Issue 254 of the Reform Index, covering the period from December 16 to 29, includes six regulations. Among them is a new law on the Accounting Chamber, which initiates a long-awaited reform of Ukraine’s main auditing body. This regulation received a +2 rating from our experts. The overall Index value for the two-week period is +1 point. In the previous four issues, the Index value stood at + 0.8 points.
Graph 1. Dynamics of the Reform Index
Graph 2. Values of the Reform Index and its Components in the Current Assessment Round
Accounting Chamber reform, +2 points
The law on the reform of the Accounting Chamber came into force in December 2024, marking one of the structural benchmarks of the International Monetary Fund program. The changes strengthen the Accounting Chamber’s independence and professionalism, particularly through a transparent and competitive recruitment process and a revised approach to remuneration (certified auditors will receive higher salaries).
The number of members of the Accounting Chamber will be reduced from 13 to 11. Candidates will be selected by a six-member advisory group, which, during a transitional period of eight years, will include three international experts and three representatives appointed by the Verkhovna Rada based on proposals from parliamentary factions. International experts will have a decisive vote: a candidate will be considered selected if at least four members of the advisory group vote in favor, including at least two international representatives.
The Accounting Chamber will now prioritize audits in areas with the highest risks of inefficient use of funds. This will allow for more rational resource allocation and improve overall effectiveness. The Chamber will be able to audit not only the state budget but also local budgets, state and municipal enterprises, social and pension funds, as well as the use of foreign grants and aid.
The updated law incorporates provisions from Bill No. 10044-d, which we previously covered in detail.
Information about the Reforms Index project, the list of Index experts and the database of the regulations assessed are available here.
Expert commentary
Andrii Shvadchak, Legal Advisor at Transparency International Ukraine
“The new law incorporates most of the recommendations from international partners to strengthen the capacity of the institution:
- Introduces a revised competitive selection process for members of the Accounting Chamber, granting international experts a decisive vote.
- Enhances the institution’s financial independence by exempting its officials from the provisions of the Law on Civil Service. The law also establishes the salary scales and additional payments for the Chamber’s members.
- Eliminates the possibility of direct political influence on the Accounting Chamber by preventing unscheduled audits initiated by other bodies. Instead, a risk-based approach to audit planning is introduced.
- Strengthens the monitoring of the implementation of the Accounting Chamber’s recommendations and expands its authority to audit local budgets.
However, several risks were not addressed before the second reading. Beyond concerns over political influence, the most critical issues include:
- The overlap of functions between the Accounting Chamber and the State Audit Service remains unresolved.
- The expansion of the Chamber’s powers does not account for the current situation, where more than half of its seats are vacant, nor the time required to conduct a competition to fill these positions.”
Oleh Ivanov, Vox Ukraine Analyst
“The reform of the Accounting Chamber is a significant step toward strengthening financial control in Ukraine. The law takes into account the requirements of international partners regarding the independence of this body and the expansion of its powers.
At the same time, several issues remain unresolved. The formation of the new Accounting Chamber will take several months, and only 6 out of 11 members will be selected under the new rules. This could create a situation where the reformed Accounting Chamber lacks a stable majority to make decisions independently of political pressure. Under the old procedure, members of the Accounting Chamber were appointed by Parliament through a ranked vote based on the results of interviews conducted by the Parliamentary Budget Committee. International partners, including G7 countries, insisted as early as 2023 that the reform of the Accounting Chamber take place first, followed by the selection of new members and the head of the institution. However, at the end of 2023, Parliament appointed five new members under the old rules, one of whom was later chosen as the head of the Accounting Chamber.”
Reform Index from VoxUkraine aims to provide a comprehensive assessment of reform efforts by Ukraine’s authorities. The Index is based on expert assessments of changes in the regulatory environment in six areas: Governance, Public Finance, Monetary system, Business Environment, Energy, Human Capital. Information about the Reforms Index project, the list of Index experts and the database of the regulations assessed are available here.
Attention
The author doesn`t work for, consult to, own shares in or receive funding from any company or organization that would benefit from this article, and have no relevant affiliations
