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How to effectively allocate tens of millions of hryvnias for public organizations of people with disabilities?

Friday, 08 August 2014 207
Author: Ivan Sikora
10 to 50 million of hryvnias are issued annually to support the statutory activities of public organizations of people with disabilities. This amount varies due to certain political or economic trends.

The funds are allocated mainly for institutional support of civil society organizations (CSO), including property maintenance, staff salaries and financing public events. Typically, few all-national organizations claim budget support. The list of usual recipients includes Ukrainian Society for Blind People, Ukrainian Society for Deaf People, Association of Organizations of People with Disabilities of Ukraine, the National Assembly of People with Disabilities of Ukraine, the Confederation of Public Organizations of People with Disabilities and others. Until recently the criteria used to allocate the budget funds were neither straightforward nor transparent, as repeatedly stated by the Accounting Chamber of Ukraine.

Distribution of state aid by the Ministry of Labour and Social Policy of Ukraine and the State Service for Veterans and People with Disabilities caused numerous complaints, as it was performed predominantly in the "manual" mode. As a result, the availability of government support of the majority of CSOs was questioned. Corruption risks and conflicts of interest in the allocation of state aid remain obvious.

Expectations of the Interested Parties

The "Open Society" Foundation has interviewed 10 leaders of national public organizations of people with disabilities (OPD), 10 directors of regional enterprises of OPDs, 5 heads of Kyiv enterprises of OPDs and 10 people with disabilities. The survey was conducted during March - May 2014. The vast majority of interviewees noted the importance of government support for enterprises and OPDs. The role of state support is likely to remain crucial for OPDs over the next 5-10 years.

Most respondents assessed current and previous modes of granting state aid as unsatisfactory.

Respondents mentioned several problems associated with the state support, including officials’ bias, the presence of personality factors that affect the amount of state support for disabled people, the lack of state orders for businesses, government intervention in statutory activities of OPD, lack of rehabilitation instruments purchased by government agencies. DeficienciesgbvFRT’;/ of government procedures and regulatory acts were also revealed, namely delayed procedures for obtaining the funds and complicated mechanism for funding the events.

The respondents mentioned potential corruption risks in the provision of government support for community-based OPDs and enterprises. These included demands of "kickbacks" to obtain financing, "protection racket" by political parties, forgery of staff documents allowing companies representing physically healthy people to obtain the financing.

The biggest challenges to receive tax benefits are usually associated with the activities of the regional commissions. According to respondents from Kyiv and the regions, commission officials are often incompetent and subject to corruption.

The majority of respondents indicated the need to improve the existing system of state support, particularly in terms of legislation and operation of public authorities.

The interviewed managers of all-national OPDs spoke of priority and necessity of state support for OPDs at all levels. The majority of respondents declared the need for reforming the system of allocation of state support funds, including mandatory public participation in the competition committees and the development of clear criteria for funding.

Some recommendations coincided with the following changes:

- To implement the mechanism of social orders for CSOs services;

- To eradicate corruption in obtaining benefits and loans for OPD enterprises and ensure social orders for them;

- To create of the post of Presidential Envoy for Matters of Veterans and People with Disabilities.

Respondents devoted special attention to prospective amendments to the Law "On social protection of people with disabilities", namely:

1) Regulations related to persons with disabilities should be formally agreed with the OPDs of appropriate levels;

2) The expenditures of local targeted funds for social assistance to disabled persons should be calculated with the obligatory consultations with OPDs with the permanent control of the latter;

3) National and local governments should provide funding of statutory activities of OPDs of respective levels;

4) Contributions from OPD enterprises should become an additional source of funding for OPDs.

How to Allocate the Funds?

Holding a competition is an important principle, which increases the efficiency of budget spending. It creates more opportunities for organizations that do not have powerful lobbies, but are active in their field and have a competitive offer.

Existing competition procedures to support the programs (projects, activities) were developed by CSOs and approved by the Cabinet of Ministers of Ukraine Decree 1049 dated October 12th 2011. However, this competition mechanism did not apply to OPD and veterans organizations.

The questions of relevance of the activities, their social orientation, and also the issue of doubling of OPDs activities were mentioned both by CSOs and the representatives of the State Service for Veterans and People with Disabilities.

Moreover, the financial support for CSOs to carry out tasks of regional policy is to be provided on a competitive basis according to the Budget Code of Ukraine (referring to local organizations financed from the local budget). Why can’t the national public associations be funded on a competitive basis? Perhaps, it’s time to include this issue on the agenda.

5 Steps to More Efficient Allocation of Public Funds

How to effectively allocate tens of millions of hryvnias for public organizations of people with disabilities? To answer this question one has to apply the following principles and approaches.

