On 23 January 2019, the Cabinet of Ministers of Ukraine have promulgated a decree distributing 824 million UAH on social and economic development, particularly 2,805 objects and events in different oblasts of Ukraine. These funds, as well as 2016-2018 subventions in amount of 12 billion UAH, were supposed to solve at least some problems in regions, to equal and balance their development, and guarantee the stability.

However, subventions for social and economic development of territories have failed to realize these goals and, what even worse, became a platform for cooperation between territorial communities and politicians, striving to gain electoral benefits for the next election. According to earlier researches made by Civil Network OPORA, budget funds are being spent more and more often on trivial purchases like printers, mincing machines, school desks or bicycles, instead of significant infrastructural projects.

Thus, the average amount of a subvention has decreased from 660 thousand UAH in 2016 to 294 (in 55.5%) thousand UAH in the first distribution of 2019.

 

According to the Decree #39 of the Cabinet of Ministers, there are some raions in Ukraine, where over 90% of measures aimed at social and economic development are trivial purchases, which unlikely will guarantee a stable development.

For example, 34 of 50 subventions in Snihurivka raion (Mykolaiv oblast) were allocated for the purchase of printers and multi function devices (MFD) costing 1,400 UAH. The other measures – also purchases of TVs, furniture, or even tires for a school bus, costing 4,000 UAH. Similar purchases were also made in Romny raion (Sumy oblast), where acquisition of furniture for schools was the main target of subventions.

This is a national trend in the use of state subvention funds. 37% of subventions are allocated on projects costing less than 50 thousand UAH. We would like to emphasize, that most of these projects are one-time purchases for educational institutions, instead of systematic ones, aimed at solution of regional problems.

 

Similarly to previous years, unequal distribution of funds among Ukrainian regions is another problem in allocation of subventions. The first distribution of state funds in 2019 is not an exception.

Thus, the biggest amount was allocated to Ivano-Frankivsk oblast – 85.8 million UAH; Kyiv oblast – 64.3 million UAH; Chernivtsi oblast – 53.6 million UAH; and Lviv oblast – 50.4 million UAH. At the same time, 12.9 million UAH were allocated for realization of projects in Khmelnytsk oblast, and 5.8 million UAH – in Luhansk and Zaporizhia oblasts.

Besides that, we should also mention in this regard the quantity of financed projects in different oblasts. Thus, 46% of objects that received state subventions are located on territory of five oblasts: Mykolaiv (368), Kyiv (294), Sumy (219), Rivne (207) and Chernivtsi (193).

 

Thus, the first distribution of subventions in 2019 is as unequal, nontransparent, and unjustified as in previous years. Besides that, the list of state-funded objects proves again that influential majoritarian MPs and political parties can have an impact on formation of this list.

Thus, from June 2018 to January 2019, observers of the Civil Network OPORA have detected 1,506 incidents when budget resources were probably used for indirect campaigning in support of MPs and political parties. Most of them concerned subventions on social and economic development.

Such misuse of budget resources may become a key hazard for competitiveness of 2019 parliamentary election.

Therefore, Civil Network OPORA had prepared and sent detailed recommendations to the Cabinet of Ministers concerning more transparent and equal allocation of subventions on social and economic development of territories, and concerning the prevention of administrative resources’ misuses in 2019 national elections. However, these recommendations, as well as recommendations of the Accounting Chamber, were not taken into consideration in draft amendments to the Decree of the Cabinet of Ministers of Ukraine “On the Procedure and Conditions of Receiving State Budget Subventions by Local Budgets for Social and Economic Development of Territories”. It means that the procedures for the allocation of subventions on social and economic development will contain regulations allowing influential majoritarian MPs and political parties to have an impact on formation of the list of state-funded objects.

Therefore, OPORA calls on the Cabinet of Ministers to take into consideration the recommendations to stop indirect campaigning at the cost of Ukrainian taxpayers.

The research on distribution of state subventions in 2018

The research on distribution of state subventions in 2017

The research on distribution of state subventions in 2016

Data set

Report on a probable use of budget resources for indirect campaigning (June 2018 – January 2019)