under the Reanimation Package of Reforms” urges for the adoption of the bill #2072 “On Accounting Chamber” in the second reading in its presented form.