“We’ve Earned them Together”. Anti-Coronavirus Fund Used for Needs of Various Agencies

Out of 19 Billion, Already Allocated from COVID-19 Counteraction Fund, only 3.2 Billion, Granted to Ministry of Health, Used for Needs of Laboratory Centers and Hospitals.

A law which allows spending money out of COVID-19 Counteraction Fund for road repair was passed by the Ukrainian Parliament the previous week. This news wasn’t given a warm welcome by the society due to one reason – where does the road repair come into the matter of countering COVID-19? Still there is some correlation at least, MPs see it this way. 

The law-related concept note explains the following:

Creation of additional jobs for the citizens is acknowledged to be one of the measures to counter COVID-19 acute respiratory disease, caused by SARS-CoV-2 coronavirus, and its consequences. Improving of transport communication for the timely provision of the medical assistance to the citizens and their broad coverage with coronavirus testing are also the important factors. The two mentioned tasks may be reached by implementation of infrastructure projects related to construction, rehabilitation and repair of public-access national roads.

With due account of the fact that Memebers of the Parliament have managed to link even roads repair to a fight with coronavirus, StateWatch decided to get to the bottom of it – figure out what the money, meant for improving Ukrainian medicine and preparing it for a possible boost in the number of COVID-19 cases, is spent on.

With reference to StateWatch analytical data, we’ll tell you what the money was spent on, and what are still the plans on paying away the money meant to save the country from COVID-19 pandemic.

It is worth reminding for a better understanding of the situation that the money is allocated from the Fund by prior approval of the Verkhovna Rada as well as the Cabinet of Ministers of Ukraine. To start with we’ll report on the funds, already approved by the aforementioned public authorities.

As of today the Cabinet of Ministers of Ukraine has approved allocation of about UAH 19 billion from the Fund. Interestingly, only 3.2 billion was channeled to the Ministry of Health to cover the needs of laboratory centers, hospitals and additional salaries for health care staff, meaning only 15% was directly spent on health care out of all the money allocated from the Fund.

What happened to the remaining 85 % of funds, which should have saved the country form COVID-19? The Ministry of Social Policy has taken the lead in terms of the amount of money received to fight COVID-19. At the moment the Cabinet of Ministers has agreed to allocate no more and no less than UAH 10.1 bln. This means three times more than the MoH has received. The money granted to the Ministry of Social Policy is planned to be used as pay-outs to the insured parties and self-employed individuals, as well as material support to family members of medical and other health care workers who died of COVID-19 acute respiratory disease.

The Ministry of Economy became another authority which has bitten off its lump of COVID-19 Fund. The Cabinet of Ministers has approved UAH 2.9 bln. for them. In its request the Ministry indicated that this money will go to the Fund of Compulsory State Social Insurance of Ukraine in case of unemployment to timely grant unemployment benefits.

Another recent money transfer from the COVID-19 Fund was the subject of much controversy in the society. As much as UAH 2.7 bln (almost as much as the MoH has received) was reallocated to the Ministry of Internal Affairs of Ukraine headed by Arsen Avakov. This money is planned to be used as additional payments to service persons of the National Guard, the State Border Guard Service, enlisted personnel and command staff of civil defense bodies and police officers who ensure the vital activity of a country and population, as well as to pay extra to medical workers of the health care institutions by the Ministry of Internal Affairs, rather than to fight COVID-19. At the very same time it is worth mentioning that the bulk of this money and namely UAH 2.2 bln. will be given to the National Police of Ukraine.

In spite of the support from the Government and the Committee there were those unsupportive of such allocation of funds. Kira Rudyk, head of the Holos faction, was one of the opponents:

There are such figures in Ukraine as Arsen Avakov, who are ready to lay hands on the budget money to accommodate their whims even in the most difficult of times. Why do I find these to be whims? Because namely the Ministry of Internal Affairs is always financed by 100%. On our side we’ll insist on an audit – where and how the Ministry of Internal Affairs distributes the received funds. It’s high time to open this can of worms.

