Title of the project: Strengthening Capacities in External Audit in line with International Standards (EU4ACU)

The Donor of the project: European Union

The Implementer of the project: Hulla & Co Human Dynamics GmbH & Co KG

The Beneficiary of the project: Accounting Chamber of Ukraine

The Recipient of the project: Accounting Chamber of Ukraine

Project duration: 09/2021-09/2022

Ukraine has been in the midst of numerous public and private sector reforms expected to bring the country closer to Europe and into alignment with EU and international standards and good international practices. The Government’s current reform program is guided by Ukraine’s Association Agreement with the European Union. Among the numerous reforms underway and planned in the public sector, public finance management (PFM) has been highlighted as a priority area for EU / Ukraine relations. This is reflected in the Development Strategy of the Accounting Chamber for 2019-2024, which is based on public demand for an objective expert assessment of the management of public funds and state property.

As Ukraine implements public sector reforms, it is crucial to strengthen the current PFM system including more robust mechanisms and safeguards for eradicating rampant abuse and corruption. In recognition of the importance of PFM to the EU / Ukraine relations, on 17 November 2017 the EU approved an assistance program designed to provide support for implementing the Government’s Public Finance Management (PFM) Strategy and the PFM reform action plan.

EU4ACU project is a part of an assistance program for implementing the Government’s Strategy and to strengthen PFM, consistent with the EU’s overall framework for providing PFM assistance, the “Development of External Audit and Control of Public Finances in Ukraine” (EU for better public finance audit) project is prepared to start.

This EU project is designed to bring more efficient oversight to public resources through enhanced capacities in external audit of budgetary funds by Ukraine’s Supreme Audit Institution, the Accounting Chamber of Ukraine (ACU). The work of Supreme Audit Institutions’ (SAI) according to international principles and standards is to act as an independent guardian of the financial interests of the country’s citizens. SAI external audits according to international principles and standards provides: (I) warnings of risks and improprieties, (II) provides assurances and offers guidance to policymakers on how to improve the management of public finances, and (III) ensures citizens know how their money is being spent.

In project 4 Components, 11 project activities with a total of 45 tasks will be implemented over a two-year period.

Improved audit methodology, are intended to introduce a risk-oriented audit planning, ISSAI-based compliance and performance audit manuals, processes, support pilot compliance and performance audits, implement modern audit quality control and assurance system;

Legislative approximation and regulatory changes, will provide expert support, advice and analysis on amendments to the Law on the ACU and other related regulatory enactments, will help improve the Institution's internal regulatory acts;

Institutional development, will support implementation of the ACU institutional development strategy, improving strategic and operational planning and internal control system and building a robust process management and accountability system;

Strengthened follow-up mechanisms and communication on the main results of ACU's work, will support the implementation of the ACU’s Communication Strategy through development and implementation of accessible information products and tools on the main results of the ACU’s work and the strengthening monitoring procedures for the implementation of the ACU recommendations and evaluation of monitoring results.

Achieving the expected results defined for the project will implement important reforms also helping to implement key elements of the Government’s Strategy for strengthening PFM for more effective budgetary control and addressing budgetary inefficiencies, abuses and corruption where public finances are involved.