The document discusses key approaches and activities for comprehensively evaluating the execution of local budget programs in Ukraine. It outlines the legislative framework for performance evaluation and describes methodological principles and recommendations for conducting evaluations of budget programs at the local level. These include evaluating programs based on quantitative indicators, qualitative indicators, and analytical materials to assess effectiveness.

1. Comprehensive Evaluation of Execution of
Local Budget Programs: Key Approaches
and Activities
2 March 2017,
Kyiv

2. Evaluation of Budget Programs: An Indispensable
Stage in Effective Budget Management
The performance program budgeting in the budget process is a budget
management method, which envisages use of performance evaluation of
budget spending at all stages of the budget process.
In the world practice, program evaluation is probably the most important
element of the budget process, as it is based on evaluation results that
decisions are made with regard to future implementation of specific programs.

3. Legislative Framework of Performance Evaluation
At all stages of the budget process, its participants shall carry out
performance evaluation of budget programs within the scope of their
responsibilities, which includes the activities of monitoring, analysis, and
control over targeted and efficient use of budget funds.
The results of performance evaluation of budget programs shall serve as
the basis for making decisions on amending – according to the established
procedure – the budget allocations of the current budget period, respective
proposals to the draft budget for the planning budget period, and the budget
forecast for the two budget periods subsequent to the planning period, including
termination of respective budget programs.
The Ministry of Finance of Ukraine shall determine the organizational and
methodological principles for performance evaluation of budget programs.
Part 6, Article 20, Budget Code of Ukraine

4. Methodological Principles of Performance Evaluation of
Local Budget Programs
Methodological recommendations for conducting performance
evaluation of budget programs (Order of the Ministry of Finance of Ukraine of
17 May 2011, #608 (with amendments of 12 February 2012, #13)
The improved methodology of conducting comparative analysis of
performance of the budget programs implemented by spending units of
local budgets (Letter of the Ministry of Finance of Ukraine of 19 September
2013, #31-05110-14-5/27486)

5. Methodological Recommendations for Conducting
Performance Evaluation of Budget Programs
Amendments approved to Order #608 by MOF Order #13 of 12 January 2012,
extending the effect of the Methodological Recommendations for performance
evaluation of budget programs of the state budget to the local level.
The Order provides general recommendations for conducting performance
evaluation of budget programs both for the state and local budgets.

6. Methodological Recommendations for Conducting
Performance Evaluation of Budget Programs (Cont’d)
It is recommended that key spending units of the state budget and local budgets
use the Methodological Recommendations when evaluating performance of budget
programs.
The Methodological Recommendations for performance evaluation of budget
programs may be used by key spending units and other participants in the budget process
when evaluating efficiency of budget programs within the scope of their responsibilities.
When arranging for the performance evaluation of budget programs, a key spending
unit shall independently decide on:
– the scope and structure of the information to be used for performance evaluation
of budget programs based on the specifics of its activities, goal and objectives of
each budget program;
– sources of information; and
– information gathering procedure and intervals, and the obtained information
processing and analysis technology.
Наказ Міністерства фінансів України від 17.05.2011 року № 608

7. Methodology of Conducting Comparative Analysis of
Performance of the Budget Programs Implemented by
Spending Units of Local Budgets
It accounts for the specifics of budget programs in local
budgets:
It applies the same criteria to determining the level of performance
for all budget programs
It allows unifying the performance evaluation for all spending units
It applies a unified calculation algorithm using the formula-based
approach

8. Methodology of Conducting Comparative Analysis of
Performance of the Budget Programs Implemented by
Spending Units of Local Budgets (Cont’d)
Calculation of key evaluation parameters
calculation of the budget program average performance indictor
achievement index
calculation of the budget program average quality indicator achievement
index
calculation of budget program effectiveness comparison against
indicators of previous periods

9. The methodology of comparative performance analysis
of budget programs allows to:
 Automate the performance evaluation of budget programs
 Obtain the evaluation results immediately
 Compare the evaluation results at different levels:
• within one key spending unit;
• between key spending units within the same budget;
• between key spending units of respective department (education, healthcare
etc.)

10. The budget program comprehensive
performance evaluation system shall:
 Be easily understandable and clear
 Apply the same approaches to all implementers of budget programs
 Have the same formats and clear implementation deadlines
 Establish responsibility
 Provide all participants of the budget process with necessary information
 Be built on principles of openness and transparency

11. Comprehensive Evaluation of Execution of Local
Budget Programs: Level of Information Detail
• Міністерство фінансів України
• Місцеві фінансові органи
• Головні розпорядники коштів
Quantitativeindicators
Qualitativeindicators
Analytical (descriptive) materials
Analytical (descriptive) materials
Ministry of Finance of Ukraine
Local finance departments
Key spending units

12. Schematic Diagram of Comprehensive Evaluation of
Execution of Local Budget Programs
Summarized evaluation
information
Information notes
about effectiveness of
budget programs
Report on execution of
budget program passport
Report on budget
program performance
evaluation results
Quantitativeindicators
Qualitativeindicators
Analytical (descriptive) materials
Analytical (descriptive) materials
Ministry of Finance of Ukraine
Local finance departments
Key spending units

13. To improve performance evaluation of local budget
programs it is necessary to:
 Amend the Budget Code, so as to establish responsibility for nonperformance of
evaluation
 Integrate the Methodological recommendations for budget program performance
evaluation with the Methodology of comparative performance analysis of budget
programs implemented by spending units of local budgets
 Refine the rules of conducting performance evaluation of budget programs in the
following areas:
– Set the deadlines for conducting the evaluation and the formats of evaluation
reports
– The annual performance evaluation conducted by key spending units must be
obligatory. Evaluation should cover tasks, subprograms, and the program as a
whole
– Determine the mechanism of impact of budget program evaluation results on the
allocation of budget resources in future periods
– The report on evaluation results should be signed by head of the relevant key
spending unit and should have the status of a statutory document. Its availability
and content should be verified by supervisory bodies
– The reports on evaluation results should be published and made publicly
available
 Introduce evaluation at the level of lower-level spending units and recipients of
budget funds

14. Contact Information
INSTITUTE FOR BUDGETARY AND SOCIO-ECONOMIC
RESEARCH
15-V, Borysohlibska St., 2nd
Floor,
Kyiv, 04070, Ukraine
Tel.: (044) 353-58-68, 492-97-80, 492-97-81
Fax: (044) 492-97-83
www.ibser.org.ua