QUARTERLY REPORT for the Implementation of the PULSE Project

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QUARTERLY REPORT for the implementation of the PULSE Project

APRIL – JUNE, 2020 (²I² QUARTER OF US FISCAL YEAR 2020)

EIGHTEENTH QUARTER OF THE PROJECT IMPLEMENTATION QUARTERLY REPORT for the implementation of the PULSE Project

TABLE OF CONTENTS

List of abbreviations 4

Resume 5

Chapter 1. KEY ACHIEVEMENTS IN THE REPORTING QUARTER 5

Chapter 2. PROJECT IMPLEMENTATION 7

Expected Result 1: Decentralisation enabling legislation reflects local government input 7

1.1. Local government officials participate in sectoral legislation drafting 8 grounded on the European sectoral legislative principles

1.1.1. Preparation and approval of strategies for sectoral reforms 8

1.1.2. Preparation of sectoral legislation 24

1.1.3. Legislation monitoring 33

1.1.4. Resolving local government problem issues and promotion of sectoral reforms 34

1.2. Local governments and all interested parties are actively engaged and use 40 participatory tool to work on legislation and advocating for its approval

1.2.1 Support for approval of drafted legislation in the parliament: 40 tools for interaction with the Verkhovna Rada of Ukraine

1.2.2 Support to approval of resolutions and directives of the Cabinet of Ministers: 43 tools for interaction with the Cabinet of Ministers of Ukraine

1.3. Local governments improved their practice and quality of services 57 because of the sound decentralised legislative basis for local governments

1.3.1. Legal and technical assistance 57

1.3.2. Web-tools to increase the efficiency of local government activities 57

1.3.3. Feedback: receiving and disseminating 61

Expected Result 2: Resources under local self-governance authority increased 62

2.1. Local self-governance resources are increased 63 ensuring local government financial autonomy

2.1.1. Tools to increase own resources of local governments 63

2.1.2. Dissemination of best practices and replication of experience 66

2.2. Tool for local government to access additional financial resources 66

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2.2.1. Capacity building for local government officials 66

2.2.2. Promotion of access to resources 66

Expected Result 3: Capacity of stakeholders increased 70

3.1. Local governments and stakeholders are informed and capable 71 of carrying out new roles and responsibilities flowing from decentralisation reform

3.1.1. Capacity building for local officials at the local level 71

3.1.2. Capacity building for local officials at the oblast and rayon level 76

3.1.3. Training of NGO representatives and librarians as communicators of reforms 76

3.2. Communication and outreach of decentralisation reform is enhanced 79

3.2.1. Creating communication channels for central authorities outreach and messaging 79 on decentralisation reform progress in various sectors

3.2.2. Strategic messaging through different media 80

3.3. Increased public awareness of reform successes 89 and trust in local governments

3.3.1. Supporting Offices for Reform Implementation Support 89

3.3.2. Spotting and Dissemination of Reform Successes 91

3.3.3. Promotion of reform successes 91

3.3.4. Attracting Youth and Teenagers to Decentralisation 92

Chapter 3. IMPLEMENTATION PROBLEMS AND BARRIERS 94

Chapter 4. SUCCESS STORIES (all sectors of activities of the PULSE Project and communities including activities to counter COVID-19) 96

Chapter 5. COOPERATION WITH OTHER PROJECTS 109

Chapter 6. ESTIMATED SCHEDULE FOR THE NEXT QUARTER 113

ANNEXES 114 Annex А. Calendar of activities PULSE Project conducted in April – June, 2020 Annex В. List of sub-agreements concluded by AUC and PULSE Project sub-partners

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LIST OF ABBREVIATIONS

AUC – Association of Ukrainian Cities AUC RO – Regional Office of the Association of Ukrainian Cities CMU – Cabinet of Ministers of Ukraine CONPC – communally-owned no-profit companies Decentralisation Reform – Local government reform and reform of territorial arrangement of government institutions in Ukraine whose Concept was endorsed by the Cabinet of Ministers of Ukraine on April 01, 2014 CSEA – central state executive authorities CTC – consolidated territorial community HCE – health care establishments HU – housing and municipal utilities KCSA – Kyiv City State Administration LGs – local governments LSG – Local self-governance MCIPU – Ministry of Culture and Information Policy of Ukraine MDTU – Ministry of Digital Transformation of Ukraine MEDTAU – Ministry of Economic Development, Trade and Agriculture of Ukraine MESU – Ministry of Education and Science of Ukraine MHCU – Ministry of Health Care of Ukraine MIAU – Ministry of Internal Affairs of Ukraine MIU – Ministry of Infrastructure of Ukraine MRD – Ministry of Community and Territorial Development of Ukraine (Minregion) MYSU – Ministry of Youth and Sport of Ukraine NRDF – National Regional Development Fund MSP – Ministry of Social Policy of Ukraine NEURC – National Energy and Utilities Regulatory Commission of Ukraine NGO – non-governmental organisation NHSU – National Health Service of Ukraine NSS – National Social Standards NSSR – National Social Standards and Requirements NSUGCC - National Service of Ukraine for Geodesy, Cartography and Land Cadastre RLD – regulatory and legal document TCU – Tax Code of Ukraine UWLGA – Ukraine-wide local government associations VRU – Verkhovna Rada of Ukraine

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RESUME PULSE Project is working to develop a proper legal framework for decentralisation reform in Ukraine, ensuring that local government bodies contribute to decentralisation policy development and implementation, increase resources under local government authority and improve local government capacity to effectively use them enhancing the capacity and raising the professional level of key reform stakeholders involved. This report provides the information about the activities of the project during April – June, 2020. The main achievements for this period are presented in Section 1. The list (calendar) of the activities is provided in Annex A. The list of sub-agreements concluded by the AUC with project sub-partners is provided in Annex B.

Chapter 1. KEY ACHIEVEMENTS IN THE REPORTING QUARTER AND CALENDAR OF EVENTS

During calendar Quarter III, 2020 (April - June):

x PULSE Project participated in the preparation of 81 draft regulatory and legal documents; x The Verkhovna Rada of Ukraine and the Cabinet of Ministers endorsed and approved 17 regulatory and legal documents of importance for local self-governance, which were prepared with the participation of PULSE Project experts; x PULSE Project experts prepared 105 expert opinions to draft regulatory and legal documents the AUC received for concurrence from central state executive authorities; x PULSE Project experts prepared 90 expert opinions on draft regulatory and legal documents, which are being considered by committees of the Verkhovna Rada of Ukraine; x PULSE Project experts participated in 13 meetings of 3 parliamentary committees; x PULSE Project experts participated in 13 meetings of the Cabinet of Ministers of Ukraine; x in the course of the discussion of draft agendas of the Cabinet of Ministers and its committees PULSE Project experts and analysts monitored 482 draft regulatory and legal documents in particular: 59 draft legislation, 16 decrees and directives of the President, 397 resolutions and directives of the Cabinet of Ministers, 10 expert opinions on draft legislation, legislation implementation plans, etc. The draft regulatory and legal documents PULSE Project experts and analysts worked with included 131 (or 27%) documents dealing with local government issues; x PULSE Project organised and conducted 1 working sessions of AUC Professional Group in the format of a video conference (30 participants); x PULSE Project organised and conducted 3 video conferences with representatives of the MHC, NHSU, and the "ProZorro.Sales" State Enterprise (more than 22 thousand views); x PULSE Project continued the implementation of five distance learning courses on the Prometheus on-line platform (www.prometheus.org.ua). Also, two new training courses were introduced in cooperation with IREX and the Ostroh Academy. During the reporting quarter, the total number of students increased from 24,108 to 25,830 persons. The number of certificates increased from 10,056 to 11,088. x PULSE Project, together with the Congress of Local and Regional Authorities of the Council of Europe and the regional offices of the AUC, conducted a survey of representatives of local government bodies of AUC members on gender policy. This information will become the foundation for comparing the situation in communities before and after the local elections using the example of communities that are members of the Association of Ukrainian Cities. x PULSE Project continued its cooperation with partner projects and organisations and participated in activities of partner projects, as well as and invited their project representatives to PULSE Project events; x the PULSE Project participated in the implementation of the Memorandum between the AUC, several ministries, organisations, and the UNICEF Children and Youth Friendly Community Fund; x the PULSE Project carried out a number of joint activities on gender equality; x IREX, PULSE Project sub-partner, conducted 6 webinars for participants of Reform Support Groups (RSGs) in communities; x PULSE Project regional consultants provided 2,482 consultations on legal and financial issues, local economic development, which promoted the process of consolidation of territorial communities;

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x PULSE Project conducted 32 on-line training events (including 16 on-line regional legislation application laboratories, with the number of participants being: 440 on-line and approximately 10,000 video views), which were viewed by a total of 66,000 network users, the audience reached constituted 93,000 users and the number of cases of posts with webinars forwarded constituted 750; x with the participation of PULSE Project regional consultants, local TV stations aired 345 programs and local media published 1,990 articles; x the AUC web site has launched a platform for communities to exchange experience of communities in countering the spread of coronavirus: the PULSE Project published more than 700 success stories; x The "PULSE: Decentralisation Marathon" web page offers 1,885 publications.

The calendar of PULSE Project activities conducted in April – June, 2020 is presented in Annex A.

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Chapter 2. PROJECT IMPLEMENTATION

Expected Result 1: Decentralisation enabling legislation reflects local government input

Overview of the overall context of implementation of the local government reform and reform of the territorial arrangement of government institutions On April 16, 2020, the Verkhovna Rada of Ukraine approved the Law of Ukraine # 562-IX, which vested the Cabinet of Ministers of Ukraine with the powers to determine territories of territorial communities and designate their administrative centers. These territories will serve as the basis for the formation of local self- government bodies of the basic [community] level, specifically: village, town, and city councils and the corresponding village, town, and city mayors. In the course of the approval of these amendments, the parliament did not take into account the proposals of the AUC/PULSE to empower territorial communities to independently determine their administrative centers and to limit in time such powers of the Cabinet of Ministers until the local elections on October 25, 2020. Note: Ukraine does not have a law that would outline the procedures for changing, forming, and liquidating administrative and territorial units. The legal relationships in this sector are governed accordance with the resolution of 1982 approved in the Soviet times. However, in general, AUC/PULSE supported the approval of this law as one that would accelerate the formation of the administrative and territorial arrangement at the basic [community] level before the upcoming local elections on October 25, 2020.

During the reporting period, the Cabinet of Ministers also prepared a draft administrative and territorial arrangement of the sub-regional (rayon) level. And already on June 15, 2020, this draft document was submitted for consideration to the Verkhovna Rada. According to the Cabinet of Ministers of Ukraine, the number of new rayons was 129, which territorially included 490 "former" rayons and 187 cities of oblast significance. The decision to establish the new rayons also covers the occupied territories of the ARC and the Donetsk and Luhansk oblasts. The draft document of the Cabinet of Ministers takes into account PULSE Project proposals for the formation of new rayons, in particular in the Kyiv oblast.

The action plan for the implementation of the reform endorsed by the Cabinet of Ministers on January 23, 2019 under Registration # 77-р provides for the preparation by the Ministry of Community and Territorial Development by June 30, 2020 of a number of draft laws that will assign powers and resources to local government bodies of the basic [community] (village, town and city councils) and sub-regional levels (rayon councils) and delineate the powers between local government bodies and local state administrations (including introducing amendments to the Budget Code of Ukraine, Tax Code of Ukraine, Law "On Local Self-Governance in Ukraine", and Law "On Local State Administrations"). During the reporting period, PULSE Project actively participated in the preparation of these draft laws together with the Ministry of Community and Territorial Development in the format of video conferences.

On May 18, the Verkhovna Rada of Ukraine registered the Draft Law “On Introducing Amendments to Certain Laws of Ukraine on Improving Electoral Legislation (Registration # 3485). The draft law provided for numerical amendments to both the Election Code of Ukraine and other laws. The main threats to local self-government included: introduction of the proportional system of elections in communities with more than 15,000 voters; introduction of the imperative mandate; and, a considerable increase in expenditures from local budgets for the organisation and conducting of the local elections. The draft law received a lot of criticism from local government officials.

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Following the approval of Draft Law # 3485 in the first reading, PULSE Project prepared more than 200 amendments for the second reading, which were registered by National Deputies of Ukraine. These amendments offered the following suggestions: to retain the proportional system of elections at the level of communities with more than 90 thousand voters; to ensure 100% financing of the organisation and conducting of the local elections at the expense of the National Budget; to remove the term "consolidated communities" from the text of the Code; and to make other technical changes with regard to the election process.

After the President withdrew the Draft Law "On Introducing Amendments to the Constitution of Ukraine (with regard to decentralisation)" (Registration # 2598 of December 13, 2019), the Office of the President and the parliamentary faction of the "Servant of the People" party continued to discuss conceptual issues local government, scientists, and experts in the reporting quarter.

On April 01, 2020, the National Program for Health Care Guarantees for secondary, tertiary, emergency, palliative care and medical rehabilitation, etc. started. The provision of these types of health care services envisions funding to be provided for a service in the clinic and for the treated case in the hospital. However, the situation in the country with the spread of the COVID-19 coronavirus forced the Cabinet of Ministers to revisit the system of management and financing of health care establishments.

Activity 1.1. Local government officials participate in sectoral legislation drafting grounded on the European sectoral legislative principles

1.1.1. Preparation and approval of strategies for sectoral reforms

Each sector has a responsible Project expert to follow up on the sectoral profile: Each sectoral profile includes: - a list of regulatory and legal documents regulating the sector, - a long-term sector development strategy (for the next 7 - 10 years) and legislative map of its implementation, - a list of problem issues of sector which is regularly updated, and, - a list of ways to solve certain problems, which is also updated on a regular basis. The sectoral profile will serve as the basis for the preparation the relevant legislation both for the implementation of the sectoral development strategy and for resolving specific problem issues.

Progress in sectoral strategy implementation During the reporting quarter, the Project managed to succeed in the following operational goals: Regarding the Local Finance Strategy With regard to the achievement of Operational Goal 1.1 "Preservation and expansion of the resource base": - in the process of drafting and finalising the Draft Law “On Introducing Amendments to the Law of Ukraine “On the National Budget of Ukraine for 2020”, AUC/PULSE experts insisted on the necessity of preserving financial resources that are extremely important for local governments. As a result, UAH 51.03 billion was retained in local budgets; - in the course of the consideration of draft amendments to the National Budget for 2020, the Cabinet of Ministers, pursuant to the special request from the parliamentary Budget Committee, made a promise to earmark UAH 1.5 billion to support the development of CTCs; - The Verkhovna Rada withdrew Draft Laws # 3329, # 3329-1, # 3329-2, because the implementation of the proposed amendments to the draft laws would have reduced the revenues of National Budget and local budgets down to UAH 1 billion per month, in particular, of the budgets of territorial communities of villages, their unions, towns, cities (including city rayons), and budgets of consolidated territorial communities - UAH 0.6 billion per month; - On May 13, the Verkhovna Rada approved Law of Ukraine “On Introducing Amendments to the Tax Code of Ukraine and Other Laws of Ukraine with Regard to the Additional Support for Tax Payers for the Period of Activities Aimed at Preventing the Outbreak and Spared of the Coronavirus Disease (COVID- 19)”, # 591-IX of May 13, 2020. The approval of these amendments provides for the introduction of additional steps to support taxpayers for the period of restrictions aimed at preventing the outbreak and spread of the

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coronavirus disease, as well as the continuation of certain tax privileges and simplifications of administrative procedures for this period. In particular, the government introduced a mechanism to support certain categories of health care workers by providing them with monetary compensation, withheld personal income tax from the amounts of salary supplements accrued for the period May - June;

With regard to the achievement of Operational Goal 1.2 "Replacement of tax privileges by the mechanism of targeted support. Reducing the number of privileges": - The President of Ukraine signed the Law of Ukraine "On Introducing Amendments to the Tax Code of Ukraine with Regard to Improving the Administration of Taxes and Elimination of Technical and Logical Inconsistencies in the Tax Legislation" # 466-IX (approved by the Verkhovna Rada of Ukraine on January 16, 2020) , which: 1) has retained the financial resources of local budgets in the amount of 4.2 billion UAH thanks to the prevention of the introduction of 100% discount on land fees for lands owned by railway companies; 2) has resumed taxation with the tax on immovable property other than the land plot and payment for land of taxable objects located on the military conflict line; and, 3) has ensured crediting to local budgets of the tax for using land plots, which are permanently used or are part of property of business entities, which are flat tax payers.

With regard to the achievement of Operational Goal 1.3 "Improving the efficiency of local taxes and fees": - aiming at preventing the decrease in business and economic activities, the Verkhovna Rada of Ukraine approved the Law of Ukraine «On Introducing Amendments to Certain Legislative Acts of Ukraine Aimed at Ensuring Additional Social and Economic Guarantees in the Context of the Spread of the Coronavirus Disease (COVID-19)» of 03.03.2020 (Registration # 540-19) (entered into force on April 02, 2020). Law # 540 vests local government bodies with the right to make decisions with regard to introducing amendments to the previous decisions on establishing local taxes and/or fees for 2020 to reduce flat tax rates; - the VRU approved the Law of Ukraine «On Introducing Amendments to the Tax Code of Ukraine and Other Laws of Ukraine with Regard to the Support for Tax Payers for the Period of Activities Aimed at Preventing the Outbreak and Spared of the Coronavirus Disease (COVID-19)» of March 17, 2020 # 533-IX, which increased the maximum amount of income that triggers the payment of the flat tax: Group I - from 300 thousand UAH to 1 million UAH; Group II - from UAH 1.5 million to UAH 5 million; and, Group III - from UAH 5 million to UAH 7 million; - on April 29, 2020, the Cabinet of Ministers of Ukraine endorsed the Procedure for functioning of a single account for the payment of taxes and fees, a single contribution for the mandatory state social insurance, and for compliance with Paragraphs 35-1.10 of Article 35-1 of the Tax Code of Ukraine by central state executive authorities.

With regard to the achievement of Operational Goal 2.3 "Expanding the rights of local government bodies to administer and control the payment of local taxes and fees": - aiming at preventing the decrease of business and economic activities, the Verkhovna Rada of Ukraine approved the Law of Ukraine «On Introducing Amendments to Certain Legislative Acts of Ukraine Aimed at Ensuring Additional Social and Economic Guarantees in the Context of the Spread of the Coronavirus Disease (COVID-19)» of March 03, 2020 (Registration # 540-19) (entered into force on April 02, 2020). Law of Ukraine # 540 vests local governments with the right to make decisions with regard to introducing amendments to the previous decisions on establishing local taxes and/or fees for 2020 to reduce flat tax rates; - on May 21, 2020, the Law of Ukraine “On Introducing Amendments to the Tax Code of Ukraine with Regard to Improving the Administration of Taxes and Elimination of Technical and Logical Inconsistencies in the Tax Legislation” (Registration # 466-IX) (approved by the Verkhovna Rada of Ukraine on January 16, 2020) entered into force, The Law has changed the closing dates for local government bodies to make and publish their decisions on the establishment of taxes and/or fees. Also, the law stipulates that local government bodies in the current 2020 do not have to make decisions on introducing local taxes and fees. In addition to this, this law has improved the procedure for State Tax Service entities to submit tax reporting on tax payers, which are legal entities to local government bodies.

Regarding the Social Protection Strategy With regard to the achievement of Operational Goal 3.1. "Develop a system for early detection of diseases, disabilities and difficult life circumstances", the Cabinet of Ministers of Ukraine endorsed the Resolution of June 01, 2020 (Registration # 587), which has outlined the mechanism for identifying persons/families in difficult life circumstances.

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With regard to the achievement of Operational Goal 4.3. “Put together a list of services, the organisation of which can be provided by the community; to develop the constituent documents for a utility company with a clear list of services according to the identified needs», the Cabinet of Ministers of Ukraine endorsed the Resolution of June 01, 2020 # 479, which has introduced the standard regulations on the utility company that can unite all other institutions providing social services in one organisational entity.

With regard to the achievement of Operational Goal 5.2. "Introduce an effective institution of controlling bodies in the sector of social protection", the Cabinet of Ministers of Ukraine endorsed the Resolution of June 01, 2020 (Registration # 427), which has outlined the procedure for monitoring compliance with the Law of Ukraine "On Social Services".

With regard to the achievement of Operational Goal 5.4. "Involve the public to control and provision of social services (social order) and promote the volunteer movement", the Cabinet of Ministers of Ukraine endorsed the Resolution of June 01.06.2020 (Registration # 450), which has outlined the Procedure for providing social services through the social order.

Regarding the Education Strategy: With regard to the achievement of Operational Goal 1.1. "Enshrine in the legislation the new requirements and rules for the functioning of the sector of education" and 2.1. "Make a clear delineation of the powers of the state and municipalities in sphere of management of educational establishments", the Cabinet of Ministers endorsed the Directive of April 29.04.2020 (Registration # 508-р) "On Approving the Plan of Activities for 2020 - 2027 for the Implementation of the Concept for the Implementation of the National Policy in the Sector of Vocational (professional and technical) Education «Modern Vocational (professional and technical) Education» for the Period till 2027». The act has endorsed an action plan for 2020 - 2027 to implement the Concept of implementation of national policy in the sector of vocational (professional and technical) education called: "Modern Vocational (professional and technical) Education" for the Period till 2027. In particular, the document provides for the implementation in 2020 and completion in 2021 of the pilot project to transfer funding for vocational (professional and technical) educational establishments located in oblast center cities from oblast budgets, which corresponds to the position of the AUC. Also, the draft document offers a suggestion to develop and submit to the Cabinet of Ministers the Draft Law of Ukraine "On Vocational (professional and technical) Education" in 2020 and to revise the list of professions of national importance, as well as to take other steps to continue the reform of vocational (professional and technical) education.

With regard to the achievement of Operational Goal 1.5. "Upgrade the pedagogical staff", in pursuance of the Law of Ukraine "On Completed Comprehensive Secondary Education" and in order to conduct high- quality competitions for the positions of heads of educational institutions, the Ministry, in cooperation with a PULSE Project expert, prepared the Directive of the Ministry of Education and Science of Ukraine of May 19, 2020 «On the Model List of Questions» (Registration # 654). The document has endorsed an indicative list of questions to test the knowledge of legislation in the sector of comprehensive secondary education. The Cabinet of Ministers is continuing monitoring the payment of salaries to teacher. For example, the Directive of the Cabinet of Ministers of Ukraine "On the Redistribution of the Amount of the Education Subvention from the National Budget to Local Budgets in 2020" of May 06, 2020 (Registration # 506-р) has redistributed the amount of the education subvention in order to prevent salary arrears to employees of comprehensive secondary educational establishments financed from certain local budgets of Ivano- Frankivsk, Poltava, Khmelnytskyi, and Chernihiv oblasts. The reason for the debt was the inaccuracies in the statistics, which were made by the founders of comprehensive secondary educational establishments and has affected the formula for the calculation of the amount of the education subvention. The Cabinet of Ministers directive has increased by 42 million hryvnyas the oblast budgets of the Poltava and Khmelnytskyi oblasts, as well as the budgets of three CTCs. For example, in particular, the budgets of CTCs will receive additional UAH 16.8 million. The source of funding for these expenditures will be the reserve funds of the education subvention in the amount of UAH 26.8 million and the reduction of the amount of the subvention for three rayon budgets by UAH 15.2 million.

With regard to the achievement of Operational Goal 2.2. "Ensure physical accessibility to high quality educational services" in pursuance of the resolution of the Cabinet of Ministers of Ukraine of 11.03.2020 (Registration # 211) "On Preventing the Spread of the COVID-19 Coronavirus on the Territory of Ukraine", during the reporting period the MESU prepared the explanation to managers of pre-school, comprehensive

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secondary and vocational (professional ad technical) educational establishments on how to ensure to provide distance learning for students and pupils, as well as how to prevent the spread of the pandemic in the educational environment.

With regard to the achievement of Operational Goal 2.3. "Promote convenient conditions for the provision of quality educational services", the President of Ukraine published the Decree of May 25, 2020 "On the National Strategy for the Promotion of the Safe and Healthy Educational Environment in the New Ukrainian School" (Registration # 195/2020). The document provides for promotion of a safe and healthy educational environment in the new Ukrainian school to ensure the rights of children to education, health care and proper conditions for providing students with high quality educational and health care services.

With regard to the achievement of Operational Goal 2.4. "Upgrade the material, technical and educational base of educational establishments", the situation with the COVID-19 pandemic has had a significant impact on the distribution of public funds. For example, some budget programs were closed, while with regard to others, the Law of Ukraine «On Introducing Amendments to the Law of Ukraine «On the National Budget of Ukraine for 2020»» of April 13, 2020 (Registration # 553-IX) has significantly reduced their funding. Nevertheless, the Ministry of Education and Science managed to retain certain types of transfers from the National Budget to local budgets for the development of the sector of education. In particular, the Resolution of the Cabinet of Ministers of Ukraine of April 29, 2020 "On Introducing Amendments to Resolutions of the Cabinet of Ministers of Ukraine # 237 of April 04, 2018 and # 105 of February 12, 2020" (Registration # 325) has changed the distribution of the subvention from the National Budget local budgets to provide high quality, modern and accessible comprehensive secondary education "New Ukrainian School" in 2020. The changes have been driven by the reduction as of April 13, 2020 of the amount of the subvention in the National Budget of Ukraine by UAH 361 million down to UAH 1.06 billion. The document also amends the Resolution of the Cabinet of Ministers of Ukraine of April 04, 2018 (Registration # 237), which, in particular, provides for the monthly (instead of quarterly) submission of information to the Ministry of Education and Science about the spending of the subventions and local budget funds as co-financing by oblast state administrations and Kyiv City State Administration. Taking into consideration the fact that the amount of the subvention was reduced, the draft resolution suspended, until January 01, 2021, Subparagraphs 2 - 4 of Paragraph 4 of the Procedure and Conditions for Providing the Subvention from the National Budget to local Budgets to Provide High Quality, Modern and Accessible Comprehensive Secondary Education "New Ukrainian School", the document, which deals with the competence development of teachers and conducting supervision at the expense of the subvention funds. Also, the document suspended the legal force of Clauses 6 - 11, and Paragraphs 7-12 of Clause 15 of the Procedure and Conditions for Providing the Subvention for the Payment of Services to Perform the Supervision and the disbursement of the relevant funds of the subvention.

Changes in the National Budget of Ukraine also had an affect on the funding of the budget program under the title: “Capable School for Better Results” in 2020, because the amount of the subvention was reduced by UAH 1 billion down to UAH 2.5 billion. The Resolution of the Cabinet of Ministers of Ukraine of April 29, 2020 "On Introducing Amendments to the Resolution of the Cabinet of Ministers of Ukraine # 100 of February 12, 2020" (Registration # 324) has amended Paragraph 7 of the Procedure and Conditions for Providing the Subvention for the Implementation of the Program called: "Capable School for Better Results”. The document deals about supplementing the list of representatives of the commission of the Ministry of Education and Science on checking the documents submitted by regional, Kiev city state administrations with members of VRU Budget Committee. Also, the Resolution of the Cabinet of Ministers of Ukraine introduced changes in the distribution of the subvention from the National Budget to local budgets for the implementation.

With regard to the achievement of Operational Goal 3.1. "Promote a lasting interest of children to learning according to the principles of "learning through playing and the connection of learning with life", the Resolution of the Cabinet of Ministers of Ukraine of May 13, 2020 (Registration # 367) introduced amendments to the Resolution of the Cabinet of Ministers of Ukraine of 17 October 2018 (Registration # 845). The amendments provide for updating the wording of the Directive on the Sokil [falcon] All-Ukrainian Children and Youth Military and Patriotic Dzhura Game. In particular, the authors of the regulatory document expand the categories of eligible participants. From now on, students of vocational (professional and technical) and pre-higher educational establishments will also be able to participate in the game. Also, the Directive has been supplemented with the provision that provides for the possibility for the Ministry of

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Education and Science to make a decision, in case of the quarantine restrictions, with regard to the expediency of conducting the game and postponement of its timeframe.

Regarding the Health Care Strategy Operational Goal 1.1. "Develop and approve a methodology for the calculation of the cost of medical and social services, in particular primary health care, palliative care, dental care, counselling and diagnostic services, day and inpatient care and supported living services" provides for the introduction of common approaches for all state-owned and communally-owned health care establishments to calculate the cost of health care and social services.

The Resolution of the Cabinet of Ministers of Ukraine of June 19, 2020 (Registration # 513) introduced the decision on the interim funding for the comprehensive provision of health care services by health care institutions that have concluded an agreement with the National Health Service of Ukraine for the provision of secondary (specialised), tertiary (highly specialised), palliative care, medical rehabilitation, medical care for children under 16, and pregnancy and childbirth care starting from April, 2020 at a global rate of 100% until October and 90% by the end of the year.

The government made separate calculations for the Program of Health Care Guarantees and supplemented it with the package called: “In-patient care for patients with the acute COVID-19 respiratory disease caused by the SARS-CoV-2 coronavirus” with the appropriate formulas for the calculation.

The government also calculated the tariff for health care services, which are provided by mobile medical teams formed up to respond to the acute COVID-19 respiratory disease caused by the SARS-CoV-2 coronavirus. This tariff will be defined as the global monthly rate, which is calculated on the basis of the rate for medical services and constitutes 50,942.05 hryvnyas.

Operational Goal 1.2. "Finance the sector based on the actual health care services provided and on a contractual basis" implies the departure from financing health care establishments on the basis of itemised budget (maintenance of infrastructure) and the transition to funding per capita care, and specialised care per the treated case using diagnostic-related groups.

Starting from April 01, 2020, the State Health Care Guarantee Program provides for funding for emergency, secondary (specialised), tertiary (highly specialised), palliative care, medical rehabilitation, medical care for children under 16, medical care in connection with pregnancy and childbirth; and for the reimbursement of medicines for the out-patient treatment of cardiovascular disease, bronchial asthma and Type II diabetes mellitus (except for insulin). The Resolution of the Cabinet of Ministers of Ukraine of February 05, 2020 "Certain Issues of the Implementation of the Program of State Guarantees of Health Care Services for the Population in 2020" (Registration # 65) stipulates that public health care establishments shall enter into agreements with the National Health Service of Ukraine for the provision of health care services according to the program of health care guarantees for the provision of all types of medical care.

The Resolution of the Cabinet of Ministers of April 24, 2020 (Registration # 331) introduced amendments to the Resolution of the Cabinet of Ministers of February 05, 2020 (Registration # 65) in terms of supplementing with separate packages, in particular "In-patient Care for Patients with the Acute COVID-19 Respiratory Disease Caused by the SARS-CoV-2 Coronavirus Provided by Selected Health Care Establishments».

Also, the Resolution of the Cabinet of Ministers of June 19, 2020 (Registration # 513) offered a decision to provide the interim financial support of comprehensive medical services provided by health care establishments that have concluded an agreement with the National Health Service of Ukraine with regard to the provision of secondary (specialised), tertiary (highly specialised), palliative care, medical rehabilitation, medical assistance to children under 16, medical care in connection with pregnancy and childbirth from April, 2020 at a global rate of 100% until October and 90% by the end of the year.

As of June 30, 2020, 1,610 (in the first quarter of 2020 - 1,539) health care establishments providing primary health care are already working with the National Health Service of Ukraine including 194 (in the first quarter - 179) private clinics, 335 (in the first quarter - 290) – private entrepreneurs providing services to 30.04 million patients by 23,014 family doctors, paediatricians and therapists. Of the 3,029 (in Quarter 1 -

12 April – June, 2019

1,543) health care establishments that provide specialised medical care, 544 (in Quarter 1 - 57) are privately owned entities and individual entrepreneurs who have signed agreements with the National Health Service of Ukraine. 247 health care establishments have been identified to provide medical care to patients with the acute COVID-19 respiratory disease (NSHU dashboard data).

Operational Goal 1.3. "Introduce a mechanism for reimbursement of medicines at the national, regional and local levels" envisions the introduction of targeted assistance for medicines, National List of Essential Medicines and categories of the population suffering from a certain list of diseases. The Resolution of the Cabinet of Ministers of April 15, 2020 (Registration # 286) "Certain Issues of Ensuring the Availability of Drugs for the Treatment of Rheumatic Diseases" was supplemented with the drugs under the international non-proprietary names: "Chloroquine" and "Hydroxychloroquine" for the out- patient treatment of rheumatic diseases and for dispensing these drugs by drug stores.

Operational Goal 2.2 "Implement social standards and requirements in the narrative and value versions, in particular the standard of primary care, palliative care, day care and inpatient care” envisions the preparation of social standards and requirements in the sector in narrative and cost formats for the purposes of providing funding to the sector. The Resolution of the Cabinet of Ministers of June 19, 2020 (Registration # 513) introduced amendments to the Resolution of the Cabinet of Ministers of February 05, 2020 "Certain Issues of the Implementation of the Program of State Guarantees of Health Care Services for the Population in 2020" (Registration # 65), which increased the following tariffs: - for health care services related to the provision of medical care for acute myocardial infarction in an in-patient setting from 16,001.43 hryvnyas to 30,108 hryvnyas. - for health care services related to the provision of medical care for acute stroke in an in-patient setting from 19,332.31 hryvnyas to 26,947 hryvnyas.

The Resolution of the Cabinet of Ministers of April 24, 2020 (Registration # 331) supplemented the national program of health care guarantees with separate packages, in particular "In-Patient are for Patients with the Acute COVID-19 Respiratory Disease Caused by the SARS-CoV-2 Coronavirus Provided by Selected Health Care Establishments".

The planned cost of in-patient care for the acute respiratory COVID-19 disease caused by the SARS-CoV-2 coronavirus is set as a global rate per month and constitutes UAH 498,325.65, and the rates for the health care service for the preparedness to provide health care services to patients with the acute respiratory COVID-19 disease caused by the SARS-CoV-2 coronavirus in intensive care facilities, which constitutes 171,167.83 hryvnyas. The tariff for health care services provided by mobile medical teams formed up to respond to the acute COVID-19 respiratory disease caused by the SARS-CoV-2 coronavirus has bee calculated, which is defined as the global rate per month calculated on the basis of the rate for a health care service and constitutes 50,942.05 hryvnyas.

The Resolution of the Cabinet of Ministers of 15.04.2020 (Registration # 286) "Certain Issues of Ensuring the Availability of Drugs for the Treatment of Rheumatic Diseases" was supplemented with medicines under the international non-proprietary names of "Chloroquine" and "Hydroxychloroquine" for out-patient treatment of rheumatic diseases and for dispensing these drugs by drug stores.

Operational objective 2.3 "Implement the scope of the state-guaranteed free health care assistance" envisions the introduction of a state-guaranteed package of health care services and the list of such services, which should be available to all citizens of the country (including primary care, emergency medical care, basic types of specialised outpatient services upon referral of primary care physicians and the main types of planned inpatient care upon referral). The Resolution of the Cabinet of Ministers of Ukraine of February 05, 2020 (Registration # 65) "Certain Issues of the Implementation of the Program of State Guarantees of Health Care Services for the Population in 2020" stipulates that communally-owned health care establishments are to conclude contracts for health care services for the population according to the program of health care guarantees for the provision of primary health care; for emergency, secondary (specialised), tertiary (highly specialised), palliative care, medical rehabilitation, medical care for children under 16, medical care in connection with pregnancy and childbirth; and, for the reimbursement of drugs for out-patient treatment of the cardiovascular disease, bronchial asthma and Type II diabetes mellitus (except for insulins).

13 QUARTERLY REPORT for the implementation of the PULSE Project

The Resolution of the Cabinet of Ministers of June 19, 2020 (Registration # 513) endorsed a decision on the interim financial support for the provision of complex medical services by health care establishments that have concluded a contract with the National Health Service of Ukraine for the provision of secondary (specialised), tertiary (highly specialised), palliative care, medical rehabilitation, medical care children under 16, pregnancy and childbirth care from April, 2020 at a global rate of 100% until October and 90% by the end of the year.

The Resolution of the Cabinet of Ministers of April 24, 2020 (Registration # 331) supplemented the program of health care guarantees by a separate package called: "In-Patient Care for Patients with the Acute COVID-19 Respiratory Disease Caused by the SARS-CoV-2 Coronavirus Provided by Selected Health Care Establishments".

The Resolution of the Cabinet of Ministers of June 19, 2020 (Registration # 513) supplemented the program of health care guarantees by a separate package called: "Medical care provided by mobile medical teams formed to respond to the acute COVID-19 respiratory disease caused by the SARS-CoV-2 coronavirus". The tariff for health care services provided by the mobile medical teams formed to respond to the acute COVID- 19 respiratory disease caused by the SARS-CoV-2 coronavirus, which is defined as the global rate per month calculated on the basis of the rate for health care services and constitutes 50,942.05 hryvnyas.

Operational objective 2.4 "Optimise the network of health care establishments" envisions the formation of a network of health care establishments that would be in a position to provide affordable, high-quality primary, secondary (specialised) and tertiary (highly specialised) medical care to the population. In particular, the government should designate the hospitals that have the potential to serve as the base for the establishment of the hospital district hospital to ensure the provision of secondary (specialised) and emergency medical care. Other hospitals need to be re-oriented according to the needs of a particular community.

The Resolution of the Cabinet of Ministers of May 27, 2020 (Registration # 456) endorsed the List of health care facilities that provide medical services to patients with the acute COVID-19 respiratory disease caused by the SARS-CoV-2 coronavirus. 247 medical institutions have been identified that provide medical care to patients with the acute COVID-19 respiratory disease (NHSU dashboard data).

Operational Goal 3.2. "Development of a modern system of medical information management within a unified national medical space" envisions the introduction of electronic tools for exchanging medical, financial and statistical data. This is necessary to ensure the functioning of a unified national medical space (electronic registers, data exchange protocols, coding systems for diagnoses and procedures, etc.). The Resolution of the Cabinet of Ministers of April 15, 2020 (Registration # 348) introduced amendments to some resolutions of the Cabinet of Ministers of Ukraine on the issues of the electronic health care system. The registers have been supplemented with the item called: “Electronic register of certificate of work incapacity” and changes were introduced to the Procedure for keeping the Electronic Register of certificates of work incapacity and providing information excerpts from it, etc.

The Directive of the Ministry of Health Care of Ukraine of April 27, 2020 (Registration # 963) "On Endorsing Amendments to the Instruction for the Regulations for Issuing the Documents Certifying Temporary Incapacity for Work of Citizens" in the part dealing with supplementing the provisions on issuing certificates of work incapacity to persons who have had contacts with patients who were sick with the acute COVID-19 respiratory disease and stay on self-isolation and observation.

Operational Goal 3.5. "Switch over to paying workers in the sector based on the workload, work intensity and results and introduce a system of incentives" provides for the introduction of a system of incentives and motivations to improve performance, in particular, to establish the linkage of salaries with the workload, work intensity and results, ensure resolution of housing issues to attract highly professional specialists to work. At its extraordinary session on May 07, the Parliament approved the Law of Ukraine "On Introducing Amendments to Article 39 of the Law of Ukraine "On the Protection of the Population from Infectious Diseases" with Regard to the Additional Guarantees of the Rights of Health Care Workers Engaged in the Sector of Protecting the Population from Infectious Diseases and Members of Their Families " (Registration # 588). With the Resolution of the Cabinet of Ministers of April 24, 2020 (Registration # 331) «On Immediate Steps with Regard to Ensuring State Financial Guarantees for Health Care Services with the Acute COVID-19 Respiratory Disease Caused by the SARS-CoV-2 Coronavirus and the Adequate

14 April – June, 2019

Remuneration of Health Care Workers and Other Caregivers of Such Patients» provides for additional payments to medical staff and other workers of health care establishments in the amount of up to 300 percent of their salaries. The Directive of the MHC of April 02, 2020 (Registration # 768) endorsed the List of positions of health care workers and other staff who are directly involved in the elimination of the epidemic and implementation of activities aimed at preventing the spread of the acute COVID-19 respiratory disease caused by the SARS-CoV-2 coronavirus, which is used for the payment in the amount of three salaries (tariff rates). The Resolution of the Cabinet of Ministers of April 08, 2020 (Registration # 267) introduced amendments to the Resolution of the Cabinet of Ministers of February 08, 2020 (Registration # 65) regarding the preliminary payment for health care services under medical care packages for patients with the acute COVID-19 respiratory disease caused by the SARS-CoV-2 coronavirus, primarily for the remuneration of health care workers and other staff directly engaged in the elimination of the acute COVID-19 respiratory disease caused by the SARS-CoV-2 coronavirus, in particular with regard to additional payments envisioned by the legislation and salary raises.

