Moving Forward TogetherMinistry of Finance Ukraine

The project

The LOGICA project consists of the following four components:

Component 1: Improving Local Government’s Budgeting and Accounting Process

This Component aims to achieve 2 general results:

  • modernisation of budget planning and budget execution monitoring systems for local governments;
  • achieving consistent use of accounting practices in the public sector.

It provides both the opportunity and the challenge for local governments to modernise and to have increased capacities, in the face of major limitations. Establishment of improved local government budgeting and accounting processes will positively affect the responsiveness and transparency of government and public expenditure, leading to program and service delivery efficiencies and savings.

Component 2: Preparing the new integrated IT information system to support the budget preparation, at subnational government level.

  • Contribute to the preparation of the IT systems strategic development plan for PFM and a detailed roadmap regarding the IT solution for integrated budget and accounting system (with milestones and deliverables) or its update, as needed
  • Collect user and client requirements for the future budget system through consultation with relevant stakeholders at the central and local levels
  • Support MOF in identifying business and technological owners of the future IT platform at the initial stages of the project
  • Develop the IT platform, including business /user requirements, technical specifications documentation for a new IT platform for budget and accounting, a presentation/options paper elaborating on possible options within the IT platform capabilities and relevant cost estimates taking into account future maintenance, licensing and upgrading needs, and develop appropriate IT security policies for PFM data exchange among different levels of government that would be applicable for the IT platform
  • Support Ministry of Finance in identifying sources of finances for the successful pilot and full-scale roll out of the project as regards IT infrastructure
  • Identify trainings needs of budgeting staff at central and local level for the use of the future IT system, design and implement a training strategy. In case the system is installed, provide initial training.

Component 3: Better surveillance of new borrowing and debt at the local governments' level

  • Assess current practices and capacity building needs in MOF regarding local government debt management
  • Develop recommendations on local debt management (assessment of community creditworthiness, procedures for provision and monitoring of local guarantees, credits, risk management approaches)
  • Assist in preparation of a recommendations/roadmap for optimization, data exchange and analysis of local government debt (at disaggregated and aggregated level)
  • Support the MOF in the execution of recommendations including developing business, technical requirements and tender specifications for a possible tender for the local debt management module (as a module/ functionality of the IT platform)

Component 4: Effective Internal Control And Financial Audit At Local Level

The objective of this Component is to provide for a comprehensive and integrated review of the powers of national financial control and audit bodies (including the State Audit Service, the Accounting Chamber, and the State Treasury), as well as local financial bodies, regarding their current policies and procedures for the control and audit of local budgets. Component 4 has a strong capacity building focus, and it will achieve its goals through an integrated assessment of the current national-level financial control and audit organisations (especially the State Audit Service, the Accounting Chamber, and the State Treasury) as well as local government audit organisations. Implementation will be based on three elements – first, a review and analysis of current national-level financial control and audit organisations, and of local government audit organisations, as well. Second, a successful assembly of PIFC and external audit policy and procedural models from other countries. Third, and based on the assessment of current circumstances and international models, the Project Team will develop and support the implementation of recommendations for more comprehensive and integrated national- and local government level PIFC and external audit policies and procedures.