“ Ensuring transparency of key public finance authorities

ARTICLE INFO Alina Bukhtiarova, Yuliia Dukhno, Ganna Kulish, Iryna Kurochkina and Volodymyr Lypchanskyi (2019). Ensuring transparency of key public finance authorities. Investment Management and Financial Innovations, 16(2), 128-139. doi:10.21511/imfi.16(2).2019.11 DOI http://dx.doi.org/10.21511/imfi.16(2).2019.11 RELEASED ON Friday, 24 May 2019 RECEIVED ON Monday, 29 April 2019 ACCEPTED ON Thursday, 16 May 2019


INTRODUCTION
Information openness of the key public finance authorities provides through publication of reliable and objective data about the state of public funds at the national level, as well as openness of officials in making any decisions in public finances.
Ensuring the transparency of the system of public finances provides an opportunity to objectively assess the actions of representatives of public finance authorities and public participation in issues of disposal of public funds. Ukraine's noticeable progress in public disclosure of public finances still requires further improvement of the transparency system of public finance authorities. Since obtaining objective, relevant, accessible information on the activities of the main public finance authorities increases the level of public confidence in the basis of the modern reforms.

LITERATURE REVIEW
Despite the constant change in the direction of increasing transparency of the public sector in Ukraine, it is not always possible to achieve maximum results. This provokes the need for an additional study of existing problems in ensuring transparency of key public finance authorities. Therefore, today, the study of transparency in the area of public finance focuses in the work of many scientists.
Some authors emphasize the need to monitor compliance with data transparency requirements by public finance authorities, the need to expand information on public procurement and appeal to IMF experts to assess the state of transparency of finances in the public sector (Hasanov, 2017).
Other researchers substantiate the need to increase the level of information openness of public finance authorities of Ukraine as a guarantee of key principles of a democratic country. The openness of information meets interests of not only society, but also country, since in obtaining reliable data on public administration, the confidence of citizens increases in the actions of the authorities (Kruk, 2017).
Some authors study the external and internal factors influencing the transparency of public finance authorities in Ukraine (the availability of appropriate information dissemination infrastructure, the general information culture of society, the difference in regulatory transparency requirements, etc.), as well as substantiate measures aimed at increasing the transparency of the activities of such authorities (Stetsenko, 2017).
Among the scientists there are those who also studied the experience of implementing the principle of transparency in individual states (Tikhomirova & Stolyarok, 2017). Based on the study of foreign experience, the main causes of opacity and new ways of ensuring the transparency of public finance authorities were identified. In general, in democratic countries, public finance authorities should implement clear procedures for informing citizens about their activities and involving citizens in public administration processes.
Some authors investigated the transparency of the country in terms of budget policy (Vasilyeva, Shkolnyk, Mershchii, & Melnyk, 2018) and identified main ways to improve fiscal policy in the areas of openness of budget information, the effectiveness of budget supervision and citizen participation in the budget process. Also, the essence of the main problems that need to be solved in order to create budget transparency in Ukraine is disclosed (Vynnychenko, 2017).
The level of transparency of public finance authorities is significantly influenced by the ability of the population to observe how the distribution of taxpayers' funds takes place. For this purpose, there is a system of electronic public procurement in Ukraine, the analysis of which has become the subject of research for scholars (Shkolnyk, Bukhtiarova, & Horobets, 2018). E-procurement is dedicated to works by other authors who argue that disclosure in public procurement can be a prerequisite for minimizing fraud and corruption and will provide a more efficient and fair business environment (L. Naidoo, V. Naidoo, & Ambe, 2017). Using the electronic procurement system allows you to monitor the flow of bids, prevent any attempt to abuse budget funds and create a level playing field in the public procurement market (Martin-Ortega, 2018).
Transparency and openness of public finances are one of the tools of combating corruption, since it provides users with reliable and timely information, contributes to the formation of a responsible government and prevents abuse by public finance authorities (Bukhtiarova & Kybenko, 2018).
Researchers such as Park and Blenkinsopp (2011), Alt and Lowry (2010), Hood and Heald (2006) and others have made a significant contribution to the study of the theory and practice of transparency. However, despite many public finance transparency studies, the issue of quantitative evaluation of the transparency of key public finance authorities remains open and requires further study.
Aims. Development of a methodology for assessing the institutional and political transparency of key public finance authorities in Ukraine and its practical application on the example of the Ministry of Finance and the State Fiscal Service of Ukraine.

