Destruction of the Kakhovka HPP: increased efficiency in the use of funds for restoration projects
Approaches to price control in the estimates of restoration projects have been improved and the establishment of a safe water supply for the city of Mykolaiv has begun. Such measures are being implemented on’ objects of control over the implementation of the recommendations of the Accounting Chamber, provided based on the results of the performance audit on the topic «Destruction of the Kakhovka Hydroelectric Power Plant: the scale and consequences of the disaster.»
It should be noted that within the framework of the audit, the Accounting Chamber identified shortcomings in the process of using allocated funds and implementing urgent measures to eliminate the consequences of the destruction of the Kakhovka HPP.
In particular, the executors did not use a significant part of the funds allocated for restoration within the specified period and, accordingly, the planned measures were not implemented. And urgently adopted decisions on the allocation and use of funds - were not always sufficiently substantiated and in some cases did not take into account regulatory requirements. Also, simplified procedures for selecting performers, improper internal control over the use of funds and the fulfillment of contractual obligations - introduced during the implementation of the pilot project created risks of uneconomic and ineffective use of budget funds.
To eliminate the identified shortcomings, the Accounting Chamber provided the audit objects with a number of recommendations, the implementation of which:
- The Ministry of Development of Communities, Territories and Infrastructure of Ukraine (Ministry of Development) reported that it ensured the procedure for implementing pilot projects only if their financial and economic calculations were available. At the same time, the Ministry did not specify the list of measures taken. The Ministry of Development also approved the draft budget norms of Ukraine - Guidelines for determining the current market price of construction resources.
- The State Agency for Infrastructure Restoration and Development of Ukraine (Reconstruction Agency) has created an information and analytical system "Price Database" (IAS "Price Database") to regulate the cost of restoration work, which allows you to monitor prices for labor, material and technical resources and road works and avoid overestimating their cost. Heads of infrastructure restoration and development services in the regions are obliged to ensure monthly filling of the IAS "Price Database" up-to-date information, at the regional level, their own procedures for analyzing current prices have been approved.
- In addition, The Recovery Agency is developing a Procedure for organizing and implementing internal control in institutions and organizations under its management in order to prevent the use of state budget funds in violation of the law.
- Some steps have also been taken to properly provide water to the city of Mykolaiv – The Recovery Agency has begun negotiations with the European Investment Bank on attracting international assistance for the construction of a water intake from the Southern Bug River, a main water supply, and the reconstruction of the Zhovtnevy reservoir.
In general, out of 16 recommendations provided by the Accounting Chamber, the objects of control have implemented nine, three each – have started work, four more – are awaiting implementation. Therefore, monitoring of the implementation of the recommendations continues. The Accounting Chamber will inform the public about its results.
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