Fiduciary Risk Assessment for Ukraine

Fiduciary Risk Assessment for Ukraine

Background & Context

Since the war began in 2022, Ukraine’s national budget has doubled to annually, with defence and security now accounting for nearly half of public expenditure. The war has placed significant pressure on Ukraine’s PFM systems, which must simultaneously sustain the war effort and maintain core state functions and social services. A significant portion of the budget continues to be financed by international partners, underscoring the importance of strong fiduciary oversight and transparent budget execution.

Key Counterparts

British Embassy in Kyiv

Objective

The overarching objective of this intervention was to conduct a comprehensive Fiduciary Risk Assessment (FRA) of the Government of Ukraine·s national public financial management (PFM) systems. This will support the UK·s strategic decision-making on future aid modalities, including potential direct budgetary support, and ensure robust fiduciary oversight of its largest bilateral ODA portfolio.

Approach & Scope of Support

ASI supported FCDO in assessing fiduciary risks within the Government of Ukraine’s public financial management (PFM) systems to inform future aid modalities, including potential budget support and wider UK-funded programmes. The assessment covered key sectors such as construction, energy, and social protection, and reviewed the full range of UK aid instruments.

Structured in line with the Public Expenditure and Financial Accountability framework, the assignment provided a comprehensive overview of risks and mitigation measures to ensure robust oversight of UK support and inform decision-making on the design and delivery of future UK support.

Outcomes / Emerging Impact

While there are no outcomes at this stage, the key outputs included a comprehensive FRA.