Quarterly Report 01 October 2012 - 31 December 2012

The Ministry of Finance (MOF) has incorporated proposals from MFSI-II experts into several orders, including the MOF Order dated 23 November 2012, which approves key approaches to PPB implementation in local budgets. The MOF has also issued two orders to amend the MOF Order of 14 February 2012, No. 97, which incorporates all the proposals of MFSI-II experts regarding the structure of the code of program classification of expenditures and crediting of local budgets. The MFSI-II experts have prepared an updated version of the Planning of Local Budgets Based on Performance Program Budgeting Method handbook, which presents training, normative, and methodological materials required for learning the methods and applying the practices of local budget planning based on the PPB method. This publication reflects all the changes of the PPB legislation and will be disseminated during PPB trainings for raion-level specialists. Regional conferences and consultations for participants of the PPB experiment were held in October and November in Lviv, Kharkiv, and Rivne. The participants shared their experience of PPB implementation in local budgets, considered the practical aspects of realization of Phase III of PPB implementation, and were familiarized with the directions for optimization of PPB budgeting at the local level. MFSI-II experts started delivering a series of local-level PPB implementation trainings for raions, with more than 200 local-level specialists passing through the training in the reporting period. The MFSI-II Project experts have analyzed the Main Characteristics of the Law of Ukraine "On the State Budget of Ukraine for the Year 2013." The cities of Myrhorod, Vinnytsya, Ternopil, Alchevsk, and Lutsk have been selected for participation in Year Two of the Project, with Memoranda of Cooperation concluded with all the selected cities. IBSER experts developed training materials on the monitoring and evaluation of energy efficiency projects implemented by municipal enterprises. In the reporting timeframe, the project prepared monthly monitoring reports on the implementation of State and local budgets for the period from August 2012 to October 2012. According to the treasury's preliminary data, MFSI project's experts prepared "Budget Monitoring for January-September 2012," 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, approved over the reporting period. The MFSI-II experts organized and conducted a meeting of the National Advisory Board (NAB) on the issues of effective public finance management on 25 December 2012. The meeting discussed the main directions of work and tasks of the experiment on implementation of the Performance Program Budgeting method at the level of local budgets in 2013. MFSI-II experts also conducted a training session for members of NGOs on 9 November 2012, covering the issues of the gender component in developing and disseminating the Performance Program Budgeting method to local budgets of Ukraine. The MFSI-II experts and the Ministry of Finance of Ukraine will continue working together to implement the Performance Program Budgeting method at the level of local budgets. MFSI-II experts will prepare the annual report on the results of realization of the experiment of PPB implementation in local budgets. IBSER will provide organizational support to the Ministry of Finance's Intergovernmental Working Group and organize its meeting in February 2013. By the end of the next quarter, it is planned to prepare three monthly monitoring reports on the implementation of State and local budgets for the period from November 2012 to January 2013. MFSI-II experts will analyze five selected cities' current budget expenditures on energy resources and update Recommendations on financial incentives to promote the establishment of energy-efficient projects.