Transparency in the use of external financing: oversight by the Ministry of Finance and international donors

Since the start of the full-scale war, Ukraine has faced unprecedented challenges, including significant financial and economic. The Ukrainian Government and the Ministry of Finance have implemented necessary measures to maintain financial stability. Meanwhile, international support has been crucial for funding priority expenditures under martial law, as internal resources are allocated to security and defense area.

Since February 2022, the Ministry of Finance of Ukraine has secured over USD 93 billion in budget support from international partners. These funds have been essential for addressing priority needs in the social and humanitarian sectors, such as social support programs, old-age social payments, salaries for civil servants and others.

The substantial financial assistance reflects the trust placed in Ukraine as a reliable partner. Transparency and accountability are key to our cooperation with donors. 

Financial support from international partners cannot be misused. Ensuring that international aid is used appropriately is a critical aspect of this cooperation.

How are the Ministry of Finance and donors ensuring oversight? Key areas of cooperation:

The Ministry of Finance, in cooperation with the World Bank, ensures the transparency of both securing and utilizing funds from development partners. To date, Ukraine has received approximately USD 40 billion through World Bank mechanisms, with these funds allocated for specific purposes agreed upon by both the Ukrainian Government and its partners.

PEACE in Ukraine is the largest funding initiative in World Bank history, with nearly USD 30 billion allocated to the State Budget of Ukraine. Over 80% of this funding comes from the United States. PEACE in Ukraine is also funded by the World Bank, Japan, the United Kingdom, Norway, and other development partners.

The Ukrainian Government submits expenditure reports to the World Bank, which verifies and approves the documents. Upon successful verification, funds through the PEACE in Ukraine are transferred to Ukraine’s State Budget to cover previously incurred expenses. This reimbursement mechanism ensures high transparency, allowing donors to track actual budget payments.

Additionally, the Ministry of Finance works with Deloitte Consulting on the USAID SOERA project to oversee direct budget support from the US Government. The auditing firm PricewaterhouseCoopers Ukraine conducts audits based on agreed procedures to confirm the legitimacy of public expenditures under the PEACE in Ukraine project.

The Ministry of Finance and the World Bank also implement a monitoring system for fund allocation through other World Bank projects, including DPL/DPO, HOPE, ARISE, and HEAL.

In terms of EU Macro-Financial Assistance, which provided over EUR 25 billion in 2022-2023, the Ministry of Finance has engaged in systematic cooperation with the EU to oversee financing. This includes regular exchanges of data and reports on fund usage and allocation.

For the EU's Ukraine Facility for 2024-2027, worth EUR 50 billion (with EUR 7.9 billion already raised), the EU has established an Audit Board to continuously monitor and control the use of EU funding, preventing misuse. The Audit Board has the authority to request information, contact relevant authorities, and conduct its own audits through its secretariat.

Trust and transparency remain crucial for sustaining a long-term partnership with international donors.