Improving public financial management in Ukraine under martial law

Abstract

The relevance of this study is driven by the need to strengthen the role of state financial control in ensuring Ukraine’s economic security under martial law and amid an unprecedented increase in international financial assistance. The full-scale military aggression has significantly transformed the public finance management system, resulting in higher budget expenditures, increased public debt, and growing dependence on external financing. Under such conditions, the effectiveness of state financial control becomes of strategic importance, as its performance determines the legality and targeted use of budget funds, the level of trust of international partners, and the financial sustainability of the state. The purpose of this article is to develop evidence-based recommendations for improving the effectiveness of state financial control as a component of Ukraine’s economic security by enhancing mechanisms for monitoring the use of international assistance, introducing a risk-based approach, and applying modern digital technologies. The study employs a range of general scientific methods, including systemic, structural-functional, comparative, analytical, statistical, and logical approaches. The information base includes Ukrainian regulatory and legal acts, materials from international financial organizations, official statistical data, and recent scholarly works on state financial control and economic security. The results of the study reveal that the current system of state financial control is characterized by a number of systemic problems, including fragmentation of information resources, insufficient coordination between controlling authorities and international donors, staff shortages, an inadequate level of digitalization, and low effectiveness in recovering financial violations. The study substantiates the need to establish a Unified National Platform for Monitoring International Assistance, integrated with state information systems, which would ensure automated accounting, real-time monitoring of financial flows, and increased transparency in the use of international resources. The introduction of a risk-based approach to planning control activities based on financial risk assessment is proposed, as well as the use of big data technologies, artificial intelligence, blockchain, robotic process automation, and cloud services to improve the effectiveness of control activities. Special attention is given to the necessity of digital transformation of the state financial control system, development of human resources, improvement of the legal framework, and harmonization of control procedures with international public audit standards. The study concludes that the modernization of state financial control should be comprehensive and combine institutional, organizational, legal, and digital mechanisms. The implementation of the proposed measures will contribute to strengthening Ukraine’s economic security, improving the efficiency of the use of public and international financial resources, reducing the risk of financial violations, strengthening trust among international partners, and creating the necessary preconditions for successful post-war recovery of the state.