The team of the Regional Office of U-LEAD with Europe in the Cherkasy Oblast organised the event to explain how to address financial issues under martial law. Among the topics was the financing of the needs of the military at the expense of local budgets. This issue was raised as a request for clarification from the municipalities. Mykola Hulko, Adviser on Municipal Finance and Management of the Regional Office of U-LEAD, told about this in more detail.
According to the adviser, the powers of local self-government bodies in the field of defence are set forth in the Law “On Local Self-Government in Ukraine”, the Law “On the Fundamentals of National Resistance” and the Budget Code of Ukraine. Municipalities can allocate interbudgetary transfers to institutions (organisations) financed from the state budget (recruitment and social support centres, military units, units of the National Police, the Ministry of Defence of Ukraine, military units and other security and defence forces, etc.).
“Municipalities also need to approve local target programmes, which should provide for the allocation of funds for the implementation of territorial defence and mobilisation training measures and works of local importance, as well as measures to support other units of the security and defence forces,” the adviser said.
Executing entities for these activities and works within the local target programmes, as he explained, are determined by the above state institutions and organisations. If the executing entities under the local programmes of executive local councils establish measures that require the purchase of fixed assets, they shall be transferred to institutions (organisations) maintained at the expense of the state budget in accordance with:
- the Law of Ukraine “On Transfer, Compulsory Alienation or Seizure of Property under the Legal Regime of Martial Law or State of Emergency” (in the case of an appeal by the military command to transfer property free of charge);
- Laws of Ukraine “On Local Self-Government in Ukraine”, “On the Transfer of State-Owned and Municipal Property” and Resolution of the Cabinet of Ministers of Ukraine No.1482 “On the Transfer of State-Owned and Municipal Property” dated 21 September 1998.
“However, municipalities should keep in mind according to Article 10 of the Law of Ukraine “On the Defence of Ukraine”, the organisation of the accumulation of weapons, military equipment, and other material resources falls within the purview of the Ministry of Defence of Ukraine. Pursuant to the Law of Ukraine “On Local Self-Government in Ukraine, the development, procurement, modernisation and repair of weapons, military vehicles, means and equipment are outside the scope of the powers of local self-government organisations,” said Mykola Hulko.
In addition, at the event, the adviser informed the municipalities about changes to the legislation of Ukraine, which were adopted in July-August 2023. The new Laws “On Waste Management” and “On Service in Local Self-Government Bodies”, amendments to the Tax Code of Ukraine, which re-imposed a single tax on individual entrepreneurs of Group I and II, were considered. The Letter of the Ministry of Finance “On the Peculiarities of Developing Draft Local Budgets for 2024” was also discussed.