Also, Resolution # 498 of June 17, 2020 regulates the provision of insurance benefits in the event of illness or death of health care workers in connection with infection with the acute COVID-19 respiratory disease caused by the SARS-CoV-2 coronavirus.

Regarding the E-Government and Public Services Strategy With regard to the achievement of Operational Goal 2.5 "Automation of public services", the Diya [action] portal started to work. It provides an opportunity to receive a significant number of services on-line. Diya is a unified portal where one can get all services on-line: it is fast, convenient and humane. All you need to do is to log in, confirm your data, select the required service and get the result. Driver's license and the vehicle technical passport are also available in electronic form in the Diya mobile application. The Ministry of Digitalisation has "launched" the experiment using electronic passports in the Diya application. From now on, a person can provide a passport on electronic media to receive administrative services. So far, the digital documents are valid only on the territory of Ukraine. In May, a comprehensive service for teenagers ID-14 was launched, which provides for the simultaneous issuance of the first passport and the taxpayer number. This is the second comprehensive service (after the e-Baby). Regarding Organisational Aspects of Local Government Activities and Professional Development Strategy With regard to the achievement of Operational Goal "Completion of the formation of capable territorial communities and the system of their local government bodies", on April 16, 2020 the Verkhovna Rada of Ukraine approved Law of Ukraine # 562-IX, which has vested the Cabinet of Ministers with the powers to determine the territories of territorial communities and designate their administrative centers. These territories will serve as the basis for the formation of local government bodies at the basic level, namely: village, town and city councils and the corresponding village, town and city mayors. While approving these changes, the parliament did not take into account the proposals form the AUC/PULSE to empower territorial communities with the right to independently determine their administrative centers and to limit in time the relevant powers of the Cabinet of Ministers by the timeframe only till the local elections on October 25, 2020. By the end of the reporting period, in exercising this right the Cabinet of Ministers of Ukraine established 1,470 territorial communities at the basic [community] level. The decision of the Cabinet of Ministers to outline the territories of territorial communities is an important step in the formation of capable communities that would cover the entire territory of the country. This event is especially important because it took place in the year of the upcoming local elections. The establishment of capable territorial communities throughout the country will also provide an opportunity to elect the new management teams of local government bodies through the elections on October 25.

The Project updated the Current Legislative Framework sections of the following sectoral profiles (see Table 1.1.): Table 1.1. Updates to the current legislative framework for sectoral profiles

Technical area Titles of regulatory and legal documents Titles of regulatory and legal documents added excluded

15 QUARTERLY REPORT for the implementation of the PULSE Project

Decrees of Decrees of instructions instructions the CMU CMU the CMU CMU Laws of Laws of President resolutions directives President resolutions directives ministries ministries of Ukraine of Ukraine Local finance 0 0 0 0 0 0 0 0 0 0 Public 1 1 3 2 6 0 0 0 0 0 education Social 0 0 6 0 0 0 0 5 0 1 protection Organisational 0 0 0 0 0 0 0 0 0 0 aspects and professional development Housing and 0 0 0 0 0 0 0 0 0 0 municipal utilities E-governance 0 0 2 0 0 0 0 0 0 0 and public services Land relations 0 0 0 0 0 0 0 0 0 0 and communally- owned property Health care 0 5 12 3 5 0 0 0 0 0 Sustainable 0 0 0 0 0 0 0 0 0 0 economic development TOTAL 1 6 23 5 11 0 0 5 0 1

Of the problem issues, which were resolved during the reporting period, one should mention the following:

In the sector of local finance: Partially resolved: x The problem with the inconsistency in submission of tax reports on taxpayers represented by legal entities submitted by State Tax Service entities to local government bodies through amendments to the Tax Code of Ukraine (Law # 466-IX). x The problem of local budgets funds under-collected for the use of land plots that are given to permanent use or owned by business entities, which pay the flat tax. The parliament introduced the relevant amendments to the Tax Code of Ukraine through Law # 466-IX about excluding land tax privileges for flat tax payers. x The problem of losses of local budget funds due to the failure to impose tax on immovable property other than the land plot impose land tax on tax payers located on the military conflict line. The amount of losses caused by the failure to introduce this tax on the military conflict line in 2017 amounted to approximately UAH 62.0 million, in 2018 - more than UAH 50 million (the reduction of losses took place due to the resumption of single tax), in 2019 - more than UAH 50 million), and according to forecast calculations for 2020 - losses in the amount of UAH 74.4 million were prevented. Law # 466-IX introduced amendments by the Tax Code of Ukraine by resuming the taxation with the tax on immovable property other than the land plot, imposing taxation on taxable entities objects located on the military conflict line. x The problem with unfair distribution of the additional subsidy to cover the expenditure categories transferred from the National Budget to local government budgets of the Chernihiv oblast for maintenance of educational and health care establishments. On June 25, 2020, the Cabinet of Ministers endorsed the relevant Resolution # 766-р. Thanks to the distribution of the unallocated balance to budgets of cities, town and villages, communities additionally received UAH 23 million

16 April – June, 2019

of the additional subsidy. In particular, UAH 3,506.0 thousand (+ 100%) was directed to the budget of the city of Chernihiv; to the budget of the Kiptivska Village CTC + 282.7 thousand UAH (+ 99%); to the budget of the Makiivska Village CTC + 276.8 thousand UAH (+ 132%); to the budget of the Koryukivska City CTC + 802.9 thousand UAH (+ 47%); to the budget of the Nosivska City CTC + 6 600 thousand UAH (+ 377%); to the budget of the Osterska City CTC + UAH 1,133.3 thousand (+ 83%); to the budget of Sosnivska City CTC +1 599,2 thousand UAH (+ 52%); to the budget of the Koropska Town CTC +1 024.2 thousand UAH (+ 95%); to the budget of the Menska City CTC + 635.7 thousand UAH (+ 25%); to the budget of the Kozeletska Village CTC + 536.9 thousand UAH (+ 36%); and, to the budget of Semenivska City CTC + 1 340.2 thousand UAH (+ 211%), etc. x The problem of writing off the debts of local budgets on medium-term loans to the National Budget, which has been registered in the State Treasury and arose due to improper planning by state bodies of expenditures on delegated powers at the expense of local budgets.

In the sector of education Partially resolved: x The problem with the shortage of the education subvention was partially solved by the endorsement of the Directive of the Cabinet of Ministers of Ukraine of May 06, 2020 (Registration # 506-р) "On the Redistribution of the Amount of the Education Subvention from the National Budget to Local Budgets in 2020". The redistribution of the amount of the education subvention was performed in order to prevent salary arrears to employees of comprehensive secondary educational establishments financed from separate local budgets of the Ivano-Frankivsk, Poltava, Khmelnytskyi and Chernihiv oblasts. The arrears are explained by inaccuracies in the statistics data, which were made by the founders of comprehensive secondary educational establishments and had an effect on the formula for calculation of the amount of the education subvention. The Directive increased the oblast budgets of the Poltava and Khmelnytskyi oblasts, as well as the budgets of three CTCs by 42 million hryvnyas. For example, in particular, the budgets of CTCs will receive additionally UAH 16.8 million. The source of funds to cover the expenditures is the reserve funds of the education subvention in the amount of UAH 26.8 million and the reduction of the amount of the subvention of the three rayon budgets by UAH 15.2 million. x Shortage of funds in local budgets to upgrade the material and technical base was partially resolved by the endorsement of two acts by the Cabinet of Ministers. These include the Resolution of the Cabinet of Ministers of Ukraine of April 29, 2020 (Registration # 324) "On Introducing Amendments to the Resolution of the Cabinet of Ministers of Ukraine # 100 of February 12, 2020", which provides 2.5 billion UAH for the implementation of the program called: "Capable School for Better Results". Also, the Resolution of the Cabinet of Ministers of Ukraine of April 29, 2020 (Registration # 325) "On Introducing Amendments to Resolutions of the Cabinet of Ministers of Ukraine # 237 of April 04, 2018 and # 105 of February 12, 2020" distributed 1.06 billion UAH from the National Budget to local budgets to ensure high provide quality, modern and accessible comprehensive secondary education "New Ukrainian School" in 2020. x Absence of clearly defined managerial functions in the sector of vocational (professional and technical) education was partially resolved through the Directive of the Cabinet of Ministers of Ukraine of April 29, 2020 (Registration # 508-р) "On Approving the Plan of Activities for 2020 - 2027 for the Implementation of the Concept for the Implementation of the National Policy in the Sector of Vocational (professional and technical) Education «Modern Vocational (professional and technical) Education» for the Period till 2027”. The act endorses the Action Plan for 2020 - 2027 for the implementation of the Concept of the implementation of the national policy in the sector of vocational (professional and technical) education called: "Modern vocational (professional and technical) education" for the Period till 2027. In particular, the document deals about the implementation in 2020 and completion in 2021 of the pilot project on transferring funding for vocational (professional and technical) educational establishments located in oblast center cities, from oblast budgets, which corresponds to the position of the AUC. The draft document also offers a suggestion to develop and submit to the Cabinet of Ministers in 2020 a draft Law of Ukraine "On Vocational (professional and technical) Education", revise the list of professions of national importance and take steps to continue the reform of vocational (professional and technical) education.

17 QUARTERLY REPORT for the implementation of the PULSE Project

In the health care sector

Resolved: - the problem with lack of financial resources for secondary health care. At its extraordinary plenary session, the Verkhovna Rada of Ukraine approved the Law “On Introducing Amendments to the National Budget for 2020”, which Formed the Fund for Countering the Acute Respiratory COVID-19 Disease Caused by the SARS-CoV-2 the Coronavirus and Its Consequences”. The volume of the funding constitutes 64.7 billion hryvnyas. The Fund has already disbursed resources to the health care sector:

UAH 3 billion were earmarked for the activities to prevent the spread of the coronavirus, including: UAH 650 million for laboratory units of the Ministry of Health Care and UAH 2.3 billion for the purchase of personal protective equipment for health care establishments that provide in-patient and emergency medical care; UAH 100 million were earmarked for the purchase of ventilators for health care establishments that provide in-patient care to patients with COVID-19;

and endorsed the distribution of: UAH 7.8 billion - for additional payments to physicians and certain categories of workers who provide for life-sustaining activities for the population; UAH 2.9 billion - for the purchase of equipment for reception units for hub health care establishments in hospital districts.

Also, the expenditures on health care were increased by UAH 15.4 billion from UAH 115.9 billion to UAH 131.3 billion, in particular, expenditures on the implementation of the program of state health care guarantees were increased by UAH 15.8 billion from UAH 72.3 billion. up to 87.8 billion hryvnyas. The AUC appealed to the Office of the President, Parliament and Cabinet of Ministers with requests to increase health care expenditures in 2020. The AUC stressed that still there were health care establishments that have were not able to switch to a new form of work since April 01, 2020, that Ukraine faced the emergency situation caused by the acute COVID-19 coronavirus infection, that health care workers were not given personal protection equipment and did not have additional salary payments in the context of the liquidation of the epidemic, etc.

- the problem of lack of resources for additional salary payments to health care workers who provide medical care to patients with the acute COVID-19 respiratory disease. The Resolution of the Cabinet of Ministers of April 24, 2020 (Registration # 331) «On Immediate Steps with Regard to Ensuring State Financial Guarantees for Health Care Services with the Acute COVID-19 Respiratory Disease Caused by the SARS-CoV-2 Coronavirus and the Adequate Remuneration of Health Care Workers and Other Caregivers of Such Patients” provides for additional payments to medical and other employees of health care establishments in the amount of up to 300 percent of their salaries. Directive of the Ministry of Health Care of Ukraine of April 02, 2020 (Registration # 768) endorses the List of positions of medical and other workers who are directly involved in eliminating the pandemic and in implementing activities aimed at preventing the spread of the acute COVID-19 respiratory disease caused by the SARS- CoV-2 coronavirus who will receive additional payments in the amount of their three salaries (tariff rates). The Resolution of the Cabinet of Ministers of April 08, 2020 (Registration # 267) introduced amendments to the Resolution of the Cabinet of Ministers of February 08, 2020 (Registration # 65) regarding the prepayment for medical services provided under health care packages for patients with the acute COVID-19 respiratory disease caused by the SARS-CoV-2 coronavirus, primarily for the remuneration of medical and other workers directly engaged in the elimination of the acute COVID-19 respiratory disease caused by the SARS-CoV-2 coronavirus, in particular in terms of introducing additional salary payments and salary rises specified by the legislation.

Also, the Resolution of the Cabinet of Ministers of June 17, 2020 (Registration # 498) regulates the provision of insurance allowances in case of illness or death of health care workers in connection with infection with the acute COVID-19 respiratory disease caused by the SARS-CoV-2 coronavirus.

During its extraordinary plenary session, the Verkhovna Rada of Ukraine approved the Law “On Introducing Amendments to the National Budget for 2020”, which established the Fund for Combating the Acute

18 April – June, 2019

COVID-19 Respiratory Disease Caused by the SARS-CoV-2 Coronavirus and Its Consequences. The amount of the fund constitutes 64.7 billion hryvnyas. The government approved the disbursement of UAH 7.8 billion from the Fund for additional payments to physicians and certain categories of workers who ensure life-sustaining activities for the population.

The AUC sent letters with appeals to the Cabinet of Ministers with requests to resolve this issue.

- the problem with the lack of new drugs subject to reimbursement within the framework of the program called: "Affordable Medicines". The Resolution of the Cabinet of Ministers of April 15, 2020 (Registration # 286) "Certain Issues of Ensuring the Availability of Drugs for the Treatment of Rheumatic Diseases" was supplemented with the list of drugs under the international non-proprietary names "Chloroquine" and "Hydroxychloroquine" for the out-patient treatment of rheumatic diseases and for dispensing these drugs by drug stores.

Partially resolved: - the problem of low tariffs for health care services, programs of state health care guarantees for population for 2020 during the provision of secondary, tertiary, palliative care. The Resolution of the Cabinet of Ministers of June 19, 2020 (Registration # 513) introduced amendments to the Resolution of the Cabinet of Ministers of February 05, 2020 (Registration # 65) "Certain Issues of the Implementation of the Program of State Guarantees of Health Care Services for the Population in 2020" and increased the tariffs: x - for health care services associated with the provision of medical care for acute myocardial infarction in an in-patient setting from 16,001.43 hryvnyas to 30,108 hryvnyas. x - for health care services for the provision of medical care for acute stroke in an in-patient setting from 19,332.31 hryvnyas to 26,947 hryvnyas.

The Resolution of the Cabinet of Ministers of April 24, 2020 (Registration # 331) supplemented the program of health care guarantees by a separate package called: "In-patient Care for Patients with the Acute COVID- 19 Respiratory Disease Caused by the SARS-CoV-2 Coronavirus Provided by Selected Health Care Establishments".

The planned cost of in-patient care for the acute COVID-19 respiratory disease caused by the SARS-CoV-2 coronavirus is set as a global rate per month and constitutes 498,325.65 hryvnyas and the rates for the health care service for the preparedness to provide health care services to patients with the acute respiratory COVID- 19 disease caused by the SARS-CoV-2 coronavirus in intensive care facilities, which constitutes 171,167.83 hryvnyas. The tariff for health care services provided by mobile medical teams formed up to respond to the acute COVID-19 respiratory disease caused by the SARS-CoV-2 coronavirus has bee calculated, which is defined as the global rate per month calculated on the basis of the rate for a health care service and constitutes 50,942.05 hryvnyas.

- the problem with the lack of necessary medical equipment required by the standard list of equipment and software for the implementation of telemedicine and electronic document turnover in health care establishments; compatibility of medical information systems and information protection for successful implementation of the e-health system. At its extraordinary plenary session, the Verkhovna Rada of Ukraine approved the Law “On Introducing Amendments to the National Budget for 2020”, which established the Fund for Combating the Acute COVID-19 Respiratory Disease Caused the by SARS-CoV-2 Coronavirus and Its Consequences. The volume of the fund constitutes 64.7 billion hryvnyas. has already disbursed resources to the health care sector: x UAH 3 billion were earmarked for the activities to prevent the spread of the coronavirus, including: UAH 650 million for laboratory units of the Ministry of Health Care and UAH 2.3 billion for the purchase of personal protective equipment for health care establishments that provide in-patient and emergency medical care; x UAH 100 million were earmarked for the purchase of lung ventilators for health care establishments that provide in-patient care to patients with COVID-19; and endorsed the distribution of: x UAH 7.8 billion - for additional payments to physicians and certain categories of workers who provide for life-sustaining activities for the population;

19 QUARTERLY REPORT for the implementation of the PULSE Project

x UAH 2.9 billion - for the purchase of equipment for reception units for hub health care establishments in hospital districts. Also, the expenditures on health care were increased by UAH 15.4 billion from UAH 115.9 billion to UAH 131.3 billion, in particular, expenditures on the implementation of the program of state health care guarantees were increased by UAH 15.8 billion from UAH 72.3 billion. up to 87.8 billion hryvnyas. The AUC appealed to the Office of the President, Parliament and Cabinet of Ministers with requests to increase health care expenditures in 2020. The AUC stressed that still there were health care establishments that have were not able to switch to a new form of work since April 01, 2020, that Ukraine faced the emergency situation caused by the acute COVID-19 coronavirus infection, that health care workers were not given personal protection equipment and did not have additional salary payments in the context of the liquidation of the epidemic, etc.

Since April, 2020, local government bodies have been purchasing medical equipment and medical information systems at the expense of local budgets, which was necessary to conclude contracts with the National Health Service of Ukraine and to provide medical care to patients with the acute COVID-19 coronavirus infection. Local budgets spent for the procurement of medical equipment, medicines, personal protective equipment for medical workers and additional salary payments in the amount of UAH 2.336 billion.

In the sector of social protection

Completely resolved: x problem: executive bodies of city councils of cities of oblast significance, which have annexed the adjacent territorial communities, are deprived of the opportunity to administer privileges, subsidies, and state assistance to residents of the annexed communities. The Information and Computing Center State-Owned Company of the Ministry of Social Policy has improved the national information programs and given the right to the executive bodies of city councils of oblast significance cities to administer privileges, subsidies, state assistance to residents of the annexed communities. x problem: local governments are not in a position to put together a social order for the provision of social services. The Cabinet of Ministers Resolution of June 01, 2020 (Registration # 450) has endorsed the necessary procedure.

In the sector of housing and municipal utilities

Partially resolved: The problem of separate accounts for municipal heating companies, which contradicts the principles of equal state protection of all business entities. The Resolution of the Cabinet of Ministers of April 29, 2020 (Registration # 314) "On Introducing Amendments to Paragraph 23 of the Regulations for the Distribution of Funds Coming to Special Operational Accounts for Settling Payments with the Suppliers of the Natural Gas Charged with Special Obligations" has shifted electricity costs of municipal heating companies to their earmarked budget revenue line items, which are not subject to separation on special accounts.

The problem with the lack of working capital of heating and water supply companies, which makes it difficult for them to carry out their production and business activities. Thanks to the endorsement of the resolution of the Cabinet of Ministers of June 10, 2020 (Registration # 467) “On Introducing Amendments to the Mechanisms for Setting Tariffs for Heat Energy, Its Generation, Transportation and Supply and Heat Supply and Hot Water Supply Services and the Mechanisms for Setting Tariffs for Centralised Water Supply and Centralised Sewerage”, heating and water supply companies received the opportunity to increase their working capital in the amount up to 2% of the planned cost of heat and centralised water supply.

Table 1.2. Current status of problem solutions by each sectoral profile over the reporting quarter

20 April – June, 2019

Resolved or removed As of the As of the end of due to optimisation of Sectoral profile beginning of the Added the reporting previously identified reporting period period problems Local budgets and 24 0 0 24 financial foundations of local self- governance Housing and 47 1 1 47 municipal utilities Land relations and 26 0 0 26 communally-owned property Organisational 26 0 0 26 aspects and capacity building Social protection 17 0 2 15 Health care 20 0 5 15 Public education 27 0 0 27 Local economic 24 0 0 24 development E-governance and 11 0 0 11 public services

Meetings of AUC Professional Groups AUC Education Professional Group April 30, 2020 in the format of a web conference

On April 30, 2020, the Association of Ukrainian Cities working within in the framework of the USAID "Policy for Ukraine’s Local Self-Governance” Project (PULSE) organised and conducted a meeting of the AUC Education Professional Group in the format of a web conference in the context of the quarantine restrictions throughout Ukraine. The webinar brought together approximately 30 top managers and representatives of education management departments from Bila Tserkva, Varash, Vinnytsya, Dnipro, Zhytomyr, Ivano-Frankivsk, Kremenchuk, Kropyvnytskyi, Lutsk, Lviv, Mykolaiv, Mukachevo, Odessa, Pervomaisk, Ternopil, Uman, and Chernihiv.

The main topic for the discussion was ensuring the financial autonomy of educational institutions in accordance with the Law of Ukraine "On Completed Comprehensive Secondary Education". The PULSE Project expert focused the attention of education management specialists on the main provisions of the laws of Ukraine "On Education" and "On Completed Comprehensive Secondary Education" whose implementation requires the introduction of financial autonomy of educational institutions. In addition to this, she presented three models of how the financial autonomy is introduced and presented the main advantages and risks of each of them.

O. Buynevych, Director of the Department of Education and Science of the Odessa City Council, and representatives of this Department, H. Moskalyk, Director of the Department of Education of the Executive Committee of the Kremenchuk City Council of the Poltava oblast, O. Yatsenko, Director of the Department of Education and Science of the Vinnytsya City Council, and representatives of this department, S. Kovtunenko, Head of the Department for Supporting Educational Institutions of the Directorate of Education of the Zhytomyr City Council, Z. Dovhanyk, Head of the Department of Education of the Directorate Department of Humanitarian Policy of the Lviv City Council, O. Salohub, Head of the Department of Humanitarian Policy of the Dnipro City Council, L. Kostenko, Head of the Department of Education of the Kropyvnytskyi City Council, K. Kryshinets-Andyaloshiy, Head of the Department of Education, Youth and Sports of the Mukachevo City Council and others took an active part of the discussions of the financial autonomy of educational institutions.

Following the discussions of the main topic of the webinar, the specialists of the education sector discussed a number of key issues of local governments:

21 QUARTERLY REPORT for the implementation of the PULSE Project

x on the main problems of the implementation of the Law of Ukraine "On Completed Comprehensive Secondary Education", in particular with regard to the transferring managers of educational establishments and persons receiving an old-age pension to fixed-term employment contracts; x on the completion of the 2019/2020 academic year; x regarding the independent external knowledge check in 2020; x on the problem issues of distance learning and ways to prevent them; x on amendments to the National Budget of Ukraine for 2020 in the part dealing with the sector of education; x on the main decisions of the Cabinet of Ministers with regard to the implementation of programs funded through the National Budget in the sector of education; x on ensuring high quality of education and functioning of educational establishments during the quarantine restrictions; x on ensuring the reorganisation of methodical offices/services of the education system; x on ensuring fire safety in educational institutions; x on the preparation of national standards and regulations in descriptive and cost formats for each of the powers delegated by the state to local government bodies in the sector of education, etc.

1.1.2. Preparation of sectoral legislation During the reporting quarter, PULSE Project experts participated in the preparation of 81 draft legal documents (see Table 1.3) including: x 9 draft regulatory and legal document prepared exclusively by PULSE Project experts, with 4 of having been registered in the Verkhovna Rada of Ukraine (see Table 1.4); x 62 draft regulatory and legal documents, with comments and proposals to them submitted in the course of the concurrence of these documents in the manner specified by the Law of Ukraine “On Local Government Associations”, or as expert opinions, with 3 of them having been registered as draft laws in the Verkhovna Rada; and, x 10 draft regulatory and legal documents, which prepared within the framework of working group at central state executive authorities

During the reporting quarter, the Cabinet of Ministers, Verkhovna Rada of Ukraine and other central state executive authorities endorsed and approved 17 regulatory and legal documents, which are important for local self-governance. PULSE Project experts participated in the preparation of these documents (for more details, please see Section 4 "SUCCESS STORIES"): 1. The Law of Ukraine «On Introducing Amendments to Certain Laws of Ukraine with Regard to Approving Territories and Designating Administrative Centers of Territorial Communities» of April 16, 2020 (Registration # 562-IX) (regarding vesting the Cabinet of Ministers with powers to form the administrative and territorial arrangement at the community level (basic level)); 2. The Law of Ukraine «On Introducing Amendments to the Tax Code of Ukraine and Other Laws of Ukraine with Regard to the Additional Support for Tax Payers for the Period of Activities Aimed at Preventing the Outbreak and Spared of the Coronavirus Disease (COVID-19)» of 13 May 2020 (Registration # 591-IX) (additional payments for doctors); 3. The Law of Ukraine "On Introducing Amendments to Certain Laws of Ukraine with Regard to Approving Territories and Designating Administrative Centers of Territorial Communities" of April 16, 2020 (Registration # 562-IX) (transition from voluntary to administrative consolidation of territorial communities and vesting to the Cabinet of Ministers with the relevant powers); 4. The Law of Ukraine "On Introducing Amendments to the Law of Ukraine "On the National Budge of Ukraine for 2020"" of April 13, 2020 (Registration # 553-IX) (formation of the State Fund to Counter the Coronavirus); 5. The Resolution of the Cabinet of Ministers of May 14, 2020 (Registration # 377) "On Introducing Amendments to Paragraph 2 of the Resolution of the Cabinet of Ministers of Ukraine # 211 of March 11, 2020" (resuming the operations of non-food markets); 6. The Resolution of the Cabinet of Ministers of June 03, 2020 (Registration # 483) "Certain Issues of Renting out State-Owned and Communally-Owned Property" (endorsed the Procedure for Leasing out State-Owned and Communally-Owned Property); 7. The Resolution of the Cabinet of Ministers of Ukraine of June 01, 2020 (Registration # 450) "Certain Issues of Providing Social Services through the Social Request"; 8. The Resolution of the Cabinet of Ministers of Ukraine of June 01, 2020 (Registration # 479) "Certain Issues of Activities of Centers for Social Services";

22 April – June, 2019

9. The Resolution of the Cabinet of Ministers of Ukraine of June 01, 2020 (Registration # 427) "Certain Issues of Exercising Control of Compliance with the Requirements of the Law of Ukraine "On Social Services”"; 10. The Resolution of the Cabinet of Ministers of Ukraine of June 01, 2020 (Registration # 429) "On Endorsing the Regulations for the Introduction of the Differentiated Payment for the Provision of Social Services"; 11. The Resolution of the Cabinet of Ministers of Ukraine of June 01, 2020 (Registration # 585) "On Ensuring the Social Support for Children Who Are in Difficult Life Circumstances"; 12. The Resolution of the Cabinet of Ministers of Ukraine of June 01, 2020 (Registration # 586) "Certain Issues of the Protection of Children in the Context of Countering the Consequences of the Acute COVID-19 Respiratory Disease Caused by the SARS-CoV-2 Coronavirus"; 13. The Resolution of the Cabinet of Ministers of Ukraine of June 01, 2020 (Registration # 587) "On Organisational Aspects of the Provision of Social Services"; 14. The Resolution of the Cabinet of Ministers of Ukraine of June 01, 2020 (Registration # 515) "On Introducing Amendments the Resolution of the Cabinet of Ministers of Ukraine # 877 of November 15, 2017"(the document endorses the Regulations for the provision in 2019 of the subvention from the National Budget to local budgets for design, construction and repair works, procurement of housing and premises for the development of family type and other forms of education similar family type ones, and providing housing for orphans, children deprived of parental care, and persons from such categories); 15. The Resolution of the Cabinet of Ministers of April 29, 2020 (Registration # 314) "On Introducing Amendments to Paragraph 23 of the Regulations for the Distribution of Funds Coming to Special Operational Accounts for Settling Payments with the Suppliers of the Natural Gas Charged with Special Obligations". Thanks to the endorsement of this document, the government has lifted restrictions for municipal heating companies; 16. The Resolution of the Cabinet of Ministers of June 10, 2020 (Registration # 467) "On Introducing Amendments to the Mechanisms for Setting Tariffs for Heat Energy, Its Generation, Transportation and Supply and Heat Supply and Hot Water Supply Services and the Mechanisms for Setting Tariffs for Centralised Water Supply and Centralised Sewerage". The document was endorsed with the purpose of improving mechanisms for setting tariffs for heat and water supply companies; and, 17. The Directive of the Ministry of Education and Science of Ukraine of May 19, 2020 (Registration # 654) "On the Model List of Questions". The document has endorsed a Sample list of questions to test the knowledge of the legislation in the sector of comprehensive secondary education for the purposes of conducting the competition for the position of the head of the comprehensive secondary educational establishment.

Also, with the assistance of the PULSE Project, the Cabinet of Ministers of Ukraine endorsed 24 oblast long- term perspective plans and outlined the territorial boundaries of all territorial communities, as well as designated their administrative centers in 24 oblasts (a total of 48 regulatory and legal documents were endorsed).

During the reporting quarter, the Verkhovna Rada of Ukraine registered 6 draft laws of Ukraine prepared with the participation of the PULSE Project: 1. The Draft Law “On Introducing Amendments to the Law of Ukraine "On the Court Fee"” to ensure stable implementation of the legislation on verification of state payments (Registration # 3551 of May 28, 2020); 2. The Draft Law “On Introducing Amendments to the Budget Code of Ukraine to Bring the Provisions of the Budget Legislation in Line with the Completion of the Administrative and Territorial Reform (Registration # 3614 of June 09, 2020); 3. The Draft Law of Ukraine “On the Main Foundations of the Youth Policy” (Registration # 3718 of June 23, 2020). 4. The Draft Law of Ukraine "On Introducing Amendments to the Law of Ukraine "On the Status of War Veterans and Guarantees of Their Social Protection" with Regard to Increasing the Level of Social Protection of War Veterans" (Registration # 3238 of March 20, 2020). 5. The Draft Law of Ukraine "On Introducing Amendments to Certain Legislative Acts of Ukraine with Regard to Reforms of the System of Institutional Care and Upbringing of Children" (Registration # 3587 of June 03, 2020).

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6. The Draft Law of Ukraine "On Solid Waste Management" (Registration #2207-1-d of June 04, 2020);

Also, the parliament registered comments and suggestions prepared by the PULSE Project for National Deputies to the draft Law of Ukraine “On Introducing Amendments to Certain Laws of Ukraine on Improving the Electoral Legislation (Registration #3485 of May 18, 2020) approved in the first reading.

Table 1.3. Distribution of draft regulatory and legal documents by sector

Number of Number of draft draft documents documents Sector prepared since prepared in the the beginning of reporting the Project quarter Local finance 5 98 Housing and municipal utilities 8 51 Land relations and communally-owned property 0 21 Organisational aspects of local government activities and capacity 34 113 building for their officials Social protection 19 95 Health care 3 12 Public education 10 69 Administrative services and e-governance 1 5 Sustainable economic development and urban development 1 41 TOTAL 81 505

Table 1.4.

List of prepared draft regulatory and legal documents

# Registration Subject matter The title name of the draft law number 1 The Draft Law “On Introducing The draft document offers a suggestion to Amendments to the Law of Ukraine exempt local state administrations and local Registration # "On the Court Fee" Regarding government bodies, which are tasked with 3551 of May 28, Ensuring Stable Implementation of resolving issues of social protection of the 2020 the Legislation on Verification of population, from paying court fees. State Payments” 2 The Draft Law “On Introducing The draft document defines the distribution of Amendments to the Budget Code of sources of revenues and expenditures Registration # Ukraine to Bring the Provisions of between budgets of the basic [community] 3614 of June 09, the Budget Legislation in Line with and sub-regional level. 2020 the Completion of the Administrative and Territorial Reform” 3 The Draft Law “On Introducing The draft document offers a suggestion to Amendments to the Law of Ukraine repay the debt of local budgets on loans «On the National Budget of granted from the single treasury account to Ukraine for 2020»» local budgets in 2009 – 2014

24 April – June, 2019

# Registration Subject matter The title name of the draft law number 4 The Draft Directive of the Ministry The draft document offers a suggestion to of Health Care “On Introducing simplify the conditions for re-registration of Amendments to the Directive of the patients with a doctor in connection with the Ministry of Health Care of Ukraine merger of health care facilities in the course # 503 of March 19, 2018” of the administrative and territorial reform. 5 The Draft Law of Ukraine “On The draft document offers a suggestion to Introducing Amendments to the simplify the procurement procedure when its Law of Ukraine “On Public cost is less than 50 thousand UAH, in Procurement” with Regard to particular, due to the abolition of the Simplifying Certain Procedures of requirement on the need to submit a Procurement” procurement report to the customer. 6 Amendments to the Resolution of The draft document offers a suggestion to the Cabinet of Ministers of March reduce quarantine restrictions in non-food 11, 2020 (Registration # 211) "On markets. Preventing the Spread of the Acute COVID-19 Respiratory Disease Caused by the SARS-CoV-2 Coronavirus on the Territory of Ukraine" 7 The draft Directive of the Ministry The draft document offers a suggestion to of Youth and Sports of Ukraine vest executive bodies of councils of "On Introducing Amendments to consolidated territorial communities with the Regulations on the Unified powers to grant the second and third sports Sport Classification of Ukraine" categories to athletes. 8 Amendments to Clause 12 of the The draft document offers a suggestion to let Resolution of the Cabinet of the Ministry of Education and Science to Ministers of Ukraine of October 11, develop a national targeted program to ensure 2016 (Registration # 710) "On the fire safety of educational institutions. Effective Use of Public Funds" 9 Amendments to the Resolution of The draft document offers a system of the Cabinet of Ministers of Ukraine funding the treatment of diabetes during the of February 05, 2020 (Registration period from April 01 to October 01, 2020. # 65) "Certain Issues of the Implementation of the Program of the State Guarantees of Health Care Services for the Population in 2020"

The PULSE Project prepared comments and suggestions for the second reading of the draft Law of Ukraine “On Introducing Amendments to Certain Laws of Ukraine on Improving the Electoral Legislation (Registration # 3485 of May 18, 2020). They were registered by National Deputies.

