Accounting and control support for expenditures on the restoration of critical infrastructure facilities in the public sector under martial law and post-war recovery

Анотація

The aim of the study was to examine the issues of accounting and control support for the restoration of critical infrastructure facilities in the public sector under conditions of martial law and post-war recovery. The formation of an evidence bases regarding the losses incurred required proper documentation, systematisation and accounting recognition based on reliable and structured information on damaged or destroyed assets, incurred costs, and economic consequences. It was established that 60-70% of the significance in the process of verifying damages was ensured by documented accounting and registration data. The remainder was attributable to supporting analytical and expert materials that provided their interpretation and justification for further use in assessment and compensation procedures. It was substantiated that, as a result of simplified procurement procedures, the heterogeneity of procurement items within the Prozorro system, and the absence of a unified approach to the accounting recognition of costs, the risks of their misclassification as either current or capital expenditures increase. The structure of expenditures included costs for construction and engineering works, design and estimate documentation, technical and author supervision, engineering consultancy services, and the acquisition of materials and equipment. It also encompassed costs associated with ensuring physical protection, fortification, and restorative sheltering of critical infrastructure facilities, which collectively formed the overall cost of their restoration and the maintenance of uninterrupted operation. It has been demonstrated that the consequences of such uncertainty included the undercapitalisation of expenditures, distortion of accounting information, weakening of financial control, and a reduction in the evidential suitability of data for international compensation mechanisms. Based on an analysis of national and international regulatory documents, as well as procurement practices within the Prozorro system, it has been established that the key criterion for the proper classification of expenditures was their economic substance and the outcome of the transaction. The classification also considered its impact on the asset, rather than the formal designation of the transaction or the procurement item. The application of a criteria-based identification approach will contribute to improving the reliability of accounting information, strengthening financial control, reducing the risk of undercapitalisation, and forming an appropriate evidence base for subsequent compensation of losses

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