1. Prevent the discrimination and balance the support.

Balanced funding principle for all-national OPDs should be based on the mechanism suggested by the Decree 176. Discrimination and practices of funding individual organizations separately should be eliminated. In particular, the minimum amount of financing national OPD activities should be determined, providing a possible increase of support depending on the budget capacities and the performance of organizations.

2. Develop a clear evaluation system.

The guidelines for the evaluation of proposals for OPD funding should be developed with a particular focus on efficiency and effectiveness of spending.

3. Introduce a mixed (competitive and non-competitive) funding system.

- Introduce a mixed OPD funding system, providing funding for statutory activities (congresses, held not more than 1 per year) on non-competitive basis. All other OPD activities should be supported on a competitive basis only. Clear evaluation criteria for submitting proposals should be developed;

- Establish a competitive mechanism of state aid provision for OPD. Clearly define its criteria and indicators, taking into account the similar practice of financing local OPD from local budget under Art. 20 and 91 of the Budget Code of Ukraine.

It should be noted that a mixed system of financial support was recently proposed by the State Service for Veterans and People with Disabilities for discussion among the interested parties. The proposal suggested:

for CSOs

1) to provide a list of statutory activities: congresses, elective conferences, etc. (once or twice a year) – to be funded without competition;

2) to provide a list of other statutory activities (the primary direction). For example – day care services for the people with disabilities, rehabilitation of women, support for people with cancer, seminars on legal issues, and so on. These activities will be analyzed by an expert group. Their relevance and feasibility will be determined, along with the amount of funds required for their implementation;

3) to submit the projects designed to address the priorities of the State Service for the competition. For example, according to its statute the State Service in partnership with OPDs analyzes the accessibility for persons with disabilities in all spheres of life. At the same time, State Service employees have no physical ability to monitor the accessibility of public buildings in different regions of the country.

The projects (programs, events) to be submitted for the competition should also aim for the development of civil society. In particular, the following thematic priorities can be identified:

- Monitoring of the accessibility of certain facilities;

- Development of charitable and volunteer activities;

- Providing guidance, counseling or other assistance to CSOs and state authorities on tools for public participation in policy formulation and implementation (public consultations, community councils, etc.);

- Public control and expertise on social protection of people with disabilities (residential care facilities);

- Information support of cooperation between state authorities and CSOs to implement socially important programs, the spread of best practices.

The following activities can be supported:

- Round tables, conferences, seminars and other training, information and public events;

- Development and production of instructional and informational materials (brochures, flyers, etc.);

- Research and development of recommendations to improve the operation of state authorities;

- Consultations of CSOs and officials of district state administrations;

- Other activities necessary to implement the priorities of the competition.

Mixed system

Funding for national OPDs.

Support for the activities of statutory bodies of OPDs (assemblies, congresses, plenary meetings of the board, the bureau, management, conferences and general assemblies).

Non-competitive basis.

Funding the implementation of the charter activities of the OPD.

Expert assessments.

The activities will be analyzed by an expert group. Their relevance and feasibility will be determined along with the amount of funds required for their implementation. The programs (activities) developed by national OPD and aimed at priorities identified by the State Service for Veterans and People with Disabilities will be financed on a competitive basis.

Competitive basis.

4. Introduce external independent assessment and prevention of corruption risks.

- Prevent potential conflicts of interest related to participation of recipient national OPD in the relevant committees that evaluate the proposals. Form the commission of independent experts to evaluate OPD proposals. Develop clear criteria and guidelines for the evaluation of proposals for OPD funding, as well as the efficiency and effectiveness of spending;

- Restore the validity of the rule set up in paragraph 3 of Decree 176; prohibit OPD to pay for the services of an intermediary to conduct activities and use of public funds for activities covered by other funds.

5. Arrange simple and transparent financial management.

- Ensure payment to OPD employees under labor laws, eliminating the concept of "financial incentives", used in Decree 176;

- Provide pre-payment of OPD events, at least 10 days before the event;

- Identify the possibility of financial support of OPD offices (salaries of managers, secretaries and accountants) from the state budget. Ensure state funding of local OPDs, which have limited rights to receive funding from local budgets;

- Ensure the distribution of state support to OPD according to the needs and characteristics of individual nosonomies;

- Provide payment for employees supporting persons with level 1 disability;

- Provide financing for non-production facilities not only for Ukrainian Societies of Blind and Deaf People, but also for OPDs;

- Identify funding mechanisms for national OPDs rehabilitation centers that are more efficient than those owned by the state.

Improvement of public spending and increased availability of state support for public organizations remains on the agenda.

The analysis was prepared within the project "Analysis of policies to support enterprises and organizations of disabled people in Ukraine and Kyiv: promoting equal access to state support of NGOs and delivery of social services for disabled people", implemented by the "Open Society" Foundation and supported by the International Renaissance Foundation.

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