Draft regulatory and legal documents (61), to which amendments and proposals were submitted in the course of their approval in the manner prescribed by the Law of Ukraine "On Local Government Associations", or when expert opinions were provided:

1. Draft National Standard of Basic Comprehensive Secondary Education, which is being prepared by the Ministry of Education and Science of Ukraine; 2. Draft Directive of the Cabinet of Ministers of Ukraine "On Introducing Amendments to Methodological Recommendations with Regard to the Preparation of the Regional Request for Training of Workers and Blue Collar Workers", which is being prepared by the Ministry of Education and Science of Ukraine; 3. Draft Resolution of the Cabinet of Ministers "On Endorsing the Regulations on the Center for Professional Development of Pedagogical Workers", which is being prepared by the Ministry of Education and Science of Ukraine;

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4. The Draft Professional Standard for the Professions of “Primary Secondary School Teacher”, “Comprehensive Secondary School Teacher”, which is being prepared by the Ministry of Education and Science; 5. The Draft Resolution of the Cabinet of Ministers of Ukraine "On Introducing Amendments to Paragraph 23 of the Regulations for the Distribution of Funds Coming to Special Cooperation Accounts for Settlements with a Natural Gas Supplier with Special Responsibilities", which is being prepared by the Ministry of Community and Territorial Development; 6. The Draft Directive of the Ministry of Regional Development "On Endorsing the Methodology for the Preparation of Schemes of Heat Supply of Populated Areas of Ukraine"; 7. The Draft Resolution of the Verkhovna Rada “On the Program of Activities of the Cabinet of Ministers of Ukraine (Registration # 3330 of April 13, 2020), in the part dealing with social policy (proposals were submitted to the Verkhovna Rada Committee on Social Policy and Protection of Veteran Rights); 8. The Resolution of the Cabinet of Ministers of Ukraine "On the Peculiarity of the Provision of Housing Subsidies" (Registration # 247) of March 25, 2020; 9. The Draft Law of Ukraine "On Introduction Amendments to Certain Legislative Acts with Regard to Reforms of the System of Institutional Care and Upbringing of Children", which is being prepared by the Ministry of Social Policy; 10. The Draft Resolution of the Cabinet of Ministers of Ukraine "On Introducing Amendments to Annex 2 of Resolution of the Cabinet of Ministers of Ukraine # 1298 of August 30, 2002 with Regard to Systematisation of the Payroll Scale of Staff Positions of Providers of Social and Rehabilitation Services", which is being prepared by the Ministry of Social Policy; 11. The Draft Resolution of the Cabinet of Ministers of Ukraine "On Endorsing the Regulations for the Introduction of the Differentiated Payment for the Provision of Social Services", which is being prepared by the Ministry of Social Policy; 12. The Draft Directive of the Cabinet of Ministers of Ukraine "On Endorsing the Long-term Perspective Plan for the Formation of Community Territories of the Donetsk Oblast", which is being prepared by the Ministry of Community and Territorial Development; 13. The Draft Directive of the Cabinet of Ministers of Ukraine "On Endorsing the Long-Term Perspective Plan for the Formation of Community Territories of the Kyiv Oblast", which is being prepared by the Ministry of Community and Territorial; 14. The Draft Directive of the Cabinet of Ministers of Ukraine "On Endorsing the Long-Term Perspective Plan for the Formation of Community Territories of the Zakarpattya Oblast", which is being prepared by the Ministry of Community and Territorial Development; 15. The Draft Directive of the Cabinet of Ministers of Ukraine "On Endorsing the Long-Term Perspective Plan for the Formation of Community Territories of the Kirovohrad Oblast", which is being prepared by the Ministry of Community and Territorial Development; 16. The Draft Directive of the Cabinet of Ministers of Ukraine "On Endorsing the Long-Term Perspective plan for the Formation of Community Territories of Zaporizzhya oblast", which is being prepared by the Ministry of Community and Territorial Development; 17. The Draft Directive of the Cabinet of Ministers of Ukraine "On Endorsing the Long-Term Perspective Plan for the Formation of Community Territories of the Poltava Oblast", which is being prepared by the Ministry of Community and Territorial Development; 18. The Draft Directive of the Cabinet of Ministers of Ukraine "On Endorsing the Long-Term Perspective Plan for the Formation of Community Territories of the Lviv Oblast", which is being prepared by the Ministry of Community and Territorial Development; 19. The Draft Directive of the Cabinet of Ministers of Ukraine "On Endorsing the Long-Term Perspective Plan for the Formation of Community Territories of the Dnipropetrovsk Oblast", which is being prepared by the Ministry of Community and Territorial Development; 20. The Draft Directive of the Cabinet of Ministers of Ukraine "On Endorsing the Long-Term Perspective Plan for the Formation of Community Territories of the Odessa oblast", which is being prepared by the Ministry of Community and Territorial Development; 21. The Draft Directive of the Cabinet of Ministers "On Endorsing the Mechanisms for Assigning Addresses to Immovable Property Items", which is being prepared by the Ministry of Community and Territorial Development; 22. The Draft Law of Ukraine "On Introducing Amendments to the Law of Ukraine" On the National Budget of Ukraine for 2020" (Registration #3279-d of April 11, 2020) regarding the reduction of withdrawals of funds from local budgets an formation of the Coronavirus Control Fund;

26 April – June, 2019

23. The Draft Directive of the Ministry of Education and Science "On Introducing Amendments to Directive of the Ministry of Education and Science of Ukraine # 466 of April 25, 2013"; 24. The Draft Resolution of the Cabinet of Ministers of Ukraine “On Introducing Amendments to the Model Regulations on the Accounting Service of a Public Institution”, which is being prepared by the Ministry of Education and Science; 25. The Draft Law of Ukraine “On Introducing Amendments to the Law of Ukraine “On Culture” with Regard to the General Framework for the Provision of Cultural Services to the Population”, which is being prepared by the Ministry of Culture; 26. The Draft Directive of the Ministry of Health Care "On Endorsing the Sanitary Regulations for Comprehensive Secondary Educational Establishments"; 27. The Draft Resolution of the Cabinet of Ministers of Ukraine "Certain Issues of Granting and Payment of the Compensation to the Physical Persons Who Provide Educational Services on a Non- Professional Basis", which is being prepared by the Ministry of Social Policy; 28. The Draft Resolution of the Cabinet of Ministers of Ukraine "On Improving the Social Protection of Children Who Are in Difficult Life Circumstances", which is being prepared by the Ministry of Social Policy; 29. The Draft Directive of the Cabinet of Ministers of Ukraine "On Endorsing the Long-Term Perspective plan for the Formation of Community Territories of the Sumy Oblast", which is being prepared in the Ministry of Community and Territorial Development; 30. The Draft Directive of the Cabinet of Ministers of Ukraine "On Endorsing the Long-Term Perspective Plan for the Formation of Community Territories of the Rivne Oblast", which is being prepared by the Ministry of Community and Territorial Development; 31. The Draft Resolution of the Verkhovna Rada of Ukraine "On Changing and Setting the Boundaries of the City of Lozova and the Lozova Rayon of the Kharkiv Oblast", which is being prepared by the Ministry of Community and Territorial Development; 32. The Draft Directive of the Cabinet of Ministers of Ukraine "On Determining the Administrative Centers and Approving the Territories of the Territorial Communities of the Dnipropetrovsk Oblast", which is being prepared by the Ministry of Community and Territorial Development; 33. The Draft Directive of the Cabinet of Ministers of Ukraine "On Determining the Administrative Centers and Approving the Territories of the Territorial Communities of the Ivano-Frankivsk Oblast", which is being prepared by the Ministry of Community and Territorial Development; 34. The Draft Directive of the Cabinet of Ministers of Ukraine "On Determining the Administrative Centers and Approving the Territories of the Territorial Communities of the Volyn Oblast", which is being prepared by the Ministry of Community and Territorial Development; 35. The Draft Directive of the Cabinet of Ministers of Ukraine "On Determining the Administrative Centers and Approving the Territories of the Territorial Communities of the Ternopil Oblast", which is being prepared by the Ministry of Community and Territorial Development; 36. The Draft Directive of the Cabinet of Ministers of Ukraine "On Determining the Administrative Centers and Approving the Territories of the Territorial Communities of the Sumy Oblast", which is being prepared by the Ministry of Regional Development; 37. The Draft Directive of the Cabinet of Ministers of Ukraine "On Determining the Administrative Centers and Approving the Territories of the Territorial Communities of the Donetsk Oblast", which is being prepared by the Ministry of Community and Territorial Development; 38. The Draft Directive of the Cabinet of Ministers of Ukraine "On Determining the Administrative Centers and Approving the Territories of the Territorial Communities of the Zhytomyr Oblast", which is being prepared by the Ministry of Community and Territorial Development; 39. The Draft Directive of the Cabinet of Ministers of Ukraine "On Determining the Administrative Centers and Approving the Territories of the Territorial Communities of the Chernihiv Oblast", which is being prepared by the Ministry of Community and Territorial Development; 40. The Draft Directive of the Cabinet of Ministers of Ukraine "On Determining the Administrative Centers and Approving the Territories of the Territorial Communities of the Poltava Oblast", which is being prepared by the Ministry of Community and Territorial Development; 41. The Draft Directive of the Cabinet of Ministers of Ukraine "On Determining the Administrative Centers and Approving the Territories of the Territorial Communities of the Zakarpattya Oblast", which is being prepared by the Ministry of Community and Territorial Development; 42. The Draft Directive of the Cabinet of Ministers of Ukraine "On Determining the Administrative Centers and Approving the Territories of the Territorial Communities of the Kirovohrad Oblast", which is being prepared by the Ministry of Community and Territorial Development;

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43. The Draft Directive of the Ministry of Community and Territorial Development "On Introducing Amendments to Directive of the Ministry of Community and Territorial Development # 190 of July 27, 2018", which deals determining the cost of maintaining buildings; 44. The Draft Law of Ukraine “On Introducing Amendments to the Law of Ukraine “On Pre-School Education”, which is being prepared by the Ministry of Education and Science; 45. The Draft Law of Ukraine "On Introducing Amendments to Certain Laws of Ukraine with Regard to Privileges on Fares", which is being prepared by the Ministry of Social Policy; 46. The Draft Law of Ukraine "On Introducing Amendments to Certain Legislative Acts of Ukraine with Regard to Improvements of the Procedure for Granting the Status of a Person Who Have Suffered from Trafficking in Humans", which is being prepared by the Ministry of Social Policy; 47. The Draft Resolution of the Cabinet of Ministers of Ukraine "Certain Issues of the Activities of Territorial Centers for Social Services (provision of social services)", which is being prepared by the Ministry of Social Policy; 48. The Draft Resolution of the Cabinet of Ministers of Ukraine "Certain Issues Regarding the Payment of the State Social Assistance", which is being prepared by the Ministry of Social Policy; 49. The Draft Directive of the Ministry of Social Policy of Ukraine "On Endorsing Amendments to the National Home Care Standard"; 50. The Draft Directive of the Ministry of Social Policy of Ukraine "On Endorsing the National In-Kind Assistance Social Service Standard"; 51. The Draft Directive of the Ministry of Social Policy of Ukraine "On Endorsing the Regulations on the Activities of Children Rooms in Institutions and Organisations"; 52. The Draft Directive of the Cabinet of Ministers of Ukraine "On Determining the Administrative Centers and Approving the Territories of the Territorial Communities of the Kharkiv Oblast", which is being prepared by the Ministry of Community and Territorial Development; 53. The Draft Directive of the Cabinet of Ministers of Ukraine "On Determining the Administrative Centers and Approving the Territories of the Territorial Communities of the Kherson Oblast", which is being prepared by the Ministry of Community and Territorial Development; 54. The Draft Directive of the Cabinet of Ministers of Ukraine "On Determining the Administrative Centers and Approving the Territories of the Territorial Communities of the Khmelnytskyi Oblast", which is being prepared by the Ministry of Community and Territorial Development; 55. The Draft Directive of the Cabinet of Ministers of Ukraine "On Determining the Administrative Centers and Approving the Territories of the Territorial Communities of the Chernivtsi Oblast", which is being prepared by the Ministry of Community and Territorial Development; 56. The Draft Directive of the Cabinet of Ministers of Ukraine "On Determining the Administrative Centers and Approving the Territories of the Territorial Communities of the Kyiv Oblast", which is being prepared by the Ministry of Community and Territorial Development; 57. The Draft Directive of the Cabinet of Ministers of Ukraine "On Determining the Administrative Centers and Approving the Territories of the Territorial Communities of the Odessa Oblast", which is being prepared by the Ministry of Community and Territorial Development; 58. The Draft Directive of the Cabinet of Ministers of Ukraine "On Determining the Administrative Centers and Approving the Territories of the Territorial Communities of the Zaporizzhya Oblast", which is being prepared by the Ministry of Community and Territorial Development; 59. The Draft Law “Draft Law on Introducing Amendments to the Law of Ukraine “On Urban Beautifications of Populated Areas”” (Registered under # 2688 of December 27, 2019), which is being considered by the Verkhovna Rada Committee on State Building, Regional Policy and Local Self-Governance; 60. The Draft Law "On Introducing Amendments to Certain Laws of Ukraine with Regard to Streamlining the Debt for the Consumed Energy Resources of Heat Supply and Heat Generating Organisations and Centralised Water Supply and Sewerage Companies" (Registration # 3508-1 of June 05, 2020), which is being considered by the Verkhovna Rada Committee on Energy and Housing and Municipal Utility Services; and, 61. The Draft Law of Ukraine "On Introducing Amendments to the Law of Ukraine" On Heat Supply "with Regard to Improvements of Mechanisms of State Regulation of Activities of Business Entities in the sector of Heat Supply", which is being prepared by the Ministry of Community and Territorial Development.

PULSE Project experts comments and edits to the following 10 draft legislation in the course of its preparation in various working groups set up at government authorities:

28 April – June, 2019

1. The Draft Law "On the Formation and Liquidation of Rayons", which was prepared in the Ministry of Community and Territorial Development; 2. The Draft Law “On Introducing Amendments to the Tax Code of Ukraine and Other Laws of Ukraine on Additional Support to Taxpayers for the Period of Activities Aimed at Preventing the Outbreak and Spread of Coronavirus Disease (COVID-19) (Registration # 3329-д of April 30, 2020) in the course of the preparation of comments for the second reading in the Verkhovna Rada Committee on Tax and Customs Policy; 3. Amendments to the Law of Ukraine “On Local Self-Governance in Ukraine” (the draft law from a package of draft laws required for the implementation of the local government reform and reform of the territorial arrangement of government institutions) together with the working group at the Ministry of Community and Territorial Development; 4. The Draft Law “On Introducing Amendments to Certain Legislative Acts of Ukraine with Regard to the Optimisation of the Network and Functioning of Centers for Administrative Services Provided in the Electronic Format” (Registration #2679 of December 29, 2019) together with the working group of the Committee on State Building, Regional Policy and Local Self-Governance in the course of the preparation of it for the second reading; 5. The Draft Resolution of the Cabinet of Ministers of Ukraine “On Introducing Amendments to Paragraph 17 of Model Regulations on the Youth Center” (the draft document offers a suggestion to establish the procedure for providing paid services by youth centers) together with the working group at the Ministry of Youth and Sports; 6. The Draft Directive of the Ministry of Social Policy of Ukraine "On Endorsing the Regulations for Ensuring the Provision of Care to the Persons Who do not Have the Possibility to Receive Care during the Period of Self-Isolation by Other Persons" together with the working group at the Ministry of Social Policy; 7. The Draft Directive of the Ministry of Education and Science "On Endorsing the List of Questions to Check the Knowledge of the Legislation in the Sector of Comprehensive Secondary Education" together with the working group of the Ministry of Education and Science; 8. The Draft Directive of the Ministry of Education and Science "On Endorsing the Regulations on the Attestation of Pedagogical Workers" together with the working group of the Ministry of Education and Science; 9. The Draft Law “On Introducing Amendments to Certain Laws of Ukraine with Regard to Regulation of Certain Issues in the Sector of the Provision of Housing and Municipal Utility Services” (Registration # 2458 of November 15, 2019), which was finalised by the Verkhovna Rada Committee on Energy and Housing and Municipal Utilities; and 10. The Draft Law "On Solid Waste Management" (Registration # 2207-1 of October 16, 2019), which was finalised by the Verkhovna Rada Committee on Environmental Policy and Management of Natural Resources.

In addition to this, the Project continued the work (providing expert opinions and participating in working groups) on 9 draft regulations, which started in the previous reporting periods: 1. The concept for introducing amendments to the laws of Ukraine "On Local Self-Governance in Ukraine" and "On Local State Administrations" together with the working group at the Ministry of Community and Territorial Development; 2. Amendments to the Constitution with regard to local self-government and administrative and territorial arrangement (for more details see Section 1.1.4 of this Report); 3. The Draft Law “On Introducing Amendments to Certain Legislative Acts with Regard to Connections to Heat and Water Distribution Networks” together with the working group at the Verkhovna Rada Committee on State Building, Regional Policy and Local Self- Governance; 4. The Draft Law of Ukraine "On Introducing Amendments to Certain Laws of Ukraine with Regard to Ensuring the Rights of Freedoms of Internally-Displaced Persons and War Veterans"; 5. The Draft Resolution of the Cabinet of Ministers of Ukraine "Certain Issues of Exercising Control of Compliance with the Requirements of the Law of Ukraine" On Social Services"”; 6. The Draft Resolution of the Cabinet of Ministers of Ukraine "On Endorsing the Regulations for the Provision of Social Services through Social Request and Compensation of the Cost of Social Services to Providers";

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7. The Draft Resolution of the Cabinet of Ministers of Ukraine "Certain Issues of Activities of Centers for Social Services"; 8. The Draft Resolution of the Cabinet of Ministers of Ukraine "On Introducing Amendments to the Regulations on the Family Type Children House and Regulations on the Adopted Family"; 9. The Draft Directive of the Cabinet of Ministers of Ukraine "On Endorsing the Long-Term Perspective plan for the Formation of Community Territories of the Ternopil Oblast"; and, 10. The Draft Resolution of the Cabinet of Ministers of Ukraine "On Endorsing the Regulations on Leasing out State-Owned and Communally-Owned Property"

1.1.3. Legislation monitoring

During the reporting period, the Association of Ukrainian Cities received 105 draft regulatory and legal documents submitted by central agencies of the state executive for concurrence including:

Ministry of Social Policy of Ukraine 59 Ministry of Community and Territorial Development of Ukraine 36 Ministry of Education and Science of Ukraine 3 Ministry of Veterans, Temporarily Occupied Territories and Internally Displaced Persons of Ukraine 1 Ministry of Culture of Ukraine 1 Ministry of Youth and Sports of Ukraine 4 Ministry of Infrastructure of Ukraine 1

44 of these draft regulatory and legal documents were concurred with without reservations, 60 were concurred with reservations, and 1 was not concurred with.

During the reporting quarter, PULSE Project experts prepared and submitted 90 expert opinions to the draft legislation under consideration in Verkhovna Rada of Ukraine Committees and central agencies of the state executive including: x positive opinions - 20; x expert opinions with comments and proposals - 70 including 44 - negative expert opinions with a suggestion to reject the draft regulatory and legal document. The expert opinions were submitted to:

Verkhovna Rada of Ukraine Committee on Finance, Tax and Customs Policy 23 Verkhovna Rada of Ukraine Committee on the Organisation of State Power, Local Self- Government, Regional Development and Urban Development 14 Verkhovna Rada of Ukraine Budget Committee 10 Verkhovna Rada of Ukraine Committee on Social Policy and Protection of Veteran Rights 7 Ministry of Education and Science of Ukraine 7 Verkhovna Rada of Ukraine Committee on Education, Science and Innovations 4 Ministry of Economic Development, Trade and Agriculture of Ukraine 4 Verkhovna Rada Committee on Agrarian and Land Policy 3 Ministry of Community and Territorial Development of Ukraine 3 Verkhovna Rada of u1 Committee on Energy and Municipal Utility Services 2 Cabinet of Ministers of Ukraine 2 Ministry of Health Care of Ukraine 2 National Service of Ukraine for Geodesy, Cartography and Cadastre 2 Ministry of Culture of Ukraine 1 Ministry of Social Policy of Ukraine 1 Ministry of Finance of Ukraine 1 State Property Fund of Ukraine 1

30 April – June, 2019

Committee on Nation Health, Medical Care and Health Insurance 1 Verkhovna Rada Committee on Humanitarian and Information Policy 1 Verkhovna Rada Committee on Law Enforcement 1

1.1.4. Resolving local government problem issues and promotion of sectoral reforms Introducing amendments to the Constitution of Ukraine regarding local self-government and administrative and territorial arrangement.

Given the strong criticism from the AUC, its member communities, opposition parliamentary factions, experts, and other stakeholders, on January 17, 2020, the President of Ukraine withdrew the Draft Law "On Introducing Amendments to the Constitution of Ukraine (with regard to decentralisation)" # 2598 of December 13, 2019.

The main points of the criticism from the AUC included: 1. Inadmissibility of the closed nature and extremely high pace of preparations and consideration of the draft law. 2. Giving prefects most of the powers of former heads of local state administrations, in particular their political involvement. 3. According to the draft amendments, prefects and the President would have had the right to interfere in any local government affair (by suspend acts and activities of local government bodies). This contradicted the European Charter of Local Self-Government, which requires the definition of clear cases when the state may exercise its oversight and the proportionality of the administrative response. 4. Inclusion of larger communities (cities of oblast significance) into rayons. 5. Unacceptable ambiguity of the term "community": (1) residents of one local community, (2) administrative territory. 6. The draft document declares decentralisation of powers and resources but does not imply it.

In February 2020, the Office of the President and the parliamentary faction of the Servant of the People party began the discussions of amendments to the Constitution of Ukraine. During the period from February 25 to March 04, 2020, the discussions focused on conceptual issues and took place with local government representatives in regions. The further steps were temporarily suspended due to the coronavirus-related quarantine restrictions (COVID-19).

On April 23, 2020, the discussions continued in 2 formats: 1) in a broad format - between representatives of the state, the Constitutional Commission under the President of Ukraine, and representatives of all-Ukrainian local government associations, scientists, and experts; 2) in a narrow format - between representatives of all-Ukrainian local government associations.

These consultations continued throughout the whole reporting period and will continue now. These consultations were accompanied by the following circumstances. At the same time, the Cabinet of Ministers and the parliament endorsed and approved many decisions important for local self-government, which were accompanied by tensions and protests from many local government bodies. These decisions were the following: administrative formation of new territorial communities, consideration of amendments to the election legislation, preparations for consolidation of rayons and including cities of oblast significance into them, and resuming the curtailment of decentralisation in the sector of urban planning.

A characteristic feature of the discussions was the attempt of all-Ukrainian local government associations to discuss the new concept of amendments to the Constitution and the implementation of the provisions of the European Charter of Local Self-Government in it in the maximum extent possible, and eliminating contradictions that had been in the previous version of the amendments. However, the representatives of the state constantly demonstrated their desire to change the previously prepared text of the amendments as little as possible. Their main goal was to preserve and increase the influence of the President on local self- government and local state authorities. There convergence of positions between the negotiators was minimal.

Local government reform and reform of administrative and territorial arrangement On April 16, 2020, the Verkhovna Rada of Ukraine approved Law of Ukraine # 562-IX, which vested the Cabinet of Ministers the powers to approve the territories of territorial communities and designate their administrative centers. These territories will serve as the basis for the formation of local government bodies at the basic [community] level, namely: village, town and city councils and the corresponding village, town

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and city mayors. In the course of endorsement of these amendments, the government did not take into account the proposals of the AUC/PULSE to vest territorial communities with the right to independently determine their administrative centers and to limit in time such powers of the Cabinet of Ministers with the timeframe till the local elections on October 25, 2020. Note: Ukraine does not have a law that would outline the procedures for changing, forming, and liquidating administrative and territorial units. The legal relationships in this sector are governed accordance with the resolution of 1982 approved in the Soviet times. However, in general, AUC/PULSE supported the approval of this law as one that would accelerate the formation of the administrative and territorial arrangement at the basic [community] level before the upcoming local elections on October 25, 2020.

The PULSE Project actively joined the work to introduce the new administrative and territorial arrangement as early as the stage of endorsement by the Cabinet of Ministers of long-term perspective plans for the formation of community territories in each oblast. These long-term perspective plans have become the basis for the Cabinet of Ministers to make decisions on approving the territories of territorial communities as early as on June 12, 2020. The Cabinet of Ministers has approved the territories of 1,470 territorial communities and their administrative centers including on the occupied territories of the Donetsk and Luhansk oblasts, but without the Autonomous Republic of Crimea. Prior to the reform, there were 11,250 territorial communities on these territories. Thus, the new administrative and territorial arrangement at the basic [community] level has been established. Thanks to the participation of the PULSE Project, it was possible to defend the formats of the capable territorial communities of the following oblasts: Vinnytsya (Vinnytska), Volyn (Lypynska, Boratynska, Lutska, Velytska, Horodyschenska), Zhytomyr (Novohrad-Volynska, Myropilska), Ivano- Frankivsk (Chernelytska), Kirovohrad (Oleksandriyska, Svitlovodska, Bobrynetska, Vytyazivska), Luhansk (Severodonetska, Lysychanska), Mykolaiv (Konstantynivska, Yelanetska, Volodymyrivska, Mykhailivska), Odesa (Yuzhnenska), Poltava (Pyryatynska, Romodanivska, Myrhorodska), Rivne (Zdovbunivska), Sumy (Romenska, Sumska), Ternopil (Zborivska), Kherson (Hornostaivska), Cherkasy (Buzivska), Chernivtsi (Novoselytska), and Chernihiv (Tupychivska, Nizhynskka).

Also, during the reporting period, the Cabinet of Ministers prepared the administrative and territorial arrangement of the subregional (rayon) level. And already on June 15, 2020, this draft document was submitted to the Verkhovna Rada for consideration. The number of new rayons, according to the CMU, was 129, which embraced the territory of 490 "former" rayons and 187 cities of oblast significance. Also, the decision to establish the new rayons included the occupied territories of the Autonomous Republic of Crimea and Donetsk and Luhansk oblasts. The draft document of the Cabinet of Ministers took into account proposals form the PULSE Project with regard to the formation of new rayons, in particular in the Kyiv oblast.

The plan of activities for the implementation of the reform endorsed by the Cabinet of Ministers on January 23, 2019 (Registration # 77-р) provides for the preparation by the Ministry of Community and Territorial Development by June 30, 2020 of a number of draft laws that will consolidate the powers and resources of local governments at the basic [community] level (village, town and city councils) and the sub-regional level (rayon councils), and delineate powers between local governments and local state administrations (in particular, this includes amendments to the Budget Code of Ukraine, Tax Code of Ukraine, Law "On Local Self-Governance in Ukraine", and Law "On Local State Administrations"). During the reporting period, PULSE Project actively participated in the preparation of these draft laws with the Ministry of Community and Territorial Development in the format of video conferences.

Electoral legislation On January 01, 2020, the Election Code of Ukraine entered into force, which updated the existing electoral system in Ukraine. However, in the spring of 2020, the central government began to declare the need to amend the election legislation of Ukraine. The main amendments proposed to the election legislation dealt with the introduction of the proportional system of elections to members of all local councils and the abolition of the possibility for self-nomination for village, town and city mayors. Separately, there were discussion of the possibility of imposing additional restrictions on the participation of small parties in local elections and the size of the upfront money deposit for participation in the elections.

Already during the phase of preliminary statements made by heads of the state, AUC/PULSE declared the inadmissibility of introducing amendments to the election system less than six months before the elections and introducing additional barriers for participation in the local elections. Nevertheless, on May 18, the

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Verkhovna Rada of Ukraine registered the Draft Law “On Introducing Amendments to Certain Laws of Ukraine on Improving the Election Legislation (Registration # 3485). The draft law provided for some quantitative amendments to both the Election Code of Ukraine and other laws. The main threats to local self- government were: the introduction of the proportional system of elections in communities with more than 15,000 voters; introduction of the imperative mandate; and, significant increase in the cost of local budgets for the organisation and conducting the local elections.

Despite the criticism of the draft law from both local governments and western partners of Ukraine, on June 04, the Verkhovna Rada of Ukraine voted for it in the first reading.

Following the approval of Draft Law # 3485 in the first reading, PULSE Project experts prepared more than 200 amendments to the second reading, which were registered by the National Deputies of Ukraine. The amendments offered the following suggestions: to have the proportional system of elections at the level of communities with the number of 90 thousand voters and more; ensure 100% financing of the organisation and conducting elections at the expense of the National Budget; remove the term "consolidated communities" from the text of the Code; and, make other technical changes in the election process.

Reform of the New Ukrainian School During the reporting period, which coincided with the end of the 2019/2020 school year, the reform of the system of comprehensive secondary education underwent significant changes in the form of the student learning. Given the introduction of the quarantine restrictions by the resolution of the Cabinet of Ministers of Ukraine of March 11, 2020 (Registration # 211) "On Preventing the Spread of the COVID-19 Coronavirus on the Territory of Ukraine", the Ministry of Education and Science issued recommendations for managers of educational establishments make arrangements for the work for teachers from home, as well as to meet the requirements of the curriculums and ensure compliance with the national standards and introduce distance learning.

Taking into account the significant problem issues, inadequate provision of computer equipment to students and teachers, as well as the lack of competencies of individual teachers, one can make state that comprehensive secondary educational establishments have mastered and introduced distance learning technologies in different ways. At the same time, the quarantine restrictions provided an opportunity for creative teachers to develop many meaningful recommendations on distance learning, as well as to set up new educational and teaching technique platforms. The best ideas and practices of progressive teachers will be included in the new draft Regulation on Distance Learning, which is currently being prepared at the Ministry of Education and Science. In fact, the end of the school year and the final assessment of the knowledge of students took place in a remote mode.

The end of the 2019/2020 academic year was also marked by the necessity of implementing the new Law of Ukraine “On Completed Comprehensive Secondary Education” prepared with the participation of the PULSE Project, in particular in the part dealing with switching managers of educational establishments and teachers receiving old-age pensions to employment contracts. Taking this into consideration, a PULSE Project expert together with the Ministry of Education and Science provided prompt recommendations to communities and managers of educational establishments. For example, in particular, upon the request of the PULSE Project expert, the Ministry of Education and Science prepared its letter of April 08, 2020 (# 1 / 9- 201) on urgent issues of the implementation of the Law of Ukraine "On Completed Comprehensive Secondary Education", and later provided more detailed explanations in the letter of the Ministry of Education and Science of May 15, 2020 (# 1 / 9-259) «Regarding the implementation of Sub-Paragraphs 1 and 2 of Paragraph 3 of Chapter Х« Closing and Transitional Provisions» of the Law of Ukraine «On Completed Comprehensive Secondary Education»».

In the second quarter of 2020, the issue of student safety in schools came under the close attention of the head of state. For example, the Decree of the President of Ukraine of May 25, 2020 (Registration # 195/2020) "On the National Strategy for the Promotion of the Safe and Healthy Educational Environment in the New Ukrainian School" deals with the promotion of a safe and healthy educational environment in the new Ukrainian school to ensure rights children for education, health care, creating conditions for providing students with high quality educational and health care services. In pursuance of this document, the Cabinet of Ministers must prepare the appropriate steps on an annual basis.

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Reform of vocational (professional and technical) education In the second quarter of 2020, the Cabinet of Ministers continued the implementation of the reform of vocational (professional and technical) education. For example, the Directive of the Cabinet of Ministers of Ukraine of April 29, 2020 (Registration # 508-р) "On Approving the Plan of Activities for 2020 - 2027 for the Implementation of the Concept for the Implementation of the National Policy in the Sector of Vocational (proprietary and technical) Education" Modern Vocational (professional and technical) Education "for the Period till 2027" endorsed the action plan for 2020 - 2027 for the implementation of the Concept of the national policy in the sector of vocational (professional and technical) education under the title: "Modern Vocational (professional and technical) Education" for the Period till 2027. In particular, the documents deals with the implementation in 2020 and completion in 2021 of a pilot project to transfer funding for vocational (professional and technical) educational establishments located in oblast center cities from oblast budgets. This suggestion is in line with the position of the AUC. Also, the draft document offers a suggestion to prepare and submit to the Cabinet of Ministers in 2020 a draft Law of Ukraine "On Vocational (professional and technical) Education", revise the list of professions of national importance, and make other steps to continue the reform of vocational (professional and technical) education.

Staffing policy in the sector of education The approval of the Law of Ukraine “On Completed Comprehensive Secondary Education”, which was prepared with the participation of the PULSE Project, stimulated the preparation of the relevant regulatory and legal documents. As this law provides for appointment of managers of comprehensive general educational establishments according to the fixed-term contracts and based on the results of the competition, there was a need to develop the requirements for putting together a list of questions for the technical test for the competition. A PULSE Project expert together with the Ministry of Education and Science prepared a list of such questions, which was endorsed by the Directive of the Ministry of Education and Science of Ukraine of May 19, 2020 (Registration # 654) "On the Model List of Questions". The existence of this act will make it easier for local governments to prepare and conduct the competitions.

Funding for the sector of education During the second quarter of 2020, the issue of salary payments to teachers remains under the control of the Cabinet of Ministers. For example, the Directive of the Cabinet of Ministers of Ukraine of May 06, 2020 (Registration # 506-р) "On the Redistribution of the Amount of the Education Subvention from the National Budget to Local Budgets in 2020" redistributed the amount of the education subvention in order to prevent salary arrears to employees of comprehensive secondary educational establishments financed from separate local budgets of Ivano-Frankivsk, Poltava, Khmelnytskyi and Chernihiv oblasts. The reason for the debt was the inaccuracies in the statistics, which were made by the founders of comprehensive secondary educational establishments and has affected the formula for the calculation of the amount of the education subvention. The Cabinet of Ministers directive has increased by 42 million hryvnyas the oblast budgets of the Poltava and Khmelnytskyi oblasts, as well as the budgets of three CTCs. For example, in particular, the budgets of CTCs will receive additional UAH 16.8 million. The source of funding for these expenditures will be the reserve funds of the education subvention in the amount of UAH 26.8 million and the reduction of the amount of the subvention for three rayon budgets by UAH 15.2 million.

During the reporting period, the situation with the COVID-19 pandemic has had a significant impact on the distribution of public funds. For example, some budget programs were closed, while with regard to others, the Law of Ukraine «On Introducing Amendments to the Law of Ukraine «On the National Budget of Ukraine for 2020»» of April 13, 2020 (Registration # 553-IX) has significantly reduced their funding. Nevertheless, the Ministry of Education and Science managed to retain certain types of transfers from the National Budget to local budgets for the development of the sector of education. In particular, the Resolution of the Cabinet of Ministers of Ukraine of April 29, 2020 "On Introducing Amendments to Resolutions of the Cabinet of Ministers of Ukraine # 237 of April 04, 2018 and # 105 of February 12, 2020" (Registration # 325) has changed the distribution of the subvention from the National Budget local budgets to provide high quality, modern and accessible comprehensive secondary education "New Ukrainian School" in 2020. The changes have been driven by the reduction as of April 13, 2020 of the amount of the subvention in the National Budget of Ukraine by UAH 361 million down to UAH 1.06 billion. The document also amends the Resolution of the Cabinet of Ministers of Ukraine of April 04, 2018 (Registration # 237), which, in particular, provides for the monthly (instead of quarterly) submission of information to the Ministry of Education and Science about the spending of the subventions and local budget funds as co-financing by oblast state administrations and Kyiv City State Administration. Taking into consideration the fact that the

34 April – June, 2019

amount of the subvention was reduced, the draft resolution suspended, until January 01, 2021, Subparagraphs 2 - 4 of Paragraph 4 of the Procedure and Conditions for Providing the Subvention from the National Budget to local Budgets to Provide High Quality, Modern and Accessible Comprehensive Secondary Education "New Ukrainian School", the document, which deals with the competence development of teachers and conducting supervision at the expense of the subvention funds. Also, the document suspended the legal force of Clauses 6 - 11, and Paragraphs 7-12 of Clause 15 of the Procedure and Conditions for Providing the Subvention for the Payment of Services to Perform the Supervision and the disbursement of the relevant funds of the subvention.

The total local budget expenditures on the education sector with regard to the funds not received in connection with the formation of the COVID-19 Fund from state subventions amounted 3.073 billion hryvnyas.

Health care reform Starting with April 01, 2020, the Program of health care guarantees for secondary, tertiary, emergency, palliative care and medical rehabilitation, etc. was launched. The provision of these types of medical care envisions funding to be provided for the service in the polyclinic and for the treated case in the hospital. The relevant tariffs have been set by the Resolution of the Cabinet of Ministers of February 05, 2020 (Registration # 65) for 27 packages within the Program of health care guarantees. The tariffs are mostly significantly understated and do not cover the real cost of such services. The program of health care guarantees will also operate for the reimbursement of drugs for cardiovascular diseases, bronchial asthma and Type II diabetes. The state provides funding for such services through the National Health Service of Ukraine. UAH 72 billion has been earmarked for the Program of health care guarantees for 2020. Letters were prepared to the Cabinet of Ministers with a request to amend the National Budget to increase the funding for tariffs under the program of health care guarantees.

The situation in the health care sector is complicated by the extraordinary situation in the country with the spread of the COVID-19 coronavirus. The problem of the lack of personal protective equipment and medical equipment, which was very acute at the beginning of the year, became a serious issue in preparation for the signing of agreements with the National Health Insurance Fund and manifested itself during the epidemic. During the reporting period, the PULSE Project expert provided an overview of the problems communities faced and participated in the organisation of a survey of health care professionals (more than 4,500 physicians) about changes in health care sector. The materials of the survey were sent to public authorities for consideration and management decisions. The constant communication with local governments provides opportunities to identify problems on time.

The problem with the lack of health care funding and reduced tariffs identified by the PULSE Project expert provided an opportunity to avoid transferring the responsibility to resolve it to communities only. At its extraordinary plenary session, the Verkhovna Rada of Ukraine approved the Law “On Introducing Amendments to the National Budget for 2020”, which established the COVID-19 Fund for Combating Acute Respiratory Disease. The volume of the Fund is 64.7 billion hryvnyas. The Fund has already made the following disbursements to health care: x UAH 3 billion were earmarked for the activities to prevent the spread of the coronavirus, including: UAH 650 million for laboratory units of the Ministry of Health Care and UAH 2.3 billion for the purchase of personal protective equipment for health care establishments that provide in-patient and emergency medical care.

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x UAH 100 million were earmarked for the purchase of ventilators for health care establishments that provide in-patient care to patients with COVID-19; and approved the distribution of: x UAH 7.8 billion - for additional payments to physicians and certain categories of workers who provide for life-sustaining activities for the population; x UAH 2.9 billion - for the purchase of equipment for reception units for hub health care establishments in hospital districts.

Also, the expenditures on health care were increased by UAH 15.4 billion from UAH 115.9 billion to UAH 131.3 billion, in particular, expenditures on the implementation of the program of state health care guarantees were increased by UAH 15.8 billion from UAH 72.3 billion. up to 87.8 billion hryvnyas. The Resolution of the Cabinet of Ministers of June 19, 2020 (Registration # 513) introduced amendments to the Resolution of the Cabinet of Ministers of February 05, 2020 (Registration # 65) "Certain Issues of the Implementation of the Program of State Guarantees of Health Care Services for the Population in 2020" and increased the tariff: x - for health care services associated with the provision of medical care for acute myocardial infarction in an in-patient setting from 16,001.43 hryvnyas to 30,108 hryvnyas. x - for health care services for the provision of medical care for acute stroke in an in-patient setting from 19,332.31 hryvnyas to 26,947 hryvnyas.

Tanks to constant appeals of the AUC to the Cabinet of Ministers, the Resolution of the Cabinet of Ministers of 15.04.2020 (Registration # 286) "Certain Issues of Ensuring the Availability of Drugs for the Treatment of Rheumatic Diseases" was supplemented with medicines under the international non-proprietary names of "Chloroquine" and "Hydroxychloroquine" for out-patient treatment of rheumatic diseases and for dispensing these drugs by drug stores.

Activity 1.2. Local governments and all interested parties are actively engaged and use participatory tool to work on legislation and advocating for its approval

1.2.1. Support for approval of drafted legislation in the parliament: tools for interaction with the VRU

During the reporting period, the PULSE Project utilised the tool to interact with the parliament including supporting the work of the Inter-Faction Local Government Support Group (local government caucus), participation in the work of parliamentary committees, preparation of expert opinions on draft laws, and conducting Regional Policy Dialogue Platforms.

Cooperation with the local government caucus and National Deputies During the reporting quarter, National Deputies registered 2 draft laws prepared by the PULSE Project, 4 draft laws to which PULSE submitted proposals (for details please see Section 1.1.2 “Preparation of sectoral legislation”). Thanks to cooperation with certain groups of National Deputies, the PULSE Project manages to push for the approval of 4 laws, which were prepared with the participation of the PULSE Project (for details please see Section 1.1.2 "Preparation of sectoral legislation" and Section 4 "SUCCESS STORIES").

36 April – June, 2019

Participation in the work of parliamentary committees During the reporting period of Project implementation, PULSE Project experts participated in 13 meetings of 3 parliamentary committees:

Verkhovna Rada of Ukraine Committee on Social Policy and Protection of Veteran Rights – 6; VRU Committee on Energy and Housing and Municipal Utilities - 3; and, Verkhovna Rada Committee on State Building, Regional Policy and Local Self-Governance - 4

Starting with March 12, 2020, the Cabinet of Ministers introduced quarantine restrictions, which limit, in particular, the number of participants of meetings of the Verkhovna Rada committees. Therefore, starting from that date, PULSE Project representatives were not in a position to participate in the meetings of the parliamentary committees. However, the activities of the PULSE Project focused on remote forms of participation and cooperation with VRU committees.

During the reporting period, thanks to the participation of PULSE Project specialists and experts, the following results were achieved in terms of cooperation with the committees, specifically:

Verkhovna Rada of Ukraine Committee on State Building, Regional Policy and Local Self-Governance The Committee supported the position of AUC/PULSE and came up with a decision to give a recommendation to the Parliament to approve the draft Law of Ukraine “On Introducing Amendments to Annexes # 3 and # 6 of the Law of Ukraine “On the National Budget of Ukraine for 2020” with Regard to Financial Support for Conducting Elections” (Registration #3712 of June 22, 2020), which provides for the resumption of expenditures for elections of members to local councils and village, town and city mayors, which were reduced due to the need to capitalize the Fund to combat COVID-19.

On May 20, 2020, the Committee considered the draft Law of Ukraine "On Introducing Amendments to the Law of Ukraine "On Local Self-Governance in Ukraine" with Regard to Compliance with the State Guarantees of Local Self-Governance and Protection of Its Economic Foundations" (Registration #3118 of February 24, 2020). The Committee supported the position of AUC/PULSE and came up with a decision to give a recommendation to the Verkhovna Rada of Ukraine to approve Draft Law # 3118 in the first reading. Aiming at preventing significant shortfalls in local budgets and their imbalance, Draft Law # 3118 makes it impossible to change the place of registration of municipal utility companies, institutions, organisations unilaterally by decisions of rayon and oblast councils being local government bodies representing common interests of territorial communities of villages, towns and cities.

An AUC/PULSE representative participated in 2 meetings of the Working Group of the Verkhovna Rada Committee on State Building, Regional Policy and Local Self-Governance for the preparation of the draft law “On Introducing Amendments to Certain Legislative Acts of Ukraine with Regard to the Optimisation of the Network and Functioning of Centers for Administrative Services Provided in the Electronic Format” Registration # 2679) for the second reading. The PULSE Project experts presented their suggestions and comments, which were supported by most of the members of the working group.

A PULSE Project expert participated in a meeting of the working group of the Committee for revision of the election legislation. In the course of the meeting, the participants discussed proposals and amendments received from National Deputies of Ukraine including those prepared by the PULSE Project. The working group unanimously supported the amendments prepared by the PULSE Project regarding funding of local elections and preservation of the existing system of elections.

Verkhovna Rada of Ukraine Committee on State Building, Regional Policy and Local Self-Governance During the reporting period, a PULSE Project expert participated in 7 working meetings of the expert group of the Committee for the preparation of the draft law on connections to heat and water supply networks. With the active participation of the PULSE representative, the Committee prepared the preliminary text of the draft law for discussion, which is currently being finalised.

