Strategic goals of the State Audit Service: Ways to improve and optimize control over public procurement
30 September 19:22
Oleksiy Aleksandrov, Director of the Procurement Monitoring and Inspection Department of the State Audit Service of Ukraine
The State Audit Service of Ukraine plays a key role in ensuring financial discipline and transparency in public procurement. Effective control over public funds is a key to economic development and strengthening trust in public institutions. The State Audit Service has identified four key strategic goals, the achievement of which will significantly optimize the work of the State Audit Service, transforming it from a reactive to a proactive and preventive body. These goals include legislative changes, improved accountability, institutional capacity building and increased transparency.
Objective 1: Harmonize the legal framework for procurement control
Currently, there is a legal imbalance that negatively affects the systemic nature of control. The legal regulation of procurement monitoring as a key instrument of public financial control is enshrined in the Law of Ukraine “On Public Procurement”. However, the main law regulating the activities of the State Audit Service does not contain detailed rules on monitoring. This situation creates risks associated with legal uncertainty and complicates the effective application of control measures.
The main tasks for the realization of this goal are:
- Legislative initiatives to introduce a monitoring procedure at the level of legislative acts regulating the activities of the State Audit Service. This will establish the logic and consistency of the legal framework, which, in turn, will ensure the systematic and stable regulation of control functions.
- Introducing the possibility of suspending the procurement procedure for the period of monitoring. This measure is fundamental to preventive control. It will prevent the conclusion of contracts with violations, eliminate them at an early stage and minimize financial and reputational risks for the customer. This is also in line with European practices, where preventive control is key.
- Providing procuring entities with the right to unilaterally terminate the contract in case of violations detected during monitoring. This will increase the responsibility of procuring entities and suppliers, as well as ensure compliance with the legal requirements of the controlling authority. This is an effective mechanism to prevent misuse of budget funds.
Objective 2: Improve administrative liability and speed up court proceedings
There is a need to adapt the current legislation on administrative liability and optimize court procedures. Lengthy court proceedings and the lack of adequate sanctions allow contracting authorities to avoid responsibility for violations, which undermines the principle of inevitability of punishment.
The main tasks to achieve this goal are:
- Adaptation of Article 164-14 “Violation of Procurement Legislation” of the Code of Ukraine on Administrative Offenses. It is necessary to bring it in line with the new version of the Law of Ukraine “On Public Procurement” and differentiate liability depending on the materiality of the violation.
- Introduce additional types of liability for failure to comply with the requirements of the State Audit Service. The current system does not provide for sufficient sanctions for procuring entities that ignore the requirements of the supervisory authority. The introduction of increased fines, similar to those applied by the Antimonopoly Committee, will significantly increase discipline and ensure compliance with legal requirements.
- Introduce expedited court proceedings in cases of appeals against the conclusions of the State Audit Service. This will effectively counteract the delay in court proceedings, which is one of the main obstacles to the protection of public interests. Prompt court proceedings will not only reduce corruption risks but will also ensure the inevitability of responsibility.
Objective 3: Develop institutional capacity and digitalization
Institutional capacity and the use of modern digital tools are key to increasing the effectiveness of the State Audit Service. Inflexible procedures and outdated approaches to data analysis reduce the efficiency and effectiveness of control.
The main tasks for the realization of this goal are:
- Empowering the State Audit Service to independently develop algorithms for automatic risk indicators. Currently, the procedure for updating these indicators is inflexible, which allows unscrupulous customers to circumvent control. Granting the State Audit Service autonomy in this matter will ensure prompt response to new risks, adaptation to changes in legislation and increase the effectiveness of monitoring.
- Update the classification of violations. Given the dynamic changes in legislation, it is necessary to update the classification of violations, taking into account their materiality, consequences and typical patterns of abuse. This will help unify practice, ensure a unified approach to assessing violations, and increase the objectivity of conclusions.
- Interagency cooperation. The State Audit Service, as a body that coordinates the fight against fraud, should actively cooperate with other government agencies, including the Ministry of Economy, by providing proposals on corruption risks and conflicts of interest. This will help systematize experience and strengthen the preventive control function.
Goal 4: Strengthen transparency and public control
The publicity and openness of the activities of the State Audit Service is an important element for strengthening trust in public institutions and an effective deterrent to corruption. Public control over the spending of budget funds provides an additional level of accountability and transparency.
The main tasks to achieve this goal are as follows:
- Ensuring the publicity of the activities of the State Audit Service. Information on the results of the state financial control measures, detected violations and decisions should be accessible and understandable to the public, business and government. This will increase the credibility of the State Audit Service as an institution.
- Creation of analytical dashboards. The development of a dashboard that visualizes and systematizes large amounts of data will allow identifying typical violations, risky practices and regions that require additional attention. This will improve analytical capabilities and facilitate informed management decisions.
- Strengthening public control. Providing free access to information on control measures will allow engaging the public, media and analysts in procurement control, which is an effective prevention of corruption risks. The realization that information on the results of control will be publicly displayed will encourage procuring entities to comply with the law.
The implementation of these four goals will significantly strengthen the system of state financial control, ensure the efficient use of budget funds and increase trust in the State Audit Service. This is an important step towards European integration and building a transparent, accountable and efficient state.
