01.11.2017

Start at

31.07.2020

End at

3,1 million EUR

Amount of aid

EU for Stronger Public Finance Systems of Local Governments

Project Mission – а capable, efficient, transparent and accountable local finance management system focused on attaining sustainable economic and development goals, in line with government commitment under the EU-Ukraine Association Agreement and in line with the Ukraine's Public Finance Management Strategy of 2017-2020

Project Tasks – Strengthening public finance management system at local and regional government level.

Beneficiary:

Ministry of Finance of Ukraine

Funding/support

European Union

Implementor:

Hulla & Co Human Dynamics GmbH & Co KG

Four components to realize within the Project:

Component 1: Improving local government’s budgeting and accounting process (Sub-Component 1.1: Modernization of budget planning and budget execution monitoring systems for local governments, Sub-Component 1.2: Modernization of the accounting system in the public sector)

Component 2: Development of a comprehensive information and analytical system for planning and implementation of local budgets

Component 3: Stronger supervision of local debt management

Component 4: Effective internal control and financial audit at local level

Tasks by the components:

Component 1

  • Support Ministry of Finance in developing methodological recommendations for the local authorities on medium-term budget planning and standard forms of documents for different levels;
  • Support local financial bodies of pilot administrative-territorial units in the development of medium-term budgets;
  • Analyse legislation and provide recommendations to the Ministry of Finance of Ukraine on its improvement;
  • Support the local budget funds administrators in implementing the National Public Accounting Standards;
  • Develop training module on budget process and accounting, conduct training for local governments and specialists of public sector entities on accounting issues;

Component 2

  • Develop concept as well as functional and technical requirements to integrated informational analytical system used for local budgets planning and performance (IAS);
  • testing developed IAS in pilot regions, conducting trainings using an updated IT system, developing and implementing training strategy;

Component 3

  • Develop methodological recommendations on debt management at the local level (assessment of the community's creditworthiness, procedures for the provision and control of local guarantees, loans, approaches to risk management);
  • Optimization of data exchange necessary for local debt and local guarantee analysis;

Component 4

  • Prepare a preliminary study on the powers of the bodies of state financial control and audit (State Audit Office, Accounting Chamber, State Treasury Service) concerning the control and audit of local budgets.
  • Conduct a study on the control of local financial authorities and develop proposals for their revision.
  • Assist in developing common approaches to audit of local budgets by state financial control bodies and independent external audit.
  • Develop proposals for the creation of mechanisms for public control over local finances and communal property.

Summary of LOGICA's achievements in 2018-2019

Component 1

Subcomponent 1.1

Links to the project website where the documents are posted:: http://logica-project.eu/first-component/page.html                                                                     

  1. Prepared and submitted to Minfin:
  • Investigation of foreign experience in the sphere of medium-term budget planning;
  • Recommendations on implementation of mechanisms of public participation in the budget process at the local level and recommendations for participatory budget preparation;

(where to find: https://hromady.org/%d1%8f%d0%ba-%d0%b3%d0%be%d1%82%d1%83%d0%b2%d0%b0%d1%82%d0%b8-%d1%96%d0%bd%d1%84%d0%be%d1%80%d0%bc%d0%b0%d1%86%d1%96%d1%8e-%d0%bf%d1%80%d0%be-%d0%bf%d1%80%d0%be%d0%b5%d0%ba%d1%82-%d0%b1%d1%8e%d0%b4/)

  • Budget Request Preparation Template and relevant approval documents (Financial Bodies decree, Local Council Chairman prescript) – submitted to local financial authorities;
  • Draft Instruction for Typical Program Classification implementation at the local budgets level.
  • Draft Recommendations on the Preparation and Approval of the Budget Regulation for the Budget Process at Local Level (Regulations are approved by Minfin Order № 228 dated 31.05.2019);
  • Draft documents related to medium-term budget planning introduction at the local level;
  • Report on international experience in functioning and funding authorities responsible for local budgets preparation and execution, their activity coordination, accountability of the Ministry of Finance.