Due to the active position of the PULSE Project with regard to the necessity of finalising the Draft Law "O n Introducing Amendments to the Law of Ukraine "On Urban Beautifications of Populated Areas"" (registered under # 2688 of December 27, 2019) the Committee came up with the decision of May 05, 2020 to give a

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recommendation to the VRU to return this draft law following its consideration in the first reading to the entity of the legislative initiative for elaboration.

Verkhovna Rada of Ukraine Committee on Environmental Policy and Management of Natural Resources During the meeting of the working group for the elaboration for the second reading of the Draft Law "On Solid Waste Management" (Registration # 2207-1), a PULSE Project representative provided a number of comments to the draft law, which were subsequently taken into account by its authors. The revised Draft Law "On Solid Waste Management" was registered in the Verkhovna Rada of Ukraine on June 04, 2020 under the Registration # 2207-1-д, and, according to the decision of the Verkhovna Rada Committee on Environmental Policy and Management of Natural Resources, was recommended for approval by the Verkhovna Rada of Ukraine in the first reading.

Committee of the Verkhovna Rada of Ukraine on Education, Science and Innovations On April 13, 2020, the Committee approved the Recommendations of the Committee hearings under the title: "Current status and problems of the legislative framework for the development of preschool education in Ukraine", which took place in the last reporting period. The decision takes into account the proposals of a PULSE Project expert with regard to the legal regulation of certain issues of preschool education. The document deals with the preparation of the new version of the Law of Ukraine "On Pre-School Education", introduction of financing from various sources for preschool education, definition of components of financial autonomy of preschool educational establishments, upgrading equipment of food units, repairs, and purchase of new equipment for canteens of educational establishments.

On May 12, 2020, the Committee returned for elaboration the draft Resolution of the Verkhovna Rada "On the Program of Activities of the Cabinet of Ministers of Ukraine" (Registration # 3330 of April 13, 2020, submitted by the CMU). A PULSE Project expert previously submitted comments on the draft Program of Activities of the Cabinet of Ministers of Ukraine, which needs significant elaboration.

On May 20, 2020, the Committee supported the draft Law of Ukraine “On Introducing Amendments to Articles 89 and 90 of the Budget Code of Ukraine (with regard to financial specialised pre-higher education in vocational (professional and technical) educational establishments)” (Registration # 3461 of May 12, 2020). The draft law provides for the funding of the educational and professional degree of a professional junior bachelor within the system of vocational (professional and technical) education, provided that the educational establishment obtains such a license. The AUC also supported the approval of this draft law in the conclusions prepared by the PULSE Project expert.

On May 27, 2020, the Committee, taking into account the position of the AUC expressed in the conclusions of a PULSE Project expert, returned for elaboration the draft Law of Ukraine "On Catering in Comprehensive Secondary Educational Establishments" (Registration # 2664 of December 20, 2019, National Deputies I. Kalaur, V. Vatras, M. Stefanchuk, Y. Kisel, V. Medyanyk, and O. Merezhko). The draft law had numerous shortcomings, could lead to an increase in local budget expenditures on student meals without the proper compensation mechanism, and required harmonisation with many pieces of the current legislation.

Verkhovna Rada of Ukraine Committee on Finance and Tax and Customs Policy PULSE Project experts, in cooperation with a National Deputy who is a members of the Committee, prepared the text of amendments to the Tax Code of Ukraine (Draft Law under Registration # 3329-д of April 30, 2020) with regard to preventing local government losses from collections from the personal income tax and saving their own resources by providing the monetary compensation to payers of the personal income tax from the National Budget. The registered amendment to the draft law for the second reading was supported by the relevant Committee of the Verkhovna Rada on Finance and Tax and Customs Policy and was into account in Law # 591-IX of May 13, 2020.

Committee of the Verkhovna Rada of Ukraine on Social Policy and Protection of Veteran Rights According to the outcomes of the activities of the working group for the elaboration of the Draft Law # 2587 of December 12, 2019 by the Committee with the participation of a PULSE Project expert, a National Deputy (the author of the draft law) withdrew the draft law from consideration. The PULSE Project expert presented a position against the draft law. The draft law provides for additional expenditures on local budgets in the amount of UAH 9.3 billion per year.

38 April – June, 2019

On May 20, the Committee considered Draft Law # 3240-1 of April 08, 2020, which imposed expenditure categories in the amount of UAH 5 billion on local budgets. The PULSE Project expert presented a position against the draft document. The committee supported the position of the PULSE Project expert rejected the draft law. The PULSE Project prepared a draft law that exempted local governments from the payment of court fees with regard to the sector of social protection. The draft law will provide an opportunity for local budgets to retain approximately 14.3 million hryvnyas and to better perform the powers delegated by the state. The Chairman of the Parliamentary Committee supported the draft law and registered it in the Parliament under Registration # 3551 of May 28, 2020.

Verkhovna Rada Committee on Youth and Sport A PULSE Project expert continued to work on the draft Law "On the Main Foundations of the Youth Policy" being a member of the working group at the Committee. The draft law was registered by 46 National Deputies: Draft Law “On the Main Foundations of the Youth Policy” (Registration # 3718 of June 23, 2020). Verkhovna Rada of Ukraine Committee on National Health, Medical Care and Medical Insurance On June 25, a PULSE Project expert participated in an online meeting of the working group at the Committee for the preparation of the draft Law "On Introducing Amendments to Certain Laws of Ukraine with Regard to Protection of Health of Citizens from the Harmful Influence of Tobacco". Verkhovna Rada Committee on Digital Transformation A PULSE Project representative participated in the Smart City and e-Democracy working group at the Verkhovna Rada Committee on Digital Transformation. In the course of the meeting, its participants discussed the necessity of promoting the conditions for the development of the smart city concept in populated areas of Ukraine and to find ways for the financial support.

Meetings of Regional Policy Dialogue Platforms A regional policy dialogue platform is a joint meeting of mayors of AUC Regional Office member municipalities, oblast leadership, and National Deputies who were elected from the given region, which are conducted with the purpose of supporting the approval in the parliament of the legislation including the draft laws prepared by AUC experts aimed at resolving local government problem issues in selected regions. The Project conducts two meetings of regional policy dialogue platforms every year.

During the reporting period, meetings of regional policy dialogue platforms did not take place because of the introduction of quarantine restrictions.

1.2.2. Support to approval of resolutions and directives of the Cabinet of Ministers: tools to interact with the Cabinet of Ministers of Ukraine During the reporting quarter, the PULSE Project continued to use various tools to interact with the Cabinet of Ministers. They included: the Dialogue Day, participation in meetings of the Cabinet of Ministers and Cabinet of Ministers Committees, sectoral forums, cooperation with line ministries, and drafting of expert conclusions and drafts regulatory and legal documents.

Interaction with the Cabinet of Ministers

Participation in Cabinet of Ministers meetings Throughout the whole period of the impolementation of the decentralisation reform, the direct participation of AUC/PULSE representatives in meetings of the Cabinet of Ministers and Cabinet of Ministers committees has contributed to the direct and effective dialogue between the local governments and the Cabinet of Ministers.

In the first quarter of 2020, such interaction became significantly more complicated due to interrupted communication, an unclear mechanisms for government decision making aggravated by staff turnover and the Cabinet of Ministers itself.

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Oleksandr Slobozhan, Executive Director of the Association of Ukrainian Cities and senior PULSE Project expert, became an official representative of local self-government in the Cabinet of Ministers.

The main areas of the interaction between AUC/PULSE and the Cabinet of Ministers in the second quarter included: representation and protection of interests of territorial communities at the Cabinet of Ministers level; monitoring and analysis of regulatory and legal documents submitted to the Cabinet of Ministers; and, providing comments and suggestions on draft regulatory and legal documents prepared by the Cabinet of Ministers local government issues, as well as appeals to the Prime Minister of Ukraine on the most pressing and important issues for local governments.

During the reporting period, 32 meetings of the Cabinet of Ministers took place, however PULSE Project representatives were invited to only 13 of them (Figure 1.1).

The remaining 12 extraordinary meetings of the Cabinet of Ministers were held "behind the closed doors”. Contrary to the CMU Regulations, draft regulatory and legal documents related to local government issues were not sent or discussed with representatives of local government associations or local governments.

Also, the involvement of PULSE Project representatives to meetings of Cabinet of Ministers Committees was a partial success. The Resolution of the Cabinet of Ministers of May 13, 2020 (Registration # 396) "On the Establishment of the Cabinet of Ministers Committees and Endorsing the Personal Composition" once again introduced reorganization in the system of Cabinet of Ministers Committees. Instead of two government committees (on state policy and on European integration and regional development) working under the leadership of Deputy Prime Ministers, the government set up three others committees: Cabinet of Ministers Committee on Digital Transformation, Community and Territorial Development, Education, Science and Innovations, Health Care, Economic, Financial and Legal Policy, Law Enforcement, Fuel and Energy and Infrastructure; Cabinet of Ministers Committee on European and Euro-Atlantic Integration, International Cooperation, Culture, Youth, Sports and Information Policy; Government Committee on National Security and Defence, Reintegration of the Temporarily Occupied Territories and Social Policy.

Since May, AUC/PULSE representatives have been participating in the meetings of two of the three Cabinet of Ministers Committees, namely: on economic, financial and legal policy, as well as on the reintegration of the temporarily occupied territories and social policy.

Despite the repeated appeals to the Chairman of the Cabinet of Ministers Committee on European Integration, Culture, Youth, Sports, the participation of an AUC/PULSE representative in the work of this Committee has not been resolved yet. This is because of the fact that the third committee was set up with almost a month delay according to the original schedule, as well as changes in staffing (change of the Deputy Prime Minister for European and Euro-Atlantic Integration of Ukraine who is the chairman of the Committee).

April May June

Cabinet’s Meetings Committees’ Meetings

Figure 1.1. Meetings of the Cabinet of Ministers and Cabinet of Ministers committees in the second quarter of 2020

40 April – June, 2019

During the second quarter, PULSE Project experts monitored 482 draft regulatory and legal documents and provided overview of 131 draft Cabinet of Ministers regulatory and legal documents regarding their potential impact on local self-governance (Fig. 2).

April May June

Number of overviewed draft regulatory and including ones on local governance legal documents of the Cabinet of Ministers Figure 1.2. Monitoring of draft regulatory and legal documents of the Cabinet of Ministers by PULSE Project experts in the second quarter of 2020

The monitoring process covered 59 draft laws prepared by the Cabinet of Ministers, 16 draft decrees (directives) of the President of Ukraine, 236 draft resolutions, 161 draft directives of the Cabinet of Ministers, and 10 other regulatory and legal documents (see Table 1.5).

Table 1.5. Monitoring of Cabinet of Ministers draft regulatory and legal documents by PULSE Project Experts in April – June, 2020

Month Laws Decrees or CMU CMU directives Plans for activities to Total draft directives orders Resolutions implement laws, decrees, regulatory of the President etc. and legal documents April 10 0 50 23 3 86 May 14 6 68 49 4 141 June 35 10 118 89 3 255 Total: 59 16 236 161 10 482

The general tendencies observed in the draft regulatory and legal documents on local government issues considered by the Cabinet of Ministers revealed the fact that: 1) starting from April to June, 2020, the share of these regulatory and legal documents increased from (April) to 39% (June). This can be interpreted as a sign that despite the declining “publicity” of the topic of decentralisation, these issues and tasks still remain in the focus of attention of the Cabinet of Ministers and its structural entities; 2) as compared to the previous quarter, the share of regulatory and legal documents on local self- governance also increased: from 26% to 35%, and this only confirms the previous statement.

Thus, of the 482 draft Cabinet of Ministers regulatory and legal documents PULSE Project experts reviewed during the quarter 27% (or 131 documents) dealt with local self-governance issues. Of the 131 draft documents PULSE Project experts supported 88% (or 115 documents) and did not support 12% (16 documents, Table 1.6).

Table 1.6. PULSE expert support for Cabinet of Ministers draft regulatory and legal documents in April – June, 2020

Month Draft regulations prepared by the Cabinet of Draft regulations on local government issues Ministers total including regulations on local supported by PULSE Project not supported by PULSE government issues experts Project experts

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April 86 28 28 0 May 141 53 42 11 June 255 50 45 5 Total: 482 131 115 16

The cooperation of AUC/PULSE with the Cabinet of Ministers has resulted in the endorsement of 98 important regulations that contributed to the decentralisation reform and strengthened community capacity and local budgets. The most important for local self-governance acts endorsed in the second quarter of 2020 were: Draft resolutions of the Verkhovna Rada: On June 12, the Cabinet of Ministers of Ukraine endorsed the draft resolution of the Verkhovna Rada of Ukraine "On the Formation and Liquidation of Rayons". Resolutions of the Cabinet of Ministers of Ukraine: 1. The Resolution of April 01, 2020 (Registration # 254) «On Endorsing the Conditions for Attracting Loan Funding and Provision of State Guarantees in 2020 for Ensuring Debt Compliance on the Loans of the National Agency for Automobile Roads and the List of Projects for Construction, Reconstruction and Capital and Scheduled Repairs of General Purpose Automobile Roads of National Significance in 2020 and Amounts of Budget Funding to Finance Them at the Expense of Loans Attracted under State Guarantees», which provides additional opportunities to attract loan funding under state guarantees. Also, the resolution endorses the list of projects for construction, reconstruction, and capital and scheduled repairs of automobile roads in 2020 in several oblasts of Ukraine (within framework of the Large Construction program). 2. The Resolution of April 02, 2020 (Registration # 255) "On Introducing Amendments to the Resolution of the Cabinet of Ministers of Ukraine # 211 of March 11, 2020", by which the Cabinet of Ministers gave a recommendation that local governments, enterprises, institutions and organisations take a number of steps to prevent spread of the disease, in particular, shift based (remote) work of employees, prohibition for electricity suppliers to cut off or limit electricity supply to water supply and sewerage companies, prohibition for gas suppliers to suspend the supply of natural gas to producers of heat and electricity, etc. These proposals were presented by PULSE Project experts in the course of the discussion of the draft regulatory and legal document. 3. The Resolution of April 08, 2020 (Registration # 264) "Certain Issues of the Provision of the State Social Assistance", which simplified for the period of quarantine the procedure and extended the terms of payment of various types of state social assistance without the need for personal application of citizens. 4. The Resolution of April 08, 2020 (Registration # 266) "On Introducing Amendments to Certain Resolutions of the Cabinet of Ministers of Ukraine", which simplified for the period of quarantine the procedure and extended the payment of various types of state social assistance without the need for personal application for IDPs. 5. The Resolution of April 08, 2020 (Registration # 267) "On Introducing Amendments to Resolutions of Cabinet of Ministers of Ukraine # 410 of April 25, 2018 and # 65 of February 05, 2020", which amended the program of state health care guarantees in 2020 with regard to the revision of the system of funding of health care facilities as of April 01, 2020, in particular, the distribution of the global rate and the rate for the treated case for health care, etc. 6. The Resolution of April 08, 2020 (Registration # 287) "On the Development of Social Services for Certain Social Groups of Population", which introduced a pilot project on remote payment for housing and municipal utility services and launched the Help Nearby information platform to identify and meet the needs of vulnerable categories citizens, providing them with assistance from local governments and social services. 7. The Resolution of April 15, 2020 (Registration # 278) «On the Implementation of the Experimental Project for Using the Electronic Format of the Information Contained in the Passport of the Citizen of Ukraine in the Forma of a Card and Reflection in the Electronic Format of the Information Contained in the Foreign Travel Passport of the Citizen of Ukraine», which determines the conditions for the implementation of the pilot project on digitalisation of administrative services in 2020 - 2021.

42 April – June, 2019

8. The Resolution of April 15, 2020 (Registration # 286) "Certain Issues of Ensuring the Availability of Drugs for the Treatment of Rheumatic Diseases", which expanded the list of drugs to be reimbursed at the expense of budget funds. 9. The Resolution of April 22, 2020 (Registration # 292) "On Establishing the Amount of Payment for Filing the Complaint to the Appeal Office through the Electronic Procurement System and Returning It to the Subject of the Complaint", which endorses the procedure for payment for filing a complaint through electronic procurement system and its return. 10. The Resolution of April 22, 2020 (Registration # 293) "On Introducing Amendments to Resolutions of the Cabinet of Ministers of Ukraine # 1101 of December 24, 2019 and # 251 of April 01, 2020", which has streamlined the use of funds intended for the payment of one-time cash allowance assistance (UAH 1,000) to certain categories of citizens in connection with the spread of coronavirus and the deadline for payment of this allowance. 11. The Resolution of April 22, 2020 (Registration # 294) "On Endorsing Amendments to the Regulations on Carrying out the Analysis of the Efficiency of the Implementation of the Public- Private Partnership", which included state-owned and communally-owned companies, institutions, organisations in the list of participants in the preparation of proposals for PPP, clarified the procedure for the preparation of PPP proposals, and outlined the reasons for refusal of PPP on the basis of the analysis of efficiency of the partnership. 12. The Resolution of April 22, 2020 (Registration # 302) "On Endorsing the Regulations for Using the Funds of the Fund for Countering the Acute Respiratory COVID-19 Disease Caused by the SARS- CoV-2 Coronavirus and Its Consequences", which has set up a fund in the amount of 64.7 billion UAH within the National Budget to prevent the negative consequences of the crisis in connection with the outbreak and spread of the acute COVID-19 respiratory disease, in particular, to increase the efficiency of local government bodies (the timeframe of the Fund: period of quarantine restrictions and the next 30 days of the date of lifting the quarantine). 13. The Resolution of April 24, 2020 (Registration # 303) "On Endorsing Amendments Resolution of the Cabinet of Ministers of Ukraine # 867 of October 19, 2018", which, in particular, stipulates that the amounts of calculated and not paid privileges and subsidies will not be taken into account when determining the level of payments of heat generating companies, which improves the financial condition of municipal utility companies producing heat. 14. The Resolution of April 29, 2020 (Resolution # 313) "On Introducing Amendments to the Resolution of the Cabinet of Ministers of Ukraine # 211 of March 11, 2020", whereby the Cabinet of Ministers has streamlined the activities of food markets during the period of the quarantine restrictions, which had a positive impact on employment and increased local budget revenues. 15. The Resolution of the Cabinet of Ministers of April 29, 2020 (Registration # 314) "On Introducing Amendments to Paragraph 23 of the Regulations for the Distribution of Funds Coming to Special Operational Accounts for Settling Payments with the Suppliers of the Natural Gas Charged with Special Obligations". Due to its endorsement, the restrictions on heat supply utilities for utility companies have been lifted. 16. The Resolution of the Cabinet of Ministers of April 22, 2020 (Registration # 329) "Certain Issues Regarding the Social Support to Families with Children", which endorsed the Procedure for the payment of child allowances to private entrepreneurs, extended the timeframe for payment of the debt on housing and municipal utility services (from 1 to 3 months), and introduced privileges for allowances for low-income families for persons who became unemployed during the quarantine. 17. The Resolution of April 29, 2020 (Registration # 324) "On Endorsing Resolution of the Cabinet of Ministers of Ukraine # 100 of February 12, 2020", which introduced amendments to the procedure and conditions for granting the subvention for the implementation of the Capable School for Better Results program, in particular: reduced the amount of the subvention by UAH 1 billion - from UAH 3.5 to 2.5 billion. 18. The Resolution of April 29, 2020 (Registration # 320) "On Introducing Amendments to the Resolution of the Cabinet of Ministers of Ukraine # 206 of February 20, 2019", which improved the procedure for providing monetary compensation for housing for the participants of the Revolution of Dignity and their families, in particular: CTCs became involved in the housing distribution system, powers of local commissions have been expanded, and the criteria developers should meet have been established. 19. The Resolution of April 29, 2020 (Registration # 325) "On Introducing Amendments to Resolutions of the Cabinet of Ministers of Ukraine # 237 of April 04, 2018 and # 105 of February 12, 2020", which reduced the amount of subventions to local budgets to ensure high quality, modern and

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accessible comprehensive secondary education "New Ukrainian School" by UAH 361 million - from UAH 1.4 billion to UAH 1.06 billion, and also stopped the disbursement of funds for professional development of teachers and supervision at the expense of the subvention till January 01, 2021. 20. The Resolution of April 29, 2020 (Registration # 333) "On Introducing Amendments to Resolution of the Cabinet of Ministers of Ukraine # 214 of March 28, 2018", which improved the procedure for providing monetary compensation for housing veterans and their families, in particular, CTCs became involved in the housing distribution system, powers of local commissions have been expanded, and the criteria developers should meet have been established. 21. The Resolution of May 04, 2020 (Registration # 332) "On Introducing Amendments to Paragraph 8 of the Resolution of the Cabinet of Ministers of Ukraine # 211 of March 11, 2020", by which the Cabinet of Ministers has limited the list of types of medical care provided by health care establishments during the period of quarantine restrictions. 22. The Resolution of May 13, 2020 (Registration # 357) "On Introducing Amendments to Resolutions of the Cabinet of Ministers of Ukraine # 183 of Marc 14, 2018 and # 166 of March 03, 2020", which regulates the issue of competitive selection and financing of projects of non-governmental organisations of persons with disabilities from local budgets. 23. The Resolution of May 13, 2020 (Registration # 399) "On Introducing Amendments to Certain Resolutions of the Cabinet of Ministers of Ukraine in the Sector of State Registration", which has improved the mechanisms for providing administrative services in the sector field of state registration, optimisation of the borrowing process, attraction of investment into economy of Ukraine. 24. The Resolution of May 14, 2020 (Registration # 377) "On Introducing Amendments to Paragraph 2 of the Resolution of the Cabinet of Ministers of Ukraine # 211 of March 11, 2020", by which the Cabinet of Ministers allowed the resumption of the work of non-food markets, which has had a positive impact on employment and also helped increase the revenue flow to local budgets. 25. The Resolution of May 27, 2020 (Registration # 411) "On Introducing Amendments to the Regulations and Conditions for the Provision of the Subvention from the National Budget to Local Budgets for Implementation of Activities for Social and Economic Development of Certain Territories", which has introduced amendments to the procedure and conditions for granting the subvention, specified the conditions and criteria for its provision during the implementation of projects for the construction of communal property, implementation of environmental and environment protection activities, procurement of medical equipment and public transportation vehicles; implementation of projects in the sectors of energy efficiency, water and heat supply, etc. 26. The Resolution of June 01, 2020 (Registration # 427) "Certain Issues of Exercising Control of Compliance with the Requirements of the Law of Ukraine" On Social Services"", which has defined the procedure for monitoring compliance with the Law “On Social Services”, in particular: the procedure for such monitoring exercised by executive bodies of city councils of cities of oblast significance, village, town and city CTC councils shall be determined by the relevant local council. 27. The Resolution of the Cabinet of Ministers of Ukraine of June 01, 2020 (Registration # 429) "On Endorsing the Regulations for the Introduction of the Differentiated Payment for the Provision of Social Services". 28. The Resolution of June 01, 2020 (Registration # 450) "Certain Issues of Providing Social Services through the Social Request", which defines the mechanism for the involvement of social service providers on a contract basis to meet the needs of individuals/families in social services at the expense of public funds and for the compensation the service costs to providers of social services, in particular, from local budgets. 29. The Resolution of the Cabinet of Ministers of June 10, 2020 (Registration # 467) "On Introducing Amendments to the Mechanisms for Setting Tariffs for Heat Energy, Its Generation, Transportation and Supply and Heat Supply and Hot Water Supply Services and the Mechanisms for Setting Tariffs for Centralised Water Supply and Centralised Sewerage". The document was endorsed with the purpose of improving tariff mechanisms for heat and water supply companies. 30. The Resolution of June 01, 2020 (Registration # 479) "Certain Issues of the Work of Centers for Social Services", which has endorsed (in connection with the entry into force of the Law of Ukraine "On Social Services") Standard Regulations on the Republican of the Autonomous Republic of Crimea, Oblast, Kyiv and Sevastopol City Centers for Social Services, as well as the Standard Regulations on the rayon, city, city rayon, town, and village center of social services in the new working with the participation of PULSE Project experts.

44 April – June, 2019

31. The Resolution of June 03, 2020 (Registration # 441) "On Introducing Amendments to Appendices to the Resolution of the Cabinet of Ministers of Ukraine # 268 of March 09, 2006", which provides for an increase in salaries for local government employees (amendments to Annexes 48 - 55), which the AUC insisted upon with the purpose of ensuring stabile staffing and increasing the attractiveness of the service in local government bodies. 32. The Resolution of the Cabinet of Ministers of Ukraine of June 01, 2020 (Registration # 450) "Certain Issues of Providing Social Services through the Social Request". 33. The Resolution of June 03, 2020 (Registration # 454) "On Introducing Amendments to the Resolution of the Cabinet of Ministers of Ukraine # 417 of May 30, 2018", which will help meet the needs of communities in medical, pedagogical and artistic staff by providing benefits upon hiring and provision of free housing for persons who have concluded an agreement to work for at least three years in rural areas. 34. The Resolution of June 03, 2020 (Registration # 455) "Certain Issues with Regard to Implementation of the Pilot Project for the Implementation of the Principle of Extraterritoriality in the State Registration of Land Plots", which has introduced the principle of extraterritoriality in the state registration of land plots and simplified the registration procedure. In particular, the documents has reduced the term of land registration from 14 to 7 days, eliminated the reasons for repeated appeals of applicants through Centers for Administrative Services to state cadastre registrars, and allowed the results of state examination of land management documentation in the electronic. 35. The Resolution of June 03, 2020 (Registration # 483) "Certain Issues of Renting out State-Owned and Communally-Owned Property", which has endorsed the Procedure for leasing out state-owned and communally-owned property, which unblocked the process of leasing communal property and increased the revenue flow to local budgets. 36. The Resolution of June 10, 2020 (Resolution # 467) «On Introducing Amendments to the Mechanisms for Setting Tariffs for Heat Energy, Its Generation, Transportation and Supply and Heat Supply and Hot Water Supply Services and the Mechanisms for Setting Tariffs for Centralised Water Supply and Centralised Sewerage", which established a method for calculating the cost of thermal energy and utilities and determining the amount of costs in the formation of tariffs for thermal energy and the mechanism for the distribution of general production, administrative and other operating costs. 37. The Resolution of the Cabinet of Ministers of Ukraine of June 01, 2020 (Registration # 479) "Certain Issues of Activities of Centers for Social Services". 38. The Resolution of June 17, 2020 (Registration # 491) "On Introducing Amendments to the Regulations for the Provision of the Monthly Targeted Assistance to Internally-Displaced Persons to Cover the Subsistence Expenditures Including for the Payment of Housing and Municipal Utility Services", which extends for the period of quarantine and for one month after it has been lifted the term of payment of financial assistance without the application of IDPs and the mechanism for recalculation of the allowance by a social protection department. 39. The Resolution of June 17, 2020 (Registration # 499) "On Introducing Amendments to the Budget of the Social Insurance Fund of Ukraine for 2020", which determines the amount of payments to medical workers (including the municipal medical institutions) in case of disability or death from the coronavirus infection, which enhances the social protection of physicians. 40. The Resolution of June 17, 2020 (Registration # 500) "On Introducing Amendments to Certain Acts of the Cabinet of Ministers of Ukraine", by which the Cabinet of Ministers extended the quarantine period until July 31, 2020, came up with a recommendation for local government bodies to introduce more flexible working hours, and gave a directive to develop (adjust) routes of public transportation taking into account the changed in work schedules of enterprises, establishments and organisations. 41. The Decree of June 19, 2020 (Registration # 610) "Certain Issues Regarding Remuneration of Health Care and Other Employees of Health Care Establishments", which provides for additional payments to the salaries of health care workers starting from September 01, 2020. 42. The Resolution of June 19, 2020 (Registration # 513) "On Introducing Amendments to the Regulations for the Implementation of the Program of State Guarantees of Health Care Services for the Population in 2020", by which the Cabinet of Ministers increased tariffs for certain services under the program of state health care guarantees, as well as has introduced and a mechanism for the interim financial support for the provision of health care services by health care establishments. 43. The Resolution of the Cabinet of Ministers of Ukraine of June 01, 2020 (Registration # 515) "On Introducing Amendments to the Resolution of the Cabinet of Ministers of Ukraine # 877 of November 15, 2017" (has endorsed the mechanism and conditions for the provision in 2019 of the

45 QUARTERLY REPORT for the implementation of the PULSE Project

subvention from the National Budget to local budgets for design, construction and repair works, procurement of housing and premises for the development of family type and other forms of education similar to family type ones, and for the provision of housing for orphans, children deprived of parental care, and persons of similar categories). 44. The Resolution of the Cabinet of Ministers of Ukraine of June 01, 2020 (Registration # 585) "On Ensuring the Social Support for Children Who Are in Difficult Life Circumstances". 45. The Resolution of the Cabinet of Ministers of Ukraine of June 01, 2020 (Registration # 586) "Certain Issues of the Protection of Children in the Context of Countering the Consequences of the Acute COVID-19 Respiratory Disease Caused by the SARS-CoV-2 Coronavirus". 46. The Resolution of the Cabinet of Ministers of Ukraine of June 01, 2020 (Registration # 587) "On Organisational Aspects of the Provision of Social Services".

Directives of the Cabinet of Ministers of Ukraine: 1. The Directive of 29 April 2020 (Registration # 508-р) «On Approving the Plan of Activities for 2020 - 2027 for the Implementation of the Concept for the Implementation of the National Policy in the Sector of Vocational (professional and technical) Education «Modern Vocational and technical) Education» for the Period till 2027", which envisages the preparation and submission to the Cabinet of Ministers for consideration in 2020 of a draft Law of Ukraine "On Vocational (professional and technical) Education", revision of the list of professions of national importance, and other steps to continue the reform of the vocational (professional and technical) education. PULSE Project experts were actively involved in the preparation of the document. 2. The Directive of May 06, 2020 (Registration # 506-р) "On the Redistribution of the Amount of Education Subvention from the National Budget to Local Budgets in 2020", which increased the financial resources for salaries of teachers of Ivano-Frankivsk, Poltava, Khmelnytskyi and Chernihiv oblasts by UAH 42 million at the expense of the reserve funds. In particular, budgets of CTCs additionally received UAH 16.8 million. 3. The Directive of June 10, 2020 (Registration # 656-р) "On Introducing Amendments to Methodological Recommendations Regarding the Preparation and Placement of the Regional Request for Training Specialists and Blue Collar Workers", which introduced a unified approach to the preparation of the regional request, as well as clarified the mechanism for interaction of local government bodies, state executive authorities and non-governmental organisations in the course of the formation of proposals for the regional request. The most important Cabinet of Ministers regulatory and legal documents in the second quarter of 2020 included 48 directives of the Cabinet of Ministers, which determined the conditions and peculiarities of changes in the administrative arrangement and the process of consolidation of territorial communities, in particular: 24 directives of the Cabinet of Ministers of Ukraine on the endorsement of long-term perspective plans for the formation of community territories for each of the oblasts (# 474-р Kherson # 475-р Khmelnytskyi, #480-р Mykolaiv, # 481-р Zhytomyr, # 482-р Ternopil, # 483-р Ivano-Frankivsk, # 486-р Luhansk, # 512-р Vinnytsya, # 540-р Donetsk, # 541-р Cherkasy, # 564-р Chernihiv, # 571-р Poltava, # 572-р Zakarpattya, # 590-р Volyn, # 593-р Kirovohrad, # 595-р Chernivtsi, # 596-р Kharkiv, # 598-р Sumy, # 600-р Kyiv, # 601-р Dnipropetrovsk, # 623-р Odesa, # 624-р Lviv , # 625-р of Zaporizzhya, and # 599-р Rivne oblast); 24 directives of the Cabinet of Ministers on Designating the Administrative Centers and Approving the Territories of the Territorial Communities of the (#707-р Vinnytsya, # 708-р Volynska, # 709-р Dnipropetrovsk, # 710-р Donetsk, # 711-р Zhytomyr, # 712-р Zakarpattya, # 713-р Zaporizzhya, # 714-р Ivano-Frankivsk, # 715-р Kyiv, # 716-р Kirovohrad, # 717-р Luhansk, # 718-р Lviv, # 719-р Mykolaiv, # 720-р Odesa, # 721-р Poltava, # 722-р Rivne, # 723-р Sumy, # 724-р Ternopil, # 725-р Kharkiv, # 726-р Kherson, # 727-р Khmelnytskyi, # 728-р Cherkasy, # 729-р of Chernivtsi, and # 730-р Chernihiv oblasts). In addition to this, PULSE Project representatives actively worked with the AUC official appeals to the Cabinet of Ministers of Ukraine to draw the public attention to the ambiguous decisions of the Cabinet of Ministers initiating public discussions of regulatory and legal documents of the Cabinet of Ministers and their negative effect on local self-government, in particular:

46 April – June, 2019

1. On April 02, 2020, the Association of Ukrainian Cities addressed the Prime Minister of Ukraine (Letter # 5-260) regarding the necessity of preserving the functions of the state architectural and construction control at the level of local self-government, emphasising that certain provisions of resolutions of the Cabinet of Ministers suspend control functions of state architectural and construction control entities for an indefinite time, jeopardise the local government control functions in the sector of urban planning, as well as block the work of the Unified Register of construction permits and access to it, which may leads to the violation of the legislation guaranteed rights of urban planning entities to properly protect their interests. 2. On April 07, 2020, the AUC appealed to the Prime Minister of Ukraine (Letter # 5-274) with a request to provide the 100% funding for health care facilities under the global budget for the period of quarantine restrictions, to redistribute subvention funds to local budgets to support certain health care establishments and activities to cover current expenses of health care establishments that have not concluded agreements for the provision of health care with the National Health Service of Ukraine, as well as to immediately allocate additional resources for the procurement of special medical equipment, personal protective equipment and envision expenditures from the National Budget for additional salary payments for health care workers for the quarantine period. In response to the appeal, the Cabinet of Ministers endorsed the Resolution of April 08, 2020 (Registration # 267) (changes to the program of state health care guarantees in 2020), the Resolution of June 19, 2020 (Registration # 610) (increase in salaries of health care workers), and Resolution of June 19, 2020 (Registration # 513) (increase in tariffs for health care services under the program of health care guarantees, introduction of the transition to direct funding of health care establishments by the National Health Services of Ukraine). 3. On May 08, 2020, the AUC appealed to the Prime Minister of Ukraine (Letter # 5-396) with a request to support the initiative of the Ministry of Social Policy to disburse funds from the National Budget in the form of a subvention to ensure the work of social workers in communities to protect the rights of children with disabilities and/or from low-income families, and for the organisation of social support for these families, which will promote the development of social protection and motivate local government bodies to invest additional resources in the protection of children rights. 4. On May 12, 2020, taking into account numerous appeals from communities, the AUC sent an official appeal (Letter # 5-398 / 2) to the Prime Minister of Ukraine regarding the resumption of work of non-food markets, justifying the appeal by necessity of reducing social tensions and taking into account the need to address the problem of supporting local businesses during the quarantine restrictions. On May 14 the Cabinet of Ministers endorsed Resolution # 377, which restored the operation of non-food markets. 5. On June 24, 2020, the AUC Board addressed the Prime Minister with questions regarding the necessity of regulating funding for urban public transportation services to privileged categories of citizens. In particular, the AUC asked the Prime Minister of Ukraine to resolve the issue of allocating funds from the National Budget for privileged urban public transportation services to pensioners and persons with disabilities, or vesting local governments with the right to make a decision on granting privileges for urban public transportation services. 6. The AUC also repeatedly appealed to the Prime Minister with regard to the necessity of preparing a national targeted program to ensure fire safety in educational institutions (AUC Letters of February 27, 2020 # 5-170, of April 21, 2020 # 5-308, and of May 27, 2020 # 5- 479), inclusion of expenditures for its implementation in the earmarked budget line items, as well as promoting the conditions for attracting funds from donor organisations to ensure safe educational environment for children. In response to the AUC request, the Prime Minister gave a directive to the Ministry of Finance of Ukraine and the Ministry of Education and Science of Ukraine to consider the AUC proposals and inform the Cabinet of Ministers about the results. Also, in the context of the quarantine restrictions, the PULSE Project used remote forms of direct communication between representatives of local government bodies and central state executive authorities, in particular: x On April 09, representatives of AUC/PULSE and mayors of oblast center cities participated in a conference call with the Prime Minister of Ukraine (also attended by the leadership of the Office of the President, Ministers of Social Policy, Community and Territorial Development, Health Care Maksym Stepanov and heads of oblast state administrations) to discuss the problems of combating the spread of coronavirus, the introduction of new social standards for urban public

47 QUARTERLY REPORT for the implementation of the PULSE Project

transportation, social support for vulnerable categories of the population, gradual lifting of the quarantine and the gradual recovery of the economy on the basis of state and local budget support. x On April 17, 2020, mayors of the AUC member cities and PULSE Project experts participated in a conference call with the Prime Minister of Ukraine and representatives of central state executive authorities for the second time. During the meeting, the participants discussed issues of funding for activities to combat the coronavirus epidemic, the current status of local budgets and social and economic problems of communities. In particular, the mayors raised the issue of the possibility of introducing a "credit vacation" for infrastructure projects implemented jointly with the World Bank, the EBRD and other international financial organisations. The Prime Minister expressed his readiness to act as a mediator in the negotiations to reduce the financial burden on local budgets and called on the Association of Ukrainian Cities to submit proposals on this issue immediately.

Sectoral forums Sectoral forums represent a new practice in sectoral policy dialogue. This is a platform to approve the strategy for the development of the sector together with the follow-up monitoring of its implementation and necessary adjustments. In addition to this, this is an opportunity for sectoral specialists to communicate with the line ministry and technical parliamentary committee, National Deputies of Ukraine, other sectoral experts, and representatives of NGOs active in the sector, as well as to exchange of experience in resolving practical issues. The sectoral forum is a platform for the consolidation of positions of state executive authorities and local governments, outlining the common direction for the future development and reforming of the respective sector. The Project did not conduct sectoral forums in the reporting quarter.

Cooperation with line ministries PULSE experts continued to cooperate with ministries and other central executive authorities. Below are the main achievements in this area in the reporting period.

Ministry of Education and Science of Ukraine On April 24, 2020, a PULSE Project expert in cooperation with the Ministry of Education and Science organised a webinar on the implementation of the Law of Ukraine "On Completed Comprehensive Secondary Education" for managers of secondary schools in the city of Dnipro. The speakers of the webinar were: PULSE analyst L. Mozhova and the head of the expert group on coordination policy of the Directorate for Strategic Planning and European Integration of the Ministry of Education and Science of Ukraine O. Sych. During the webinar, the participants discussed hands-on aspects of the implementation of the Law of Ukraine "On Completed Comprehensive Secondary Education". Specialists form Dnipro received answers to questions sent to the speakers in advance. In addition, the heads of educational institutions had the opportunity to formulate questions to the speakers on-line and receive hear answers to them. Heads of educational institutions were interested in the following issues: procedures for transferring persons receiving an old-age pension to fixed-term employment agreements; mechanism for competence development of teachers; sources of funding for additional hours for student counselling; sources of funding for extended day groups; issues of providing textbooks written in the state language for classes with teaching of subjects in Russian; mechanism for implementing the individual educational trajectory and developing an individual curriculum for students, formation of a network of educational institutions and other important issues.

