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The history of establishment and development
of the Accounting Chamber



The Accounting Chamber is a permanent acting body of external state financial control that has been functioning in Ukraine since 1997.

The Constitution of Ukraine adopted by Verkhovna Rada of Ukraine on June 28, 1996, fixed constitutional status of the Accounting Chamber as the body acting on behalf of Verkhovna Rada of Ukraine and executing control over use of the funds of the State Budget of Ukraine. On July 11, 1996, Verkhovna Rada of Ukraine approved the Law of Ukraine "On the Accounting Chamber of Verkhovna Rada of Ukraine". On August 19, 1996, the President exercised veto of the approved law. Verkhovna Rada overrode veto in October and the President signed the law.

In December of 1996 Verkhovna Rada of Ukraine assigned Mr. Valentyn Symonenko the Head of the Accounting Chamber. On December 11, 2003, he was re-assigned to this position by the absolute majority of the constitutional composition of Verkhovna Rada of Ukraine.

On December 28, 1996, the President of Ukraine appealed to the Constitutional Court of Ukraine requesting about conformity of the Law of Ukraine "On the Accounting Chamber of Verkhovna Rada of Ukraine" with the Constitution of Ukraine. Having considered the request the Constitutional Court approved the judgment No. 7-zp from December 23, 1997 that recognized some provisions of this law non-constitutional, namely:

Definition of the Accounting Chamber as body of "supreme state financial and economic" control;

Authority of organization and control over revenues of the State Budget of Ukraine;

Authority of control over "revenues of the State Budget of Ukraine obtained from state property management including privatization, selling, property management subjected to state property right".

Provisions of the law prevented the Accounting Chamber from full controlling over execution of the State Budget as integrated process because budget revenues were left out of control that was integral part of the budget process in the state. Reversing this situation needs amendments to the Constitution and further improvement of the Law of Ukraine "On the Accounting Chamber".

On January 17, 2002, people deputies of Ukraine at the second session of the fourth convocation

approved the Law of Ukraine "On Amendments to Article 98 of the Constitution of Ukraine" by the constitutional majority (300 votes for) that was the first time in the history of Ukrainian parliamentarism. According to this Law "Parliamentary control over forming and execution of the State Budget of Ukraine and local budgets regarding financing of local state administrations on behalf of Verkhovna Rada of Ukraine shall be exercised by the Accounting Chamber of Ukraine".

It means that according to the amendment to article 98 of the Constitution of Ukraine approved by the Parliament, the Accounting Chamber got the right to control not only use of the budget funds but forming of revenues of the state and local budgets regarding financing of the local state authorities. However, the President of Ukraine exercised veto again on the amendment to the Constitution introduced by the Parliament.

On December 8, 2004, Verkhovna Rada adopted the Law of Ukraine No. 2222-IV "On Amendments to the Constitution of Ukraine" that reads article 98 of the Constitution of Ukraine as following:

"Article 98. Control over revenues of the State Budget of Ukraine and their use on behalf of Verkhovna Rada of Ukraine shall be exercised by the Accounting Chamber".

Thus, amended article 98 of the Constitution of Ukraine extended authorities of the Accounting Chamber regarding control over revenues and use of the funds of the State Budget of Ukraine.

The Accounting Chamber is established by Verkhovna Rada of Ukraine and reports to it. Staff of the Accounting Chamber shall be appointed by Verkhovna Rada of Ukraine through secret balloting.

Relations between the Accounting Chamber and Verkhovna Rada of Ukraine are based on accountability, its independent status as the body of special constitutional competence being preserved.

The Accounting Chamber makes annual reports to Verkhovna Rada of Ukraine on its performance results. By consent of Verkhovna Rada its committees may hear reports, information (statements) of the Accounting Chamber on results of audits, revisions and inspections in line with the necessary deadlines.

Relations between the Accounting Chamber and other state authorities are based on organizational and functional independence within the band of authorities set by the applicable legislation.

The applicable law envisages that the scope of control authorities of the Accounting Chamber includes administrative staff of Verkhovna Rada of Ukraine, administration (secretariat) of the President of Ukraine, state authorities including their administrative staffs, the National Bank of Ukraine, the State Property Fund of Ukraine and other state authorities and institutions established according to the legislation. The Legislation also envisages right of the Accounting Chamber to obtain information while its functioning in response to its inquiries from the state and local authorities, enterprises, institutions and organizations regardless of the form of ownership.

Thus all the operations having fiscal consequences for the State Budget of Ukraine conducted by any institutions, organizations, business entities regardless of the form of ownership are subjected to control by the Accounting Chamber. According to terms of effectiveness of the Law No. 2222-IV amended article 98 of the Constitution came into force on January 1, 2006.

Besides, the Accounting Chamber is granted the right, in case of necessity, to involve the experts of any control bodies to its audits. Relations between the Accounting Chamber and audited objects are regulated by the applicable legislation.

