Kyiv, October 30, 2008 - The Government of Ukraine and the World Bank today officially launched the implementation of the Public Finance Modernization Project for Ukraine recently ratified by the Ukrainian parliament. The World Bank’s Board of Executive Directors approved a US$50 million loan for this project on January 8, 2008. The objective of this project is to strengthen public financial management in Ukraine by improving operational efficiency and transparency. The project will contribute to ensure public resources are used efficiently to address key national priorities and improve public services. Enhancing the transparency, efficiency and effectiveness of public financial management is an important element of the institutional modernization plan of the Government of Ukraine. Good progress has already been made since the start of decade, including the establishment of a Treasury system, the abolishment of National Bank direct financing of the Government, the adoption of a new Budget Code and budget classification system, the creation of internal audit function and the improvement of the availability of fiscal information. “The Project will focus on improvements in management of public finances and budget operations, internal audit and public accountability, and institutionalizing these systems to increase effectiveness of business processes. – says Cem Dener, project Task Team Leader.– It will help improving transparency and facilitate better interaction both among state entities and between these entities and the citizens they serve.” The development of the integrated public financial management system (PFMS) and further reforms in budget planning and execution will have positive effects on the timeliness and predictability of public expenditure, including the areas relevant to combating poverty. Arrangements for improving information dissemination to civil society supported through the Project will strengthen governance and accountability across the executive, and mitigate governance risks. The Project will ultimately have positive benefits for Ukrainian people through the greater quality of public services that result from improved management of public finances. The Project will furthermore help Ukraine align its public financial management practices with EU principles and thereby further Ukraine’s EU aspirations. The expected duration of the Project is five years. However, some of the reform initiatives it supports have a longer term perspective. The design of project components builds on the Government’s existing strategies for reforms in budgeting, accounting and public internal financial control and audit. "With this project, we hope to help the government improve the delivery of public services by making it easier to plan, execute and monitor public spending. – stresses Martin Raiser , World Bank Director for Ukraine, Belarus and Moldova. - This is a core activity within the Country Partnership Strategy and we look forward to its successful implementation and completion."
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