During the reporting period, the PULSE analyst constantly worked remotely with experts of the Ministry of Education and Science to consult local governments on distance learning, work at home for teachers, remuneration, implementation of the Law of Ukraine "On Completed Comprehensive Secondary Education". Also, in pursuance of this law, the PULSE Project expert in cooperation with the Ministry of Education and Science prepared draft regulations, one of which (MES order of May 19, 2020 (Registration # 654) "On the Model List of Questions") is already in force.

Ministry of Community and Territorial Development of Ukraine On May 14 and June 03, 2020, PULSE Project experts participated in on-line meetings of the Ministry of Community and Territorial Development, Ministry of Education and Science, Ministry of Finance, and Ministry of Economy to delineate the powers in the text of draft laws “n Local Self-Governance in Ukraine” and “On Local State Administrations”, as well as in amendments to the budget and tax legislation. Based on

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the outcomes of these consultations, the Ministry of Community and Territorial Development is preparing proposals for delineating the powers of local government bodies in the new document wording.

In the course of the working meeting organised by the Ministry of Regional Development to discuss the second reading of the draft law "On Introducing Amendments to Certain Laws of Ukraine with Regard to Regulation of Certain Issues in the sector of the Provision of Housing and Municipal Utility Services" (Registration # 2458), a PULSE Project expert expressed his concern about the impossibility of implementing the proposals submitted by National Deputies of Ukraine to exclude, in some cases, the services of cleaning the territory adjacent to apartment blocks from the list of apartment block management services. Because of this, the submitted amendments were significantly revised and included in the versions of the draft law prepared for the second reading. In the course of the coordination meeting organised by the Ministry of Community and Territorial Development on the draft law "On Introducing Amendments to the Law of Ukraine "On Heat Supply”” developed by the Ministry, the PULSE Project expert expressed a recommendation regarding the necessity of transferring to the Ministry of Regional Development the powers to regulate the process of tariff setting for alternative energy producers. This proposal was supported by the majority of the meeting participants.

Energy Efficiency Fund

In the course of the meeting organised by the Energy Efficiency Fund to discuss the amendments introduced to the EnerhoDim Program, a PULSE Project representative came up with a number of proposals for the program, which were taken into account by the authors in the process of elaborating the document.

Cabinet of Ministers of Ukraine On May 05 and June 04, 2020, PULSE Project representatives participated in on-line discussions of issues in the sector of education and science as part of the preparation of the action plan for the implementation of the Open Government Partnership Initiative. N. Oksha, Deputy Director of the Department of Information and Public Relations, Head of the Secretariat of the Cabinet of Ministers of Ukraine, Secretary of the Coordinating Council for Implementation of the Open Government Partnership Initiative in Ukraine, served as the coordinator of the event. O. Arkhypska, Project Manager of the Government-Public Initiative “Together against Corruption” and Co-Chair of the Coordinating Council for the Implementation of the Open Government Partnership Initiative in Ukraine, moderated the on-line discussion. A total of 37 participants from the Ministry of Education and Science, Institute for Modernisation of the Content of Education State Scientific Institution, higher educational establishments, non-governmental organisations, and the expert community joined the dialogue. The purpose of the event was to discuss problem issues that exist in the sector of education and science and can be addressed through the Open Government Partnership Initiative (through access to information, public participation, public accountability, and information and communication technologies).

The PULSE Project expert participated in the discussion and emphasised the main ways for interaction of the central executive body with civil society institutions, in particular: presentation of justified comments to draft documents that do not receive funding; presentation of intentions of the Ministry of Education and Science to establish working groups and the possibility of involving a wide range of stakeholders; necessity of standardising reporting information; optimization of information search on websites of founders of educational establishments and authorised government bodies and educational institutions. After the discussion, the participants planned to prepare an action plan within the framework of the Open Government Partnership Initiative.

Ministry of Finance of Ukraine A PULSE Project expert in cooperation with a representative of the Ministry of Finance worked out an coordinated stance on the proposed changes to the Tax Code of Ukraine with regard to: 1) resumption of the payment of land tax and rent for land, real estate tax, the payment of which was previously cancelled by a different law; 2) simplification of the mechanism for reducing the rates of these taxes in 2020 by local government bodies. The proposals from the PULSE Project were taken into account in Law # 540-IX of March 30, 2020, which entered into force on April 02, 2020.

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Ministry of Social Policy of Ukraine The Ministry of Social Policy prepared a draft law that stipulates that local governments can enroll the children left without parental care only in certain designated institutions. In the course of the elaboration of this draft law with the Ministry, the PULSE Project expert came up with a suggestion not to limit the list of institutions where such children can be enrolled, as there are very few special designated institutions in Ukraine. If such restrictions remain, local government bodies will not be able to fully provide social protection for such children. This could endanger their lives and health. The Ministry supported the position of the PULSE Project expert and expanded in the draft law the list of institutions where such children can be enrolled. The proposals of the PULSE Project expert have been taken into account in the draft law and will enable local government bodies to better exercise their powers in the sector of child protection. The draft law is registered in the Parliament under Registration # 3587 of June 03, 2020. The Ministry of Social Policy prepared a draft law that delineates in the legislation the powers of state authorities and local government bodies in ensuring rights and freedoms of internally displaced persons. The draft law stripped rayon state administration of certain powers and transferred these powers to the newly established executive bodies of councils of consolidated territorial communities. The PULSE Project expert noted that such a wording of the draft law would lead to the situation when certain territories will not have any government body to exercise the relevant powers because of the peculiarities of the formation of consolidated territorial communities. The PULSE Project expert came up with a suggestion to stipulate that the rayon state administrations will continue to exercise the relevant powers until the executive bodies of councils of consolidated territorial communities take these powers. The Ministry took into account the suggestion fro the expert. The proposals of the PULSE Project expert were taken into account in the draft law and will make it possible to better delineate the powers between state and local governments. In the next quarter, the Ministry will send a revised draft law to the Cabinet of Ministers for endorsement and submission to the parliament. The Ministry of Social Policy prepared a Procedure for monitoring compliance with the requirements of the Law of Ukraine "On Social Services". According to this Procedure, oblast state administrations would have to exercise control of local government bodies of the basic [community] level (village, town and city). Since the organisation of the provision of social services is the exclusive authority of local governments, the state, in accordance with the Constitution of Ukraine, has no right to control their implementation. Therefore, the PULSE Project expert in cooperation with the Ministry of Social Policy prepared a new version of the Control Procedure, according to which oblast state administrations will control only rayon state administrations, and local government bodies will organise their own internal control. The procedure was endorsed by the CMU Resolution of June 01, 2020 (Registration # 427). Thanks to this, the PULSE Project preserved independence of local governments from the state control. The Ministry sent the draft resolution of the Cabinet of Ministers of Ukraine “On Endorsing Model Regulations on Centers for Social Services” to the AUC for a repeated concurrence. The draft resolution takes into account all the comments provided by the PULSE Project expert. The remarks, which were taken into account vest local government bodies with the right to set up other structural subdivisions of municipal institutions not defined by standard regulations and, accordingly, to independently determine the services that will be provided by them. This has provided an opportunity for local government bodies to set up a comprehensive system of social work in communities. The Cabinet of Ministers endorsed the resolution on June 01, 2020 under Registration # 479. The Ministry of Social Policy prepared a draft resolution of the Cabinet of Ministers of Ukraine, which imposed additional expenditure categories on local budgets in the amount of UAH 3 billion per year for salaries of additional social workers. The PULSE Project expert worked on the draft document together with the Ministry of Social Policy and submitted substantial proposals to it, which are taken into account in the final version of the resolution. Thanks to the work of the PULSE Project expert, the Ministry excluded from the draft resolution a provision that imposed additional expenditures on local budgets. The Cabinet of Ministers endorsed the resolution on June 01, 2020 under Registration # 587. The Ministry sent to the AUC the draft resolution of the Cabinet of Ministers of Ukraine “Certain Issues of Providing Social Services through the Social Request” for a repeated concurrence. The Cabinet of Ministers used this document to endorse the Procedure for providing social services through a social request. The draft resolution took into account all the comments provided by the PULSE Project expert. The comments: - have simplified the procedure for local government bodies to involve non-governmental organisations in the provision of social services;

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- have vested local government bodies with the right to independently regulate the issue of prepayment for the provision of social services together with non-governmental organisations. The Cabinet of Ministers endorsed the Resolution on June 01, 2020 under Registration # 450. The Ministry of Social Policy prepared the Regulations for establishing a differentiated fee for the provision of social services. The Regulations offer the provisions of a budgetary nature, which would be impossible to implement in municipal institutions. Thanks to the work of the PULSE Project expert, the Ministry of Social Policy excluded these provisions from the final version of the Regulations. The Regulations were endorsed by the Cabinet of Ministers on June 01, 2020 under Registration # 429. The Ministry of Social Policy prepared a draft law vests local government bodies with the right to decide on the provision of privileges for urban public transportation services for certain categories of citizens and to determine the procedure for granting and calculating them. The provisions of the draft law have been taken from the draft law prepared by the PULSE Project in the previous reporting periods and have been submitted to the Ministry for elaboration. The draft law is currently being concurred by the relevant government authorities. The Ministry of Social Policy together with the PULSE Project prepared the Regulations for providing care to persons who do not have relatives and friends who can take care of them during self-isolation. The Ministry plans to approve these Regulations in the next reporting period.

Ministry of Youth and Sports of Ukraine The Ministry prepared amendments to the Model Regulations on the Youth Center. The amendments vest local government bodies with the right to independently establish paid services in youth centers. These amendments were prepared jointly by the Ministry of Youth and Sports, Ministry of Finance and the PULSE Project in previous reporting periods. In the next reporting period, the Cabinet of Ministers plans to endorse the appropriate amendments. The PULSE Project prepared amendments to the Directive of the Ministry of Youth and Sports, which expands the powers of local government bodies in the sector of physical culture and sports and vests executive bodies of local councils of consolidated territorial communities with the right to assign athletes second and third sport grades.

The Ministry of Youth and Sports has supported these changes and is preparing them for endorsement.

Activity 1.3. Local governments improved their practice and quality of services because of the sound decentralised legislative basis for local governments

1.3.1. Legal and technical assistance During the reporting quarter, the Project continued supporting its network of Reform Offices at AUC Regional Offices consisting of regional consultants on legal and budget issues. Also, the Project supported the work of six regional local economic development consultants to focus on rendering priority assistance on local economic development issues in 30 territorial communities from all oblasts.

The activities of all these consultants were supported by regional communications consultants.

In view of the introduction of quarantine restrictions related to the coronavirus disease (COVID-19), in the relevant period, the activities of consultants were performed only through the electronic communication channels.

During the reporting quarter, the network of consultants provided, in general, 2,482 consultations for local government officials, local council members and other persons, with the total number consultations provided since the beginning of the project being 40,701.

By technical area, the regional consultants provided the following consultations: on legal issues – 1,000; on budget issues – 1,226; on local economic development - 256.

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With the assistance of AUC reform offices, the following results were achieved in the reporting quarter: • the Cabinet of Ministers of Ukraine endorsed 24 long-term perspective plans for oblasts; • the Cabinet of Ministers of Ukraine approved the territorial boundaries of all territorial communities and designated their administrative centers.

1.3.2. Web-tools to increase the efficiency of local government activities

The web-tools prepared by the PULSE Project during Project Year One were integrated into the AUC web site. The main page of the web site provides access to the following tools: Electronic Law Creator; Consultations; e-petitions; and, Fair of Ideas.

During the reporting quarter, the PULSE/AUC web site published 3 explanations of the central state executive authorities including those received upon the request of the AUC or local government bodies: x in the sector of education (including financial support) - 3;

The Decentralisation Section of the web site provides links to the Sectoral Dialogue page where users may choose to go to 10 Sectoral Platforms.

In the Consultations Section, PULSE Project experts published 45 consultations in the following sectors: land and communally-owned property - 5, education - 40, and housing and municipal utilities - 1. The inquiries received from the site through the Consultations tool are of a local nature, PULSE Project experts the analysts send their answers to the applicants' e-mail.

The PULSE Project also conducts training for local government officials using on-line tools. This experience came in handy in the context of the introduction of quarantine restrictions due to the threat of the spread of the coronavirus disease and PULSE Project reoriented to remote operations. AUC Regional Offices also started to actively use online tools for capacity building and training for local government officials.

For example, during the reporting quarter, the PULSE Project conducted 3 webinars, with their on-line broadcast provided through the AUC Facebook page. AUC Regional Offices conducted 27 online events (not counting regional legislation application laboratories and consultations).

The activities conducted from the AUC Central Office: Webinar: Agglomerations as points of economic growth On April 14, Ihor Parasyuk, PULSE Project Director and Candidate of Economic Sciences, held a webinar on the AUC Facebook page on the topic: "Agglomerations as are points of economic growth". More than 1.6 thousand network users joined the webinar online, with the number of views of the recorded video reaching 3.5 thousand.

Webinar # 3 on the Health Care Reform On April 23, the PULSE Project organised a webinar on changes in the sector of health care to be introduced in 2020, in particular, reforms in the secondary health care. Svitlana Ostashko, PULSE Project health care expert, moderated the event. The AUC invited the representatives of the National Health Service of Ukraine (NHSU) to discuss the first results of signing agreements with the NHSU and financing medical facilities in the context of the COVID-19 pandemic.

Answers to the questions from the audience and consultations on the peculiarities of financing medical institutions in the context of the pandemic were provided by Andriy Vilenskyi, Director of the Department of Contractual Work of the National Health Insurance Fund, and Alyona Horoshko, Director of the Department of Ordering Medical Services and Medicines of the National Health Service of Ukraine.

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The questions of the participants, which were not addressed in the course of the webinar, were collected and sent for processing and further explanation to the NHSU. More than 4,000 network users joined the online webinar, with the number of views of the recorded video reaching 10,000. As one probably remembers, earlier, the PULSE Project conducted webinars on the health care reform on January 28 and March 17.

Webinar on leasing communally-owned property On June 24, the PULSE Project in cooperation with the Prozorro.Sales state-owned company organised a webinar on the new Regulations for leasing so and communally-owned property. The document was endorsed by the Cabinet of Ministers of June 03, 2020 (Registration #483). The on-line broadcast was conducted through the AUC Facebook page and disseminated through the PULSE: Decentralisation Marathon account.

The speakers of the event included: Tetyana Medvetska, PULSE Project land expert, and Vladyslav Urivskyi, a representative of the Proorro.Sales Company.

In the course of the webinar, the experts provided consultations on the transition to electronic services and the rules of operations for local government bodies according to the new provisions of the Regulations for renting property. The speakers also answered questions from communities submitted to the AUC and those put in the on-line chat.

More than 400 network users joined the webinar online, with the number of views of the recorded video reaching 11 thousand.

Online events in AUC Regional Offices

The Luhansk AUC Regional Office Natalya Boyko, PULSE Project Local Economic Development Consultant, has launched an online marathon under the title "Community Life BEFORE and AFTER COVID". The purpose of the marathon is to explore local economic development issues of AUC member communities and their plans come out of the economic recession after the quarantine. On April 23, two village CTCs, Chmyrivska and Krasnorichenska, went on-line. The event participants discussed projects for the production of pellets and opening of an agro-industrial facility on the land plot of the former oil depot. On April 28, the Starobilska CTC went on-line, and its mayor shared his experience of supporting the rayon hospital. On April 29, PULSE Project regional consultants provided an on-line consultation to the Shulhynska CTC about the preparation of the Community Development Strategy for the period until 2027. On May 04, the Bilovodska CTC went on-line, and its mayor shared his experience in supporting the health care sector industry and developing the tourism sector in the community. On May 05, the Kreminnska Community went on-line, and its mayor shared his experience in supporting local doctors and implementing local economic development projects. On May 05, the Pryvilska Village CTC went on-line, and its mayor spoke about the current status of the health care sector in the community and the implementation of infrastructure improvements projects. On May 06, the Pryvilska and Novodruzheska communities went online, and their mayors talked about the life of mining towns during the period of quarantine restrictions. On May 12, the Lozno-Oleksandrivska Community went on-line, and its mayor shared his experience with the community life in the conditions of quarantine restrictions and implementation of various investment promotion projects. On May 12, the Starobilska Community went on-line, and its mayor shared his experience with the community life in the conditions of quarantine restrictions and implementation of the Community Development Strategy. On May 18, the Severodonetska Community went on-line, and its deputy mayor shared his experience in implementing project management in the community. On June 02, the Markivska Community went on-line, and its mayor shared his experience with the community life in the conditions of continued quarantine restrictions.

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On June 03, an on-line consultation took place with local officials of the Oleksandriyska Community about the Community Development Strategy. On June 09, the Hirska Community went on-line and its acting mayor shared her experience with the community life in the conditions of quarantine restrictions.

The Sumy AUC Regional Office On April 28, PULSE Project experts organised an on-line seminar under the title: “Current issues of local governments. Formation of a capable and effective CTC” for officials of CTCs of the Sumy oblast on organisational aspects CTCs activities in the context of quarantine restrictions and amendments to the election legislation.

The Ivano-Frankivsk AUC Regional Office On April 07, a webinar on open data policy took place within the framework of the on-line platform under the title "An Hour with an Expert" on the Facebook account of the AUC Regional Office. The event was hosted by Andriy Derkach, PULSE Regional Legal Consultants, and Lyudmyla Nepyivoda, Regional Representative of the Verkhovna Rada of Ukraine Commissioner for Human Rights in the Ivano-Frankivsk oblast. 76 network users joined the webinar online. On April 12, the on-line platform under the title: "Communities the of Prykarpattya region in the context of the pandemic" took place. The event brought together the following participants: National Deputies of Ukraine Oksana Savchuk, Zinoviy Andriyovych and Igor Fris, as well as mayors and experts. Local journalists had the opportunity to join the event and ask their questions. On April 14, a webinar on the role of secretaries of local councils during the crisis took place within the framework of the online platform called: "An Hour with an Expert" on the Facebook account of the AUC Regional Office. On April 23, a webinar on the role of secretaries of local councils during the pandemic crisis took place on the on-line platform called: "An Hour with an Expert" and on the Facebook account of the AUC Regional Office. On May 06, upon the initiative of the AUC Regional Office, the Day of the On-Line Dialogue of Local Government Bodies with the Head of the Ivano-Frankivsk Oblast State Administration took place. Approximately 50 mayors discussed problem issues of community activities in the context of quarantine restrictions. On May 07, an on-line video conference took place within the framework of the online platform called: "An Hour with an Expert" to discuss the importance of the volunteer movement to help communities during quarantine restrictions.

The Ternopil AUC Regional Office On May 12, an on-line meeting took place to discuss new legislation on state registration of CTCs charters.

The Kyiv AUC Regional Office On May 14, an on-line meeting took place with representatives of the Union of Communes and Poviats of the Silesian Voivodship of the Republic of Poland. The event was dedicated to issues of reforming the administrative and territorial arrangement and the election legislation in Ukraine.

The Vinnytsya AUC Regional Office On May 18, an on-line meeting took place. It was chaired by the Head of the Vinnytsya Oblast State Administration and was dedicated to the formation of professional competencies in CTCs.

The Chernivtsi AUC Regional Office On May 20, a PULSE Project expert participated in the on-line meeting dedicated to the discussions of the impact of tax privileges on local budgets. On May 21, a PULSE Project expert participated in the on-line meeting dedicated to the discussions of the disbursement of funds from local budgets of CTCs to combat the pandemic in the Chernivtsi oblast.

The Kherson AUC Regional Office On June 22, PULSE Project experts participated in the on-line meeting dedicated to topic: "Staffing support in local government bodies".

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1.3.3. Feedback: receiving and disseminating

Survey of AUC member communities Data collection from regional consultants or from communities The PULSE Project expert conducted the National Survey under the title: "Health care sector through the eyes of physicians". More than 4,500 physicians participated in the survey. On May 07, the AUC organised a briefing under the title: "Health care sector today: reforms, COVID-19 Epidemic, and Quarantine" where the survey finding were presented. The materials of the survey were submitted to the Office of the President, Chairman of the Verkhovna Rada, Chairmen of the parliamentary Committees, Prime Minister, Minister of Health Care, and the National Health Service of Ukraine.

In April, the PULSE Project in cooperation with the Active Group research company and the All-Ukrainian Medical Society conducted a survey of health care workers under the title: "Coronavirus through the eyes of Ukrainian health care workers" to assess the provision of personal protective equipment in the context of the pandemic; availability of medicines in accordance with the COVID-19 treatment protocol; and changes in the sector of health care since April 01. The materials of the survey were sent to various government agencies and organisations for the appropriate steps to improve the protection of health care workers, making changes in the system, etc.

In April – May, 2020, the PULSE Project in cooperation with the Congress of Local and Regional Authorities of the Council of Europe and regional offices of the Association of Ukrainian Cities conducted an on-line survey of representatives AUC member local governments on gender policy. The survey collected the data gender of mayors of territorial communities and their deputies, secretaries of councils, local council members, groups of local council members and officials responsible for gender equality, number of signatory communities to the European Charter for Equality, etc. The findings of the survey will serve as the starting point for comparing the gender balance of elected positions at the local level before and after the local elections using the sample of member communities of the Association of Ukrainian Cities. The statistics data were processed and the infographics materials will be prepared in the next quarter. Total number of questionnaires constitutes: 839 (including 505 from consolidated territorial communities - CTCs): - 364 cities (including 153 CTCs) - 232 towns (including 157 CTCs) - 243 villages (including 195 CTCs).

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Expected Result 2: Resources under local self-governance authority increased

Impact on local government activities The quarantine restrictions introduced by the Cabinet of Ministers in the first quarter of 2020 to prevent the outbreak and spread of the COVID-19 coronavirus had an effect on resources of local self-government in the second quarter. The pace of business activities slowed as some businesses were closed because of the quarantine restrictions. This had a negative impact on local budget revenues: local budget own revenues for the period of January - June 2020 amounted to UAH 139.8 billion, which is UAH -0.7 billion less (-0.5%) as compared to the same period in 2019.

In the first quarter of 2020, the Verkhovna Rada approved amendments to the tax legislation (Law # 533-IX and Law # 540-IX) in an attempt to reduce the negative impact of the quarantine restrictions on entrepreneurs by: lifting penalties for violations of tax legislation; introducing a moratorium on documentary and factual inspections; increase in the maximum amount of income that allows entrepreneurs to pay the flat tax (Group I - from 300 thousand UAH to 1 million UAH; Group II - from 1.5 million UAH to 5 million UAH; Group III - from 5 million UAH to 7 million UAH); and, expanding the list of cost items that can be included to obtain a tax rebate, etc.

However, such support for entrepreneurs did not stabilise the financial condition of local budgets. In addition to this, these laws introduced privileges for entrepreneurs on local taxes (land fees) for two months. AUC/PULSE managed to reduce the grace period to one month and to vest local government bodies with powers to decide on the privileges themselves. However, in January – May, 2020, as compared to the corresponding period of 2019, revenues from land fees decreased by 22.3%, or from UAH 12.9 billion to UAH 10.0 billion.

Upon the request of the Cabinet of Ministers, on April 13, 2020, the Verkhovna Rada established the Coronavirus Fund (amendments to the National Budget of Ukraine for 2020 - Law # 553-IX). Such a fund was formed in the amount of UAH 64.7 billion at the cost of the reduction of a number of budget programs including local budgets. As a result, local budgets suffered losses in the amount of UAH 9.65 billion caused, in particular, by the reduction in the following funds: x National Regional Development Fund - by UAH 2.6 billion; x subvention for elections of members of local councils and village, town and city mayors - by UAH 1.15 billion; x subventions to support the development of CTCs - by UAH 2.1 billion; x subventions to improve the social protection of certain categories of teachers of comprehensive secondary educational establishments - by UAH 1.55 billion x subventions for the implementation of the program "Capable School for Better Results" - by UAH 1 billion, etc.

In the course of the process of preparing and finalising the draft law “On Introducing Amendments to the Law of Ukraine“ On the National Budget of Ukraine for 2020””, AUC/PULSE experts insisted on the need to preserve extremely important financial resources for local government bodies and, as a result, managed to retain 51 billion UAH in local budgets.

Due to the spread of the COVID-19 coronavirus, local budgets incur increased expenditures on the health care sector. Despite the establishment of the Government Coronavirus Fund, the main health care expenditures were made from local budgets. According to the State Treasury, as of June 25, 2020, the payments made at the expense of budgets of all levels control the coronavirus amounted to UAH 3.25 billion, of which UAH 0.9 billion was spent from the National Budget and UAH 2.3 billion was spent from local budgets.

In addition to this, in the context of the growing expenditure burden on local budgets in connection with COVID-19, National Deputies initiated a number of draft laws in the parliament to provide privileges and tax rebates for certain categories of citizens at the expense of local budget revenues. However, AUC/PULSE, engaged in active lobbying, preparation and disseminating of analytical materials and managed to prevent the introduction of reduced personal income tax rates and/or introduction of personal income tax privileges for certain categories of citizens, thus, preserving the total resource in the amount of 76.0 billion UAH by

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rejecting 11 draft laws - # 2758-1, # 3076, # 3302, # 3302-1, # 3311, # 3311-1, # 3329, # 3329-1, # 3329-2, # 3379, and # 3331.

AUC/PULSE also managed to prevent the introduction of privileges to health care workers at the expense of local budgets by finalising the second reading of Draft Law # 3329-d. Thus, due to the persistent position of AUC / PULSE, Law # 591-IX of May 13, 2020 now has the provision that provides an opportunity to provide support to health care workers through the mechanism of monetary compensation from the National Budget and to prevent losses of local budgets from reducing personal income tax. In addition to this, Law # 591-IX vests local government bodies with the right to make decisions on reducing the rates of payment for land and/or tax on real estate other than the land plot with regard to non-residential real estate owned by individuals or legal entities.

Activity 2.1. Local self-government resources are increased ensuring local government financial autonomy

2.1.1. Tools to increase own resources of local governments

Currently, out of 15 CTCs that have requested the connection to the Municipal Fiscal Register software package, there are only five active users: the Bibrska (Lviv oblast), Oleksandrivska (Donetsk oblast), Khodorivska (Lviv oblast), Bilopilska (Sumy oblast) consolidated territorial communities and city of Brody (Lviv oblast). The actual reasons for the low level of coverage of communities by the Municipal Fiscal Register software complex include: security of personal data has not been completely resolved; expensive installation of the server; and the lack of local government desire to introduce a new position of a persons in charge of filling in databases and maintaining them.

In addition to this, the Center for the Development of Innovations in the framework of the EU U-LEAD with Europe Project has launched the for URBIO Platform (e-solutions for community development) for 30 CTCs with the purpose of introducing a program to keep records of municipal property called "URBIO communal property", to keep records of addresses called "URBIO address registration", and the computer program called "Register of territorial communities". In fact, the U-LEAD with Europe Project has duplicated the idea of the software complex of the Municipal Fiscal Registry. The URBIO platform is currently being actively deployed. The U-LEAD with Europe Project is actively conducting trainings on the use of its platform and is promoting it.

The Municipal Fiscal Register is a piece of software that offers information on real estate, communally- owned property, and land plots and ensures processing of these data, preservation and access to information for each individual local budget, as well as offers information on students, pre-school children, and citizens served by health care establishments, citizens who need of social assistance, and registers of privileged persons.

The MFR provides an opportunity to optimise the expenditure part of local budgets and ensure better revenue flow to them, analyse the amount of benefits and the justification to provide them, and forecast the necessary amount of funds for complete implementation of the delegated mandate.

The introduction of the MFR has become even more important in the context of the transition to monetisation of benefits and privileges.

Preparation of the system of social standards and requirements During the reporting quarter, the process of the preparation of the system of national social standards and requirements (hereinafter - NSSR) significantly slowed down. The main factors for this included the economic crisis, incomplete composition of the new Cabinet of Ministers, tight fiscal and budgetary restrictions, and the slowdown in the legislative work of the Parliament against the background of the deep social crisis due to the COVID19 epidemic and sharply reduced the performance of the state. At the same time, central state executive authorities took some steps to modernise NSSR upon the initiative or with the assistance of the AUC. Yet, these actions were not always consistent or justified.

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For example, in the sector basic national social standards, the Parliament approved Resolution # 620-IX of May 19, 2020 "On Recommendations of Parliamentary Hearings on the Topic: "Problems of introducing the Minimum Subsistence Level in Ukraine"" (following the parliamentary hearings on December 18, 2019). The resolution takes into account the proposals of the AUC. Specifically, the Cabinet of Ministers provided the following recommendations: - to establish a working group with the participation of stakeholders of the social dialogue, the general public and scientists to develop an improved methodology for determining the subsistence level with the subsequent submission of the relevant draft law to the Verkhovna Rada; - to make steps to bring the subsistence level closer to its real value in 2020 and to ensure the submission to the Verkhovna Rada of the draft law “On Introducing Amendments to the Law of Ukraine "On the National Budget of Ukraine for 2020”" in terms of approving a new minimum subsistence level; and - by October 01, 2020 to inform the Verkhovna Rada on the status of implementation of these recommendations.

Almost simultaneously, National Deputies registered the draft law "On Introducing Amendments to Certain Legislative Acts of Ukraine Regarding Regulation of Issues of the Formation of the Minimum Subsistence Level and Promoting the Conditions for Its Increase" (Registration #3515 of May 20, 2020), which offers the following suggestions: - to change the legislative definition of the basic NSSR and minimum subsistence level; - to establish the minimum subsistence level as a percentage of the average monthly salary in Ukraine taking into account the inflation; - to gradually increase on an annual basis the ratio of the minimum subsistence level to the average monthly wage from 40% in 2021 to 50% in 2031; - by October 01, 2020, the Cabinet of Ministers should prepare and submit to the Verkhovna Rada draft laws on establishing the non-taxable minimum income at the subsistence level (approved in the law on the National Budget) and on introducing the system of taxation of household income exceeding the minimum subsistence level; and, - to introduce the minimum salary rate in the amount of not less than 50% of the minimum salary, together with its approval through the law on the National Budget for the relevant year.

Draft Law # 3515, if approved by Parliament, will provide opportunities to switch over to move to an updated model of basic national social standards. However, the draft document fail to describe the mechanisms, organisational aspects and resource base for such innovations, and some of its provisions contradict with the Law "On National Social Standards and State Social Guarantees". As of the end of the reporting period, the draft law was still under consideration by the Verkhovna Rada committees.

President of Ukraine Volodymyr Zelenskyi took an initiative to substantially revise another basic social standard: the minimum wage. On June 27, 2020, the President tasked the Cabinet of Ministers to raise the level of the minimum salary in Ukraine. Prime Minister D. Shmyhal and Minister of Finance S. Marchenko worked on the task of the President and presented the preliminary timeline. For example, starting from September 01, 2020, the minimum salary is planned to be increased from UAH 4,723 to UAH 5,000 (+ 5.9%), from January 01, 2021 - to UAH 6,000 (+ 27.0%), and from July 01, 2021 - to UAH 6,500. (+ 37.6%).

At the same time, the government has not "Ukrainians deserve a decent salary. I know it's not easy to do identified any fiscal or loan resources to so at once. However, we did not look for easy solutions when cover the increased expenditures (almost by we came to power… I am glad that this can be done in a year. The well-being of Ukrainians is the main indicator of our 40%) of the National Budget or local budget efficiency» to ensure compliance with this basic national President of Ukraine Volodymyr Zelenskyi on standard. June 27, 2020 PULSE Project experts, while generally supporting the steps of the central state executive authorities aimed at improving NSSR, constantly drew the attention of the stakeholders to the risks associated with the practical implementation of the tasks identified as the goals of the draft regulatory and legal documents mentioned above. In particular, the timeframe for updating the foundations of NSSR in terms of basic social standards fall on September - October. This means

58 April – June, 2019

that there is a high probability that the 2021 the budget process will not take into account the NSSR calculated according to the new methodology.

The local elections scheduled for October, 2020 with a simultaneous "reset" of the councils of new communities and rayons represent yet another risk. The uncertainty in the distribution of delegated powers between the state and the new configuration of local government bodies will have a negative effect on the situation with the provision of NSSR at the community level.

Finally, the state has failed to provide financial and economic justifications for any of these initiatives. Thus, the issue of the resource support for the declared quantitative and qualitative changes in the system of NSSR in the conditions of the economic crisis and reduction of budget revenues remains open.

Changes in sectoral NSSR are also in the "risk zone", because the technical central state executive authorities (social services, health care, social protection, culture, and sports) do not demonstrate their practical readiness to develop and approve NSSR in the narrative and cost formats for each of the delegated powers1.

At the same time, the Ministry of Education and Science has demonstrated an active position in the sector of NSSR. In April, 2020, the Ministry of Education and Science appealed to the AUC with a request to join the preparation of national standards and requirements in the narrative and cost formats. Given th fact that PULSE Project experts regularly participated in all meetings and events of the Ministry of Education and Science2, the AUC confirmed its readiness to continue the cooperation with the Ministry of Education and Science with regard to the preparation of NSSR and came up with a suggestion to include its education and sectoral decentralisation expert in the membership of the working group.

Also, the AUC managed to get the preliminary agreement from the Ministry of Culture and Information Policy, as well as the Ministry of Youth and Sports to involve PULSE Project experts in the preparation of draft regulatory and legal documents in the sector of NSSR to overcome the imbalance between the powers delegated by the state and financial resources provided to local governments.

Thus, in the second quarter of 2020, despite the unfavourable social and economic situation and significant difficulties in communication with central state executive authorities, PULSE Project experts continued to work on improving both the methodology for determining the basic NSSR and the practical implementation of sectoral NSSR for basic public services guaranteed by the state (education, culture, sports).

2.1.2. Dissemination of best practices and replication of experience

Collections of successes and best practices

Because of the outbreak and spread of the coronavirus disease (COVID-19), Ukrainian communities including cities, towns, villages and CTCs became actively involved in combating the spread of the infection. Local self-government, in addition to the introduction of quarantine measures, continues to disburse funds to increase the salaries of physicians, purchase drugs, masks, tests, equipment, organise transportation of physicians to work, and deliver food for the elderly and socially disadvantaged families. While preparing for lifting the quarantine restrictions, communities have developed crisis exit programs and continue to make decisions to support local businesses, etc.

PULSE Project regional communications consultants track information about community activities and send it to the AUC, as well as promote best practices of territorial communities.

The USAID PULSE Project has set up a platform for communities to share their experience during the quarantine. During the reporting period, a selection of practices prepared by PULSE regional consultants was

1 According to the Directive of the Cabinet of Ministers of January 23, 2019 (Registration # 77-р) "On Endorsement of the Action Plan for the Implementation of the New Phase of the Local Government Reform and Reform of the Territorial Arrangement of Government Institutions in Ukraine for 2019 - 2021". 2 Activities related to the implementation of Paragraph 10 of Section VI of the Final and Transitional Provisions of the Budget Code regarding the endorsement by the Cabinet of Ministers by March 01, 2020 of NSSR in the narrative and cost formats for each of the powers delegated to local governments, as well as introduicing the relevant amendments to the regulatory and legal documents outlining sectoral standards for the provision of social services and requirements for expenditures from local budgets.

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regularly published on the AUC web site. All in all, 45 compilations were published, which included 724 practices.

"Itinerary of Successes. Best local government practices” The PULSE Project planned to organise six study tours for Project Year Five, which were supposed to begin in March. Because of the restrictions related to the risk of the coronavirus spread, the visits in the reporting period were cancelled.

Activity 2.2. Tools for local government to access additional financial resources are in place and utilised

2.2.1. Training for local government officials During the reporting period, the Project did not conduct any activities under this component.

2.2.2. Promotion of access to resources

Thanks to the consultations, explanations, assistance in the preparation of strategic documents for the development of municipalities, and preparation of project applications provided by regional LED consultants, territorial communities managed to achieve the following results: x In April, 2020, the online rynok.in.ua platform was launched where agricultural producers (farmers) and their potential consumers will be able to meet without intermediaries and help each other. The Open Market Project is a response to the challenge of the COVID-19 epidemic and its consequences. Many villagers found themselves in a difficult situation not being able to sell their own products in the markets in Ukraine. At the same time, residents of cities and towns were forced to buy fruits, vegetables, meat, milk and other products exclusively in shops and supermarkets. The work of such farms has an important social mission, because on the one hand it reduces unemployment due to self-employment, and fills the budgets of their communities on the other. The introduction of the Open Market Project will reduce the risk of closure or bankruptcy of such small farms. The form of involvement of the LED consultant in Rivne oblast was: full support of project development and implementation. x In the Zakarpattya oblast, in May 2020, the “ETIMA - environmental monitoring and development of an action plan to protect natural ecosystems of the Upper Tysa River Basin" project was launched within the framework of the EU Cross-Border Hungary - Slovakia - Romania - Ukraine Cooperation Program for 2014 - 2020. The grant agreement with the estimated budget of more than 500 thousand Euros was signed by the Government Representation in Szabolcs-Szatmr-Berezka region, Hungary, the main partner of the project. Romania is represented in the consortium of partner organisations by the Transylvanian Carpathian Society - Satu Mare. The partnership included the State Ecological Inspectorate in the Zakarpattya oblast and the Europolis Local Development Agency NGO from the Europolis city of Uzhgorod representing Ukraine. The implementation phase of the project, which will last for two years, will include monitoring of the types and sources of pollution and preparation of a database and a map of the impact of pollutants on the environment, flora and fauna of the Upper Tysa region. Based on the data collected, the partners plan to prepare a joint strategy and a plan of coordinated activities aimed at preserving the natural ecosystems and biodiversity of the Upper Tysa Basin and its inflow in the context of increasing anthropogenic impact. Ukraine is planning to spend 112 thousand Euros from the European Union grant for monitoring activities, laboratory research, data analysis and public discussions in communities, which will be aimed at improving the logistics of the environmental monitoring process. The form of involvement of the consultant: participation in the working group of developers in terms of planning activities, formation of technical tasks of the investment part, and preparation of the budget for Ukrainian project partners. x The Kreminna city community of Luhansk oblast. The local self-government has started the implementation of a project for UAH 22 million for city lighting and thermal modernisation of preschool educational institutions. The form of the involvement of the regional consultant: project development.

