State Audit Service Needs Comprehensive Reform, Not Just Salary Revisions

The State Audit Service will gain special status. A new salary accrual mechanism will also be introduced for officials of the Service and its local offices. The relevant amendment was approved during the preparation of draft law No. 8222 for its second reading. The components of salaries for officials of the State Audit Service and its local offices will be defined by the Law of Ukraine on the Basic Principles of State Financial Control in Ukraine. The Cabinet of Ministers will determine the payroll scheme based on the Ministry of Finance’s recommendation.

“We opposed this step because any salary increase must be justified and accompanied by reforms within the body. However, MPs decided to exempt the State Audit Service and the Tax Service from the general salary payment rules. Clearly, the State Audit Service seeks salaries comparable to those in the Accounting Chamber, as these two bodies essentially compete with each other. However, we need a systematic approach to solving problems,” explains Ivan Lakhtionov, Deputy Executive Director of TI Ukraine for Innovative Projects.

Similar changes have already been attempted through governmental draft law No. 12245, which aims to update the provisions of the Budget Code and ensure Ukraine meets its obligations to international partners. Transparency International Ukraine then warned MPs against supporting them.

We maintain that salary revisions should be part of comprehensive reforms to the institution’s operations. Therefore, we call on MPs to implement systemic changes. Here are some urgent steps to be taken:

1. Differentiate the powers between the Accounting Chamber and the State Audit Service Following the adoption of the law that expanded the Accounting Chamber’s authority to audit local budgets, the overlap in functions between these bodies remains unresolved. This issue is acknowledged by the Budget Committee and has been emphasized by the European Commission.
2. Enhance the Service’s effectiveness and capacity by introducing competitive selection processes and re-certifying current employees. These changes will create opportunities for qualified specialists to receive decent working conditions. All results of the State Audit Service’s work should be open and accessible to everyone.
3. Enhance approaches to specific control measures, particularly the monitoring of public procurement. According to TI Ukraine’s estimates, state auditors initiate more than 80% of monitoring operations only after procurement contracts have been concluded and published. In practice, monitoring fails to fulfill its intended preventive function.

This material is funded by the European Union. Its content is the sole responsibility of Transparency International Ukraine and does not necessarily reflect the views of the European Union.