In 2022, the Zoria Village Council created a municipal institution — Centre for Financial and Economic Services for Educational and Cultural Institutions — which helps ensure financial autonomy in educational institutions. The Centre was created to provide financial and economic services to the above institutions, and the municipality is already heralding the advantages of such an approach.
“In our oblast, we tried a new approach to the management of educational institutions, starting with the idea of joint accounting for several schools. We were motivated by the experience of municipalities in the Vinnytsia Oblast and tried to implement it in our oblast as well. The main goal was to create one central body that would manage the finances of all educational institutions. We can already safely say that financial autonomy helped us establish a systematic and transparent functioning of all our educational institutions,” said Mykhailo Oliynyk, head of the Zoria municipality.
According to him, the development of this unit involved calculations, and the council determined that it was more profitable for the municipality to create a municipal institution that would serve educational and cultural institutions than to introduce the position of accountant in each individual institution:
“Our Centre has professionals from various fields who take care of our vocational schools, kindergartens, music and sports schools, the Zoria Palace cultural centre, libraries and village clubs. I personally think that the work of the Centre simplifies the process when one structure serves all educational institutions, compared to when each school has its own accountants.”
Mykhailo Oliynyk reaffirmed Zoria’s commitment to the effective use of resources and cost-efficiency. Although the creation of the Centre was not cheap, it is a promising investment in the future of the municipality. The creation of separate municipal institutions to provide financial and economic services to educational institutions is a best practice that has proven to be beneficial despite being used in few Ukrainian municipalities so far. U-LEAD experts provided assistance in implementing this model of financial management in education in the Zoria municipality.
According to Iryna Kondratiuk, Adviser on Local Finance and Management at the Regional Office of U-LEAD with Europe in the Rivne Oblast, the issue of financial autonomy of educational institutions has long been on the agenda for municipalities. That is why, starting in 2021, the U-LEAD Program has organised a number of info sessions and consultations on this issue for the municipalities of the Rivne Oblast. In particular, the Office team held individual consultations for the Zoria municipality on this issue back in 2021.
As was noted by Iryna Kondratiuk, the financial autonomy of educational institutions is a requirement of Ukrainian legislation, which states that educational institutions must independently provide, among other things, their own financial and accounting services:
“Today there are two ways of doing it. The first option is more popular. In every vocational school or gymnasium, the position of an accountant is introduced to the staff of the educational institution, who helps the principal to solve all these issues. The second option, currently less common, is when the local council creates a special municipal institution, whose accountants are contracted to provide financial and accounting services to educational institutions but do it free of charge. In both cases, the educational institution is a legal entity with its own accounts that employs all its teachers and pays their salaries.”
Furthermore, according to the adviser, to date, 50 out of 64 municipalities of the Rivne region have ensured, among other things, the financial autonomy of educational institutions by introducing the positions of accountants in these institutions or by providing financial services to them by municipal institutions that offer financial and economic services. The financial autonomy of educational institutions also means that each institution is a separate manager of lower-level funds.
Iryna Kondratiuk reaffirmed that U-LEAD was committed to supporting the municipalities of the Rivne region and providing them with assistance in building and strengthening their capacities.