The Government reduces the regional network of public financial control bodies

Following the proposal of the Ministry of Finance, the Government reduced the number of the local units of the State Financial Inspection of Ukraine. The necessary Government’s decree was adopted on April 6.

The Ministry of Finance is taking steps to improve financial discipline in the public sector of economy. One of such steps is the reorganization of the State Financial Inspection into the State Audit Service which was started in October 2015. The aim of this transformation is to switch public activities from control to audit, in order to prevent incompliant and ineffective use of state budget funds and property, to re-focus inspection on major financial violations as well as to ensure that financial checks are conducted based on detected risks only.

The Government’s decree on the reduction and re-organization of the local units of the State Financial Inspection was adopted in accordance with the decision on the creation of the State Audit Service.

According to the above Decree, five interregional local units of the State Audit Service will be created on the basis of 27 local financial inspections: Office North (Kyiv), Office Northern East (Kharkiv), Office South (Odessa), Office East (Dnipropetrovsk) and Office West (Lviv).

Staff of the new local units will be re-formatted after a competence assessment. Following the initiative of the Ministry of Finance, the Government has already set the maximum number of employees of the State Audit Service which is equal to 3200 persons including 520 persons at the central office and 2680 persons at the regional offices. Such a structure takes into account the number of public sector entities reporting to the State Audit Service (600 entities reporting to the central office and 17600 entities reporting to the regional units).

Thus, the implementation of the above decree will make it possible to improve the quality and effectiveness of public financial control while reducing the number of the local units significantly and re-formatting their staff.