METHODS
In today's environment, the need for a high level of transparency of public finance authorities and transparent government is indisputable. The difficulty lies in the lack of disclosure of information by public finance authorities and the plurality of information flows, among which a large number are unreliable, unclear to ordinary citizens or irrelevant.
In order to ensure maximum public sector openness in Ukraine, there is a USAID/UKAID Agency for Transparency and Accountability in Public Administration and Services aimed at providing financial support to the public and government to combat corruption in leading public services and services provided by these services. The project is aimed to build public confidence in the government by improving the quality of public administration services, demonstrating accountability and transparency in the activities of key public services. The result of the project is constant and favorable changes in the public administration and services sector the elimination of corruption abuses in three main areas: electronic services, open data and electronic public procurement system. Ukrainian experts are implementing the best world practices in these areas, working together with state and local authorities and citizens.
During the time of the project's existence in Ukraine there have been notable and successful changes in the public administration sector: 1) in the area of public procurement: all suppliers in the procurement system can receive contracts online, the government's procurement management process is constantly increasing, paper work is reduced, the process of monitoring dubious purchases is improved, and compliance with the law is improved due to competition in the small and medium eco- 3) in the area of electronic services: a large number of public services can be provided by citizens online 24 hours a day; the essence of providing services is changed due to the reduction of the need for interaction of the population with employees of public finance authorities; positive changes are made in the process of combating corruption by reducing certain employees' public finance authorities.
The USAID/UKAID Transparency and Accountability Project in Public Administration and Services also serves as the main investor in the ProZorro electronic public procurement system. Electronic purchases are becoming more and more popular in the world. In turn, increasing transparency of public procurement procedures, according to some researchers, is the only way to reduce the level of corruption in this area, which is important for all countries without exception.
With the financial support of USAID/UKAID, the ProZorro system in 2018 successfully migrated all IT landscapes from Amazon Web Services (the largest public cloud in the world) to the De Novo G-Cloud data center in Ukraine and is currently continuing to function well. Such an event is exclusive in the IT industry, since Amazon has moved a record amount of information (50 terabytes and more than 30 million files) and modules that are necessary for the stable and efficient operation of the public procurement system. The need to migrate data from Amazon hosting came after ProZorro system became mandatory for all government customers. According to the Law of Ukraine "On the Protection of Information in Information and Telecommunication Systems" dated July 5, 1994, No. 80/94-VR, all data of the public procurement system should be placed in a data center in the territory of Ukraine.
With the launch of the electronic procurement system, there has been a significant increase in the transparency of the public finance sector, reflected in international rewards: 1) international Award to the Ministry of Economic Development and Trade of Ukraine for the development and implementation of an electronic system with a unique structure (London, May 18, 2016); 2) the ProZorro system became the winner of the Open Government Awards annual prize at the Open Government Partnership Summit (Paris, December 08, 2016); 3) the European Bank for Reconstruction and Development marked the ProZorro system as the recommended model for public procurement reform.
Therefore, today the ProZorro system is an open web portal that provides access to information on all electronic trading (from July 31, 2016) from the central database. The electronic procurement system plays an important role in the public administration process, since it contains data on the use of taxpayers' money by the state that are openly accessible to all citizens. Due to the openness of data and the transparency of the bids, confidence about the authorities of public procurement is growing, as well as the interaction between citizens, business representatives and public administration.
Besides the donation of the electronic public procurement system, the project "Transparency and accountability in public administration and services" has other notable achievements in the spheres of state and regional governance. It is worth noting that at the state level, the term transparency includes three main components: 1) informative (availability and openness of data on the activities of public finance authorities and their officials); 2) participatory (the ability of the population, directly or through representatives, to participate in government decision-making processes and exercise public control); 3) accountability (observance of the norms of the current legislation and consideration of public opinion in the activities of public finance authorities).
In Ukraine, the transparency of state authorities is determined by such elements as: the existence of an adequate level of legislative framework for ensuring the transparent functioning of public finance authorities; the level of bureaucracy and corruption in the state apparatus; the state of development of information interaction of the state with the institutes of the public, etc. The imper-fection of these elements is the cause of opacity, therefore, there is a need to increase the level of information openness of the activities of state authorities.
In order to determine the level of transparency in the evaluation of the activities of key public finance authorities, a specific list of indicators should be used (Table 1).

