Despite its prominent position in global corruption rankings, Ukraine has only one state watchdog to keep its public finances in check. And even it lacks bite.
The Accounting Chamber of Ukraine is the parliament’s special auditor and financial controller. But even though the Constitution guarantees the body’s existence, it’s like an unwanted child for the parliament, neglected and craving attention.
The chamber started in 1997. Lawmakers appoint the staff by secret ballot, which in turn reports back to parliament. It has powers to audit the administrative staff of parliament, the president’s administration, the central bank, the State Property Fund and other state authorities and institutions that other agencies cannot access.
In fact, the chamber has powers to make inquiries and receive information about any state and local governments, companies, institutions and organizations – anything involving public money. The chamber has 10 departments and nine regional offices, and had an annual budget of Hr 65 million in 2011.
At present, the chamber only audits budgetary expenses, while earlier it also oversaw revenue. It might once again get those powers if the Constitutional Assembly, an agency formed by the president to rewrite the Constitution, decides to restore those powers and the amendment goes through parliament.
Roman Mahuta, head of the chamber, in a recent interview to Dengi business magazine, said the power to control the budget revenues is a requirement for his agency.
“Having lost at the end of September 2010 that power, the Accounting Chamber of Ukraine became the only – not just in Europe but throughout the world – supreme auditing institution that does not control the budget process in full,” Mahuta said. “Restoring that function would give the Accounting Chamber a capability of full, comprehensive control, which is its main task.”
But it seems that the chamber is not even using its existing powers in full. For example, the chamber kept silent when the state-owned Naftogaz subsidiary Chornomornaftogaz purchased two state-of-the-art oil rigs through offshore intermediaries at inflated prices.
The deal was coined “Boyko’s Towers” in the Ukrainian media, after Ukraine’s Energy Minister Yuriy Boyko, who gave his blessing for the purchase. He has denied any accusations, but media reports and some opposition deputies who have investigated the case said he may have financially benefited from the deal.
Serhiy Teriokhin, a member of the opposition who for years sat on the financial committee of the Verkhovna Rada, said he sees no point in giving more powers to the chamber because it’s underperforming even under its existing mandate. He said there are few criminal cases opened on the basis of the chamber’s findings, an indication of both underperformance and the reluctance of prosecutors to investigate corruption.
“What’s the point of controlling state budget revenues if the current system doesn’t work properly?” Teriokhin asked.
In previous attempts to give the Chamber more powers, there were proposals to make it fully independent, but the issue did not receive enough support in parliament.
“So today it’s difficult to know how much Rada officials spend on equipping their offices,” Teryokhin said.
Kyiv Post staff writer Denis Rafalsky can be reached at [email protected].
