Government strengthens control over state-owned enterprises

The Cabinet of Ministers has adopted a decision on a comprehensive analysis of the activities of enterprises in the state sector of the economy and on strengthening control over state-owned enterprises. The Government endorsed the relevant order at its meeting on 13 November.

“This decision strengthens control and transparency in the management of state-owned companies. It is now necessary to verify how governance mechanisms are functioning in all key companies in the state sector. We are therefore conducting an audit and have instructed supervisory boards to examine the state of internal control, compliance, risk management, adherence to anti-corruption policy, and especially procurement procedures and financial discipline,” said Oleksii Sobolev, Deputy Minister of Economy, Environment and Agriculture.

Under the Government’s decision, the supervisory boards of Naftogaz of Ukraine, Ukrzaliznytsia, Ukroboronprom, Ukrhydroenergo, and state-owned banks – within the competence defined by their charters – have been instructed, among other things, to:

• analyse the effectiveness of the system for controlling the activities of the enterprises’ executive bodies;
• verify compliance with anti-corruption policy, financial discipline, procurement procedures, and the functioning of internal control, risk management and internal audit systems;
• take measures to improve the effectiveness of corporate governance and the accountability of officials.

In addition, the Government has instructed the State Audit Service to include large enterprises in the plan of financial control measures on a priority basis.

State control over enterprises in which it participates in management is also being strengthened.