 

  1. Training module «Program Performance Budgeting at the local level» developed and training for local financial bodies conducted (Sep-Nov 2018).
  2. PEFA assessment in Stara Synyava provided and PEFA report prepared (where to find: https://pefa.org/node/3716).
  3. Developed guidebook for mass media and citizens: How to deal with the local budgets labyrinth (where to find: https://decentralization.gov.ua/news/10813).
  4. Prepared and submitted to the local financial authorities Budget Calendar (where to find: https://decentralization.gov.ua/news/10699).
  5. Developed draft documents on the personnel management of the local financial authority (where to find: https://decentralization.gov.ua/news/11912).

Component 1

Subcomponent 1.2

Links to the project website where the documents are posted: http://logica-project.eu/first-component/page.html                                                                     

  1. Prepared and submitted to Minfin:
  • Report on accounting policy formulation for budget spending units;
  • Analytical information on IPSAS implementation and accounting methods in EU member-countries;
  • Analytical information on deviations from public accounting standards and recommendations for their improvement;
  • Investigation results and relevant report on international experience of accounting systems in EU member-countries and OECD countries;
  • Draft Methodological Recommendations on Revenue and Expenditure Accounting of Spending Units;
  • Proposals on amendments to the national accounting standards in the public sector of Ukraine;
  1. Handout on accounting policy formulation for budget spending units (sent to Kyiv city state administration).
  2. Developed training materials on: “Public Accounting and Financial Reporting Modernization: Accounting National Standards Implementation”.
  3. Training Module “Public Accounting and Financial Reporting Modernization: Accounting National Standards Implementation” is download on On-line Platform of Association of Amalgamated Communities.
  4. Started work on Accounting and Reporting Guidebook for Local Budgets Spending Units.
  5. Translation of IPSAS is under the process as well training for representatives of public sector entities on accounting issues.

Component 2

To improve Informational Analytical System (IAS) used for local budgets preparation and execution:

  • Specified business requirements to Dictionary Data and Forms Data;
  • Approved non-functional requirements to business-process management;
  • Developed functional specifications (functional and technical requirements are covered by specifications) for the IAS;
  • IAS testing in pilot oblasts (Vinnytska, Dnipropetrovska, Lvivska, Cherkaska) is started;
  • Conducted training for Minfin representatives – IT Department (training covered issues on IAS administration and exploitation) and Local Budget Department (training covered issues on maintaining directories, forms, managing a budget calendar).

Component 3

  • Conducted assessment of current practice to provide local borrowings and local guarantee by the local governments, prepared comprehensive assessment report with proposals on how to improve this process at the local level (посилання: http://logica-project.eu/third-component/page.html);
  • Developed proposals on improvement of approaches to debt and guarantee risks management and assessment;
  • Prepared recommendations for optimization of business processes around approval of applications for debt and guarantees;
  • Elaborated Manuals for local self-governments on: Local Borrowings and Local Guarantees;
  • Developed a template for justification of state investment project used to evaluate the social and economic added value of investments at the local level;
  • Prepared recommendations for automatization of exchange data process under local debt management;
  • Developed recommendations on how to cope with deviations in data on local debt and local guarantees reporting by the Treasury and Minfin.

Component 4

Links to the project website where the documents are posted: http://logica-project.eu/fourth-component/page.html                                                                     

  1. Prepared analytical notes regarding:

- legal and regulatory base in the sphere of public financial control and audit;

- control powers of public financial authorities of EU member-countries and financial control mechanisms used by these authorities.

  1. Prepared study on regulatory support for the control powers of local financial authorities at all stages of the budget process which identifies key issues to be addressed and refined in the sphere of public financial control.
  2. Carried out analysis of the state of organization and provision of internal control by the finance departments of regional administrations and Kyiv City State Administration – relevant proposals sent to Minfin.
  3. Prepared and submitted to Minfin:
  • Investigation on legal regulation of control powers of local financial authorities at all stages of budget process;
  • report on international experience in application of public in the budget process at the local level and municipal property management, assessment of public control legal regulation and its compliance with international standards.
  1. Prepared Manuals: “Control Basics and Essential Audit Aspects”, “Internal Control: From Theory to Practice” (посилання: https://decentralization.gov.ua/news/11027, https://decentralization.gov.ua/news/12034).
  2. Prepared Guidebook on Internal Control for local budgets spending units.

Areas