Besides the Cabinet of Ministers has agreed upon allocation of money from the COVID-19 Counteraction Fund to the Ministry of Education and Science and the Ministry of Justice. However, the appetites of these two ministries were much smaller than the appetites of Arsen Avakov’s agency. The Cabinet of Ministers has agreed to transfer 52 million for the Ministry of Edication and Science and 23 million for the Ministry of Justice. In terms of actual spending – the educators plan to refund what was paid for the provision of a trial external independent testing services in 2020, while the Ministry of Justice – to procure medical equipment, PPE and make supplemental payments to the medical staff for the Health Center of the State Penitentiary Service of Ukraine.

Apart from the funds already approved by the Cabinet of Ministers, plenty of other requests from various public authorities which also apply for money from the special fund are still waiting to be considered. We’ll cover that below.

6 Oblast State Administrations has addressed the Cabinet of Ministers to get some allocations from the COVID-19 Counteraction Fund. They all gave pretty similar explanations in their applications as regards why they need this money. Predominantly they ask for allocations to implement measures aimed at prevention of COVID-19 spread, supplemental payments to the medical and other staff involved in counteracting COVID-19 as well as for procurement of medical equipment.

Poltava Oblast State Administration became a leader in amount requested – it asked the Government for UAH 686 million. Kharkiv Oblast State Administration (OSA) ranks second – filing a request for UAH 616 million. Significant amounts were asked for by Ivano-Frankivsk OSA – UAH 446 million, Odesa OSA – UAH 383 million and Chernivtsi OSA – UAH 204 million. Only Cherkasy OSA stands out from this list, asking for only UAH 36 mln.

Applications for COVID-19 Counteraction Fund allocations from five ministries were found by us among those which weren’t considered. The Ministry of Social Policy, for which about UAH 10 bln was already approved, asked for the biggest amount of all. The Ministry decided to handle it without gloves and asked for another UAH 15.2 bln. The gaps the Ministry of Social Policy is trying to bridge include: payment of old age benefits, supplementary pensions and the Pension Fund deficiency payments.

The Ministry of Economy, for which about UAH 2.9 bln was already approved, was another ministry asking for more – it decided not to stop and applied for getting another UAH 12 bln from the COVID-19 Counteraction Fund. There is a will to spend the money on filling in the Fund of Compulsory State Social Insurance of Ukraine in case of unemployment. Separately the economists asked for money to boost the defense capacity (UAH 18 mln) and recover expenditures for the operation of export promotion institutions (UAH 15 mln).

Besides the list of ministries, the requests of which have not been considered or approved by the Cabinet of Ministers, contains the Ministry of Culture, aspiring to get almost UAH 2 bln for the preservation and restoration of Ukrainian culture, the development of creative industries and the tourist attractiveness of the regions; the Ministry of Education and Science, which asked for UAH 125.6 mln to create safe conditions for external evaluation, enrollment testing and entrance examinations in 2020. And let’s proceed to the most interesting fact – the Ministry of Health, asking for extra UAH 244 million for continuous professional development of doctors, payments for the arrangement of internships of interns at various facilities. If to compare this amount with ones asked by the Ministry of Economy (12 billion) and the Ministry of Social Policy (15 billion), one might well conclude that we are doing fine with medicine in Ukraine and we are fully prepared for any challenges related to COVID-19.

It should not go without mention that a well-known institution – State Management of Affairs – may also be found in the list, we have covered the details in one of our previous publications – “Feofaniya” in need of extra millions? Where do the money meant to counter COVID-19 go”.

To crown it all we would like to recall our interview with a former government official who made the following prediction back in May:

Establishment of a separate Fund under the Ministry of Finance with UAH 60+ billion without a clearly defined goal at this stage is simply the creation of a pocket fund for virtually any expenditure, as the Cabinet of Ministers had got an opportunity to spend it upon agreement with the Budgetary Committee.

The forecast seems to be holding up. The COVID-19 Counteraction Fund was established back in April. During this time, money from this fund was spent in different ways: on pensions, education, the police, social benefits, and, why not, medicine. But taking into account the fact that only 3.2 billion was allocated directly to the Ministry of Health – a body that plays a key role in combating COVID-19, the question that has to be answered is: why was the Fund established in the first place?

And of course the most recent ‘gem’ of the Verkhovna Rada’ which should not be left unnoticed:  equate road repair and fight with COVID-19 requires a great talent. In conclusion, the Fund, which was supposed to improve Ukrainian medicine and prepare the country for a possible outbreak of the coronavirus pandemic, seems to have become a fund to close holes in the budget and satisfy political ‘wants and wishes.’