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x The Kreminska City Community of the Luhansk oblast. The local self-government has started the implementation of the City-Garden project at the expense of the city budget for UAH 700,000. The project is aimed at the arrangement of a skate playground, sports grounds, and leisure areas for children. The form of the involvement of the regional consultant: project development. x The Uzynska City CTC of the Kyiv oblast, which is part of the Incubator of Capable Communities. The CTC is implementing a project for reconstruction and expansion of production facilities of the Uzyn-Agroinvest Ltd. on its territory. The amount of attracted investments constitutes UAH 106 million. The form of the involvement of the regional consultant: Piskivska CTC has received in-depth assistance in preparing solutions that promote local business development and attract new investments. x The Piskivska CTC of the Kyiv oblast, which is part of the Incubator of Capable Communities, has attracted funds from the government program called: "Capable School for Better Results" in the amount of 6.2 million UAH for the project under the title: "capital repairs of the facade and heating system of Teteriv Grade I – III Comprehensive Secondary School I - III named after Nina Sosnina". The project includes activities for thermal modernisation of the premises, which will significantly reduce local budget expenditures for its maintenance. The form of the involvement of the regional consultant: Piskivska CTC has received in-depth assistance in planning models of local economic development, development of strategic documents and plans for their implementation, and preparation of decisions that promote local business development and attract new investments. x The Zhashkivska City CTC of the Cherkasy oblast, which is part of the Incubator of Capable Communities. The community has attracted investments of the «Напої Плюс» Ltd. for the expansion and modernisation of production of mineral water, cider, fruit wines, and beer. The local products are exported by the manufacturer to 18 countries. The investor has opened 42 new jobs, the total number of employees is currently about 500 people. The form of the involvement of the regional consultant: Zhashkivska CTC has received in-depth assistance in planning models of local economic development, development of strategic documents and plans for their implementation, and preparation of decisions that promote local business development and attract new investments. x The Sarny City Council of the Rivne oblast has received a grant in the amount of UAH 200,000 for the project called: "Installation of individual containers for solid waste collection in the private sector". The project provides for the purchase of equipment and activities to implement the system of collection and disposal of solid waste from private homes in the city of Sarny. The project is planning to open 2 jobs and receive more than 120,000 UAH per year of additional profit of the utility company. The form of the involvement of the regional consultant: participation in the development and promotion of the project. x The Kozynska CTC of the Rivne oblast has received a grant in the amount of 245 thousand for the project "Stimulating the development of small and medium-sized businesses in the sector of cheese making in the Rivne oblast”. The project provides for training for local cheese makers to expand the market, unite them into a cluster, and purchase equipment for manufacturing and storage. The form of the involvement of the regional consultant: participation in the development and promotion of the project. x The Klevanska CTC of Rivne oblast has received a grant in the amount of 185 thousand UAH for the project called: "Increasing the competitiveness of the Tourist Information Center of Klevan Village Council”. The project provides for the purchase of equipment for the manufacture of souvenirs. This will expand the range and number of items of exclusive, souvenir and gift products for sale to tourists who come to the "Tunnel of Love". An online souvenir shop will also be opened. The project provides for opening of 4 jobs and more than 140 thousand UAH per year of additional income to be received by the Tourist Information Center of the Klevan Town Council. The form of the involvement of the regional consultant: participation in the development and promotion of the project. x The Loknytska CTC of the Zarichne rayon of the Rivne oblast has received a grant in the amount of UAH 230,000 for the project called: "Creation of a recreation area on the shores of the Lake Nobel". The project provides for the arrangement of a recreation area and popularisation among potential tourists of recreation opportunities near the Lake Nobel. The implementation of the project will provide opportunities to receive revenues to the local

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budget more than UAH 50,000 annually. The form of the involvement of the regional consultant: participation in the development and promotion of the project. x The Boremelska CTC of Demydivka rayon of the Rivne oblast has received a grant in the amount of UAH 250,000 for the project called: "Tourist Boremel region – research and travel". The purpose of the project is to develop the tourism industry and entrepreneurship in the community. The project provides for the arrangement and marking of tourist routes, consulting and training of community residents on the creation and development of a network of green estates, organisation of new tourist routes in the community, and organisation of event tourism. The form of the involvement of the regional consultant: participation in the development and promotion of the project. x The Ivanivka Town Council of the Kherson oblast has received funding from the State Fund for Rural Development for the implementation of a kindergarten reconstruction project in the town of Ivanivka in the amount of UAH 13.988 million. The town of Ivanivka is the center of the CTC, which will embrace all communities in the area. The total are is approximately 2 thousand square kilometers. However, the population is 14,000 people. Therefore, the community in collaboration with a consultant developed a concept of concentrating services for the population and ensuring their accessibility through the development of road infrastructure. The project is under implementation. x The Bilyaivska CTC of the Odesa oblast. In May 2020, a berry growing enterprise will start operating in the community. The Greenland Company, part of the TM FRUKTONA group of companies, has entered into a lease agreement for the land plot. The subject matter of the project is: the company will grow planting material and involve the local population in growing berries and, later on, for their sale. At the first phase, the investment will amount to 950 thousand UAH, 15 jobs will be opened. All in all, the community is planning to involve at least 300 households in the project. The form of the involvement of the regional consultant: conducting a survey of the population, methodological support for the preparation of a strategic plan and programs to involve the population in the production. x The Bilyaivska CTC of the Odesa oblast. The community has concluded is implementing the grant agreement with the Ukrainian Social Investment Fund in the amount of UAH 140,000 for the development of a center for the provision of social services. The form of the involvement of the regional consultant: advising the community in the course of the preparation of the grant application. x The Tavrychanska CTC, Kherson oblast. The Kakhovka Rayon Council ensured the transfer of the irrigation system and irrigation equipment to the municipal ownership of the community. As a result, the community income will increase by the amount of rent in the amount of approximately 15 million UAH. The form of the involvement of the regional consultant: consulting in the process of conducting an inventory and determining the conditions of transfer of property to the municipal ownership of the CTC, and preparation of a contract for the transfer of this property.

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Expected Result 3: Capacity of stakeholders increased

Impact on local government activities

Decentralisation reform in Ukraine should be completed before the 2020 local elections - such a statement is increasingly heard from high-ranking officials. Also, all participants in the process understand that the amendments to the Constitution, which are being publicly discussed, have to consolidate the achievements of decentralisation.

However, unfortunately, the active communication to complete the reform is forced to stop due to the coronavirus pandemic and the introduced quarantine restrictions.

Communities are at the forefront of the fight against the dangerous epidemic: cities, towns, villages and CTCs have actively joined the work to counter the spread of the coronavirus. Local governments, in addition to the introduction of quarantine measures, allocate funds to increase the salaries of physicians, purchase drugs, masks, tests, equipment, organise transportation of physicians to work, and deliver food for the elderly and socially disadvantaged families.

During the reporting quarter, PULSE Project continued the trend, which started in March, 2020, namely: gathering and disseminating the experience of local councils in this difficult period. To this end, the PULSE Project has set up a platform on the AUC web site where daily selections of relevant information are published, which are collected with the help of PULSE regional consultants. A total of 45 selections have been published during the quarantine, covering more than 700 examples of relevant community experience.

Also, the PULSE Project made steps to protect the interests of communities in saving their local budgets in the course of revising the law on the National Budget for 2020 to set the Fund to counter COVID-19. It should be noted that the parliament took into account the proposals of the AUC prepared by PULSE Project, and, as a result, the amendments to the National Budget saved more than 50 billion UAH in local budgets.

The PULSE Project promptly adapted to the new conditions that have arisen in Ukraine due to the coronavirus pandemic, and has continued to be effective and engaging in dialogue with both communities and the state.

The PULSE Project has transformed consulting and training activities it into the on-line mode. On-line events were conducted both at the central level from the AUC office in Kyiv and at the oblast level by PULSE regional consultants in the AUC regional offices. For example, PULSE experts conducted webinars on topics important to communities, regional Project consultants in all areas provided on-line consultations to local officials to discuss the organizational aspects of quarantine related activities, directing funding to health care establishments, future prospects for completion of the decentralisation reform, etc. In addition to this, at the regional level, the PULSE Project launched various remote events, such as "An Hour with an Expert" on the Facebook page of the Ivano-Frankivsk Regional Office of the AUC and a marathon to share experiences on the Facebook page of the Luhansk Regional Office of the AUC.

Regional legislation application laboratories, the most popular PULSE Project training events, conducted in the AUC regional offices were also transformed on-line. The legislation application laboratories began to be conducted on-line with a video broadcast on the PULSE Facebook account: Decentralisation Marathon. It should be noted that thanks to the recorded video materials that remain available on-line after the event, the audience of participants has significantly expanded, as the number of views reach several thousand. For the convenience of users of PULSE training services, the communications coordinators have prepared a selection of on-line courses and webinars of the Project related to local government, which is constantly updated and published on the AUC web site.

The PULSE Project also transferred its work with government authorities into remote mode. Project specialists and experts participated in on-line meetings, conferences and seminars conducted by government agencies and technical parliamentary committees.

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The PULSE Project has collected issues Important for local government bodies that have arisen in various sectors of their work in connection with the introduction of quarantine and related restrictions. In particular, these include problems of local budgets, financing of the health care sector, housing and municipal utility services, communally-owned property, and social protection.

These issues, together with proposals for their solution, were submitted to the Cabinet of Ministers, and relevant ministries and government agencies.

By doing so, the PULSE Project has adapted to the new conditions and covered the activities of direct participants, stakeholders, reforms at all levels. These include: high level government officials, local government officials including those from consolidated territorial communities, media representatives, and the general public.

The communication unit, which implements the third component of the project, prepared and distributed press-releases and hot-press releases, and holds press events at the regional level. Numerous messages for the general public are distributed through various media, printed and online media, and social networks.

Comments from local government representatives and PULSE media experts were also organised in a remote mode.

The Project continues its activities to form a favourable environment for decentralisation reforms in the regions.

All AUC Regional Offices work together with PULSE regional consultants in four areas, such as local finance, legal issues, and communications. Also, there are LED consultants working in six local development hubs and cover all oblasts.

To provide the communications support of this activity, the Project continued the Decentralisation Marathon account in the Facebook networks. This recourse has almost 6 thousand likes. This is a reliable source of information about the life of consolidated communities and the status of implementation of the local government reform at the level of local self-governance. This is the resource where communications consultants post information about community events and Project activities at the regional level.

The PULSE Project has been active in promoting decentralisation successes and community consolidation in the AUC web site Successes section and the Videoteque of Successes on the AUC YouTube channel.

Activity 3.1. Local governments and stakeholders are informed and capable of carrying out new roles and responsibilities flowing from decentralisation reform

3.1.1. Capacity building for local officials at the local level

Sectoral legislation drafting and advocacy laboratories

The PULSE Project in cooperation with the Verkhovna Rada of Ukraine Secretariat holds a series of two-day practical trainings for local self-governance officials on drafting legislation. The key purpose of this activity is to give the participants practical knowledge and skills necessary for drafting legislation and the accompanying documentation, to study the principles of the legislative work and legislative process, to familiarize with the work of the Verkhovna Rada of Ukraine and the Parliamentary Committees. The participants are selected at the competitive basis from among the local officials of the communities-AUC members; after completing the course, they receive certificates.

Due to the quarantine restrictions because of the threat of the spread of COVID-19, the project did not conduct the laboratories in the reporting quarter.

Regional legislation application laboratories in AUC Regional Offices

The PULSE Project has been holding one-day training events for local government officials in AUC Regional Offices. The purpose of these events is to study and receive clarifications on new provisions in

64 April – June, 2019

laws and current legislation, as well as to provide opportunities for experience exchange. The topics of such training laboratories have been identified based on the monitoring of consultancy needs conducted by AUC Regional Offices.

During the period of October 2019 - September 2020, PULSE Project has planned to conduct 5 regional legislation application laboratories in each AUC Regional Office.

The list of topics was put together based on the findings of the monitoring of the training needs conducted by AUC Regional Offices in 2019.

Due to the quarantine restrictions because of the threat of the spread of COVID-19, regional legislation application laboratories did not take place in April in AUC regional offices. In May, PULSE launched on- line laboratories on the PULSE: Decentralisation Marathon Facebook page. The Project prepared a manual with instructions on the organisation of the training events and video broadcast were prepared for each AUC Regional Office. The first on-line training event took place in the Sumy AUC Regional Office on May 19. 25 users of the network joined the event on-line. And during the week the number of video views f the recorded event reached almost 1,000.

During the period of April – June, 2020, the Project conducted 16 on-line legislation application laboratories with the participation of 440, with the number of off-line viewers being approximately 10 thousand.

Table 3.1. List of conducted regional legislation application laboratories

Date, venue and participants Topic Information about the event May 19, 2020 The ProZorro procurement The event moderator spoke about the legislation Sumy AUC Regional Office system: public procurement in governing the procedure of public procurement city of Sumy local governments, lease of and lease of communally-owned property, communally-owned property. familiarized the audience with the general Participants: chairmen of city, principles of lease, peculiarities lease based on town and village councils, their the auction, outlined the hands-on steps of the deputies, and technical specialists. procedure for renting out property without an auction, and reviewed the ProZorro procurement system and the procedure for registration and work in electronic ProZorro Sales system. May 22, 2020 Local elections according to The event moderator spoke about the main new Zaporizzhya AUC Regional Office the new Election Code. provisions of the election legislation in the city of Zaporizzhya context of local elections, focused on the gender approach, and described the participants of the Participants: city, town, village election process, peculiarities of the electoral mayors, and secretaries of local system in local elections and nomination and councils. registration of candidates in local elections under the new Election Code of Ukraine. May 26, 2020 Ways to increase the The event moderator spoke about the general Vinnytsya AUC Regional Office investment attractiveness. principles of activities local government bodies in city of Vinnytsya Preparation and the sectors of stimulating local economic implementation of development and investment promotion, focused Participants: community mayors, infrastructure improvements the attention on practical examples of investment their technical deputies, and and investment promotion promotion, instruments for cooperation between directors of structural subdivisions projects. government and businesses and preparation of an of local councils. effective investment proposal to attract foreign investors, and explained the mechanisms of preparing a high quality project concept note. May 26, 2020 Ways to increase the The event moderator spoke about the essence of Chernivtsi AUC Regional Office investment attractiveness. investment attractiveness, its components, hard city of Chernivtsi Preparation and and soft factors of the investment climate, ways to implementation of find an investor, instruments and levers of state Participants: city and town mayors infrastructure improvements support for local agricultural development in and technical specialists. and investment promotion 2020, opportunities to attract grants from projects. international donor organisations, and consultative support. May 27, 2020 Provision of educational The event moderator told about the main

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Cherkasy AUC Regional Office services in the context of amendments in the legislation on education, city of Cherkasy reforms. described the regulatory framework for reforms in the education sector (pre-school, secondary, Participants: village, town and city vocational, higher, extracurricular) and its mayors, CTC mayors, their practical application, provided an overview of the deputies, and directors and organisation of work of education management specialists of technical departments entities in communities, and provided the and directorates of local councils. information about the work of educational establishments in the context of quarantine restrictions and the process of lifting the quarantine. May 28, 2020 Community economy during The event moderator spoke about the regulatory Kherson AUC Regional Office the period of quarantine and legislative framework of the budget process city of Kherson restrictions: impact on local under the quarantine restrictions, provided an budgets of amendments to the overview of amendments to the tax legislation, Participants: village, town and city tax and budget legislation. impact of legislative amendments on the mayors, CTC mayors, their The mechanism for preparation and implementation of local budgets, deputies, and specialists of interaction between local and described the tools to monitor compliance technical departments. government bodies and tax with the current legislation in the sector of local authorities. budget revenue flow. May 29, 2020 Local economy during the The event moderator provided an overview of Luhansk AUC Regional Office quarantine economy and its amendments to the budget legislation during the city of Severodonetsk impact on local budgets. quarantine restrictions, told about the peculiarities Mechanisms for mobilising of using budget funds for anti-pandemic Participants: deputy mayors and funds to local budgets and activities, especially local budget management directors of financial departments optimising their spending. under the quarantine restrictions, focused on and directorates. citizen participation in the budget process, and told about the organizational aspect of interaction between local governments and tax authorities. June 03, 2020 Local economy during the The event moderator spoke about budget Volyn AUC Regional Office quarantine economy and its sufficiency in the context of the quarantine city of Lutsk impact on local budgets. economy, provided an overview of the Mechanisms for mobilising implementation of local budgets in January – Participants: village, town and city funds to local budgets and May, 2020 and talked about the peculiarities of mayors, their deputies, and optimising their spending. current planning and administration of local directors and specialists of technical budget revenues under the quarantine restrictions departments. and the organisation of the budget process and expenditures from local budgets. June 04, 2020 Application of modern The event moderator told about the management Dnipropetrovsk AUC Regional information technologies in of the local community with the help of the latest Office the activities of local digital technologies, hands-on application of the city of Dnipro government bodies. E- city management platform, regional Electronic government as a factor of Dnipropetrovsk Region information program, Participants: village, town and city government openness for the presented standard electronic solutions for mayors, their deputies, CTC community. communities (virtual office, Doc Prof electronic mayors, and directors and document management system and community specialists of technical departments. site). June 16, 2020 The ProZorro procurement The event moderator provided an overview of the Donetsk AUC Regional Office system: public procurement in main regulatory documents regulations governing city of Myrnohrad local governments, lease of the sector of public procurement and leasing of communally-owned property. communally-owned property, told about the Participants: village, town and city procedure for leasing out communally-owned mayors, their deputies, CTC property through an auction and without the use mayors, and directors and of an auction, methodology of announcing and specialists of technical departments. conducting tenders and the content of bidding document packages, and introduced the new functionality of the Playtender in accordance with amendments to the tender legislation. June 17, 2020 Tools for community The event moderator spoke about the investment Cherkasy AUC Regional Office economic development legislation, ways for development of small and city of Cherkasy medium-sized businesses, formation and development of business support infrastructure, Participants: village, town and city mechanism for communication and interaction of mayors, CTC mayors, their local governments with business entities, and

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deputies, and directors and opportunities and ways to attract investments specialists of technical departments including grants from international donor and directorates. organisations. June 17, 2020 Economic development of The event moderator spoke about the peculiarities Vinnytsya AUC Regional Office communities during the of budget sufficiency under the conditions of the city of Vinnytsya period of quarantine quarantine restrictions, provided an overview of restrictions: impact on local the problem issues and performance indicators of Participants: village, town and city budgets of amendments to the the financial bodies of territorial communities mayors, their deputies, and tax and budget legislation. (CTCs) for the 5 months of 2020, and told about directors and specialists of technical The mechanism for the mechanism of interaction between financial departments. interaction between local departments (directorates) of local governments government bodies and tax and tax authorities. authorities. June 18, 2020 Tools for economic The event moderator provided an overview of the Ivano-Frankivsk AUC Regional development of communities. legislative framework for investment promotion Office activities, told about grant and expert city of Ivano-Frankivsk opportunities for local economic development, creation of pilot social school enterprises, Participants: village, town and city opportunities to attract grant funds for the sector, mayors, CTC mayors, their of culture, provided an overview of the main deputies, and directors and grant proposals, competitions and information specialists of technical departments about institutions supporting culture. and directorates. June 18, 2020 The ProZorro procurement The event moderator described the main Odesa AUC Regional Office system: public procurement in amendments to the legislation on public city of Odesa local governments, lease of procurement and lease of communally-owned communally-owned property. property, told about the authorised person and the Participants: village, town and city organizational aspects of this work, interaction of mayors, their deputies, and the authorised person and the tender committee, directors and specialists of technical simplified procurement mechanisms, departments. accountability for violations of the public procurement legislation, and familiarised the audience with the ProZorro.Sales system and the electronic procurement system. June 23, 2020 Expansion of local The event moderator told about the legislation in Sumy AUC Regional Office government powers in the the sectors of land lease including state-owned city of Sumy sector of communally-owned and communally-owned property, general resources management (land principles and peculiarities of concluding the land Participants: village, town and city and property). lease agreement, essential conditions of the land mayors, CTC mayors, their lease agreement, and provided examples of deputies, and directors and peculiarities changing, terminating and renewal of specialists of technical departments. the land lease agreement, and resolution of certain categories of disputes in the sector of land relations in the court. June 25, 2020 Application of the gender The event moderator spoke about regulatory and Kharkiv AUC Regional Office approach in the budget legislative framework for the application of the city of Kharkiv process and gender statistics. gender oriented approach in the budget process in Ukraine, current status and problem issues of Participants: village, town and city gender equality and principles of gender oriented mayors, their deputies, and approaches in the budget process. directors and specialists of technical departments.

Distance learning courses

During the reporting quarter, the PULSE Project continued the implementation of five distance learning courses prepared in previous years on the Prometheus platform (www.prometheus.org.ua), namely: ● The Gender Based Budgeting for Community Development course Total number of students: 8,936 (as of April, 2020 – 8,742). Certificates generated: 6,540 (or 73.2%) (as of April, 2020 – 6,430 (or 73.6%)). ● The Training of Local Council Members of Consolidated Territorial Communities course Total number of students: 2,273 (as of April, 2020 – 2,048). Certificates generated: 427 (or 18.8%) (as of April, 2020 - 338 (or 16.5%)).

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● The Preparation and Implementation of Community Development Projects course Total number of students: 6,439 (as of April, 2020 – 6,073). Certificates generated: 1,293 (or 20.1%) (as of April, 2020 – 1,117 (or 18.4%)). ● The Effective Budget Process in Local Governments course Total number of students: 5,255 (as of April, 2020 – 4,598). Certificates generated: 2,297 (or 43.7%) (as of April, 2020 – 1,806 (or 39.3%)). ● The Establishing Local Economic Development Institutions course Total number of students: 2,599 (as of January, 2020 – 2,508). Certificates generated: 354 (or 13.6%) (as of January, 2020 - 324 (or 12.92%)).

Training materials and the opportunity to obtain a certificate are always available, therefore the number of students has increased. The statistics show a very high rate of certification, especially the gender budgeting course. Indeed, globally, a good indicator of the effectiveness of on-line courses is considered to be 7% of students who received their certificates of the total number of those who registered for the course. During the reporting quarter, the Project also introduced a new training course under the title: “Small business in CTCs. Mission is possible!” (Module 1) prepared in cooperation with IREX, the sub-partner of the PULSE Project, and the Ostroh Academy. The course has been designed, first of all for the Reform Support Groups (RSGs) in pilot communities, but the course is open to everyone. Registered: 195 persons Certified: 103 persons.

IREX completed and started the implementation of a new training module called: "Building a dialogue in the community" with the technical support of the Ostroh Academy. The course started in April 2020. Registered: 133 persons Certified: 74 persons. The IREX team also started preparing two new courses on environmental protection (energy saving) and community culture. The training courses will start in the next quarter. During the reporting quarter, the total number of students increased from 24,108 to 25,830 persons. Number of issued certificates increase from 10,056 to 11,088.

3.1.2. Training of local government officials of the oblast and rayon levels During the reporting quarter, the PULSE Project did not conduct training events in cooperation with the Ukrainian Association of Rayon and Oblast Councils (UAROC).

In the context of (1) recent changes in the legislation of Ukraine that have led to the reduced role of rayon and oblast councils in the decentralisation reform and (2) given the increased uncertainty about the future of rayon councils in general, and their role in the decentralisation process in particular, as well as given the introduction of PULSE Project of a significant number of webinars on various sectors and on a wide variety of topics important for local government officials in the second quarter of 2020, therefore: the need for further the need for further workshops with the UAROC for representatives of rayon and oblast councils has disappeared.

3.1.3. Training NGO representatives and librarians as communicators of reforms In the context of the introduction of the quarantine restrictions due to COVID-19, IREX had to amend its work plan for this quarter, as most of its activities under the framework of the PULSE Project activities imply physical presence of people, business trips across the country, and use of external service providers. Therefore, IREX performed all its program activities in an on-line format. The activities that could not be performed on-line have been suspended. The updated IREX work plan fully covers its obligations through September 30, 2020 in line with the AUC-IREX Sub-Agreement, however, because of the situation in the country, the IREX team had to modify some of its target indicators. During the quarter, the IREX team actively supported existing libraries and civil society organisations (CSOs) within the target geography (Cohorts 4) of the PULSE Project, worked with Reform Support Groups (RSGs) consisting of participants of the four years of project implementation, and continued to provide mentoring support to libraries and their press clubs.

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Supporting teams from community members in the course of implementation of citizen engagement activities

x IREX provided participants in the fourth cohort with on-line consultations about the possibilities and benefits of information activities on the local government reform. During this period, the IREX team kept in touch with all community members via e- mail, telephone consultations and joint events.

Distance learning "Small business in CTCs. Mission is possible!", Porebysche (Vinnytsya oblast), June 01, 2020

x On April 27, 2020, IREX announced the launch of a new educational video module under the title: "Building a dialogue in the community." The module was hosted on the Moodle platform with the support of the National University "Ostroh Academy". The course offers the possibility of free training for all who are interested in implementing effective communication in the community. In particular, the module reveals not only the methods of conveying opinions, but also teaches how to convey information so that one can be heard, tells how to work with local authorities and media, teaches how to make news about the community life in various social networks and print publications. At the end of the course, the participants received their certificates. The announcements and links to the module can be found on the Facebook page of the IREX-PULSE group, as well as on the Facebook pages of regional press clubs. The following specialists served as speakers of the course: Oksana Pidnebesna, communications consultant of the AUC of the Odesa oblast, Oleksandr Nazarenko, professional journalist from the Chernihiv oblast, Olena Vynohradova, head of the department of mass media and public relations of the Bashtanska Consolidated Territorial Community of the Mykolaiv oblast, Iryna Chernya, a local activist from the Odesa oblast, and Serhiy Shturkhetsky, PhD in Public Administration.

x IREX received reports from project grantees on information activities successfully conducted on-line. The team encouraged the partners to share their videos of the events in social media in order to encourage other project participants to hold similar events in their communities.

x The project team collected all information materials prepared by IREX during previous years for dissemination to the pilot communities. These decentralisation materials are particularly useful in the absence of updated information about the reform on the part of government, because such information was ranked not as a top priority during the quarantine. The first mail of the information sets is expected in July, 2020.

x IREX prepared and disseminated information booklets on local business development in communities among the participants of the fourth cohort. The information provided in the booklets is especially relevant during the quarantine restrictions, because many persons remain temporarily unemployed. These booklets offer ideas about how to start a business, registration instructions and a direct link to the distance learning course under the title: “Small Business in CTCs. Mission is possible!” prepared by IREX/PULSE.

x The IREX/PULSE team provided an overview of all work plans of its partners within the framework of grant activities and prepared alternative types of information activities to replace activities that cannot be performed off-line. For example, study visits to neighbouring communities have been replaced by on-line

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training activities on the development of soft skills that locals can use to develop their community.

Strengthening the capacity of Reform Support Groups x The IREX team provided relevant information on the local government reform to RSG members. Group members received answers to their questions news, updates and news about local government reform through the Facebook messenger, e-mail and the Фейсбук-групу «IREX-PULSE_МОЯ ГРОМАДА МІЙ ДОБРОБУТ» Facebook group.

x Six (6) on-line seminars were held for RSG members: o Webinar on the topic: "Peculiarities of modern education for active citizens of the CTC: on- line vs. off-line" with the participation of Serhiy Shturkhetsky, decentralisation expert, for 15 on-line participants; o Webinar on the topic: "How libraries unite the community during the quarantine" with the most active representatives of "How libraries unite communities during the quarantine", April 28, 2020 libraries from all over Ukraine for 96 on-line participants; o Webinar on the topic: "How to organise young people during the quarantine and how not to lose touch with them" for 43 on-line participants. The trainer of the event was Victoria Kostyuk, head of the Smyha Youth Council; o Webinar on the topic: "Actualisation of youth initiatives in crisis situations" for 27 on-line participants. The trainer of the event was Victoria Kostyuk, head of the Smyha Youth Council; o Webinar on the topic: "Workshop of changes: everyone can change their community" for 30 on-line participants. The trainer of the event was Victoria Kostyuk, head of the Smyha Youth Council; o Webinar on the topic: "From engagement to partnership - the secret of effective communication with young people" for 23 on-line participants. The trainer of the event was Victoria Kostyuk, head of the Smyha Youth Council;

x Members of the RSGs were invited to take a distance learning course under the title: “Small Business in CTCs. The mission is possible!". This course was prepared by IREX in partnership with the AUC and the Ostroh Academy National University. 195 participants were registered, of which 103 received their certificates.

x Members of the RSGs were invited to take a distance learning course under the title: "Building a dialogue in the community." This course was prepared by IREX in partnership with the AUC and the Ostroh Academy National University. 133 participants were registered, of which 74 received their certificates.

x IREX has started the work on the next two educational video modules on the Moodle platform with the support of the Ostroh Academy National University. The new training modules will be dedicated to environmental protection and culture. These two topics were identified as "priorities" during last year's coordination meetings with RSGs. The main speakers of the course on environmental protection (the exact name of the course is to be specified) will include: Mariana Prystupa, Deputy Executive Director of the Association "Energy Efficient Cities of Ukraine"; Andriy Barulin, Director of Regional Energy Service Company Ltd,; Vladyslav Pidhayets, head of the My Severinkivka NGO (Vinnytsya oblast); and, Artem Myrhorodsky, founder of the start-up and author of the BioBin application (a program that helps waste segregation). The main speakers of the Culture 3.0 course will include: Maryna Kulinich, State Expert of the Directorate for Strategic Planning and European Integration on Regional Policy; Leonid Maruschak, manager of the Museum Is Open for Renovation project; Ihor Harmash, expert of the Ukrainian Cultural Foundation; and Daryna Pyrohova,

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sociologist, researcher, consultant, trainer and facilitator of the coaching pool of the Other Education NGO.

Cross-cutting activities

x Every week, IREX sends a selection of updates (News Digest) to RSG members, library press club representatives, library/NGO teams from all 4 years of participation in the project through an on-line platform (1,060 recipients). Community members disseminated updates on reforms they received, participated in trainings and meetings, and applied to other organisations to provide support to communities. During the quarantine restrictions, the IREX team prepared an expanded selection of news, which was regularly sent to project participants by e-mail. Each week, the team compiled a selection of thematic news taken from the Cabinet of Ministers portal, AUC website, and educational platforms. In addition to this, the News Digest included thematic sections on education, business development, useful on-line resources, culture, community activities during the quarantine, as well as those related to the decentralisation reform. x The Фейсбук-група IREX-PULSE Facebook group was regularly updated during this reporting period. It currently has 1,069 participants, including representatives of libraries, NGOs and RSGs. The group currently serves as a platform for exchanging information, updating legislative processes and materials related to decentralisation reform in Ukraine. x During the period of the quarantine, IREX continued to promote its webinars on каналі YouTube МОЯ ГРОМАДА - МІЙ ДОБРОБУТ Channel. During the reporting period, the number of webinar views increased from 1,613 (previous period views) to 5,804.

Activity 3.2. Communication and outreach of decentralisation reform is enhanced

3.2.1. Creating communication channels for central authorities outreach and messaging on decentralisation reform progress in various sectors

PULSE Project offers for representatives of central government agencies communication channels to deliver important messages about the position, plans and intentions of the government in implementation of the decentralisation reform. It is very important to have this position delivered and heard by the proper audience ranging from media representatives to local government officials and citizens.

Representatives of central government authorities who are at the head of the management structure set the tone and direction of reforms in the country. At the same time, they do not always actively use the available dialogue tools to ensure citizen participation in decision making. To fill this gap, the PULSE Project provided representatives of central government authorities with communication channels to disseminate important messages about the reform.

To disseminate information about decentralisation and Project activities, PULSE uses a traditional tool - news feeds on the site. The PULSE communication group continuously monitors the information space and publishes on the site important information about the activities of state authorities, state decisions in the areas of reform targeted at the Project. PULSE distributes strategic messages, quotes and video comments from high-level government officials through a site that traditionally serves as a source of unbiased and up-to-date information on local self-government in Ukraine.

Various events conducted by the PULSE Project with the participation of the government authorities serve as communications channels to deliver ‘firsthand’ massages about the government policy. The Project activities are mass media representatives and invited to them. Thus, high level government officials have a good opportunity to talk to journalists, provide comments to the media, and explain the position of a government agency and government policy. In addition to this, the materials about PULSE events that were prepared by media representatives and PULSE informational products were used to further disseminate messages from central state executive authorities.

Regional Policy Dialogue Platforms have traditionally become popular channels of "firsthand” information about government. The Policy Platform is a joint meeting of AUC Regional Office community members, oblast leaderships, and National Deputies elected from the oblast to get their support for approval in the

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parliament of the legislation aimed at resolving local issues of local governments. Following the meetings of Policy Platforms, the Project conducts meetings of regional press clubs.

Due to the quarantine restrictions imposed to prevent the spread of the acute COVID-19 respiratory disease caused by the SARS-CoV-2 coronavirus, the PULSE Project did not conduct any Regional Policy Dialogue Platform in the reporting quarter. Only in the Ivano-Frankivsk Regional Office of the AUC such a platform took place on-line. However, the Association of Ukrainian Cities organised and conducted two on-line webinars with the participation of representatives of central state executive authorities.

In particular, on March 26, the AUC organised a webinar on changes in the regulations on management of communally-owned property introduced on February 01, 2020 by the Law of Ukraine "On Leasing out State- Owned and Communally-Owned Property" (Registration #157-IX). Leonid Antonenko, First Deputy Chairman of the State Property Fund of Ukraine, and Vladyslav Uryvskyi, expert on management of projects with local governments, provided answers to questions from the audience and consultations on the transition to electronic services and the creation of Lists of communal property for transfer under the new lease rules.

On June 24, the AUC together with the Prozorro.Sales State Enterprise organised and conducted a webinar on the new Procedure for the leasing state-owned and communally-owned property endorsed by the Cabinet of Ministers of Ukraine on June 03, 2020 (Registration # 483). In the course of the online event, Vladyslav Uryvskyi, a leading expert and project manager of Prozorro.Sales, answered questions and provided recommendations on the transition to electronic services and rules of operations under the new provisions of the Procedure for local governments for renting property.

3.2.2. Strategic messaging through different media

One of the key aspects in strategic message delivery is the coverage of all spectrum of media outlets, because they are targeted a various types of audiences. The PULSE Project, being aware of modern communication trends, makes good use of social networks, which are popular, first of all, with young people (aged of 14 to 35 years old). It is of critical importance to explain to young people the benefits of decentralisation, because in the nearest future they will be the audience to use its benefits and will live in the environment with the principles laid today.

Also, the PULSE Project communications experts focus their efforts on disseminating messages through Internet-based media currently on the rise in Ukraine with their target audiences constantly growing (currently, 26 million of Ukrainians use the Internet) and with good chances to become the leading media outlet in the future. This is the global tendency, which becoming more and more pronounced in Ukraine by the day. One should mention that on-line resources remain the most responsive and interactive media tool.

At the same time, television enjoys the widest coverage and, as a rule, remains the most effective tool in disseminating the needed information. PULSE having taken this fact into consideration ensures the participation of Project experts in the air of a wide spectrum of TV Channels delivering the messages representing the core Project ideas to their audiences (first of all, medium-aged citizens).

Thanks to the printed media, PULSE has an opportunity to draw the attention of elderly persons to the necessity of implementing the local government reform. The Project focuses the attention on the irreversible nature and necessity of such changes and progressive impact of the reform on the life of country residents.

To ensure the permanent access of media representatives to the most up-to-date information about the implementation of the decentralisation reform, the Project web-site offers news headlines, which are updated on a daily basis. This is a so-called information bank, which serves very often as a source of information for journalists and local government representatives. In addition, The Project web-site offers press releases and press announcements for media.

At the central level:

Events and products for media

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Press news The Project prepares and disseminates regular press news to media representatives and, in case this is needed, does the express information delivery within the framework of the “Hot Topic” component. The mailing list put together during the previous years and is being constantly updated and verified. Therefore, as of today, the total number of items in PULSE mailing lists constitutes reaches more than 300.

During the reporting quarter, the reporting period, the Project disseminated 13 press releases and 7 "hot news" updates:

April 16 - The course of decentralisation of powers in the sectors of state construction and architecture control must be retained, - O. Slobozhan during an on-line meeting in the Ministry of Community and Territorial Development. April 30 - The AUC asks the Speaker of Parliament not to support the draft laws without balancing budget revenues and expenditures. May 07 - O. Slobozhan: The fight against the COVID-19 pandemic takes place exclusively at the expense of local self-government. May 08 - Cooperation and dialogue between the central and municipal authorities and not the unjustified pressure will help overcome the consequences of the coronavirus crisis in the country - the AUC appeal to the President. June 01 - AUC: New draft law to improve the election legislation - a way to forced dependence of local councils on political parties. June 16 - The AUC appealed to the Speaker of Parliament to include amendments to the Budget Code in the agenda in connection with the completion of the administrative and territorial reform. June 25 - V. Klitschko: The AUC Board insists on the endorsement of a resolution on new rayons in a package with amendments to the Budget Code.

In the reporting quarter, in cooperation with media, conducted 4 online events with the participation of mayors:

On April 17, - the Ukraine 24 TV Channel launched a special project under the title: "Ukraine in touch: a teleconference with regions of the country”. The mayors of larger cities spoke live about the problems of cities related to the coronavirus pandemic and shared their experience in resolving them. 22 mayors joined the broadcast, which lasted throughout the day. On April 21, - the InterVizor Internet TV Channel organised an on-line marathon under the title: "Smaller towns during the pandemic" with the participation of 14 mayors. In particular, they discussed the reform of the administrative and territorial arrangement, local elections in 2020 and the problems of communities caused by the pandemic. On April 22, - the Gorshenin Institute, with the support of the Lb.ua news agency, organised an on-line round table discussion under the title: "Ukrainian cities in the context of the quarantine" with the participation of 5 mayors. The event participants discussed problems that arose in the communities in connection in the context of the pandemic. On May 26, - the Gorshenin Institute, with the support of the Lb.ua news agency, organised an on-line round table discussion under the title: "How do Ukrainian cities get out of quarantine?". The event participants included 5 mayors from different regions of Ukraine: Ya. Litvinova (Starobilsk, Luhansk oblast), H. Pustovit (Lutsk), Yu. Fomichov (Slavutych, Kyiv oblast), S. Mazur (Balta, Odessa oblast), V. Tiron (Kamyanka, Cherkasy oblast). The event participants discussed issues of mitigating quarantine restrictions, ways for communities to get out of the quarantine, as well as decentralisation reform in the context of the relationships between central and local authorities. The mayors reiterated that services for the population and resources for their provision should be transferred to the basic level of local self-government.

Coverage of the AUC position and PULSE activities in media

During the reporting quarter, the PULSE Project activities were covered by 20 TV programs on the following channels: On April 08, - Oleh Harnyk, PULSE Project expert on housing and municipal utilities, provided his commentary to the Channel 5 TV Channel about the situation with consumer debts for housing and municipal utility services.

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On April 15, - Oleh Harnyk, PULSE Project expert on housing and municipal utilities, provided his commentary to the KRT TV Channel for its Hotline program about the situation with the payment for housing and municipal utility services by the population during the quarantine period. On April 23, - Oleksandr Slobozhan, Executive Director of the Association of Ukrainian Cities, provided his commentary to the InterVizor (Internet TV) Channel about the findings of the sociological survey under the title: "Coronavirus through the eyes of Ukrainian health care workers”. On April 23, - Svitlana Ostashko, PULSE Project health care expert, provided her commentary to the InterVizor (Internet TV) TV Channel about the findings of the sociological survey under the title: "Coronavirus through the eyes of Ukrainian health care workers”. On April 27, - Oleksandr Slobozhan, Executive Director of the Association of Ukrainian Cities, provided his commentary on the case of Oleksandr Shapoval, Pokrov Mayor, to the following media: The «Відкритий» [open] TV Channel; The «Дніпро TV» TV Channel; The Channel 11 TV Channel

On May 04, - Oleksandr Slobozhan, Executive Director of the Association of Ukrainian Cities, provided his commentary to the Kyiv TV and Radio Company about the financial situation in Ukrainian cities. On May 14, - Nina Melnyk, regional PULSE Project legal consultants of the Sumy Regional Office of the AUC, provided her commentary to the UA:Sumy media outlet about the long-term perspective plans for the formation of community territories in the Sumy oblast. On May 27, - Oleksandr Slobozhan, Executive Director of the Association of Ukrainian Cities, provided his commentary to the «Дім» [home] TV Channel about the decentralisation reform and the upcoming 2020 local elections. On May 28, - Oleksandr Slobozhan, Executive Director of the Association of Ukrainian Cities, provided his commentary to the «Україна 24» TV Channel about the completion of the preparation of long-term perspective plans. On June 09, - Oleksandr Slobozhan, Executive Director of the Association of Ukrainian Cities, provided his commentary to the Channel 4 TV Channel about the reform of administrative and territorial arrangement of Ukraine. On June 10, - the Channel 5 TV Channel aired a commentary by Oleksandr Slobozhan, Executive Director of the Association of Ukrainian Cities, about the establishment of the Berehove rayon, which borders on Hungary. On June 12, - Yaroslav Raboshuk, Director of the PULSE Project Center for Analysis and Legislation Drafting, provided his commentary on the draft document on the consolidation of rayons during a live broadcast on the Ukraine 24 TV Channel. On June 16, Yaroslav Raboshuk, Director of the PULSE Project Center for Analysis and Legislation Drafting, provided his commentary buy telephone to the «Рубрика» [section] on-line media about the consolidation and liquidation of rayons. On June 17, - Volodymyr Udovychenko, regional PULSE Project legal consultants, gave an interview to the «Погляд» [viewpoint] News Agency about the new rayons, the institute of prefects, and the peculiarities of the administrative and territorial reform in the Kyiv oblast. On June 19, - Volodymyr Udovychenko, regional PULSE Project legal consultants, provided his commentary to the «НАШ» [ours] TV Channel about community life in the context of the quarantine and funding of state-delegated powers. On June 23, - Oleh Harnyk, PULSE Project expert on housing and municipal utilities, provided his commentary by the telephone to the Ukraine 24 and Channel 4 TV Channels about the explosion in a high- rise building in Pozniaky. On June 26, - Oleh Harnyk, PULSE Project expert on housing and municipal utilities, gave an interview to the «Київ» TV Channel about the problem of the wear and tear condition of heating mains in Kyiv.

