Results of meeting “Strategic Dialogue EU-Ukraine” on public finance management system reform

3/26/19

On March 26, the second meeting of the participants of the Strategic Dialogue “EU-Ukraine” on the reform of the public finance management system took place. The meeting was chaired by Oksana Markarova, the Minister of Finance of Ukraine. In addition, the first extended meeting of the working group took place.

The high-level working group and nine specialized sub-groups consisting of representatives of the Ministry of Finance, the MEDT, Accounting Chamber and other state bodies as well as civil organisations and international partners were established on December 22, 2018.

The meeting participants discussed the components of the public finance management system reform accounting for the most significant changes implemented over the last six months and requiring special attention.

The most important point at the moment refers to the budget reform and implementation of the medium-term budget planning with the regular review of the expenses. The second priority area is the new approach to the assessment of fiscal risks. The third crucial point is the reform of the SFS with the split of the tax authority and the customs service and the adjustment of tax and customs regulations to international and European standards. The MLI Convention ratified by the Parliament, the draft law on authorized economic operators approved in the first reading, the draft law on NCTS approved by the responsible Parliament’s committee as well as the draft law on financial monitoring shall support these efforts.

The reform of the SFS will only be effective, if pursued simultaneously with the adoption of legislation that brings us closer to EU standards, takes into account all recommendations of our international partners and are based on the best practices,” Oksana Markarova said.

The Minister also reminded that the Ministry of Finance continued to provide open access to information about the state budget, the operations of state-owned banks (including the report on non-performing loans) as well as to explain this information to the public on its website and through social media, presentations and interviews.

We are also developing the system of internal state financial control. In December last year, amendments to the Budget Code and a Government resolution were adopted adjusting internal control and internal audit to the international standards. For instance, these amendments stipulate that the key principles of internal control shall be based on the COSO model”, the Minister of Finance pointed.

Head of the Accounting Chamber Valeri Patskan, acting Head of the SFS Oleksandr Vlasov and Deputy Ministers of Finance Vasyl Shkurakov, Yuri Heletiy and Serhiy Verlanov reported in detail about the current results of the implementation of the action plan in the selected areas including management of fiscal risks and liquidity, debt policy, cooperation with international partners and donors as well as tax administration.

Following our previous meeting, the Ukrainian side made many steps in the correct direction, and the pace of the reform of the public finance management system is really remarkable,” said Peter Wagner, Head of the Support Group for Ukraine at the European Commission.

The sub-groups prepared amendments to the Action Plan for the Reform of the Public Finance Management System including technical details (formulations and definitions) as well as new steps and measures. The consolidated draft of the updated Action Plan was presented to the working group. The working version of the analytical report on the reform of the public finance management system has already been sent to the partners in the EU. Afterwards, it will be finalized and published.
The support of the comprehensive public administration reform in Ukraine (EU4PAR) is an EU project that supports the Government of Ukraine in the implementation of the Strategy of the Public Administration Reform adopted in June 2016. The project provides advisory support to the Government of Ukraine (Secretariat of the Cabinet of Ministers, National Agency for Public Services), helps in training public servants and provides other types of assistance.

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