U.S. Department of State Releases Annual Fiscal Transparency Report

June 16, 2020

On June 15, 2020, the United States Department of State released the 2020 Fiscal Transparency Report, which found that 76 of 141 governments reviewed by the Department met minimum requirements of fiscal transparency. Fourteen of the 65 governments that did not meet minimum requirements, including Ukraine, made significant progress during the review period.

Fiscal transparency is a critical element of effective public financial management, helps build private market confidence, and underpins economic sustainability. It fosters greater government accountability by providing a window into government budgets for citizens, helping citizens hold their leadership accountable, and facilitating better-informed public debate. Annual fiscal transparency reviews provide opportunities to engage in dialogue with governments on the importance of fiscal transparency.

The Department’s fiscal transparency review process assesses whether governments meet minimum requirements of fiscal transparency.  For the purpose of this report, the minimum requirements of fiscal transparency include having key budget documents that are publicly available, substantially complete, and generally reliable.  The review includes an assessment of the transparency of processes for awarding government contracts and licenses for natural resource extraction.

Annual reviews of the fiscal transparency of governments that receive U.S. assistance help ensure U.S. taxpayer funds are used appropriately and provide opportunities to dialogue with governments on the importance of fiscal transparency.

Ukraine made significant progress by completing its adoption of international accounting standards.  During the review period, the government made its budget and information on debt obligations widely and easily accessible to the general public, including online.  Budget documents provided a substantially complete picture of the government’s planned expenditures and revenue streams.  Ukraine maintained off-budget accounts, including three social insurance funds, which have yet to be independently audited.  Ukraine’s supreme audit institution reviewed the government’s accounts and made its report publicly available within a reasonable period of time.  The process for awarding natural resource extraction licenses and contracts is specified in law and underwent some positive regulatory changes but continues to need full-scale statutory overhaul to root out persistent corruption.  Basic information on natural resource extraction awards was publicly available.Ukraine’s fiscal transparency would be improved by:

  • completing an independent audit of its off-budget accounts, and
  • updating in law or regulation the criteria and procedures for awarding natural resource extraction contracts and following applicable laws and regulations in practice.
Read more in the U.S. Department of State’s 2020 Fiscal Transparency Report: https://www.state.gov/2020-fiscal-transparency-report/.