PULSE Project activities were covered in 1 radio program:

On May 08, - Oleksandr Slobozhan, Executive Director of the Association of Ukrainian Cities, provided his commentary to the UA:Ukrainian Radio Radio Station about the upcoming local elections.

During the reporting quarter, media widely covered the AUC reactions to:

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- the Draft Law "On Introducing Amendments to the Law of Ukraine "On the National Budge of Ukraine for 2020"" (Registration # 3279-д) of April 11, 2020; - ending the unjustified pressure on local self-government and ensuring the joint work of central government authorities and local government bodies in the fight against the coronavirus epidemic and the related economic crisis; and, - unpreparedness of the health care sector to work in the emergency situation due to COVID-19.

In particular, the AUC expressed its position with regard to the unpreparedness of the health care sector to work in an emergency situation due to COVID-19, financial consequences of the quarantine restrictions for cities, and country readiness for changes in the health care sector, which started on April 01, 2020 during an on-line briefing at the Ukrainian Crisis Media Center. The topic of the event was: "Health care sector today: reforms, epidemic COVID-19, and quarantine”. Oleksandr Slobozhan, Executive Director of the Association of Ukrainian Cities, and Svitlana Ostashko, PULSE Project expert on health care, served as speakers during the event.

Print and electronic media Interviews and comments of PULSE experts on decentralisation reforms were published in more than 23 in printed media and Internet resources.

The interview of Oleksandr Slobozhan, Executive Director of the Association of Ukrainian Cities, to the Channel 5 TV Channel about the formation and liquidation of rayons drew a lot of interest. During the week, this material was also distributed by the Channel 24, ZAXID.NET, and other media outlets.

The web site of the «Дзеркало тижня» [mirror of the week] published an article with a commentary from Oleksandr Slobozhan, Executive Director of the Association of Ukrainian Cities, about the powers of local government bodies and their role in the fight against the coronavirus pandemic.

The «Експрес» on-line media outlet published an article by PULSE by Nazar Mykolyuk, PULSE Project expert on social protection, about the impact of the Cabinet of Ministers decision to increase the protection of recipients of subsidies for housing and municipal utility services on the society.

The «Урядовий кур’єр» [government courier] published an interview with Natalia Boyko, Executive Director of the Luhansk Regional Office of the AUC, about the economic and social situation of territorial communities of the Luhansk region, their future prospects, and how they are experiencing the consequences of the quarantine caused by the COVID-19 pandemic.

All in all, during the reporting quarter, there were more than 426 mentioning of the AUC in media and on web sites of central government authorities and city councils. Those who wrote about the PULSE Project included such authoritative media as the «Урядовий кур’єр» [government courier], Ukraine 24, «Страна.UA» [country.UA], Interfax, «Голос України» [voice of Ukraine], «UA:Суспільне» [UA:public], «Економічна правда» [economic truth], UNIAN, Ukrinform, Decentralisation, ZIK, «Сегодня» [today], Censor.Net, Channel 24, «Українська Правда» [Ukrainian truth], «Вечірній Kyiv» [evening Kyiv], etc.

During the reporting quarter, Project regional consultants helped to prepare 345 programs on oblast and local TV channels including stories about community successes and programs with the participation of PULSE Project experts. In addition to this, 1,990 publications came out in local print and Internet media.

Website and social networks AUC web site The AUC web-site www.auc.org.ua is an important instrument to disseminate information to the public at large about the activities of the AUC and, in particular, about PULSE. This Internet resource has become a recognised source of trustworthy information about the current status of local self-governance and professional and specialised expert information in the sphere of local self-governance, decentralisation reforms and consolidation of territorial communities.

The AUC web page, which was completely upgraded and modernised in September, 2016, is being regularly updated with new content. According to the feedback from users, it is convenient and informative. In particular, they say that the user interface of the site by intuition is easy to understand, consistent and logical.

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While going to the main page a visitor sees the news highlights (10 publications), 5 top news, and interactive sections including the Decentralisation: Sectoral Dialogue section, and the tools that, which reflect the multi- faceted activities of the Project.

The Top News section catches the eye at once. It places most important, “hot” and significant news of the Project. The news highlights on the main page publish information about the following: - preparation of draft laws by PULSE Project experts and support for their approval in the parliament; - cooperation with parliamentary Committees (providing recommendations, proposals, comments, support or lack of support for draft legislation); - appeals to high level central government authorities on key problem issues local governments face and support to decentralisation reforms; - participation of PULSE Project experts in public events and comments to media; - coverage of PULSE Project activities and events; - coverage of activities and events conducted by PULSE Project regional consultants; - news from consolidated territorial communities and their success stories; - providing clarifications to local governments prepared by PULSE Project Center for Analysis and Legislation Drafting; - coverage of main news and developments in the sphere of local self-governance and decentralisation, opportunities for development and capacity building of city representatives, etc.

The site offers one important section called “Decentralisation”, which offers a link to one of the 10 thematic platforms. The platforms are dedicated to the areas of sectoral reforms where the PULSE Project works. With the help of the platforms users can learn about the details of the sectoral reforms, provide an opportunity for an interactive dialogue (the “Discuss with a Colleague” tool) and get expert assistance and consultations (the “Put a Question to the Expert” tool). Visitors can submit a proposal to the current legislation or suggest a new draft law in the “Laws” section. The interactive “Fair of Ideas” and “E- Petitions” sections are also available on the web site. The special section "Successes" tells the visitor about the achievements and achievements that the community has received as a result of fiscal decentralisation and community consolidation. The publications are placed in the section of the library. The site also keeps video and picture galleries.

The AUC web-site is a recognised professional, analytical and impartial source of information about local self-governance in Ukraine, decentralisation and sectoral reforms, problems and achievements of cities.

In March, the PULSE Project set up a platform on the AUC web site to share community experience during the quarantine. During the reporting quarter (until the end of May), the platform published daily collections of practices of cities, towns, villages, and CTCs in combating the spread of the coronavirus. A total of 724 community practices were published.

The AUC idea about the importance of exchanging community experience in this difficult period for Ukraine was supported by National Deputies, government officials, experts, and some international projects. These selections are distributed by other sites and electronic media.

The Project web-site also offers links to social media pages (Face book and YouTube), which are also used by the Project to disseminate information about decentralisation and local government reform and important Project news.

The Facebook account The Face book account of the Association serves as a powerful tool to popularise the topic of the local government reform and progress in decentralisation and to inform about AUC and PULSE activities. Social network pages are one of important information dissemination channels allowing not only to present events, products, materials, expert information and news, but also to receive feedback from the Internet audience and to disseminate “hot news”.

One should mention the increased interest to the AUC page in Facebook. The growth in the number of new “readers” was particularly active after Project events and publication of its new products. Over the reporting period, the number of Facebook page subscribers increased from 10,000 to 12,000.

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User coverage per calendar day is an important AUC popularity indicator in the Facebook. This indicator varied within the range from 2 thousand to 38 thousand. The biggest coverage was given to the publications dedicated to safeguarding community interest, coverage of AUC webinars, dissemination of the information about amendments to the legislation with regard to decentralisation and local self-governance, as well as materials provided by AUC experts.

The maximum number of views on posts in the reporting period constituted: April 13 - 23,054 users, message: "AUC Chairman Vitaliy Klitschko: National Deputies supported the AUC position with regard to amendments to the National Budget and retained UAH 51.03 billion in the budgets of cities, towns, villages, and CTCs"; April 23 - 17,563 users, a post with a video broadcast of the webinar on health care; May 05 - 15,034 users, message: "Vitaliy Klitschko at a Cabinet of Ministers meeting: when it comes to people's lives and health, we do not care about politics"; May 07 - 18,667 users, a post about the AUC online briefing under the title: "Health care sector today: reforms, COVID-19 epidemic, quarantine", during which the presentation of the findings of the national survey under the title: "Health care sector through the eyes of physicians" took place; June 12 - 38,828 users, a post with the position of the AUC Board on the consolidation of rayons; June 24 - 35,331 users, a post with a video broadcast of the webinar on the new Procedure for renting state- owned and communally-owned property.

In general, the overall coverage of AUC posts in Facebook over the reporting quarter constituted 512.9 thousand users, which speaks about both the increasing audience trust to the activities and news of the AUC and PULSE and to their live interest to topics related to decentralisation in general. On average, during the reporting period, the posts of the Association were re-published 200 times.

The YouTube account The AUC YouTube account has become a widely used source of news and information about the status of local self-governance and about the progress of decentralisation reforms. Over the reporting period, the Project provided regular updates to the “Association in Media” and “AUC Activities” sections offering important videos from media. PULSE communications experts monitor information, organise meetings of PULSE experts and TV journalists, involve experts to thematic programs, and upload the corresponding videos in the “Decentralisation and Reform Successes” and “Comments of AUC Experts” sections.

During the reporting period, the Decentralisation and Reform Successes library received new video materials. Thanks to regional communications and reform success replication consultants who monitor local media, this section receives collections of video news about decentralisation and best practices in communities on a weekly basis. On one hand, such a collection of videos is a good and continuously updated source of information about the progress of reforms, and serves as an incentive for communities to use the experience of their peers, join reforms in the country, and enter into community consolidation to receive more resources and powers, on the other.

In addition to this, the Project constantly updated the "Comments of AUC Experts" section. This collection of videos contains comments from PULSE Project experts and consultants on key issues of decentralisation and implementation of sectoral reforms. The video library provides an opportunity to see how the position of the AUC is reflected in regional and national mass media. The visitors can also receive explanations on issues of the implementation of the reform.

Also, on the AUC YouTube Channel, the Project set up a new video library called "Itinerary of Successes". This is a series of videos on the about study visits organised within the framework of the “Itinerary of Successes” nation-wide exchange study tour Project component, which is being implemented within PULSE. In this section, the visitors can see how the community's successful experience is disseminated and how "Itinerary of Successes" local government best practices are replicated.

During the reporting period, the AUC Learning Materials playlist prepared in the last quarter offering videos of PULSE Project webinars and other educational events became especially popular. For example, in the reporting quarter, this playlist was supplemented with video materials about the regional legislation application laboratories, which are conducted on-line by Regional Offices of the AUC and webinars of IREX a PULSE subgrantee. In particular, in April - May, the following video materials of PULSE webinars were

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added to the playlist: on the new Regulations for leasing state-owned and communally-owned property (June 24, 2020), on health care (April 23, 2020), and on metropolitan areas and points of economic growth" (April 14, 2020).

The AUC YouTube account has 11 video sections: “Decentralisation and Reform Successes” (a collections of videos sorted by oblast), “Comments of AUC Experts”, “AUC Activities”, “Training materials of the AUC”, “The Association in the Media”, "Itinerary of Successes", “PULSE of Reforms TV Project” (a video library of the PULSE of Reforms Project, which was implemented in 2017 – 2018. This collection has more than 200 video stories about successes communities have achieved thanks to decentralisation and PULSE Project activities), as well as previous collections of videos, such as “Decentralisation Marathon”, “Social Videos”, “Your Government” (selection of programs within the framework of the joint Project with the Channel 5 TV Channel), and “CITY-minded Ukraine” (selection of programs within the framework of the joint Project with the TONIS and UT-1 TV Channels).

Approximately 460 network users have subscribed to AUC video updates.

PULSE Project publications

PULSE Project publications Table 3.2. Publication title Targeted audience Description The “AUC Herald” AUC member AUC Herald # 171, April - May, features the printed monthly communities, AUC information on the AUC activities during the publication partner organisations quarantine period to safeguard the interests of communities, on the decisions of the AUC Board, and on the experience of Ukrainian and foreign cities in compliance with quarantine restrictions, supporting local economy and preparing for exiting the quarantine.

The “Pulse of Reforms” International This is a bi-lingual weekly publication presenting electronic digest organisations, PULSE activities over the past week and international technical featuring Project and local government news. assistance Projects, and This publication consists of two main chapters: Project partners “PULSE in action” and “Decentralisation and Sectoral Reforms: News and Developments”. The materials for this publication are prepared on Fridays, with the mailing taking place early next week. The mailing list is constantly updated. For example, the Ukrainian version is sent to AUC partners, representatives of the state executive and parliamentary Committees AUC experts work with, while the English version is sent to more than 100 emails of international organisations. During the reporting period, the Project prepared 13 digests. Methodical AUC member The publication contains a set of recommendations for communities recommendations on the organisational aspects holding remote meetings of preparing and conducting meetings of of local councils collegial bodies of local councils in the mode of remote meetings. Also, they publication offers proposals for the preparation of draft decisions on holding remote meetings. The publication is distributed electronically to AUC member communities.

At the local level:

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Support for library press clubs x IREX continued to provide mentorship support to all 24 PULSE Project library press clubs throughout Ukraine with the help of professional mentors. x IREX recorded approximately 83 cases of coverage of the decentralisation reform in Ukraine through media as a result of the work of library press clubs. x IREX announced a competition for the most successful examples of cooperation between local authorities, media and citizens on its Facebook page fort he purpose of collecting success stories from project grantees and librarians of press clubs. Also, the purpose of the competition was to compile these stories into a book by the end of the project activity (September, 2020) and to share the collections with project participants, partners and international donors. As a result of the competition, 57 applications were received and selected for further consideration. The selection committee evaluated the stories by the following criteria: 1) the relevance of the story to the community, 2) the ability to replicate the experience in other integrated communities, and 3) creativity and exclusivity and selected three winners. Three posts on the Facebook page received the highest points and were published in the official офіційній Фейсбук-групі IREX-PULSE_МОЯ ГРОМАДА МІЙ ДОБРОБУТ Facebook group. All the participants of the competition received their distinctions for their participation.

Dissemination of successes on local TV and radio stations and through print media Collecting and disseminating success stories of the local government reform and decentralisation is one of the key areas of activities of PULSE. This type of activity, as well as promoting such publications in regional media is supported by PULSE communications consultants. They work in oblasts and have contacts with local media. Thanks to such cooperation, regional print media and local TV channels radio stations prepare and disseminate informational products about reform successes and public expert materials and position of PULSE Project experts. Their main focus is community successes due to fiscal decentralisation, current status and future prospects of reforms in the oblast, and highlighting successes of consolidated territorial communities in implementation of infrastructure improvements and development projects.

Regional communications consultants ensure the regular presence of AUC Central Office experts, regional executive directors, budget, legal and local economic development consultants, as well as mayors of consolidated territorial communities in top rating local media (radio, TV, print and Internet media) and often they themselves participate in radio and TV interviews and write articles, short sketches and prepare video stories. Local media widely use analytical materials, reviews, info graphics and comments of PULSE consultants as credible, professional and authoritative views. Based on the results of the PULSE Project activities (meetings of AUC Professional Groups and regional policy dialogue platforms), PULSE regional communications consultants convene press conferences and hold briefings with the participation of local opinion leaders, experts, CTC mayors, and directors and consultants of AUC Regional Offices to discuss issues of regional importance. PULSE Project regional communications consultants consult local media in regions about the appropriate communities in oblasts to visit to make video materials.

PULSE regional consultants have learned the skills in making videos and putting them together. Earlier, PULSE purchased a set of video equipment and conducted the professional training for them. Now, the consultants are able to go out to communities, conduct PULSE Project regional events, on-site consultations, informational meetings, take interviews and comments from CTC mayors and sectoral experts and based on this prepare video stories on their own. The topics include: implementation of the decentralisation reform in the oblast, success stories from communities, participation of the AUC and PULSE Project in the implementation of reforms, etc. These stories are branded with the PULSE logo and serve as the handy material for dissemination through local TV Channels, which are happy to broadcast them. In the reporting period, communications consultants produced 85 video materials.

The reformatted and unified web pages of all AUC Regional Offices in the Facebook social network became an important source of disseminating community successes. These web pages serve as a valuable source of information about regional news, which are used by community mayors, local government officials and local media.

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Thanks to the active work of its regional communications consultants, PULSE Project has a reliable channel to disseminate in regional media not only the successes, but also specific nuances, roles and positions of the AUC in processes related to the local government reform.

Press tours for regional media

During the reporting quarter, because of the quarantine restrictions due to the threat of the spread of COVID-19, the PULSE Project did not conduct press tours.

Activity 3.3. Increased public awareness of reform successes and trust in local governments

3.3.1. Role of Offices for Reforms: supporting reform implementation and establishment of capable communities

3.3.1. Support for reform offices

Work of reform offices. Seminars and workshops, work with consultants During the reporting quarter, the offices of the AUC continued to operate reform offices - expert groups consisting of regional consultants on legal and budgetary issues, on communications. Also, 6 local economic development consultants continued to work, each of whom is responsible for work in 3 - 5 oblasts. The main tasks of the regional legal, budget and local economic development consultants included: x providing legal assistance to representatives of local governments; x motivation and support for consolidation of territorial communities; and, x conducting of information, public awareness, training and consultative activities for local governments, representatives of other interested parties, and informing media about reforms.

The priority task for the local economic development consultants was to support local economic development in five territorial communities (with the total of 30 territorial communities from all 24 oblasts). The attention of these consultants was focused on the following: - preparation of community development strategies, implementation plan, and monitoring system for implementation of strategies; - preparation of the community profile and investment promotion profiles; - preparation of project applications for participation in the competition to select the projects to be financed at the expense of the National Budget and grants form international technical assistance projects; - introduction of the Municipal Fiscal Register; - preparation of tools for supporting small and medium-sized businesses and establishing communication between local governments and the business community; and, - promotion of local business products in foreign markets, presentations of city potential for a wider range of potential partners;

The main tasks of the regional communications consultants included: x gathering success stories and best practices from territorial communities in implementing decentralisation reform and increasing own local budget resources; x providing comments and interviewing of experts and regional public opinion leaders for media, highlighting activities of AUC Regional Offices and experts who provide AUC services in the relevant oblast, and coverage of the process of the reform in the oblast in open sources; and, x dissemination of news related to local government and information about the activities of PULSE Project and AUC.

The AUC Central Office for Decentralisation Reform provided coordination services to all regional offices, salaries and financial support for events, and provided timely consultative support.

During the reporting period, in view of the introduction of quarantine restrictions related to the coronavirus disease (COVID-19), regional consultants conducted their activities only through electronic communication channels.

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During the reporting period, consultants were actively involved in the completion of the preparation of long- term perspective plans for the formation of community territories for the oblasts, as well as new rayons. Also an important area of activity in the reporting period was ensuring mobilisation of financial resources to counter the coronavirus disease (COVID-19), as well as the introduction of remote forms of local government activities.

All in all, during the reporting quarter, PULSE Project regional communications consultants provided 2,482 consultations on legal, financial and local economic development issues.

Regional communications consultants work in all regions of Ukraine, in close cooperation with the Central Office for the Decentralisation Reform in the AUC. The Communications Coordinator of the Office and the PULSE Project Communications Group adjust the focus of their activities on a regular basis, communicate key messages, hot news and the position of PULSE and AUC to them. During the reporting period, the consultants received recommendations about marking and branding of PULSE Project products and activities, about how to improve accounts of AUC Regional Offices in the Facebook, and how to share best practices and interesting press initiatives.

The Facebook account called “PULSE: Decentralisation Marathon” opened in 2015 when community consolidation processes started became an effective communication tool for supporting PULSE activity at the regional level. This is the place where regional communications consultants post their information about Project event in communities, successful practices, press tours, regional success stories, as well as events and key changes in communities. The consultants are regularly provided with instructions on the preparation of the messages and the formulation of texts of publications on the page. In the reporting period, communications consultants placed posted 1,885 publications on the PULSE: Decentralisation Marathon page.

Monitoring, collecting and writing success stories and best community practices and feeding them into the national success story database set up within the framework of the Project remains one of the important aspects of the work of communications consultants. During the reporting period, the consultants were also advised how to improve this work, as well as the form and content of such materials. The national success story database serves as a source of information for further preparation of publications about community successes and as a source of information for the "Successes" section on the AUC web site, as well as is used for cooperation with central and regional media.

The AUC Central Office for the Implementation of the Decentralisation Reform worked closely with regional communications consultants to disseminate across Ukraine not only successes, but also “hot” messages about new legislation, local government news, and position and role of the Association in these processes. In particular, the following messages were effectively and efficiently disseminated across Ukraine during the reporting period: "The parliament took into account some proposals of the AUC in amendments to the Tax Code", "The new law regulates remote meetings of collegial bodies of local governments", "The parliament took into account AUC proposals for changes to the National Budget for 2020", Facebook "Ukrzaliznytsia should provide preferential transportation services to citizens and not to transfer responsibility to local governments - AUC", "Cooperation and dialogue of central and municipal authorities and not unjustified pressure will help overcome the consequences of the coronavirus crisis in the country - AUC appeal to the President", “The AUC categorically rejects the consolidation of rayons proposed by the Cabinet of Ministers”.

During the reporting period, regional communications consultants organised a large-scale campaign to gather information on community practices in countering the coronavirus. On the AUC web site there is a platform set up within framework of the USAID PULSE Project offers materials, from which all communities of Ukraine could learn about the experience of local governments in countering the pandemic. In particular, these include the materials about how communities live and work in new conditions: organizational aspects of work of executive bodies, provision of the necessary equipment and medical supplies to health care institutions, support of socially vulnerable categories of the population, supporting entrepreneurship in the context of the quarantine, etc.

"Itinerary of Successes" nation-wide exchange study tour Project component

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During the reporting quarter, because of the quarantine restrictions due to the threat of the spread of COVID-19, the PULSE Project did not conduct study tours.

3.3.2. Spotting and promotion of reform successes

During the reporting period, the Project regularly updated the national base of successes and best practices from communities. This interactive tool provides the opportunity to track the progress of decentralisation reform nationwide, compare different oblasts, and distribute the best initiatives and municipal practices. The materials to the database are provided by regional communications consultants who monitor the communities and provide information by key areas of sectoral decentralisation. The national base is a handy source of information for preparation of materials for other PULSE communication channels, such as the web site, social networks, cooperation with media, TV Project, as well as organisation of Project events to cover success of reforms, namely: “Itinerary of Successes” replication visits and press tours. During the reporting period, the project prepared and entered into the database 117 success stories and 92 best practices.

The success stories highlight the benefits and gains of communities they have received due to fiscal decentralisation and consolidation, emphasize the increased financial resources of local budgets through decentralisation reforms, possibilities of attracting National Budget subventions and international donor funds, etc. During the reporting period, there was a large number of success stories dealing with modernisation of infrastructure in the health care sector, supporting small and medium-sized businesses during the quarantine restrictions, development of the sector of health care, supporting such sectors and energy efficiency, housing and municipal utilities, education, introduction of community safety instruments, and development of the local economy.

Despite significant losses and shortfalls of local budgets in view of the introduction of the coronavirus quarantine restrictions, local communities continued to look for ways to minimise local budget losses, support local entrepreneurship, prevent unemployment, construct roads, and implement local development projects.

3.3.3. Promotion of reform successes

A significant segment of the PULSE communication component, which is now being implemented in cooperation with 24 regional communications consultants, is to increase the PULSE impact on stimulating and motivating further consolidation of territorial communities. The communities, which consolidate receive the resources and authority cities of oblast significance have and can use them for their own needs in order to improve the quality of services at the local level. The most effective tool in this work is to convince all participants in the process, and, most importantly, citizens that decentralisation will have a positive impact on the quality of their lives and to demonstrate the real successful examples of consolidated communities.

In the course of decentralisation, communities received resources, finance, powers representing significant tools and opportunities to ensure the full fledged local development.

The reform has provided communities with an opportunity to engage in long-term planning and implement projects that improve the quality of infrastructure and manage their own revenues. Community budget funds budgets consist of mainly go to repairs of roads, public transportation, repair and equipping of educational and health care establishments, opening of centers for administrative services, housing construction, children and sports playgrounds, cultural centers, inclusive resource centers, restoration of the water supply networks, etc. People feel all this in their own lives and this is the best illustration of the success of decentralisation, fiscal decentralisation, and consolidation of territorial communities.

PULSE uses real stories to stimulate and motivate territorial communities for further consolidation, promote reform, convince all participants of the decentralisation process, and most importantly citizens, that decentralisation brings high quality of life and better access to services. It is important to inform hesitant communities and the media community of obvious benefits of decentralisation and community consolidation, about the real facts of effectiveness of these reforms for communities and their inhabitants. During the reporting period, PULSE Project disseminated success with its own means involving media and its regional consultants.

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Every day, in a special Successes section the AUC website publishes news about best practices and successful community achievements thanks to decentralisation within the framework of the information campaign called "No Day without Success". During the reporting period, the Project prepared and published 53 articles in the section.

PULSE Project also tracks and distributes video materials about the successes of the reform. The official account in the YouTube network has a separate channel where one can view all videos about successes and implementation of the reform in regions collected and grouped by oblast. During the reporting period, the Project consultants provided new materials to the Decentralisation and Successes of Reforms Video Library, as well as collected information with the help of media monitoring. The video stories footage highlights the advantages and benefits of communities they have gained thanks to consolidation. It should be mentioned that many activities and products of the PULSE Project are dedicated to the promotion of successes of the reform, such as “Itinerary of Successes” (regional and national) exchange study tours, the PULSE OF REFORMS TV Project, the “BOOK OF SUCCESS” publication and success stories, the SUCCESSES section on the AUC website, the Decentralisation Marathon Facebook account, as well as publications in local media by PULSE regional communications consultants.

3.3.4. Involvement of young people and teenagers in decentralisation

Working with young people is an important segment of promoting a supportive environment for the implementation of decentralisation and sectoral reforms. After all, the formation of public support depends, to a large extent, on the level of support from young people, since it is the nowadays young and teenage Ukrainians will have to live in a reformed country. Therefore, they must clearly understand where the state is heading to, what decentralisation means, and what the main principles of innovations are. This topic has always been and remains the top priority for the Project. Thus, during the previous years, the Project conducted special events including, for example, the one-week School of Decentralisation for Youth (2016) and on-line local government tutorials (2016 and 2017) in cooperation with the America House in Kyiv). In 2018, the PULSE Project conducted a competition of best practices and ideas under the title: "Child Friendly City", which led to the publication and distribution of the collection of best practices, while the winners had an opportunity to attend a training seminar. During Project Year Four, PULSE published a special collection under the title: “YOUTH AND THE COMMUNITY: CHANGES FOR THE FUTURE”. The publication contains 64 short stories on how decentralisation affects the lives of young people in communities. The BOOK OF SUCCESS includes a special section "Youth and Community", which publishes successful examples of working with youth and implementing projects for young people and with their participation.

During the reporting period, the PULSE Project organised a series of webinars under the title: "Work of youth councils on-line" on the following topics: May 21 - "Youth work in the on-line format. How to properly organise young people during the quarantine so as not to lose touch with them?"; June 04 - "Actualisation of youth initiatives in crisis situations"; June 16 - "Workshop of change: everyone can be a change in their community"; June 25 - "From involvement to partnership - the secret of effective communication with young people”.

The webinar participants were persons who work or plan to work with young people. During the webinars there was an exchange of practical experience of working with young people in CTCs. During the event, the participants shared the experiences of their communities in involving young people during the quarantine, discussed youth initiatives that are forms of crisis response, social challenges and pandemic, practices of youth participation in local decision-making, what steps need to be taken to effectively interaction with young people, and where to look for leaders of change.

On May 26, the Youth Capital of Ukraine city of Ternopil organised the All-Ukrainian conference under the title: "Youth on-line". The youth forum was held in the framework of the implementation of the Ternopil - the Youth Capital of Ukraine status. The main topic of the discussion was the challenges during the pandemic and ways to resolve them.

Also, the AUC performed comprehensive legislative work, in particular, drafting a law to provide additional revenues to the budgets of local communities that have joined the Children and Youth Friendly Community initiative (UNICEF). The approval of the draft law will, first of all, promote the development of services for

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children and youth, create conditions for their safety, well-being, development and realisation of their opportunities, support for parents raising children and create an accessible environment in communities.

The experience of cities and villages in the implementation of youth policy in communities is interesting. The Pavlohrad City Council of the Dnipropetrovsk oblast held a video contest on energy saving and energy efficiency projects among students of secondary schools in the city. The Kamianets-Podilskyi City Council (Khmelnytskyi oblast) prepared an interactive map of the city sport infrastructure. In Skadovsk (Kherson oblast), active youth in cooperation with entrepreneurs set up a public space for citizens. Young entrepreneurs, representatives of Lviv IT Cluster and BotsCrew helped the city authorities to counter coronavirus: they developed the Temperature Bot chat bot, which allows to monitor the dynamics of health and body temperature in humans and thus to predict the spread of coronavirus in the region.

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Chapter 3. IMPLEMENTATION PROBLEMS AND BARRIERS

The systemic problem issues in the local government sectors and relevant legislative and executive bodies that were indicated in the previous (annual report), generally did not significantly change. The problem of insufficient (at the level of the Cabinet of Ministers) coordination of the decentralisation reform with sectoral reforms and relevant ministries remains systemic and continues to be a significant obstacle to the success of the reform.

During the reporting quarter, the main challenge for the project implementation was the quarantine restrictions imposed by the Cabinet of Ministers in connection with the COVID-19 pandemic and the corresponding restrictions on holding mass events, reducing social contacts, business trips, etc. Back in mid-March, the PULSE Project and its staff switched to the remote mode of work, but were forced to return to the project implementation directly from the office on May 25, because the challenges of the final stage of the first phase of the reform required a much higher level of mobility and other social contacts with National Deputies of the Verkhovna Rada of Ukraine and Cabinet of Ministers officials. A number of tasks were very difficult to solve working in a remote mode.

Problems with Project activities The remuneration for the PULSE Project staff has lost its competitive advantages as compared with over other international technical assistance projects operating in the same sector (more than 2 times). The staff of the new ministry directorates also have significantly higher salaries (more than 1.6 times). This has already led to the drain of four persons from the Project staff in this quarter.

Suggested solutions to new or current issues: Staff turnover and the problem with the recruitment of specialists of the highest professional level. Aiming at resolving this issue, the AUC management increased the salaries of most employees by approximately 15% in April, 2018, but even so, the PULSE Project remuneration remains substantially lower than in other projects. The AUC policies do not envision the possibility to increase (after annual performance evaluation) to increase salaries by up to 5%, as is the case with other projects, thus motivating the PULSE Project staff.

Implementation of the sub-agreement with IREX COVID-19. The biggest challenge this quarter was COVID-19. This global problem affected all projects and IREX activities. Changes to the Project Work Plan: Because of the quarantine restrictions and aiming at preventing the spread of COVID-19, the IREX/PULSE team came up with a decision to reformat all information activities into the on-line format. Most events could be conducted on-line, but those that required the physical presence of citizens in groups were suspended. Also, due to the unpredictability of restrictive measures introduced by the government, the IREX/PULSE team adjusted its work plan so that the obligations under the Sub- Agreement were to be met by September 30, 2020, as planned.

x Sub-agreements. Prior to the introduction of the quarantine restrictions in Ukraine, IREX paid the first tranches to 26 pilot NGOs (60% of the total), which were to carry out activities in 32 communities by the end of June, 2020. The team decided to revisit budgets, prolong the timeframe of agreements and timeline of event implementation, through late August, and to reduce the overall number of agreements (in other words, not to pay the remaining 40% of the tranche). IREX is working on modifying grant agreements and is negotiating on new program activities.

x Evaluation and monitoring plan. Given the reduction in payments to pilot NGOs, they will implement fewer activities than originally planned.

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x Support for Reform Support Groups (RSGs). Due to the impossibility to meet in person and conduct trainings for RSG members, IREX prepared a series of webinars on working with youth councils. In addition to this, IREX staff have updated the information materials and plan to send the updated information to community activists who do not have quality Internet access but want to stay up to date.

x Recording of distance learning courses. IREX stays in compliance with the international guidelines for social distancing and came up with an idea to prepare animated video modules, instead of studio videos where the physical presence of lecturers is required. The speakers of training courses who live in different parts of Ukraine will not have to come to the capital, and all the quarantine restrictions on public gatherings will be met.

x Final event of the PULSE Project (related to IREX activities). The final event for project participants is scheduled for August. For the safety of participants, IREX will not gather a large group of people together in one room, but will conduct the event on-line.

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Chapter 4. SUCCESS STORIES

LOCAL FINANCE

UAH 4.2 billion was retained in local thanks to preventing the provision of 100% land fee payment exemption for lands owned by railway companies

On May 23, 2020, the Law of Ukraine “On Introducing Amendments to the Tax Code of Ukraine with Regard to Improving the Administration of Taxes and Elimination of Technical and Logical Inconsistencies in the Tax Legislation” came into force (Registration # 466-IX). Thanks to the cooperation of AUC/PULSE with the parliamentary committee in the course of the consideration of the draft law, the committee rejected amendments (# 2065 and # 2066), which offered a suggestion to introduce of 100% land tax fee payment exemption for lands owned by railway companies. As a result, it became possible to prevent the loss of local government budgets in the amount of UAH 4.2 billion.

Taxation with the tax on immovable property other than the land plot, and payment for land of taxable items located on the military conflict line was resumed On May 23, 2020, the Law of Ukraine “On Introducing Amendments to the Tax Code of Ukraine with Regard to Improving the Administration of Taxes and Elimination of Technical and Logical Inconsistencies in the Tax Legislation” came into force (Registration # 466-IX). Law # 466-IX takes into account the amendment proposed by AUC/PULSE to the resume the taxation with the tax on immovable property than the land plot and land tax on taxable items located on the military conflict line. The amount of losses of local budgets caused by the failure to use this tax on the line of the military conflict amounted to more than UAH 50 million in 2019 (expected figure), while according to the forecast calculations for 2020, the PULSE Project prevented losses in the amount of UAH 74.4 million. The approval of such amendments will contribute to better financial resource sufficiency of local budgets of the populated areas located on the military conflict line, and to prevent losses of these budgets in future budget periods. The revenue side of these budgets will increase, which will provide an opportunity to balance these budgets.

Crediting of collections from flat tax payers who pay land use tax to the local budgets is ensured On May 23, 2020, the Law of Ukraine “On Introducing Amendments to the Tax Code of Ukraine with Regard to Improving the Administration of Taxes and Elimination of Technical and Logical Inconsistencies in the Tax Legislation” came into force (Registration # 466-IX). Law # 466-IX takes into account the amendment proposed by AUC/PULSE to limit the number of single taxpayers who can apply the tax exemption for land tax. The amendment provides for the introduction of the tax on the use of land plots that are in permanent use or owned by entities, which pay flat tax, and further direction of tax revenues to local budgets, and, consequently, strengthening the financial capacity of local government bodies.

The procedure for the State Tax Service to submit tax reporting on taxpayers, which are legal entities, to local governments was improved On May 23, 2020, the Law of Ukraine “On Introducing Amendments to the Tax Code of Ukraine with Regard to Improving the Administration of Taxes and Elimination of Technical and Logical Inconsistencies in the Tax Legislation” came into force (Registration # 466-IX). Law # 466-IX takes into account the amendment proposed by AUC/PULSE to improve the procedure for the State Tax Service to submit tax reporting on taxpayers, which are legal entities, to local governments. This will provide an opportunity for local government bodies to ensure: 1) additional control of fulfillment by taxpayers, which are legal entities, of their obligations to local budgets; 2) an objective approach to the preparation and implementation of local budgets.

The procedure for setting local taxes and fees was simplified On May 23, 2020, the Law of Ukraine “On Introducing Amendments to the Tax Code of Ukraine with Regard to Improving the Administration of Taxes and Elimination of Technical and Logical Inconsistencies in the Tax Legislation” came into force (Registration # 466-IX). The Law takes into account the proposal of AUC/PULSE experts to eliminate the need for: 1) annual publication by local government bodies of the information on the timeframe of the decision on introducing local taxes and fees; 2) separate information notification about this to the State Tax Service. According to the proposals from AUC/PULSE, the Law stipulates that such a decision is valid until a new decision is made. Now, local government bodies are relieved of the unnecessary need to make such decisions on an annual basis.

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PULSE Project prevented the loss of local government budgets in April, 2020 in the amount of UAH 3.15 billion On April 02, amendments to the Tax Code of Ukraine (Law # 540-IX of March 30, 2020) came into force, which renewed the payment by taxpayers of the land tax, land rent, and real estate tax for April, 2020. Prior to this, another law suspended the payment of these taxes for 2 months in view of the quarantine. These amendments became possible thanks to the work of PULSE Project experts and provided an opportunity to save UAH 3.15 billion of such funds in local budgets.

The mechanism for the reduction of rates of the flat tax, land fee, and the real estate tax for 2020 was simplified The amendments to the Tax Code of Ukraine (Laws # 540-IX of March 30, 2020 and # 591-IX of May 13, 2020) have simplified the mechanism for reducing the rates of the single tax, land fees, and real estate tax for 2020. With the support of PULSE Project experts, local government bodies were temporarily given the opportunity to make appropriate decisions in 2020 without following a number of formal procedures. This has significantly increased the capacity of local government bodies to support businesses during the quarantine (COVID-19).

PULSE helped save UAH 51 billion for local budgets in the course of the approval of amendments to the National Budget On April 13, the Parliament during its extraordinary plenary session approved the Law “On Introducing Amendments to the National Budget for 2020” (Draft Law # 3279-д of April 11, 2020).

The purpose of the law was to release the financial resources for the formation of the Fund for the Control the Acute COVID-19 Respiratory Disease caused by the SARS-CoV-2 coronavirus and its consequences.

Because of the necessity of earmarking UAH 64.7 billion for the Fund, a number of budget programs were reduced, including those related to local self-government. PULSE Project experts were involved in the preparation and elaboration of the draft law introducing the amendments to the National Budget.

AUC/PULSE entered a dialogue with the Cabinet of Ministers and the Parliamentary Budget Committee and managed to retain this critical financial resource in community budgets.

The parliament took into account the proposals of the AUC and, as a result, the amendments to the National Budget 2020 saved UAH 51.03 billion (USD 1.88 billion) in local government budgets.

This resource is of extreme importance for local governments, which are today "at the forefront" of the fight against the COVID-19 pandemic and, being the level of the government closest to the people, are responsible for their health and lives.

At the same time, as a result of partial and/or complete reduction of certain budget programs, local budgets suffered the losses in the amount of UAH 9.65 billion.

PULSE prevented monthly losses of local government budgets in the amount of UAH 0.6 billion from personal income tax Thanks to the efforts of AUC/PULSE experts, the personal income tax of local government budgets has not been lost due to the exemption from the payment of the personal income tax of health care workers who are directly involved in countering the coronavirus disease (COVID-19). Draft Law # 3329 of April 13, 2020 and alternative Draft Laws # 3329-1 of April 28, 2020, and # 3329-2 of April 28, 2020 considered by the Verkhovna Rada Committee on Finance and Tax and Customs Policy were withdrawn from consideration in the parliament.

