The President of Ukraine signed amendments to the Law of Ukraine “On the Accounting Chamber”

On December 17, the President of Ukraine signed the draft law adopted by the Verkhovna Rada of Ukraine on amendments to the Law of Ukraine “On the Accounting Chamber” and some other legislative acts of Ukraine (reg. No. 10044-d).

The draft law was developed by a working group on the development of draft laws on the reform of the Accounting Chamber in the VRU Committee on Budget, which included People’s Deputies of Ukraine, representatives of the Accounting Chamber, the Ministry of Finance of Ukraine, international experts (from the EU Delegation to Ukraine, the SIGMA program and the USAID project) and representatives of civil society. Their proposals for the draft law were also provided, in particular, by the Supreme Audit Institutions of Estonia, Latvia, Lithuania, Germany, the Czech Republic, as well as the INTOSAI Development Initiative (IDI). The legislative proposals were developed taking into account Ukraine’s European integration obligations and recommendations reflected in the reports of the European Commission, SIGMA and IMF memoranda.

The purpose of the Law is to bring the status and legal basis of the Accounting Chamber’s activities closer to the standards of the International Organization of Supreme Audit Institutions (INTOSAI). Key changes:

The institution’s status and powers

– The Accounting Chamber is designated as the supreme state collegiate body of financial control (audit);

– The INTOSAI Framework of Professional Pronouncements (IFPP) is designated as the basis of organizational and methodological principles for the implementation of state external financial control (audit);

– The powers of the Accounting Chamber are extended to business entities of the state and municipal sectors of the economy; to funds received from foreign states, the European Union, foreign financial institutions, international organizations, donor institutions in the form of credits (loans), grants, assistance and to funds of mandatory state social and pension insurance funds (for example, the Pension Fund of Ukraine);

– The Accounting Chamber will be able to conduct audits of consolidated financial statements of public sector entities and budgets.

Guarantees of the independence of the Accounting Chamber

– termination or limitation of the Accounting Chamber’s powers in the event of the expiration of the term of the the Verkhovna Rada’s powers or their early termination, as well as the introduction of martial law or a state of emergency, is impossible;

– in the event that the draft law on the State Budget of Ukraine does not take into account the proposals of the Accounting Chamber regarding its financial support, the Government is obliged to argue its position;

– any draft law concerning the activities of the Accounting Chamber or its powers must receive a corresponding opinion from the institution.

Chairwoman, Members of the Accounting Chamber, Auditors

– preliminary selection of candidates for Members of the Accounting Chamber will be carried out by an advisory group with the participation of international experts, the conditions of the selection competition, requirements for candidates, voting for them, etc. have been updated;

– the number of Members of the Accounting Chamber has been reduced to 11;

– the list of responsibilities of Members of the Accounting Chamber has been defined;

– the powers of Members of the Accounting Chamber have been improved in terms of coordinating control measures and implementing such coordination by two or more Members;

– The law establishes the structure and amount of remuneration for Members of the Accounting Chamber, the Secretary of the Accounting Chamber and the audit staff. The norms of the legislation on civil service do not apply to the audit staff, but the anti-corruption legislation applies.

Organizational issues

– every five years, the Accounting Chamber must conduct an external assessment of its activities for compliance with international auditing standards;

– activity planning based on a risk-based approach is being introduced;

– the Accounting Chamber will not conduct unscheduled control measures;

– information about meetings and technical voting issues at them will be posted on the Accounting Chamber website;

– approaches to documenting the results of control measures have been changed: in particular, auditors will not prepare acts based on the results of audits;

– members of the control group have the right to receive the necessary information and data (including information from automated information and reference systems, registers and data banks, the holder (administrator) of which is state bodies or local self-government bodies).

Implementation of recommendations

– consideration of the reports of the Accounting Chamber in the relevant committees of the Verkhovna Rada of Ukraine is mandatory, as is the appropriate response of the parliament to the information of the Accounting Chamber about the improper implementation of its recommendations;

– the processes of analysis and monitoring of its recommendations by the Accounting Chamber have been strengthened. Information about this is posted on the institution’s website;

– together with the annual report on its activities, the Accounting Chamber may submit to the Verkhovna Rada proposals for taking measures regarding the failure to implement its recommendations;

– approaches to appealing the decisions of the Accounting Chamber based on the results of control measures in court are changing, and cases of interference in the work of the Accounting Chamber will be under the jurisdiction of the Supreme Court.

The Chairwoman of the Accounting Chamber, Olha Pishchanska, welcoming the signing of the Law, thanked the President of Ukraine, People’s Deputies, experts and international partners – participants of the working group, the staff of the Accounting Chamber for their contribution to the implementation of the reform.

“This law is the result of the work of People’s Deputies, domestic and international experts. The Supreme Audit Institution is not an institution that can be rebooted in a matter of days. But long-term cooperation with international technical assistance projects has created a sufficient basis for large-scale reform, the most important stage of which – the adoption of key changes to the relevant legislation, was achieved in less than a year,” Olha Pishchanska noted.

Most of the provisions of the Law will come into force on the day following its publication: in particular, a competition will begin to fill vacant positions of Members of the Accounting Chamber. The provisions concerning the status of Members of the Accounting Chamber and officials of the Accounting Chamber’s staff, in terms of remuneration, will come into force on January 1 of the following year.