1. Strengthened Approach and PFM-PR Case Study: Ukraine
Bill Dorotinsky
The World Bank
Washington, DC January 2007

2. Outline Background and Context Current Status Strategy Approach
Impetus for Change
Timeline
Recent Bank Support
Current Status
Strategy
Approach

3. Ukraine Impetus of Change
Immediate:
Late 2004 Orange Revolution
New government eager to move forward
March 2005 Budget revision
Inadequate access to data on spending, revenues
Low cooperation across PFM agents
Minister unable to fulfill tasks
Medium to Long-Term
EU Harmonization, conforming to EU standards

4. Timeline Treasury merged into MoF PFM/MoF Reform strategy development
April White Paper on Internal Audit Reform
April MOF Reorg Decree
Gov’t Change
End 2004 Orange Revolution
Aug New
Gov’t
2004
2005
2006
Govt call for WB support in PFM
WB advisory team on-ground
WB support to reorg implementation
PFM Project Prep
March Election

5. Recent Bank Support
Advisory support to White Paper on Internal Control Reform
Advisory support to MoF Reorganization
Research, paper, advice
Internal MoF survey of staff on operational problems
Treasury II (follow-on to successful interim Treasury project) converted to PF Modernization Project, supporting MoF integration
Finalizing PEFA assessment to feed into reform strategy
Partnership with Government, supporting Government-led agenda

6. Current Status
April 2005 Presidential Decree reorganizing MoF, putting Treasury, internal audit, Tax and Customs under MoF oversight.
Treasury actually merged into MoF in December 2005.
MoF developing PFM reform vision (White Paper), MoF mission statement, to guide reforms
MoF developing project components
March 2006 Election – no government until August
New Government taking reforms forward
Meets their needs, regardless of politics
Broad support in MoF kept work progressing, issues live

7. Approach
MoF internal working group, composed of division heads, led by two Deputy Ministers
Already overcoming traditional stovepipes
Institutionalizing reforms
Active Bank advisory support to MoF
Bank lead in donor coordination on PFM, supporting Government chaired DCG
44 separate PFM donor assistance projects, spanning 12 donor organizations from 9 countries

8. Strategy Meet Government needs, help solve problems faced today
Use advice, papers, workshops and training creatively
Use AM’s to send clear messages, summarize advice
Provide options, pro/cons, no recommendations
Share knowledge liberally
WB working as part of reform working group, regular presence on-site
Multi-level counterparts, from Minister, DM’s, to Directors
PEFA PFM-PR to
give complete picture
benchmark system operation, serve as baseline for measuring reform strategy impact
serve as baseline for donor interventions

9. PFM-PR Fit naturally into work with MoF
Valuable input into reform strategy development
Most data obtained in normal course of work
Results shared real-time
Formal report for record-keeping, but value already added
Donors sharing information, using PFM-PR