Quarterly Report 01 January 2012 – 31 March 2012

The project's main objective is to enhance public awareness of the public budgeting process, revenues, and expenditures. The project has achieved several key milestones, including the production and dissemination of the PPB Handbook, which contains training, normative, and methodological materials for learning the methods and applying the practices of local budget planning based on PPB. The handbook provides the methodology of financial justification of strategic documents and principles of financial analysis of investment projects. Regional trainings on implementation of the PPB method of planning and execution of local budgets were conducted in 12 oblasts, with 1,451 local-level specialists participating in the training. The trainings focused on the implementation of PPB at the local level, and participants prepared more than 4,000 budget requests, which will enable them to approve budget programs and formulate performance indicators. The project has also developed a methodology of cost and credit provision for the planning year and two subsequent budget years by key spending units of local budgets. This methodology has been forwarded to the Ministry of Finance of Ukraine for approval. Additionally, the project has developed the Methodology of financial justification of strategic documents, which sets out the hierarchy of financial justification of strategic documents and their interrelations between each other, as well as the financial provision for implementation of strategic documents by funding source. The project has also analyzed the Main Characteristics of the Law of Ukraine "On the State Budget of Ukraine for the Year 2012" and prepared monthly monitoring reports on the implementation of state and local budgets for the period from November 2011 to January 2012. The project has also prepared a Budget Monitoring for January-December 2011, which included an analysis of the latest trends regarding state and local budget execution, as well as an analysis of the legislative acts influencing the budget process. The project has also planned several activities for the next quarter, including delivering regional trainings on implementation of the PPB method of planning and execution of local budgets for specialists from each of the regions, which joined the experiment in 2012. The project also plans to prepare proposals for improving the existing formats of budget reports and for new formats of reporting on execution of local budgets. The project's key milestones and major deliverables include the production and dissemination of the PPB Handbook, the delivery of regional trainings on implementation of the PPB method, the development of a methodology of cost and credit provision, and the development of the Methodology of financial justification of strategic documents. The project also plans to complete the analysis of efficiency of energy costs for the budgets of the remaining selected cities and develop a system for monitoring energy budget expenditures of the selected cities. The project's tasks and subtasks include providing assistance to the Government of Ukraine in conducting state-supported pilot programs on Performance Program Budgeting and their implementation in local budgets in Ukraine. The project also aims to develop and formalize a system to monitor and evaluate execution of local budget programs for all local government functions. The project has developed a draft methodology of monitoring and evaluating the performance of local budget programs based on PPB, which was reviewed at a meeting of the National Advisory Board on December 28, 2011. The project also plans to finalize and improve the methodology and submit it to the Ministry of Finance for confirmation and dissemination to all local budgets.