Ukraine’s Fiscal Center showcased its transparency tools and recovery spending analysis during a meeting with Cyprus Ambassador Michalis Firillas.
Every day Ukraine is overcoming the consequences of the bloody Russian aggression. Huge sums of money are allocated to restore the damaged areas and help the affected towns and villages. Therefore, there is a need for effective monitoring and analysis of these expenditures. At the Center for Fiscal Policy Research, we have developed a unique dashboard that will help to understand the distribution of the Armed Aggression Relief Fund among different objects throughout Ukraine, as well as to track how these funds are spent. But first things first.
In October 2022, the Verkhovna Rada created the Fund for Elimination of the Consequences of Armed Aggression. This is a separate budget program of a special fund within the country’s main budget to cover a significant part of the recovery needs: reconstruction and repair of critical infrastructure, housing for internally displaced persons and Ukrainians who lost their homes as a result of hostilities, construction of water pipes and shelters, etc.
The fund is replenished with proceeds from the forced seizure of Russian assets in Ukraine. In 2022, they amounted to UAH 17 billion, in 2023 – UAH 8.811 billion. In 2023, an additional 50% of the National Bank’s profit for 2022 was allocated to the fund, which is another UAH 35.9 billion.
We have embarked on the most challenging of all possible projects. This is the work with state data, its processing and verification. We set an ambitious goal for the Center’s team – to create a single database containing complete information on the distribution and expenditure of funds from the state budget as a result of the war, including recovery costs. It is not an easy task. After all, the data is incomplete and very “dirty”. That is why we decided to raise the bar – to check and clean the data to create a model for everyone. The next task is to make sure that all data collected by the state meets this standard.
The main tool is an interactive map that allows you to track the distribution of the Liquidation Fund among different objects throughout Ukraine (https://fiscalcenter.org/liquidationfund). The map has four levels of detail: oblast, rayon, territorial community, and settlement.
You can go down to the map of the selected settlement, where the objects financed from the Liquidation Fund are marked with dots. The size of the point on the map is proportional to the actual expenditures on this object. The filters are synchronized with the map and graphs, making it easy to see information at all levels.
In addition, the dashboard has filters by object category, budget programs, and the ability to select the payer and recipient by EDRPOU. Detailed graphs show the distribution of expenditures by type of object and by period, the largest customers and recipients, as well as tables with the distribution by budget programs and objects.
Most of the expenditures were spent on the construction of water pipelines and similar infrastructure in eastern and southern Ukraine to provide water to people. Water pipelines were especially in demand after the Russians blew up the Kakhovka hydroelectric power plant.
The Liquidation Fund is used to finance the purchase of special equipment (excavators, garbage trucks, etc.) for utility companies in the de-occupied and frontline areas. Specialized equipment is critical for the functioning of public utilities (in many cities and towns, it was destroyed or stolen by the Russians).
The Liquidation Fund also finances a pilot project to restore settlements affected by Russia’s armed aggression. It involves the comprehensive reconstruction of a city or village. For example, in Posad Pokrovskyi in Kherson region, it includes a kindergarten-lyceum, a village council building, a security center, an outpatient clinic, 120 private houses, communications, roads – in fact, all the necessary infrastructure.
The data verification process often highlights errors and inconsistencies in reporting.
When we see a data discrepancy, we start doing financial OSINT (data-driven intelligence) and find out why it is happening. In fact, we verify the data using various tools, including by contacting local authorities.
For example, to verify the data on the Liquidation Fund, the Center sent more than 100 such requests. As of today, the team of analysts has to confirm the financing of one financing for the construction of a road and paving in Izmail (Odesa region). In general, there is a very strange situation when the Treasury reports differently from the local authorities.
There are situations when the Department of Capital Construction of the Kharkiv Regional State Administration made a payment to a company other than the one that won the tender. Erroneous payments such as this one often arise due to similarity of company names, which can lead to misallocation of funds. A similar case occurred in Zaporizhzhia, where OSSB was paid for technical supervision, when it should have been paid to an individual entrepreneur.
Sometimes there are strange situations in terms of public finance and reporting. For example, to finance the facilities in Odesa in 2023, the Government allocated UAH 475 million from the Liquidation Fund through a subvention. But in the official Treasury reports on this program, we see a figure of UAH 517 million. This means that Odesa may spend more money on the consequences of the armed aggression than the government has provided.
The creation of an interactive dashboard is another step towards greater openness and transparency in the use of budget funds for the restoration and assistance to victims of Russia’s armed aggression. At first glance, this is just a technical tool, but in fact it is a mechanism that stimulates active public participation in monitoring and controlling financial processes in the country.
The dashboard was created with the support of the International Renaissance Foundation and the Act to Support the Phoenix Project acceleration program, implemented by the Eastern Europe Foundation with funding from the European Union. The opinions expressed in this material do not necessarily reflect the position of the International Renaissance Foundation, the Eastern Europe Foundation and the European Union.
Specially for the publication LB.ua.
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Ukraine’s Fiscal Center showcased its transparency tools and recovery spending analysis during a meeting with Cyprus Ambassador Michalis Firillas.
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