IMF国际货币组织全球-Ukraine_Technical-Assistance-Report_47页_848kb

Summary of the Technical Assistance Report: Strengthening Budget Formulation and Fiscal Risk Management in Ukraine

Core Content

This report, prepared by the International Monetary Fund (IMF) Fiscal Affairs Department (FAD) in January 2019, outlines recommendations for improving Ukraine's Public Financial Management (PFM), specifically focusing on budget formulation and fiscal risk management. It is based on a technical assistance mission conducted in late 2018 and reflects progress made and key areas for further development in the context of the Medium-term Budget Framework (MTBF).

Main Views and Key Information

I. Strengthening Budget Formulation

A. Progress to Date

• Ukraine has made significant progress in implementing an MTBF, including the preparation of a pilot MTBF for the 2018 budget.
• Amendments to the Budget Code of Ukraine (BCU) were passed in December 2018, establishing the MTBF as the basis for budget preparation.
• The legal framework now supports multi-year budgeting, fiscal risk monitoring, and regular spending reviews.

B. Enhancing the Budget Process and Calendar

• The budget process in Ukraine has historically been annual, with limited strategic planning.
• A revised budget calendar was introduced to support the MTBF, with fixed milestones to ensure timely and quality budget preparation.
• The calendar divides the process into two stages: strategic planning (February–June) and detailed budget preparation (June–September).

C. Content of Budget Submissions

• Key Spending Units (KSUs) currently do not distinguish clearly between baseline estimates and new policy proposals.
• The report recommends formalizing the distinction to improve strategic resource allocation and fiscal envelope calculations.

D. Roll-Out to Local Governments

• The MTBF roll-out requires coordination and capacity building at the local level.
• The Ministry of Finance (MoF) should provide guidance and training to local governments to ensure alignment with the new framework.

E. Budget Declaration

• The Budget Declaration is a critical tool for strategic budgeting.
• It should include:
  • Detailed explanations of macroeconomic and fiscal projections.
  • A more detailed breakdown of medium-term expenditure.
  • Explanations of expenditure ceiling allocations.
  • Information on objectives, programs, and performance of key spending units.

F. Recommendations

• Review the budget calendar after the first year of the MTBF to assess its efficacy.
• Finalize and issue new budget instructions and templates to KSUs.
• Develop a forward baseline estimates methodology.
• Provide guidance and training for local governments.
• Improve the content of the Budget Declaration.

II. Supporting an Effective MTBF

A. Design of the MTBF

• The MTBF requires clear conditions for adjusting expenditure limits.
• A central budget margin should be established to accommodate unforeseen fiscal pressures.
• The margin should be tightly controlled, centrally managed, and transparently reported.

B. Linking Planning, Performance Evaluation, and the MTBF

• Strategic planning should be improved to support integrated policymaking and budgeting.
• The MoF should lead the development of methodological guidelines for spending reviews.
• A second round of spending reviews is recommended to ensure the relevance, efficiency, and effectiveness of baseline spending.

C. Recommendations

• Clearly define conditions for technical adjustments in the Budget Declaration.
• Establish procedures for multi-year commitments for capital projects.
• Strengthen strategic planning to provide a stronger basis for the MTBF.
• Prepare guidelines for spending reviews and launch the second round of reviews.

III. Enhancing Fiscal Risk Analysis and Disclosure

A. Progress to Date

• The Fiscal Risk Management Division (FRMD) has been operational since 2017, primarily focusing on state-owned enterprises (SOEs).
• Efforts are underway to broaden fiscal risk analysis to include other sources of risk.

B. Enhancing Fiscal Risk Analysis and Management

• The FRMD should consolidate fiscal risk information to ensure a complete picture of the government's fiscal exposure.
• Responsibilities for fiscal risk monitoring should be clearly defined in a Cabinet of Ministers of Ukraine (CMU) resolution.
• Risk assessment methodologies should be developed, especially for non-SOE fiscal risks.

C. Improving Fiscal Risk Disclosure

• The Fiscal Risk Statement (FRS) should include quantitative analysis of macro-fiscal and public debt risks.
• Enhanced disclosure of financial sector exposures and more thorough analysis of SOE-related risks is recommended.

D. Recommendations

• Establish clear responsibilities for fiscal risk assessment in CMU resolutions.
• Improve disclosure in the annual fiscal risk statement.

Summary of Recommendations (Table 0.1)

Key Concepts and Definitions (Box 1.1)

• Baseline estimates: The cost of existing services based on actual expenditure from the most recent complete budget year, excluding one-off or non-linear expenses.
• Forward baseline estimates: Future cost of existing services derived by applying agreed cost driver adjustments to baseline estimates.
• New policy estimates: Future cost of new policy initiatives, distinct from and additional to forward estimates of existing services.

Conclusion

The report emphasizes the need for a robust legal and institutional framework to support the MTBF and fiscal risk management. It calls for improved coordination, capacity building, and transparent, methodologically sound processes to ensure the effectiveness and reliability of the budget process and fiscal risk analysis. The recommendations aim to strengthen strategic planning, budget formulation, and fiscal disclosure, aligning Ukraine's PFM system with international best practices.