3.1
Publication of annual reports on the activities of a public finance authority

3.2
Publication of semi-annual reports on the activities of the public finance authority

3.3
Publication of quarterly reports on the activities of the public finance authority

3.4
Publication of monthly reports on the activities of the public finance authority

3.5
Placement of the organization's strategy or plan for the next year

3.6
Disclosure of current information on government procurement

3.7
Open access to public information on the web-site of public finance authority

5.3
Presentation of data in a format that can be verified using an automated information processing system

5.4
The level of information and software and technical security of the authority The most effective and accessible tool for displaying the activities of any public finance authority is its official website. Therefore, the indicated system of indicators was developed based on monitoring of information of sites of leading public finance authorities of Ukraine and data of the unified state web portal of open data.
Calculation of the transparency index of public finance authorities should be carried out in stages by the following methodology.
Stage I. Definition for each of the five blocks indicated in Table 1, the system of indicators for assessing the level of transparency of the public finance authority and the introduction of their symbols ( Table 2). Stage II. Distribution of the number of points by the level of availability and completeness of information by such differentiation: the information is complete -1 point; partial information -0.5 points; no information available -0 points.

Stage III.
Definition for each indicator in the unit of gravity and symbols (Table 3).

St a ge I V.
Providing for the calculation of the transparency index for each of the 5 blocks according to formulae 1-5:  Table 4. Table 4. Conditional indication of the specific weight of the block in the overall assessment of the transparency of the public finance authority

No.
Name Weight of the block 1 General information q 1 2 Information interaction with financial sector entities q 2

3
Primary activity data q 3 4 Availability of additional information q4 5 Quality and security of published data The developed transparency index of government bodies will have a significant practical value, as it will enable: 1) any subjects on a regular basis to evaluate and compare the openness of the activities of key public finance authorities; 2) to prevent corruption abuses and violations of the rights of the population to free access to information; 3) disseminate and develop the institution of openness among public finance authorities (and their officials), as well as increase the level of public awareness of their rights and opportunities in using public data; 4) regular calculations of the transparency index can become a prerequisite for bringing together the efforts of stakeholders and non-governmental organizations in increasing the openness of public bodies in public finance; 5) the digital data obtained as a result of index measurement can be used to develop recommendations for increasing the level of transparency of the activities of key state level bodies.
Transparency of public finance authorities should become one of the priority directions of state policy in Ukraine. Some steps have already been taken in this direction: the Law of Ukraine "On Access to Public Information" was adopted, and the formation of public councils whose representatives could participate in the work of ministries and other public finance authorities. The high level of information openness increases public confidence in the actions of the state apparatus, prevents the occurrence of corruption schemes and improves the image of any public finance authority.
Applying the results of the calculations of the proposed methodology for assessing transparency will enable the development of recommendations for the public activities of public finance authorities, which will increase the efficiency of the use of public resources.

