Accounting Chamber reports misuse of funds

by Maryna Makhnonos
Special to The Ukrainian Weekly

KYIV - Ukraine's Accounting Chamber charged several government institutions with alleged misuse of 1.9 billion hrv (about $357 million U.S.) during 2001. Several cases were registered in the industrial policy and fuel and energy ministries, according to the chamber's statements released on January 17 as part of a summary of its activity during the past five years.

In particular, the management of the Industrial Policy Ministry was blamed for ineffective control of state funds aimed at financing the sectors of hard water production and conservation of mines in 1999-2001, the statement said.

"In most cases, the planned volumes of financing for recipients of state funds were determined and corrected without the necessary basic calculations," the Accounting Chamber said in its statement. In in one case alone, more than 500,000 hrv ($94,161) were misappropriated instead of financing a mine's conservation in eastern Ukraine.

Another case revealed that the Fuel and Energy Ministry had violated legislation that regulates state support for coal mines. In addition, the ministry had organized ineffective tenders to acquire mining equipment, blocking more than 3 million hrv ($565,000) for two months in 2001.

The head of the Accounting Chamber, Valentyn Symonenko, said on January 10 that his service had made about 2,500 revisions and checked some 2,000 institutions and enterprises in 1997-2001, according to the Interfax news agency. Mr. Symonenko noted that the chamber had uncovered about 12 billion hrv ($2.26 billion, according to the current exchange rate) in misused funds during that period.

Mr. Symonenko said that "lack of financial, economic and tax policies" is the main reason for the misuse of funds.

Ukraine's economy suffered a severe economic recession since winning independence in 1991 after the collapse of the USSR. The country's post-Soviet transition period was accompanied by large-scale corruption and high-profile money-laundering schemes.

The Accounting Chamber was established in 1997 to control financial operations of the state sector; it is subordinate to the Verkhovna Rada.

Copyright © The Ukrainian Weekly, January 20, 2002, No. 3, Vol. LXX

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