FEAO: Following the money

(Above: Victor Maziarchuk, the FEAO Chief Economist, live on VRU TV Channel talking about the draft Budget 2017.)

In a country battling against corruption and facing conflict in the south-east, Ukrainians are relying on their Verkhovna Rada (VRU) to conduct robust and effective financial scrutiny. “In these times of economic hardship, it is equally essential to know the amount of public spending by the Government and the efficiency of that spending,” says Victor Maziarchuk, Chief Economist of the Financial and Economic Analysis Office (FEAO).

With support from Westminster Foundation for Democracy and the Government of Germany through GIZ, the FEAO was established to support the oversight function of the parliament. It provides the VRU with financial analysis that is so urgently required to hold the government to account for the austerity measures being implemented.

Although only set up earlier this year, it has already made some startling findings. Having analysed the Ministry of the Interior’s budget, Mr Maziarchuk says, the Office found that “eight per cent of funds allocated to the Ministry were spent for purposes other than designated for this institution”.

To avoid diverting public funds in 2017, the FEAO is currently supporting the 2017 budgetary process by providing neutral expertise and assistance to committee members and staff from the VRU Budgetary Committee and nine other committees in conducting budget scrutiny. Once the budget bill is passed, the Office will continue to monitor and analyse public expenditure.

The expertise provided by the Office also supports individual MPs in conducting their oversight work. This underpins a meaningful dialogue between Parliament and the Government in regard to accurate forecasting and the appropriate use of public funds.

“Cooperation with the FEAO helps me to better understand the budget and, as an MP, to take informed and qualified decisions on effective allocation of public funds,” says Victor Kryvenko, Deputy Chair of the VRU Budgetary Committee. “I am using the 2016 Budget Diary prepared by the Office to study the 2017 budget bill that is being considered by Parliament. The Diary also helps me in assessing the Government’s initiatives to be funded from the state budget next year”.

It is not just members and staff who benefit from the FEAO; civil society activists and journalists grappling with financial issues take advantage of the analysis too. Through miscellaneous communication activities the Office has been actively engaged with interpreting the draft budget 2017, contributing to greater awareness-raising, public discussion and transparency of the budget process in Ukraine.

“As a journalist writing on economic matters, I used to lack timely, objective and complete information regarding the state budget,” says Channel 5 reporter Olha Kalynovska. “This made it difficult for me to prepare high-quality, professional media stories on this topic. Thanks to the FEAO’s materials, I have come to understand the budget document better, and the entire budgetary process has become more open and transparent. I’m glad that the Office often uses the platform of live broadcasting offered by our TV channel to promote such openness and transparency”.

The parliament’s ability to scrutinise where citizen’s money is going is crucial for delivering oversight and transparency of public spending. The Governments focus on on-going fighting in the south-east, EU accession and dealing with the economic crisis, means support for financial scrutiny is of great importance.

“The FEAO programme is committed to ensure that the Verkhovna Rada of Ukraine is a capable, accountable and responsive institution with regard to financial oversight and scrutiny, providing useful perspectives on economic sustainability, development and growth,” says WFD’s Country Representative Halyna Shevchuk. Although a number of macroeconomic reforms have helped stabilise the economy, more challenging restructuring lies ahead.

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