Strengthening Capacity and Preventive Control: What the European Commission Recommended for the Accounting Chamber and the State Audit Service

In this year’s EU Enlargement Report on Ukraine, the European Commission for the first time gave a high assessment of Ukraine’s progress in the area of external audit. Much of this was due to the amendments to the Law on the Accounting Chamber adopted at the end of last year. These changes brought national legislation closer to the International Standards for Supreme Audit Institutions (ISSAI) and expanded the Accounting Chamber’s mandate.

Despite the absence of direct criticism, the overall score for the level of legislative alignment in this area remained low — 2 out of 5. However, the Commission rated the actions taken over the past year to achieve this alignment higher — 3 points. 

Transparency International Ukraine analyzed what changes the European Commission expects from Ukraine regarding the Accounting Chamber and the State Audit Service in order to advance within the Association framework.

Accounting Chamber 

Despite the high assessment of progress in reforming the country’s main financial audit body, the key recommendation has remained unchanged since last year. The European Commission calls for strengthening the political and financial independence, and administrative capacities, of the Accounting Chamber.

As for financial independence, it is not entirely clear what further steps are expected. At the end of 2024, officials of the Accounting Chamber, including state auditors, were excluded from the scope of the Civil Service Law. Their salaries and bonuses were established directly in the sectoral law, shielding them from government influence. Moreover, in January 2025, Parliament amended the Budget Code to introduce a special procedure for considering the Accounting Chamber’s budget requests by both the government and Parliament. 

Regarding political independence, the European Commission most likely expects implementation of the adopted legislation. In particular, this refers to finally launching the competition to appoint members of the Accounting Chamber. More than ten months after the new law entered into force, the Ukrainian Parliament has yet to form the commission required to start the selection process. TI Ukraine has called on MPs to consider the expertise and reputation of candidates and establish the Selection Committee to unblock the competition. The new law reduced the number of members of the Accounting Chamber to eleven, leaving six vacancies. For the Chamber to perform its functions effectively, Parliament must urgently address this staffing issue.

Unfortunately, the report does not specify concrete steps expected in this regard.

In terms of administrative capacity, more than one-third (35%) of auditor positions remain vacant. After the approval of the Selection Procedure in January 2025 and the re-appointment of existing staff as state auditors, the Chamber held only two competition rounds in July 2025. As a result, just fifteen auditors were appointed, about 3% of the total staff. Under such conditions, ensuring effective performance remains in doubt, especially given the significant expansion of its control powers, which the European Commission also notes.

European experts further highlighted progress in monitoring the implementation of audit recommendations and in developing specialized IT tools. These likely refer to last year’s legislative changes, as their implementation is not yet complete. The Chamber, in particular, must develop procedures for monitoring the execution of its decisions. 

Despite progress in improving national legislation, full compliance with international standards remains a challenge. The Commission emphasizes that the Accounting Chamber must not only continue applying approved audit methodologies but also establish quality assurance mechanisms to regularly evaluate the effectiveness of its audits. This would guarantee compliance with international standards of transparency and accountability.

The European Commission recommended that the Accounting Chamber should:

• Strengthen the political and financial independence, and administrative capacities, of the Accounting Chamber, including by forming and operationalizing its Board.
• Prioritize effective implementation of audit methodologies based on International Standards for Supreme Audit Institutions.
• Develop robust quality assurance mechanisms to regularly evaluate the effectiveness of audits and ensure compliance with international standards of transparency and accountability.
• Select audits for the 2026 work plan based on risk and impact assessments.
• Increase the number of audits of consolidated financial statements of public-sector entities and budgets in 2026.

State Audit Service

The European Commission assessed public procurement control — one of the core functions of the State Audit Service of Ukraine — as weak, especially at early stages before contract signing. The report notes that only in a few cases are detected violations effectively corrected, particularly in large-value contracts.

The Commission therefore recommends that Ukraine strengthen control measures over procurement procedures, reinforce the monitoring function, and focus on risk-based preventive control and effective responses to identified breaches. Similar recommendations were previously made by TI Ukraine. This issue is particularly critical for EU-funded procurement, as the Commission refers to the Ukraine Plan in this context.

The State Audit Service is mentioned not only in relation to procurement control but also in the protection of the EU’s financial interests. The Commission noted partial alignment of Ukrainian legislation with the EU acquis in this area. 

This direction has become especially important after the launch of the Ukraine Facility, a macro-financial assistance program providing €50 billion in grants and loans for Ukraine’s recovery, reconstruction, and modernization between 2024 and 2027. Accordingly, the Commission recommended that Ukraine fully align its legislation with the EU Directive on combating fraud affecting the financial interests of the European Union.

In September last year, the government authorized the State Audit Service to act as the Anti-Fraud Coordination Service. Since then, it has officially coordinated cooperation among state authorities to protect the financial interests of both Ukraine and the EU.

Under the Ukraine Facility framework, Ukraine also committed to amend its legislation by the end of 2025 to strengthen the Service’s capacity in safeguarding the EU’s financial interests (through harmonization with international standards) and to improve the efficiency of procurement monitoring. However, as of early November, these changes had not been adopted, and the Commission urged Ukraine to fulfill this commitment. 

Previously, TI Ukraine warned that performing the Anti-Fraud Coordination Service’s functions could face legal obstacles. The State Audit Service must assist the European Anti-Fraud Office (OLAF) in conducting administrative investigations and inspections in Ukraine. Yet, its officials lack sufficient powers to access documents and data held by businesses or individuals that may be needed for investigations under the Ukraine Facility. 

In this context, the Commission also mentions the need to develop and implement a National Anti-Fraud Strategy to protect EU funds. This task lies with the State Audit Service, but there is currently no public information confirming that such a strategy has been adopted.

The European Commission recommended that the State Audit Service should:

• Amend financial control legislation to strengthen the national system of public financial control, including the role and powers of the State Audit Service in protecting the EU’s financial interests.
• Align national legislation with the EU Directive on combating fraud affecting the financial interests of the European Union.
• Develop and implement a National Anti-Fraud Strategy to protect EU funds.

Despite the relatively positive assessment of Ukraine’s progress in aligning its financial-control framework with European standards, reforms must continue. Adoption of laws alone is not enough — they must be effectively implemented.

Parliament must finally establish the AGE to launch the competition for members of the Accounting Chamber. At the same time, the Chamber should continue applying modernized approaches, use a risk-based methodology for planning, regularly assess the effectiveness of its audits, and improve monitoring of the implementation of its recommendations.

The State Audit Service, in turn, should prioritize preventive, risk-based control measures and continue fulfilling its commitments to protect the EU’s financial interests, by further harmonizing Ukrainian legislation with the EU acquis.