Recently, Prime Minister Denys Shmyhal has claimed that the government has already allocated UAH 19 billion from the COVID-19 relief fund. That is, during the quarantine, the Cabinet has already spent almost a third of the UAH 64.7 billion that had been allocated to the Fund.
This was the first such report on the use of this money, and it would seem that the amount indicated is not too critical. It is actually good that the government actively uses the money to fight against the coronavirus.
However, it only makes sense to be happy about it if all the money that’s been allocated has actually been used to strengthen the capacity to fight against the dangerous COVID-19 instead of patching all the possible holes in the budget. This is where we have our doubts.
When the Parliament supported the creation of a COVID-19 relief fund in late March, some people approved of this move. However, many experts questioned the need for such a fund. They had a good reason.
The money in the Fund came not just from the national budget (UAH 64.7 billion), but also from the funding provided by the EU, other governments and donor organizations. And decisions on the distribution of funds should be made by the Cabinet of Ministers in coordination with the Budget Committee of the Verkhovna Rada. This is where the first questions arose.
On the one hand, this approach should help the Government respond quickly to the threats of the pandemic. However, everyone knows that hands-on management always carries serious risks. We had no guarantees that the activity of this Fund would be transparent, accountable and efficient, while the allocation of the funds itself was hard to control from the very start, since the procedure was too uncertain.
This money would definitely come in handy, but who should manage it? Who was supposed to make decisions? Finally, who was supposed to oversee implementation of decisions and allocation of funds? Over the three months of the Fund’s existence, these questions have only become more acute.
Ask and You Shall Receive
Over the first months of the Fund’s existence, only limited information about it was available. Anti-coronavirus procurement from the Fund was extremely hard to track, and the Cabinet itself does not consider it necessary to report on its spending. What is more, it is hard even to find out who has already requested money from the Fund and why, even though these requests have mostly come from government agencies.
For instance, two weeks ago, Ukrainians found out (almost by accident) that “the most effective” Minister of Interior Arsen Avakov asked for money for his Ministry from this very fund. At the same time, we should note that the MIA was one of the very few agencies that did not have any funding cut in the sequestered budget.
However, the Ministry is still asking the Cabinet to provide an extra UAH 2.7 billion to give the National Police, the National Guard and the Border Service a raise. And they get the money. Law enforcement officers will be paid extra for overtime work, even employees of Ministry that have nothing to do with containing the coronavirus outbreak. The amount of extra payment is actually 1.5 times as big as the bonuses received by medical workers directly involved in fighting against the pandemic.
That’s a bit strange, isn’t it?
And no less strange, for example, is the fact that, according to the decision of the Cabinet of Ministers, additional payments from the Fund are provided for border guards, but not for customs officers. This is despite the fact that they are standing at the same checkpoints, and, accordingly, they are also in contact with people and are at risk of infection. This is how the MIA is different from the Ministry of Healthcare or the Customs Service.
As soon as on June 18, it became public knowledge that the Parliament approved allocating money from the COVID relief fund for road repairs. Under draft law No. 3509, construction and reconstruction of roads were added to the designated uses of the Fund, as well as procurement of equipment for medical institutions. The total amount in question is UAH 35 billion.
The reaction to this decision varied wildly. Yes, Ukraine does need good roads, and yes, they will help ambulances to respond to emergencies faster. But does it make sense when there are not enough ambulances in the first place, while medical workers are wondering when they will see their bonuses for working during the pandemic? It turns out that roads and the fight against the virus are extremely interconnected things.
Other ministries have already made requests for money from the Fund, too. For one, the Ministry of Healthcare requested UAH 3.1 billion for additional payments to medical workers and for the needs of hospitals and laboratories (UAH 2.99 billion has already been received). They also needed UAH 100 million for ventilators, UAH 244 million for professional training of doctors and for internships. The Ministry of Economic Development has asked for UAH billion for social assistance for temporary disability or death from COVID-19 (the Government has already approved this). The Ministry of Social Policy has requested UAH 1.6 billion for assistance to sole proprietors who have children, and another UAH 15.2 billion for bonuses to pensions. In connection with the cancellation of the mock external testing, the COVID-19 relief fund will allocate some money for refunds to students’ parents.
Who’s next? What other reasons will be used to get money fron this seemingly “bottomless” fund? The question stands.
Back to Transparency and Accountability
It is very difficult to identify the exact amount of money that has already been allocated or spent from the Fund. We are not sure we have been able to find all the relevant decisions on the Cabinet website, and to be honest, we are also not sure whether they record all the expenses there. The Government has already promised that the allocation will be transparent, and the ministers will report on all the decisions made after the quarantine. They promised this not just to anyone, but to the International Monetary Fund, which was recorded in the Memorandum of Cooperation with the IMF.
“We will ensure that the Fund be temporary, transparent and its expenses effective,” says the Memorandum. After that, Ukraine’s commitments are listed.
For instance, the Government promises to report on the use of this money monthly, which we saw on July 1 (though this information was published by the Prime Minister only on his social media page and is not available on the Cabinet website). After the Fund is closed, the State Audit Service and external/independent auditors will have to perform the audit of procurement under the COVID-19 program. This item is the structural milestone for the Memorandum, i.e. failure to comply may lead to IMF canceling the next tranche unless the commitment is met by March 2021.
What is more, the Cabinet promises to draft a detailed report on the use of the funds within 30 days after the Fund is closed. And these reports will be released in full as soon as they are completed.
Sounds nice, doesn’t it?
As you can see, the distribution of funds depends not only on how we will survive the pandemic now, but also on what will happen to our country in the future. Today’s decisions of the Cabinet directly affect the future of every citizen.
Since the beginning of the quarantine, the global movement Transparency International has focused on the fact that during a pandemic, corruption risks in the health system and beyond increase dramatically. Access to information is a key factor that will make it possible to bring people to responsibility in the future for decisions made now. This was a call not only for Ukraine, but for the whole world.
But even after 3.5 months after the whole thing started, we are concerned with the same questions. Will our government have the courage to take responsibility for all the decisions made during the quarantine? Will we get the promised reports on the distribution of funds from the COVID-19 Relief Fund? And will these funds be enough for the entire duration of the epidemic?
I feel like we may have only seen the beginning.