RESULTS
For a quantitative assessment of the level of transparency of key public finance authorities, consideration should be given to the practical application of the model for determining the institutional and political transparency of the public finance area in terms of non-monetary component, as exemplified by the Ministry of Finance and the State Fiscal Service of Ukraine. The distribution of the number of points in the system of indicators (Table 5) was made using the information provided by the official bodies on the official sites of the state and the data of the unified state web portal of open data. Availability of information about the public finance authority 1 1

1.2
Presence of E-declarations management on the website of the public finance authority 1 0

1.3
Information about the structure and authority of the public finance authority 0 1

1.4
Publication of normative legal acts and other documentation 1 1

1.5
Official publication of the public finance authority 0 1

1.6
Publication of information on vacancies available to a public finance authority 1 1

1.7
Results of the selection for civil service positions 1 1

2.1
Ensuring public participation (availability of public council) 1 1

2.2
Placing on the site of the plans of consultations with the citizens 1 1

2.3
Publication of reports on the results of public discussion 0 1

2.4
Mutual information exchange with other public finance authorities 1 0.5

2.5
Exchange of information with relevant authorities of foreign countries (international cooperation) 1 1

3.1
Publication of annual reports on the activities of a public finance authority 0 0.5

3.2
Publication of semi-annual reports on the activities of the public finance authority 0 0.5

3.3
Publication of quarterly reports on the activities of the public finance authority 0 0

3.4
Publication of monthly reports on the activities of the public finance authority 0 0 3.5 Placement of the organization's strategy or plan for the next year 1 0.5

3.6
Disclosure of current information on government procurement 0.5 1

3.7
Open access to public information on the web-site of public finance authority 0 1 3.8 Regular reports on requests for public information 0.5 1