In 1998 the Accounting Chamber of Ukraine joined International Organization of Supreme Auditing Institutions (INTOSAI) and in 1999 it was admitted to European Organization of Supreme Auditing Institutions (EUROSAI). Thus, the Accounting Chamber of Ukraine has been recognized by the international community as the supreme auditing body of Ukraine since 1998. Other supreme auditing bodies of foreign countries also cooperate actively with it. Today the Accounting Chamber of Ukraine has signed agreements on cooperation with supreme auditing bodies of Poland, Russian Federation, Republic of Bulgaria, Republic of Moldova, Republic of Belorus, Georgia, Republic of Lithuania, Slovak Republic, Hungary, Republic of Korea, People Republic of China. It cooperates actively with the respective Committees of INTOSAI and EUROSAI.

Besides, the Accounting Chamber supports and pays much attention to the cooperation with supreme auditing bodies of CIS that established Board of Heads. Second session of this Board that took place in Kyiv in 2001 chaired by Mr. V. Symonenko approved Declaration of General Principles of Activity of Supreme Auditing Bodies of CIS and Address to the leaders of the countries and parliaments of CIS on formation and development of independent audit.

The Accounting Chamber has managed to solve main task for nearly ten years of its existence - to form as viable constitutional body, to create basis and elaborate new concept of public, independent external state audit in Ukraine. It managed to draw attention of society to the vicious system of budget funds management, to show that the state budget funds belong not to the Government and Ministry of Finance and taxpayers' money and community funds belong to each of us. Noteworthy, that it is the core of the Accounting Chamber as the body whose activity cannot be limited to auditing only. The Accounting Chamber is the body providing society and authorities with real information on the State Budget funds management.

Auditors of the Accounting Chamber apply systematic approach to the organization of audits and analysis of their results. Experts of the Accounting Chamber pay much attention in their routine work to analytical activity, appraisal of management effectiveness of the audited objects.

The Accounting Chamber launched new promising areas in response to nowadays challenges, such as audit of the state management informatization, audit of public procurements, ecologic audit, energy saving audit, international audits jointly with foreign partners etc.

The Accounting Chamber is guided in its activity by the principles of legitimacy, planning, objectiveness, independence and publicity considering the law of state budget as the concentrated expression of economic policy for the respective year.

Conclusions and proposals of the Accounting Chamber are oriented primarily to elimination of flaws of the budget process causing ineffective use of budget funds. Examining the draft laws on the state budget, developing proposals for Verkhovna Rada of Ukraine on the use of the funds of the State Budget of Ukraine the Accounting Chamber is directly involved in improvement of the budget process.

Legislative field of Ukraine undergoes permanent changes. Thus priority of the Accounting Chamber is to search for "black holes" in the financial system of the country that allow "leakage" of state resources. It not only detects violations but identifies causes and pinpoints ways of violation elimination and prevention.

The Accounting Chamber has detected many violations of misuse of the budget funds both in central and local authorities for the years of its functioning. Materials on the violations are submitted to the prosecutor's bodies to take appropriate measures. Various state authorities made many conclusions and proposals of the Accounting Chamber the basis of flaws elimination and took them into account in economy reforms, in financial and economic crisis management plans.

Inter alia, these are the proposals of the Accounting Chamber on the budget legislation improvement, effective use of the budget funds, eradication of the vicious netting practices, appraisal of the state debt of Ukraine and the debt management.

The Accounting Chamber informs regularly the President, headship of Verkhovna Rada of Ukraine and the government on the most important performance results. Information bulletins are issued in the follow-up to auditing, auditing and analytical and expert measures, which are disseminated among people deputies of Ukraine, central authorities; mass media announcements are issued.

Ten years of the Accounting Chamber activity proves growing interest of all branches of power and public to it and its rising authority.

International recognition of the Accounting Chamber also advanced, as being a full-fledged member of international organizations of supreme audit bodies INTOSAI and EUROSAI the Accounting Chamber is deeply involved in their activities.

In view of the flaws in the sate financial resources management of Ukraine the Accounting Chamber should take higher profile in the nearest future in fulfilling the regulations set by the Constitution and Laws of Ukraine. Mr. V. Symonenko, the Chairman of the Accounting Chamber of Ukraine is convinced that today reform of the state finance control system is crucial and the Accounting Chamber should be leader in this process as independent state body accountable only to the Parliament of Ukraine. To raise the effectiveness of the use of the funds of the state budget of Ukraine, to ensure control functions of the Accounting Chamber imposed by the Constitution and laws of Ukraine territorial offices were set up on with the status of structural divisions of the Accounting Chamber in regions according to Resolution of Verkhovna Rada of Ukraine from June 15, 2004.

The Accounting Chamber is the chief advisor of society and state leadership on all issues concerning effective and transparent management of the budget resources including reduction or canceling of state activities unjustified under market economy as only the Accounting Chamber can make qualified audit of revenues and expenditures of the State Budget of Ukraine which secures the right of people to control transparent, appropriate and effective use of the community funds, i.e. taxpayers' funds.

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