On 7 December 2017, simultaneously with the adoption of the state budget for 2018, the Verkhovna Rada adopted amendments to the Budget Code (Law No 2233), which became the basis for the formation of state and local budgets for 2018.

A brief review prepared by the experts of the Financial Monitoring Group of the Central Reform Office under MinRegion (with the support of the U-LEAD with Europe Programme and the SKL International project) dwells upon the changes in the budget process and the way they will affect the formation and implementation of local budgets.

One of the aspects to be noted is that the Budget Code (hereinafter – the Code) has changed amalgamated hromadas-related wording. It is about changes in the terminology and essence of the concept of “amalgamated hromadas”. Starting from 2015, the Code determined that the budgets of local self-government are the budgets of territorial communities of villages, their associations, rural settlements, cities (including city districts), budgets of amalgamated hromadas, established in accordance with the law and perspective plan for the formation of hromadas’ territories. In the new version of the Code, local self-government budgets include the budgets of territorial communities of villages, their associations, rural settlements, cities (including city districts), and budgets of amalgamated hromadas. Therefore, there is no norm in this case, linking amalgamated hromadas with the perspective plan for the formation of hromadas’ territories. Also, the definition set of the Code was added by the definition of the “budgets of amalgamated hromadas” which includes the budgets of amalgamated hromadas, established in accordance with the law and perspective plan for the formation of hromadas’ territories, as well as budgets of amalgamated hromadas, recognised by the Cabinet of Ministers of Ukraine as capable in accordance with the procedure established by law (Part 1, Point 2¹, Article 2).

Besides, the amendments to the Code clearly regulate the issue of including budgets of amalgamated hromadas into the indicators of the oblast’s consolidated budget (Article 6), while the previous version noted that indicators of the AH budgets are included in the corresponding consolidated budget without a specific definition of the latter.

Materials are prepared by the experts of the Financial Monitoring Group of the Central Reform Office under MinRegion (with the support of the U-LEAD with Europe Programme and the SKL International project):

• Yanina Kazyuk, financial decentralisation coordinator
• Viktor Ventsel, financial monitoring expert
• Svitlana Demydenko, financial monitoring expert

The full version is available in Ukrainian – please click HERE