3.9
Publication of information on the unified state web portal of open data 0 1

3.10
Openness of aggregated performance indicators 0 0.5

3.11
List of projects initiated by the public finance authority and decisions on their implementation 1 0

3.12
Status of project financing initiated by a public finance authority 0 0

3.13
Information on the state of financing of the public finance authority's activities 0 0.5

4.2
The presence of a public finance authority page in social networks 1 1

4.3
Additional e-services on the website of the public finance authority 0 1

4.4
Online tools for counseling site users 0.5 0 4.5 Availability of administrative services 0 1

5.1
Quality of submission of statistical data 0.5 0.5

5.2
Visualization of data using graphic elements, infographics 0.5 0.5

5.3
Presentation of data in a format that can be verified using an automated information processing system 0 0

5.4
The level of information and software and technical security of the authority 0.5 0.5 Initially, using the Microsoft Excel spreadsheet process, interim calculations are performed (the number of points for each transparency indicator is entered and we find their relative weight in the corresponding block). For convenience, it is advisable to use the symbols proposed in Tables 2-4. The result of calculations is shown in Table 6.  The next step involves calculating the transparency index for each of the 5 blocks, using formulae 1-5.
The calculated index values are given in Table 7. Next, there is a need to find the specific weight of each block in the overall definition of the level of transparency (Table 8). In order to identify shortcomings and develop recommendations for improving the transparency of the reviewed public finance authorities, more detailed data should be analyzed. The transparency index of the Ministry of Finance shows that this authority only publishes a little more than half of the required information, while the rest is unavailable. The most closed is the information on the "Data on the main activity" block and the "Quality and safety of the published data" block. This is because the site does not publish activity reports, and all budget statistics in recent years filed in an awkward format. It would be advisable to submit it on a monthly, quarterly and yearly basis (at least for the last 5 years). Information on government procurement is also posted on the site, but it does not contain data for the last 3 years (the latest MFU procurement plan for 2015 is available).
There is no information on the state of financing of the public finance authority activity at all.
Another negative aspect in disclosing MFU information is the complete lack of data on the unified state public data portal, and on the site itself, there is an inactive hyperlink "Searching for Public Information". All this is a violation of the Law "On Access to Public Information".
About the quality of data submission, budget statistics are fed into an inappropriate for analysis PDF format. Visually the information displayed is available using tables, charts, histograms, but it's best to place it in XLS format.
The level of information and software and technical security of the IFI is also imperfect. During December 6-7, 2016, a professional hacker attack continued the site's website. As a result, the work of departmental accounting and payment systems -e-administration systems of VAT and excise tax notes, and the system of customs payments was stopped. There were suspended financial settlements with the state, taxpayers suffered losses and could receive a fine and fines for late payment. Therefore, measures to restore and improve the reliability of the functioning of the information and telecommunication system of the IFI should be carried out more often.
The high level of transparency was shown by the "General Information" and "Information Interaction with Financial Sectors" blocks of 71.43% and 80%, respectively. In these blocks, among the shortcomings, there was revealed the lack of an official publication of the MFU's and published reports with the results of public discussion.
The transparency index of the State Fiscal Service of Ukraine is comparatively better, where 67% of the information is publicly available. The values of the transparency indicators of the General Information, "Information Interaction with Financial Sector Entities" and "Accessibility of Additional Information" blocks from 80 to 85% are positive. Instead, most of the miscalculations were detected in the "Data on main activity" and "Quality and safety of published data" blocks.
SFSU publishes only annual and semi-annual reports. They have a fragmentary nature, focusing only on positive aspects of the authority's activi-ty, that is, objectively assessing the activities of the authority based on the data placed on the site is impossible. In addition, the reports do not include the dynamics of indicators over the last few years (actual figures are compared with the plans), and digital data is not presented in tabular form. On the site of the SFSU there are plans for the service, but only for the next six months.
There are some aggregated indicators in the closed access: taxes and fees by type of economic activity and regions, the dynamics of the number of taxpayers, the amount of losses from overpayments of taxes, tax privileges, tax debts, the balance of non-recoverable amounts of VAT, etc. (Kolodiziev, 2013).
Data on the financing of SFSU units are posted on the site's website on a monthly basis, but they do not allow a realistic assessment of fiscal policy at either the local or national level.
Most statistics of the SFSU are presented in a text format, while it would be more convenient to place them in the form of Microsoft Excel tables. In addition, graphics and infographic elements are hardly used, which complicates the perception of posted information. Therefore, it is worth working on its visual design.
There are shortcomings and safety of published data. From 6 to 11 December, due to a failure in the work of the automated information management system "Document Management", approximately 531,000 electronic documents and resolutions, 26,000 data in registration cards, 4,100 registration cards, 3.100 control cards, etc. The reasons for such a failure are the obsolete and inability to provide proper conditions for the location of equipment and servers and the inadequate level of information security. Therefore, SFSU needs to implement measures aimed at improving information security systems, software and hardware setup, increasing the number of new servers and streamlining structured data.

CONCLUSION
Thus, the methodology determined by the transparency index of public finance authorities is important from a practical point of view, since it enables them to evaluate their activities based on the availability of complete, reliable, relevant and understandable information on the management, structure, func-tions of public finance authorities, information interaction with other actors, about realization of the main activity, availability of additional data, etc. In addition, regular index calculations will make it possible to compare openness of key public finance authorities, observe the dynamics of changes in the level of transparency, identify weaknesses in disclosure of information by key public finance authorities and develop ways to address them.
With the help of the developed methodology, the transparency index of the leading public finance authorities in Ukraine was calculated. For the Ministry of Finance of Ukraine, the index value is 54.72%, that is, the given state structure publishes only a little more than half of the required information. The information on the "Data on the main activity" block and the "Quality and safety of the published data" block is the least accessible. According to these same blocks, the information of the State Fiscal Service of Ukraine is the least open, although the transparency index itself is higher and makes up 67%. That is, there are shortcomings in the disclosure of information about the main activity and in its presentation, as well as some miscalculations in ensuring the proper level of information and software and technical security of key public finance authorities in Ukraine.
It should be noted that the proposed methodology is not exhaustive and may be modified and supplemented considering the specifics of the activity of the investigated public finance authority. Therefore, further scientific research and testing of the methodology in practice are necessary.