On 1 October 2008, the Institute for Budgetary and Socio-Economic Research (IBSER) started implementing the Municipal Finance Strengthening Initiative (MFSI) Project supported by the United State Agency for International Development (USAID). The main purpose of the Project was to develop municipal capacity to plan and finance local project development, in particular municipal infrastructure, by increasing own-source revenues and utilizing alternative sources of financing.
The Project helped the central and local authorities to:
- improve the legislative and regulatory framework required for strengthening fiscal autonomy, enhancing cities’ creditworthiness and developing municipal infrastructure, particularly in the communal services sector;
- promote the further support of budget reforms, increase the capacity of local governments in elaborating realistic municipal infrastructure development strategies and using Program Performance Budgeting (PPB) at the national and local levels for implementing these strategies in the pilot regions of Ukraine;
- develop and implement innovative financing mechanisms for realizing municipal infrastructure development strategies in pilot cities;
- improve the regulatory framework regarding local borrowings at the internal and external financial markets.
The Project was implemented at both the national and regional levels.
At the national level, IBSER worked on upgrading the legislative and regulatory framework to improve the taxation system, enhance cities’ creditworthiness, as well as improve the budget process rules and procedures. The Project activities regarding this component focused both on improving the existing regulatory and legislative framework and developing new draft legislation that helped local governments in overcoming current obstacles to improving their financial position.
At the local level, the Project continued working on further implementation of Performance Program Budgeting started by IBSER under grant provided by the Municipal Budget Reform Project (MBR/USAID). IBSER experts in collaboration with the Ministry of Finance of Ukraine developed the methodology and conducted trainings on PPB implementation for the staff of finance departments in four pilot oblasts in accordance with Order of the Ministry of Finance “On the Main Approaches to Implementation of Performance Program Budgeting Method for Budget Formation and Execution” dated 22 September 2008, No. 1172.
IBSER worked intensively to adapt the best international practices and implement innovative methods for financing energy-saving activities of municipal infrastructure, which was an essential component of the Project.
Regarding that component, IBSER worked in five pilot cities by conducting specialized training sessions on the financial optimization of municipal plans and by helping to implement special contract formats in the area of public-private partnership to ensure their realization.
In order to carry out the project tasks and disseminate the results, IBSER used various formats including:
- organizing financial and economic forums for expert and public discussion of relevant economic, financial, and social issues;
- conducting meetings of the National Advisory Board (NAB) in order to coordinate activities of all parties to the budgeting process and other parties concerned in terms of improving the finance management system at the national and local level;
- issuing periodical publications, including: the monitoring of key indicators of the budget and banking systems in the form of tables and charts (on a monthly basis), brochures (quarterly), budgeting analysis (semi-annually), annual publication Innovative practices: Financial Management at the Local Level, and others;
- informing its partners about the current project activities by disseminating a monthly electronic bulletin;
- working actively with national and local media organizations in order to inform the public about project goals and objectives, as well as the progress of fiscal reforms, and key recommendations of the project.
Glyanec