Quarterly Report 01 October – 31 December, 2011

The initiative was supported by grant # AID-121-A-11-00006 from IBSER. The main objective was to provide legislative, methodological, and organizational support to central and local government bodies. Task 1.1 focused on providing assistance to the Government of Ukraine (GOU) in conducting state-supported pilot programs on Performance Program Budgeting (PPB) and their implementation in local budgets in Ukraine. Sub-task 1.1.1 involved developing and formalizing a system to monitor and evaluate the execution of local budget programs for all local government functions. The draft methodology for monitoring and evaluating the performance of local budget programs based on PPB was developed and submitted to the Ministry of Finance for confirmation and dissemination to all local budgets. Sub-task 1.1.2 aimed to complete the legislative, regulatory, and methodological framework taking into account the specifics of PPB implementation at various levels of local budgeting. IBSER assisted in developing proposals that amended the regulatory and legislative framework as needed to complete PPB implementation for oblast and district budgets, and budgets of republic-significant municipalities. The proposals were developed and submitted to the Ministry of Finance for confirmation and dissemination to all local budgets. Sub-task 1.1.3 involved developing formats and procedures for treasury-based services of local budgets to improve the budget software used by the State Treasury. IBSER provided technical support for improving the formats and procedures of treasure servicing of local budgets. The proposals for improving the existing reporting forms, as well as new forms for the treasury servicing of PPB-based budgets, were developed and submitted to the Ministry of Finance for confirmation and dissemination to all local budgets. The PPB Handbook was prepared and disseminated by IBSER. The handbook covered international experience, methods of using the tools adapted for use in Ukraine, modern methodological frameworks, the guidelines of the Ministry of Finance, and the experience of application in the pilot regions, as well as practical use recommendations. The handbook was produced, disseminated, and published on the Project website. Training sessions were conducted for relevant public budget officers on designing effective development budget programs, linking local economic development strategies and plans to available governmental and non-governmental resources, conducting sound financial analysis and developing credible investment and project financing proposals, and incorporating financial analysis into budget planning. The trainings and consultations covered all the departments, which made it possible to formulate local budgets in the PPB format in all areas of using the budget funds, and ensured their transparency and efficient use.