The “Implementation Completion and Results Report (ICR) for the Ukraine Public Finance Modernization Project (PFMP)” evaluates the performance and outcomes of the PFMP, implemented to strengthen public financial management (PFM) in Ukraine by improving operational efficiency and transparency. The project ran from 2008 to 2014 and was primarily aimed at developing an integrated Public Financial Management System (PFMS).
Key Findings:
- Project Objectives:
- Improve PFM operational efficiency and transparency through the implementation of an integrated PFMS.
- Strengthen institutional capacity for fiscal planning, budgeting, and financial reporting.
- Achievements:
- The project made progress in institutional capacity building by designing new business processes and reforms in budget preparation, financial inspection, and public sector accounting.
- A unified Chart of Accounts and several national accounting standards aligned with international standards were introduced.
- Challenges:
- The PFMS was not implemented due to procurement failures, including the cancellation of procurement processes and shifting government priorities.
- High turnover among key project leadership and tensions between stakeholders, particularly between the Ministry of Finance and the State Treasury, undermined implementation.
- Lessons Learned:
- Successful PFM reforms require strong government commitment, sustained political support, and effective interagency coordination.
- Linking project outcomes exclusively to IT system implementation increased the risk of project failure, highlighting the need to separate IT solutions from broader reform objectives.
Recommendations:
- Design future PFM reform projects with flexible IT solutions and clear risk mitigation strategies for procurement delays.
- Strengthen interagency dialogue and collaboration to ensure alignment of priorities and reduce institutional resistance.
Note on Preparation
This report was prepared by a World Bank ICR Team led by Arun Arya, Senior Public Sector Specialist. The team included Zhanybek Ybraiym Uulu, Public Sector Specialist; Iryna Shcherbyna, Public Sector Specialist; and Irina Shmeliova, Procurement Specialist. Their analysis reflects a comprehensive review of the project’s implementation and outcomes, offering valuable insights for future PFM initiatives.