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Strengthened Approach and PFM-PR Case Study: Ukraine

This case study examines the strengthened approach to Public Financial Management and Public Relations (PFM-PR) in Ukraine. It explores the impetus for change, timeline of reforms, recent World Bank support, current status, strategy, and approach. The PFM-PR approach aims to meet government needs, provide advisory support, share knowledge, and serve as a baseline for measuring reform impact and donor interventions.

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Strengthened Approach and PFM-PR Case Study: Ukraine

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  1. Strengthened Approach and PFM-PR Case Study: Ukraine Bill Dorotinsky The World Bank Brussels, October 2006

  2. Outline • Background and Context • Impetus for Change • Timeline • Recent Bank Support • Current Status • Strategy • Approach

  3. UkraineImpetus of Change • Immediate: • Late 2004 Orange Revolution • New government eager to move forward • March 2005 Budget revision • Inadequate access to data on spending, revenues • Low cooperation across PFM agents • Minister unable to fulfill tasks • Medium to Long-Term • EU Harmonization, conforming to EU standards

  4. Timeline Treasury merged into MoF April White Paper on Internal Audit Reform April MOF Reorg Decree Govt Change PFM/MoF Reform strategy development End 2004 Orange Revolution 2004 2005 2006 Govt call for WB support in PFM WB advisory team on-ground WB support to reorg implementation PFM Project Prep March Election

  5. Recent Bank Support • Advisory support to White Paper on Internal Control Reform • Advisory support to MoF Reorganization • Research, paper, advice • Internal MoF survey of staff on operational problems • Treasury II (follow-on to successful interim Treasury project) converted to PF Modernization Project, supporting MoF integration • Finalizing PEFA assessment to feed into reform strategy • Partnership with Government, supporting Government-led agenda

  6. Current Status • April 2005 Presidential Decree reorganizing MoF, putting Treasury, internal audit, Tax and Customs under MoF oversight. • Treasury actually merged into MoF in December 2005. • MoF developing PFM reform vision (White Paper), MoF mission statement, to guide reforms • MoF developing project components • March 2006 Election – no government until August • New Government taking reforms forward • Meets their needs, regardless of politics • Broad support in MoF kept work progressing, issues live

  7. Approach • MoF internal working group, composed of division heads, led by two Deputy Ministers • Already overcoming traditional stovepipes • Institutionalizing reforms • Active Bank advisory support to MoF • Bank lead in donor coordination on PFM, supporting Government chaired DCG • 44 separate PFM donor assistance projects, spanning 12 donor organizations from 9 countries

  8. Strategy • Meet Government needs, help solve problems faced today • Use advice, papers, workshops and training creatively • Use AM’s to send clear messages, summarize advice • Provide options, pro/cons, no recommendations • Share knowledge liberally • WB working as part of reform working group, regular presence on-site • Multi-level counterparts, from Minister, DM’s, to Directors • PEFA PFM-PR to • give complete picture • benchmark system operation, serve as baseline for measuring reform strategy impact • serve as baseline for donor interventions

  9. PFM-PR • Fit naturally into work with MoF • Valuable input into reform strategy development • Most data obtained in normal course of work • Results shared real-time • Formal report for record-keeping, but value already added • Donors sharing information, using PFM-PR

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