Paper/Speech Details of Conference Program for the 27th NISPAcee Annual Conference Program Overview WG5: Public Finance and Public Financial Management Author(s) Sergii Slukhai Taras Shevchenko National University Kyiv Ukraine Demydenko Liudmyla, Nakonechna Yuliia, Borschenko Tetyana, Title Ukrainian Local Budget Transparency: Challenges of Fiscal Decentralisation File Paper files are available only for conference participants, please login first. Presenter Sergii Slukhai Abstract Some progress has been achieved in Ukraine with regard to public finance transparency. According to Open Budget Survey 2017, Ukraine’s Openness Index has demonstrated a positive trend, with a score reaching 54 points (between Kyrgyzstan and Honduras). According to IBP criteria, it could mean that Ukrainian budget transparency is not sufficient (it must be higher than 61 points), so society receives a limited amount of budget information. Ukraine’s score is located almost in the middle of the range, where the mean is 43, and is ahead of many post-socialist and post-soviet nations. The achieved progress concerning budget transparency could be associated with the reforms initiated in Ukraine after the Revolution of Dignity (2013-2014). It is worth emphasizing the adoption of the Law of Ukraine ‘On openness in using public costs’ in 2015, which imposed onto main budget means controllers an obligation to upload information on transactions with public moneys onto the specially launched governmental website. While information on national government units’ budget transactions has become more open, the same could not be said about local authorities. There is a big difference between what is posted in the national portal and in the local authority’s website; local authorities mostly publish only annual budget execution data. The ongoing decentralization has brought its first results. Within the time period 2015-2018, the local budgets have soared by 2.8 times in absolute value. By September 2018, 3,839 local communities merged into 838 with 7.1 million of inhabitants. Fiscal decentralization occurring in Ukraine increases the need for publicizing budget information which secures higher transparency in local authority activities. This study intends to deliver assessment on local budget transparency on the grass-root level, i.e. within a range of local budgets of newly established merged communities. The aim is to make an assessment by use of a simplified methodology which we call ‘snapshot assessment’ encompassing about 10 main transparency indicators. The measures assessed is presentation on the official local government webpage the following information: socio-economic development programme of a territory; current year budget draft and comments thereto, approved annual budget and comments thereto, citizens’ budget, annual budget execution report, quarterly reports on budget execution, information on investment projects in progress, reports on execution of budget programs, audit agency report on the unit’s annual budget execution. Our analysis has shown that transparency at the level of the newly-formed united territorial communities is quite low at the moment. According to our estimate, a share of newly established communities that have more or less complete folder of publically available information on their budgets does not exceed 12 per cent. This measure is very unevenly distributed across the regions. This fact means that there exists a need to create institutional preconditions for the budgetary information to be publically available not only at the national, but also at the local level. That is why the Ukrainian national government needs to initiate a special budgetary program to provide local governments with respective informational and technical support in re-creating their websites. One of the study conclusions is that a national transparency assessment methodology for local budgets should be adopted to account for national peculiarities of the budget process with regard to ongoing decentralization efforts.