UAH 0.8 billion saved in local government budgets and the issue of additional financial support for health care workers was comprehensively resolved On May 29, 2020, amendments to the TCU came into force (Law # 591-IX of May 13, 2020). Thanks to the proposals of AUC/PULSE experts, the state compensated local budgets for the expenditures on personal income tax for additional salary payments for health care workers involved in countering COVID-19 for the

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period of May - June. This will provide an opportunity for local government budgets to keep their own funds in the amount of UAH 0.8 billion and prevent losses from the personal income tax in the same amount.

UAH 76.0 billion of collections from the personal income tax was saved for local government budgets PULSE Project experts prevented the introduction of reduced rates for the personal income tax and/or introduction of privileges on the payments of the personal income tax for certain categories of citizens. Thus, the financial resource in the amount of UAH 76.0 billion was retained in local government budgets by rejecting 11 Draft Laws: # 2758-1, # 3076, # 3302, # 3302-1, # 3311, # 3311 -1, # 3329, # 3329-1, # 3329-2, # 3379, and # 3331.

PULSE Project experts prevented the approval of populist legislative initiatives regarding amending the main budget revenue taxes (the financial resource in the amount of UAH 45.4 billion was retained in local government budgets) Due to the hard work of PULSE Project experts, the parliament rejected Draft Laws # 3302, # 3302-1, # 3311, and # 3311-1, which offered a suggestion to introduce a progressive scale of personal income tax, abolition of personal income tax in the form of interest on deposits, exemption from the military fee, and mandatory payments under the simplified taxation system including the flat tax. PULSE Project experts determined that the implementation of such draft laws could have led to a decrease in budget revenues of cities, villages and towns. With the increasing expenditure burden related to COVID-19, this could have led to unbalanced local budgets. The potential losses of local budgets were estimated at more than 30% of the total collections from of the personal income tax alone, which is constitutes least UAH 45.4 billion.

Positive progress has been made in preventing the imbalance of local budgets caused by the payment of personal income tax by enterprises at the place of registration, rather than at the location ob business entities On June 04, 2020, the Verkhovna Rada of Ukraine approved in the first reading the draft Law of Ukraine "On Introducing Amendments to the Law of Ukraine "On Local Self-Governance in Ukraine" with Regard to Ensuring Compliance with State Guarantees to Local Governments and Protection of Their Economic Foundations" (Registration # 3118) of February 24, 2020. Draft Law # 3118 makes it impossible to change the place of registration of communal enterprises, institutions, organisations by rayon and oblast councils being local government bodies representing common interests of territorial communities of villages, town and cities. AUC/PULSE experts have repeatedly pointed out that the payment of personal income tax by enterprises not at the location of structural and separate divisions of legal entities, but at the place of registration of the main enterprise, leads to significant shortfalls in local budgets and their imbalance.

PULSE prevented the transfer of additional expenditure categories in the amount of 15.4 billion hryvnyas for the implementation of the program of state health care guarantees for the population to local budgets. A PULSE Project expert identified a problem issue with the shortage of funding from NHSU for the secondary health care system in terms of the state's powers. This provided an opportunity to prevent shifting by the Cabinet of Ministers of its solution on the shoulders of communities. PULSE Project experts prepared the relevant appeals to the Office of the President, Parliament and the Cabinet of Ministers with a request to provide funding for this purpose. In the course of its extraordinary plenary session, the Verkhovna Rada of Ukraine approved the Law “On Introducing Amendments to the National Budget for 2020”, which established the Fund for Combating Acute Respiratory Disease COVID-19 Caused by SARS-CoV-2 and Its Consequences”. The volume of the funding constitutes 64.7 billion hryvnyas and 15.4 billion hryvnyas for the implementation of the program of state health care guarantees to the population.

EDUCATION

Thanks to the cooperation between a PULSE Project expert and the Ministry of Education and Science, the communities received a sample list of questions for the competition to fill the positions of heads of comprehensive secondary educational establishments During the reporting period, a PULSE Project expert together with state experts of the Ministry of Education and Science prepared a sample list of questions to test the knowledge of legislation in the sector of comprehensive secondary education, which was endorsed by the Directive of the Ministry of Education and Science of May 19, 2020 (Registration # 654) "On the Model List of Questions". The list was prepared in order to simplify the preparation of local government bodies for the theoretical part of competitions to fill the positions of heads of comprehensive secondary educational establishments. The list takes into account the peculiarities of different levels of comprehensive secondary education and is based on the laws of Ukraine

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"On Education" and "On Completed Comprehensive Secondary Education". The organisers of the competitions at the basic level will have an opportunity to choose questions relevant to them from the list.

Preventing unjustified increase of local budget expenditures for making arrangement for student meals On May 27, 2020, the Verkhovna Rada Committee on Education, Science and Innovations, taking into account the position of the AUC presented in the conclusions of the PULSE analyst, returned the Draft Law of Ukraine "On Catering in Comprehensive Secondary Educational Establishments" (Registration # 2664 of December 20, 2019, National Deputies I. Kalaur, V. Vatras, M. Stefanchuk, Yu. Kisel, V. Medyanyk, and O. Merezhko) for elaboration. The draft law had numerous shortcomings and could have led to an increase in local budget expenditures on student meals without a proper compensation mechanism, as well as required harmonisation with many current pieces of legislation.

Communities received timely counselling about the functioning of educational establishments during the period of the quarantine In the reporting period, educational establishments worked in conditions requiring implementation of the Law of Ukraine "On Completed Comprehensive Secondary Education" and conducting the educational process in a remote mode. A PULSE Project expert provided more than 50 consultations on the AUC website and 20 telephone consultations abut the organisation of distance learning, work at home of pedagogical and non-pedagogical staff, remuneration, and compliance with the new law. This allowed communities to avoid violations of the law and ensure compliance with state standards in comprehensive secondary education.

SOCIAL PROTECTION

A National Deputy withdrew the draft law shifting expenditures in the amount of 9.3 billion hryvnyas of on local budgets According to the results of the work of the working group on finalising Draft Law # 2587 of December 12, 2019 at the Committee on Social Policy and Protection of Veterans Rights with the participation of a PULSE Project expert, a National Deputy (the author of the draft law) withdrew the draft law from consideration. The PULSE Project expert did not support the draft law, because it imposed additional expenditures in the amount of UAH 9.3 billion per year on local budgets.

Thanks to the PULSE Project, the parliamentary committee rejected the draft law, which imposed expenditures in the amount of 5 billion hryvnyas on local budgets On May 20, the Committee on Social Policy and Protection of Veteran Rights considered Draft Law # 3240- 1 of April 08, 2020, which imposed expenditures in the amount of UAH 5 billion on local budgets. The PULSE Project expert presented an opinion against the draft document. The Committee supported the position of the expert and rejected the draft law.

PULSE prevented shifting additional expenditures in the amount of UAH 3 billion on local governments The Ministry of Social Policy prepared a draft resolution of the Cabinet of Ministers of Ukraine, which imposed additional expenditures on local budgets in the amount of UAH 3 billion per year for introduction of additional social workers. The PULSE Project expert together with the Ministry of Social Policy worked on the draft document and submitted significant proposals to it, which have been taken into account in the final version of the resolution. As a result, the Ministry excluded from the draft resolution a provision that imposed additional expenditures on local budgets. The Cabinet of Ministers endorsed the resolution on June 01, 2020 under Registration # 587.

According to PULSE proposals, the Cabinet of Ministers has simplified the involvement of non- governmental organisations in the provision of social services On June 01, 2020, the Cabinet of Ministers endorsed the Regulations (# 450) for providing social services through a social request. The Regulations has taken into account all the comments provided by the PULSE Project expert. The reflected comments, in particular: - has simplified the procedure for local governments to involve non-governmental organisations in the provision of social services; - has vested local government bodies with the right to independently regulate with non-governmental organisations the issue of prepayment for the provision of social services.

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Local governments have the opportunity to comprehensively organise the system of social work in communities On June 01, the Cabinet of Ministers endorsed Resolution # 479 to endorse the wording of standard regulations on local social service centers. Thanks to the suggestions from the PULSE Project expert, local governments will have the right to set up other structural units of the utility company not defined by the standard regulations and, accordingly, to determine the services that will be provided by them. This will provide opportunities for local government bodies to comprehensively organise the system of social work in the community.

PULSE Project helped to preserve the organisational independence of local self-government in the sector of the provision of social services The Ministry of Social Policy prepared the Regulations for monitoring compliance with the requirements of the Law of Ukraine "On Social Services". According to these Regulations, oblast state administrations were supposed exercise control of local government bodies at the basic level (villages, towns and cities). Since the organisation of the provision of social services is part of exclusive powers of local government bodies, the state, in accordance with the Constitution of Ukraine, should have no right to control their implementation. Therefore, PULSE Project expert in cooperation with the Ministry of Social Policy prepared a new version of the Regulations, according to which oblast state administrations will control only rayon state administrations, while local government bodies will make their own arrangement to organise their own internal control. The Regulations were endorsed by the Resolution of the Cabinet of Ministers of June 01, 2020 (Registration # 427). Thanks to this, the PULSE Project preserved the independence of local governments from the state control.

PULSE Project in cooperation with the Ministry of Social Policy prepared a draft law that will provide communities with the right to make decisions on granting privileges for urban public transportation services The Ministry of Social Policy, with the participation of the PULSE Project, prepared a draft law that vests local government bodies with the right to make their own decisions on granting privileges for urban public transportation and communication services to certain categories of citizens. After the draft document has been concurred by all stakeholders, the draft law will be submitted to the Cabinet of Ministers and, if endorsed, will be submitted to the Verkhovna Rada of Ukraine for registration. The AUC also received the draft law for concurrence from the Ministry of Social Policy in the prescribed manner.

If the draft law is approved, local government bodies will be able to make independent decisions, within the limits of the available budget and with due regard to the actual needs of the population, about whom to provide the privileges to and in what way. Under current law, the provision of such benefits is mandatory for local governments and is funded from local budgets.

HOUSING AND MUNICIPAL UTILITIES

Heat and water supply companies are exempt from fines and penalties of energy suppliers Thanks to the hard work of AUC/PULSE experts, the approved Law # 553-IX introducing amendments to the National Budget for 2020 stipulates that centralised water supply and sewerage companies, producers of thermal energy, in particular those of the communal ownership, received temporary exemptions from the fines and financial sanctions charged by electricity and natural gas suppliers for the period of quarantine or restrictive actions related to the spread of the coronavirus disease (COVID-19).

Restrictions for municipal heating companies on payments for electricity have been lifted On April 29, 2020, the Cabinet of Ministers took into account the position of AUC/PULSE and changed the Procedure for the distribution of funds received on special operational accounts for settling payments with the suppliers of the natural gas charged with special obligations. Thanks to this, heat supply companies have received the opportunity to have guaranteed funds to pay for the consumed electricity.

HEALTH CARE

Thanks to the PULSE Project, the problem with understated tariffs and the lack of health care packages for patients with the acute COVID-19 respiratory disease and the related tariffs in the program of state health care guarantees for 2020 was resolved

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These problems were raised, among others, by local governments. A PULSE Project expert forwarded them to the Cabinet of Ministers and the Ministry of Health Care of Ukraine. The Resolution of the Cabinet of Ministers of June 19, 2020 (Registration # 513) has amended the Resolution of the Cabinet of Ministers of February 05, 2020 (Registration # 65) "Certain Issues of the Implementation of the Program of State Guarantees of Health Care Services for the Population in 2020" and increased the tariff: for health care services for the provision of medical care for acute myocardial infarction in an in- patient setting from 16,001.43 hryvnyas to 30,108 hryvnyas. for medical services for the provision of medical care for acute stroke in an in-patient setting from 19,332.31 hryvnyas to 26,947 hryvnyas.

The Resolution of the Cabinet of Ministers of April 24, 2020 (Registration # 331) supplemented the program of health care by separate packages called: "In-patient Care for Patients with the Acute COVID-19 Respiratory Disease Caused by the SARS-CoV-2 Coronavirus Provided by Selected Health Care Establishments".

The planned cost of the in-patient care with regard to the acute COVID-19 respiratory disease caused by the SARS-CoV-2 coronavirus is set as a global rate per month and constitutes UAH 498,325.65, and the rates for the health care service for the preparedness to provide health care services to patients with the acute respiratory COVID-19 disease caused by the SARS-CoV-2 coronavirus in intensive care facilities, which constitutes 171,167.83 hryvnyas. The tariff for health care services provided by mobile medical teams formed up to respond to the acute COVID-19 respiratory disease caused by the SARS-CoV-2 coronavirus has bee calculated, which is defined as the global rate per month calculated on the basis of the rate for a health care service and constitutes 50,942.05 hryvnyas.

The Resolution of the Cabinet of Ministers of April 15, 2020 (Registration # 286) "Certain Issues of Ensuring the Availability of Drugs for the Treatment of Rheumatic Diseases" was supplemented with the drugs under the international non-proprietary names: "Chloroquine" and "Hydroxychloroquine" for the out-patient treatment of rheumatic diseases and for dispensing these drugs by drug stores.

PULSE helped local governments to resolve the problem with the lack of funds for additional payments to health care workers A PULSE Project expert conducted a survey of health care establishments (4,500 health care workers). The materials of the National Survey under the title: "Health Care through the Eyes of Physicians" were sent to the Office of the President, Chairman of the Verkhovna Rada, Chairmen of parliamentary Committees, Prime Minister, and Minister of Health Care for appropriate responses.

The Cabinet of Ministers and the Verkhovna Rada made a number of decisions to increase allowances and payments for health care workers: The Resolution of the Cabinet of Ministers of April 24, 2020 (Registration # 331) «On Immediate Steps with Regard to Ensuring State Financial Guarantees for Health Care Services with the Acute COVID-19 Respiratory Disease Caused by the SARS-CoV-2 Coronavirus and the Adequate Remuneration of Health Care Workers and Other Caregivers of Such Patients” provides for additional payments to salaries of medical and other employees of health care establishments in the amount of up to 300 percent of their salaries. The Directive of the Ministry of Health Care of Ukraine of April 02, 2020 (Registration # 768) endorsed the list of positions of medical and other workers who are directly involved in countering the epidemic and implementation of activities to prevent the spread of the acute COVID-19 respiratory disease caused by the SARS-CoV-2 coronavirus who will receive additional payments up to 300 percent of their salaries (tariff rates). The Resolution of the Cabinet of Ministers of April 08, 2020 (Registration # 267) introduced amendments to the Resolution of the Cabinet of Ministers of February 08, 2020 (Registration # 65) with regard to prepayment for the health care services provided under the health care packages for patients with the acute COVID-19 respiratory disease caused by the SARS-CoV-2 coronavirus, primarily for the remuneration of health care and other workers directly engaged in the elimination of the acute COVID-19 respiratory disease caused by the SARS-CoV-2 coronavirus, in particular with regard to additional payments envisioned by the legislation and salary raises.

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The Resolution of the Cabinet of Ministers of June 17, 2020 (Registration # 498) regulates the provision of insurance benefits in the event of illness or death of health care workers in connection with infection with the acute COVID-19 respiratory disease caused by the SARS-CoV-2 coronavirus. The Law of Ukraine “On Introducing Amendments to the National Budget for 2020”, which established the Fund for Combating the Acute COVID-19 Respiratory Disease Caused by the SARS- CoV-2 Coronavirus and Its Consequences. The amount of the fund constitutes 64.7 billion hryvnyas. The government approved the disbursement of UAH 7.8 billion from the Fund for additional payments to physicians and certain categories of workers who ensure life-sustaining activities for the population.

Thanks to the PULSE Project, issues related to the implementation of the quarantine restrictions in communities have been resolved These problems were raised, among others, by local governments. A PULSE Project expert collected them and submitted to the Cabinet of Ministers. The Resolution of the Cabinet of Ministers of Ukraine of April 02, 2020 (Registration # 255) has amended the Resolution of the Cabinet of Ministers of March 11, 2020 (Registration # 211) “On Preventing the Spread of the Acute COVID-19 Respiratory Disease Caused by the SARS-CoV-2 Coronavirus on the Territory of Ukraine”. In particular, the document introduced amendments to the list of persons who need self-isolation; stipulates that a person who has signs of illness is subject to mandatory medical examination; set the observation period of 14 days; and specified the timeframe for observation/isolation.

LOCAL GOVERNMENT REFORM

A new administrative and territorial arrangement of the basic level has been formed On June 12, 2020, the Cabinet of Ministers came up with a decision to endorse the territories of 1,470 territorial communities and their administrative centers. Prior to the reform, there were 11,250 territorial communities on these territories. The formation of such communities took place with the active participation of local governments, PULSE Project regional consultants and took into account expert opinions prepared by PULSE.

The AUC lobbied for the approval of a law on the establishment of a new territorial arrangement of the country The approval of the draft law on territorial decentralisation under Registration # 2653 (Law # 562-IX) is a key step in the decentralisation reform process in Ukraine. Law # 562-IX of April 16, 2020 empowered the Cabinet of Ministers of Ukraine to establish new capable communities in Ukraine. The transfer of power to new local governments will help citizens become more independent and enable them to manage their affairs by providing better budget resources and enabling local communities to tackle corruption in Ukraine.

PULSE Project experts were actively involved in the preparation of key sections of Draft Law # 2653 (Law # 562-IX) and worked on its approval with National Deputies. It was thanks to the AUC appeal that Draft Law # 2653 was included in the agenda of the extraordinary session of the parliament and was approved as Law # 562-IX.

SAFEGUARDING THE INTERESTS OF LOCAL GOVERNMENTS

A National Deputy his draft law on the delineation of powers between local governments in the sector of subsoil use A National Deputy of Ukraine addressed the PULSE Project with a request to provide an expert opinion on the draft law (Registration # 3490 of May 15, 2020) he was the author of. The draft law provided for the delineation of powers between different levels of local government with regard to managing natural resources. The PULSE Project provided an expert opinion where it stated that the draft law curtails the powers of certain local governments at the basic level to manage subsoil resources. Also, the expert opinion stated that the provisions of the draft law do not take into account the provisions of the Concept of the local government reform and reform of territorial arrangement of government institutions in Ukraine with regard to transferring powers to the basic level of local self-government to the maximum extent possible.

CONSULTATIVE AND ORGANISATIONAL ASSISTANCE TO LOCAL GOVERNMENT BODIES

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The PULSE Project helped to streamline remote meetings of local councils during the quarantine Aiming at assisting local governments in making prompt decisions during the period of the quarantine and countering the spread of the COVID-19 virus in the context of the prohibition on public meetings, the PULSE Project prepared amendments to the legislation on remote local council meetings. The relevant parliamentary committee supported these legislative proposals and included them in the Law, which was approved by the parliament on March 30. PULSE has also developed technical recommendations on how to conduct on-line meetings. The experience of the PULSE Project was used by IRI, a USAID U-RAP project implementer, to give recommendations for local governments how to work on-line.

Now, local councils can legally conduct their remote meetings and quickly approve decisions necessary for life-sustaining activities in communities: introducing amendments to local budgets, disbursing funds for antiviral drugs and medical equipment, implementing the necessary activities, etc.

Over the years, PULSE has provided 40,000 consultations to 4,000 Ukrainian communities The PULSE Project implemented the AUC joined the community consolidation process in 2015 when the first CTCs were established.

During this time, PULSE regional consultants working in all oblasts of Ukraine have provided almost 40,000 consultations to 4,303 communities, including: x 16.6 thousand legal consultations that assisted local governments in resolving organisational and legal issues of voluntary consolidation and annexation of territorial communities; x 17.1 thousand budget consultations, which increased the capacity of local governments to manage local finance in the context of budget decentralisation; and, x 4.5 thousand consultations on local economic development, thanks to which communities have learned how to prepare their development strategies and attract resources.

Thanks to the involvement of the PULSE Project in the local government reform in Ukraine, community consolidation took place: instead of more than 11,200 communities, 1,470 communities have now been established.

As one probably remembers, the foundations for the decentralisation reform and for the establishment of capable communities were laid by the DIALOGUE Project, which was also implemented by the AUC.

SUCCESS STORIES FROM COMMUNITIES The Association of Ukrainian Cities, working within the framework of the PULSE Project, collects and disseminates best practices of local governments in countering the spread of the coronavirus infection and getting out of the quarantine.

The city of Novovolynsk, Volyn oblast The hospital has installed disinfection frames Special equipment - two disinfection frames – have been installed in the intensive care and infectious diseases departments of the Novovolynsk Central City Hospital. They were purchased at the expense of the city budget, the cost of each constituting 15 thousand UAH. The equipment is intended for disinfection of clothes of physicians who provide care to patients with COVID-19. The frames work on the principle of fogging and the passage through them prevents the leak of the virus from the premises.

The Vinnytska Community An anti-crisis program The Vinnytsya City Council has approved a new program document aimed at mitigating the social and economic consequences of the pandemic. The title of the document is “Vinnytsya City CTC Anti-Crisis Support Program "Vinnytsya Residents Are Important"”. The program identifies three priority areas: health care, social protection and local economy.

The city of Dnipro Coronavirus control platform The unified Business Dnipro vs. COVID-19 only coronavirus control platform was introduced in Dnipro. The platform unites the efforts of several business communities. The initiators were representatives of the IT Dnipro Community. The members of the community decided to focus their efforts on providing health care

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workers with personal protective equipment. The new resource also provides information on disease prevention and volunteer work.

The city of Mariupol, Donetsk oblast Support to local businesses The City Council approved the project to support micro and small enterprises and private entrepreneurs. The entrepreneurs will have the opportunity to receive grant funding for the development of their business. The city budget has earmarked approximately UAH 1.5 million for the implementation of the program in 2020. Grant funds per one enterprise will amount up to UAH 250,000.

The Mukachivska CTC, Zakarpattya oblast Support to health care establishments The session of the Mukachevo City Council came up with a decision to increase the amount of funding for the Program of development and support of public health facilities of the Mukachivska City CTC for 2020. All in all, the local budget will earmark approximately 10 million UAH for the program. Of these, more than 420,000 hryvnyas have been earmarked for the Mukachivska City CTC Primary Health Care Center for current expenditures including medicines and dressings, as well as for the activities aimed at preventing the spread of COVID-19.

The Zhytomyrska Community A separate group in the kindergarten for children of doctors and police Despite the quarantine restrictions, the children whose parents work in hospitals and the police can attend a separate group in Zhytomyr Kindergarten # 38. For the purposes of increasing the safety of this institution, the local government has introduced special precautions in the pre-school: children enter through a separate entrance, their temperature is measured, and their hands are disinfected.

The city of Zaporizzhya Additional payments for doctors from the city budget All employees of medical institutions in Zaporizzhya who were involved in countering the coronavirus in March received bonuses in the amount of 300% from the city budget. The local budget disbursed UAH 1.1 million. "Every health care establishment in the city of Zaporizzhya submitted applications for funding signed by chief doctors and upon my directive they were fully funded. The promised funds from the National Budget have not yet come. Let it remain on the conscience of those officials who are responsible for this”, - mentioned Volodymyr Buryak, Mayor of Zaporizzhya.

The Ivano-Frankivska Community Programs to simulate economic development The participants of the session of the city council approved the program for stimulating the economic development of the Ivano-Frankivska Consolidated Community. The purpose of the program was to mitigate the negative consequences caused by the quarantine restrictions and forced economic slowdown and to create preconditions for the resumption of business activity as fast as possible, as well as the improvement of indicators of social and economic development of the Ivano-Frankivska Community. The document takes into account the proposals from all, namely the Headquarters for Economic Recovery, structural units of the City Executive Committee, employers, scientists, and NGOs.

The city of Kyiv Regulations for the resumption of the educational process after the quarantine The Department of Education and Science of the Kyiv City State Administration, based on international and own experience, prepared Regulations for the resumption of the educational process in educational establishments of the city of Kyiv and their mode of operation after the removal of the quarantine restrictions. The document contains recommendations for the resumption of the educational process in the premises of educational establishments. In addition to this, the regulations provide information for managers and employees of educational institutions on the admission of pupils (students) to educational establishments, mandatory precautions in the course of the educational process after the lifting of the quarantine restrictions, as well as disinfection of educational establishments.

The Kropyvnytska Community

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A survey of citizens "Has quarantine affected your work?" Working within the framework of the social dialogue of local authorities with the society and aiming at monitoring compliance with the labour legislation during the implementation of activities to prevent the outbreak and spread of coronavirus in the Kropyvnytska Community, the Department of Labour conducted an anonymous online survey under the title: "Has quarantine affected your work?”. Citizens had an opportunity to participate in the survey on the website of the City Council. Employees of the City Council also provide telephone consultations on labour rights of employees.

The city of Severodonetsk, Luhansk oblast Almost UAH 3 million to counter the coronavirus infection To prevent the outbreak and spread, localisation and elimination of the consequences of the coronavirus disease, the city budget of Severodonetsk earmarked UAH 2.8 million for the purchase of medical equipment, medicines, antiseptics and disinfectants, and medical devices.

The city of Drohobych, Lviv oblast Biological protection suits for doctors Representatives of gas extraction companies donated charitable assistance to Drohobych City Hospital # 1 to counter COVID-19 including 600 biological protection suits and one system for monitoring physiological parameters.

The Voznesenska CTC, Mykolaiv oblast Oxygen concentrators from teachers Teachers of the Voznesenska CTC transferred their one-day earnings to support the community charitable foundation. For example, upon the initiative of employees of the Department of Education, Inclusive Resource Center, gymnasium, lyceum, schools, educational establishments, and kindergartens, the community decided to purchase two oxygen concentrators worth of a total of 86 thousand UAH.

The Baltska CTC, Odesa oblast The infectious disease department has been repaired for 30 beds Local government authorities have revised the financial plan and redistributed funds for the capital repairs of the infectious diseases department of the capacity of 30 beds, which it planned to repair later. During the period of the quarantine restrictions, the renovated department will work as an isolation unit, as well as will be use to provide emergency medical care. Eventually, it will operate as a full-fledged infectious disease unit.

The city of Kremenchuk, Poltava oblast The PCR laboratory started working The second laboratory has been opened in the Poltava oblast to test for coronavirus. It was set up in the city of Kremenchuk on the territory of the city perinatal center, because the city has the largest number of COVID-19 patients among other populated areas of the oblast. The health care establishment has already received the permission to conduct PCR testing and has begun its operations.

The city of Rivne Volunteers produce protective shields In Rivne, local families produce protective equipment for doctors. Face shields have already been transferred to almost all health care establishments in the oblast. People donate their time and used the period of the quarantine restrictions to their advantage: they have already produced 6,500 protective shields for doctors.

The Sumska Community A social center to support care recipients During the quarantine, the Sumy City territorial Center for Social Services did not leave its care recipients without attention and assistance. The provision of social services to lonely citizens who do not have relatives and who have nobody to take care of them continues. Also, the territorial center is involved in providing emergency assistance for the delivery of food and grocery baskets to lonely disabled citizens. The Center is constantly monitoring the situation with the needs of care recipients for food and medicine.

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Also, the Center has made the necessary arrangements for daily transportation of social workers to recipients of social care. Social workers are provided with masks, hand sanitizers, gloves. The Center also procured disinfectants for treatment of premises.

The Ternopilska Community Virological laboratory The city of Ternopil has reconstructed and opened one of the buildings of the regional laboratory center where a virology laboratory will be located. From now on, the local virologists whose workload due to coronavirus has increased significantly will have comfortable conditions to conduct their research.

The city of Kharkiv A Center to support entrepreneurs The first support center for small and medium-sized businesses in Ukraine has opened in Kharkiv. The project was implemented by the Ministry of Digital Transformation in cooperation with the Kharkiv City Council. The purpose of the project was to help entrepreneurs overcome the effects of the crisis or start a new business. So far, the center will work on-line.

The city of Henichesk, Kherson oblast The City Hall is preparing the city for the vacation season After lifting of the quarantine restrictions, the municipality, in close cooperation with entrepreneurs, is actively preparing the tourism sector for the upcoming opening of the vacation season. The city is engaged in various activities ranging from landscaping and urban beautifications, improvements of infrastructure facilities to the improvements of the promenade and the beach, trade facilities and entertainment industry. First of all, care is taken to comply with strict sanitary and epidemiological requirements.

The city of Khmelnytskyi The city has procured 10 ventilators for hospitals The community has procured 10 lung ventilators for the city hospitals. The funding for the procurement of this equipment from the local budget was allocated by local council members at the extraordinary session of the Khmelnytskyi City Council. The community will install five units in the infectious disease hospital, which is the main health care establishment to control coronavirus in the oblast. The remaining units will be delivered to the city hospital where reserve beds have been set up in case of a disease outbreak.

The city of Kaniv, Cherkasy oblast The city council has insured doctors Members of the Kaniv City Council introduced amendments to the Program for the development and support of the Kaniv Center for Primary Health Care for 2020. From now on, the plan provides for insurance for the employees of the Center in case of the coronavirus infection. The local council members earmarked 40 thousand UAH from the city coffers to pay for the insurance services. The total budget under the Program framework constitutes UAH 2.6 million.

The city of Chernivtsi The city has earmarked almost UAH 83 million for countering COVID-19 The city budget of Chernivtsi has disbursed almost UAH 83 million to counter the coronavirus. As of the end of May, the city fund still has UAH 24.4 million left for the activities to prevent the spread of the coronavirus infection. The financial resources from this fund in the amount of UAH 4 million will go to additional incentives for health care employees and staff of other sectors who work with patients with COVID-19 and financial assistance to the physicians who have been infected. The additional funds will be disbursed to stimulate social workers and employees of public utilities, which supported the city in the areas with a high risk of infection.

The city of Pryluky, Chernihiv Entrepreneurs have been exempt from the payment of the flat tax for two months During the session meeting, members of the Pryluky City Council approved the zero rate of the single tax for entrepreneurs of Groups 1 and 2 for two months. They made this decision in the context of the quarantine restrictions. To be able to take advantage of this opportunity and not to pay the flat tax, the entrepreneurs must apply to the tax office by August 01.

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Section 5. COOPERATION WITH OTHER PROJECTS

In the reporting quarter, the PULSE Project continued to partner with partner projects and organisations: x PULSE Project representatives participate on a regular basis in partner project events and invite other project representatives to their activities; x PULSE Project representatives continued the implementation of two distance learning courses developed jointly with other projects. One training course was dedicated to gender oriented budgeting (together with the Swedish project called "Gender Oriented Budgeting in Ukraine"). Also, the DOBRE Project, which provided practical materials from its pilot cities, and UN Women were involved in this activity. Second training course was dedicated to training of members of local councils of consolidated territorial communities (together with the Norwegian project "Participatory democracy and evidence based decision making at the local level in Ukraine"); x PULSE Project continued the implementation of the memorandum with the UNICEF on the Children and Youth Friendly Community initiative, etc. x PULSE Project organised a number of joint activities on gender equality.

More details about the cooperation:

Activities dedicated to gender equality or increasing women participation in life in communities

On April 01, 2020, Natalia Lazarenko, Deputy Director of the PULSE Project, participated in a web meeting of representatives of national associations of local governments organised by the Council of European Municipalities and Regions. The meeting was dedicated to gender equality issues. She made a presentation about the activities of the PULSE Project. In April, the Deputy Director of the PULSE Project with assistance form PULSE Project regional consultants helped the UN Women to disseminate a gender oriented survey questionnaire about the impact of the COVID-19 pandemic, which covered more than 3,000 respondents. N. Lazarenko participated in the on-line presentation of the results of the UN Women survey.

Upon the invitation of a project of the Congress of Local and Regional Authorities of the Council of Europe, the Deputy Director of the PULSE Project participated in an on-line training course on gender equality organised by NALAS. On June 2 and June 16, 2020, the PULSE Project Deputy Project Director participated in the on-line discussion on gender equality within the framework of the preparation of a new action plan for the implementation of the Open Government Partnership Initiative by the Department of Information and Public Relations of the Secretariat of the Cabinet of Ministers of Ukraine and the National Democratic Institute. N. Lazarenko expressed presented her suggestions on gender statistics. The Deputy Project Director of the PULSE Project organised three webinar on gender budgeting for regional consultants of the PULSE Project together with the Gender Oriented Budgeting in Ukraine (GOB) project on June 16, 17, and 18. The Deputy Project Director of the PULSE Project helped to organise an on-line workshop on gender oriented budgeting for the Kharkiv Regional Office of the AUC together with the GOB project, which took place in June, 2020. On May 08, 2020, the Deputy Project Director of the PULSE Project attended a USAID project web meeting.

Upon the request of a partner project and a USAID representative, the Deputy Project Director of the PULSE Project disseminated information about the Catch the Fake competition to PULSE pilot communities. On June 04, 2020, the Deputy Project Director of the PULSE Project participated in a web meeting of USAID projects with regard to COVID-19. Online discussion of reforms "On the way to Vilnius"

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On April 02, 2020, Oleksandr Slobozhan, Executive Director of the AUC, participated in the on-line event under the title: "Regional Discussion of Reforms: On the Way to Vilnius". The event was dedicated to the implementation of the local government and decentralisation reform.

The purpose of the event was to form prepare proposals from the civil society for UkraineReformConference 2020, which is a key annual international event dedicated to the expert discussion of the progress of reforms in Ukraine.

The topic of the discussion was the Sectoral Analytical Brief on the Decentralisation Reform prepared by experts from the Civil Society Institute.

In the course of the discussion, O. Slobozhan stressed that it is necessary to prepare new changes to the budget and tax legislation, which will make it possible to resume the fiscal decentralisation.

The discussion was organised and conducted by the RPR Coalition in partnership with the Embassy of the Republic of Lithuania in Ukraine with the support of the Ministry of Foreign Affairs of the Republic of Lithuania and the EU Anti-Corruption Initiative in Ukraine (EUACI is a program financed by the European Union and is co-funded and implemented by the Ministry f Foreign Affairs of Denmark).

The Bridges of Trust online forum On April 22, 2020, Lyudmila Damentsova, PULSE Project senior expert, participated in the on-line forum under the title: "Bridges of Trust: local government associations at the forefront for communities during the pandemic (problem issues, decisions, and future prospects)". The event was organised by the U-LEAD with Europe Program. In the course of the event, local government associations presented the experience of local government bodies in overcoming the COVID-19 pandemic. Also, Ukrainian and international experts made their presentations.

IRI platform for online learning On April 29, 2020, Oleksandr Slobozhan, Executive Director of the AUC, made a presentation at the IRI webinar on the topic: "Peculiarities of Budget Support for Territorial Communities" for members of local council officials and local government officials. He focused the attention of the audience on the new conditions for funding the sector of health care, issues related social protection, innovations in the sector of education, and instruments for local taxation.

On May 06, 2020, Oleksandr Slobozhan, Executive Director of the AUC, served as a speaker at the IRI webinar under the title: “Peculiarities of Budget Support for Territorial Communities”. The training event was organised for members of local council and local government officials. He focused the attention of the audience on new conditions for funding the sector of health care, issues related social protection, innovations in the sector of education, and instruments for local taxation.

Online discussion on improving the business climate and business development On April 28, 2020, Dina Serebryanska, a PULSE Project expert on local economic development, participated in the online discussion under the title: "Deregulation vs. Quarantine: Problems, Opportunities and Future Prospects". The event was organised within the framework of the initiative "Deregulate together! Business Climate Renewal Platforms and Entrepreneurship Development” with the support of the USAID Competitive Economy of Ukraine Program.

Discussion of issues in the education sector within the framework of preparation of the action plan of the Open Government Partnership Initiative On May 05, 2020, PULSE Education expert Lyudmyla Mozhova and PULSE legal expert Inna Sklyar participated in an online discussion of the sector of education and science as part of the preparation of an action plan for the implementation of the Open Government Partnership Initiative.

The Open Government Partnership is a multilateral international initiative that brings together governments and civil society to bring about changes for the better in the lives of citizens.

Cooperation with the International Association of Extracurricular Education NGO

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During the reporting period, a PULSE Project expert provided information support on the AUC website of the international project "Distance Learning in Extracurricular Education". It was implemented by the International Association of Extracurricular Education in partnership with various Ukrainian and foreign organisations. The aim of the project was to set up an e-learning resource for out-of-school education institutions. Methodical and educational materials were developed during the distance learning period. On May 16, 2020, on the Day of Europe, the International Association of Extracurricular Education summed up the participation of representatives of extracurricular education institutions in the project. More than 1,000 projects were submitted by representatives of out-of-school education in Bulgaria, Kazakhstan, Lithuania, Poland, Slovakia, Ukraine and the Czech Republic. More than 38,000 people were involved in the project. 205 projects became winners: 5 projects won the Grand Prix; 15 projects - I place; 97 projects II place; 88 projects III place.

Cooperation with the Public Organisation "All-Ukrainian Association of Art Education Institutions" On April 01, 2020, a PULSE Project expert participated in the First Online Conference of the All-Ukrainian Association of Art Education Institutions as one of the speakers. The event was attended by about 180 employees of art education institutions, including members of the All-Ukrainian Association of Art Education Institutions, representatives of cultural authorities, trade unions and other experts. B. Khovzun the moderator of the conference, its main organiser and the Chairman of the NGO "All-Ukrainian Association of Art Education Institutions", provided an overview of the current status of the association and presented the results of its external evaluation by teachers and other experts in the field. PULSE expert L. Mozhova spoke about the relationship between art education and local governments. She stressed the shortage of resources of local governments during quarantine, spoke about changes in legislation, and outlined the prospects for the development of art education, which may be caused by the reduction of revenues to local budgets. The conference participants formulated questions on remuneration during quarantine and the possibility of introducing a state subvention for art education.

The director of the Methodical Directorate of Culture of Educational Art Institutions of the Department of Culture, Nationalities and Religions of the Lviv Oblast State Administration M. Medvid shared the experience of the organisation of methodical work with pedagogical workers of art educational establishments. Also, she demonstrated best examples of methodical collections. M. Bryl, Director of the State Scientific and Methodological Center for the Content of Cultural and Artistic Education, made an interesting report on the organisation of methodical work. She presented the content of the electronic content of the center for teachers, as well as told about the activities of its activities.

A. Yalovyi, Head of the Dnipropetrovsk Oblast Organisation of the Trade Union of Cultural Workers, spoke about the protection of pedagogical workers in quarantine conditions in terms of saving salaries and wages.

The participants of the conference were interested in the issues of transfer of pedagogical workers of retirement age to fixed-term employment agreements, part-time salaries and other issues of labour legislation.

Cooperation with the Covenant of Mayors Project (funded by the European Union under the EU4Energy initiative)

During the reporting quarter, the PULSE Project expert participated in a number of webinars organised and conducted by the Covenant of Mayors Project for local government representatives. The purpose of the webinars was to help prepare Sustainable Energy Action Plans.

In addition to this, on June 23, the PULSE Project expert participated in the webinar under the title: "Best Ideas and Practices of Clean Energy Projects" organised by the Covenant of Mayors project.

Cooperation with the Israel-Ukraine Chamber of Commerce and Industry On June 02, a PULSE Project health care expert participated in a webinar under the title: "Digital Medicine as the Future of the Global Health System. Israeli Innovations in the Digital Medicine”.

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Section 6. SUGGESTED PLAN OF ACTIVITIES FOR THE COMING QUARTER

ER 1: Decentralisation enabling legislation reflects local government input

- Legislation drafting - Legislation monitoring - Providing consultations for local governments on legislation application - Holding meetings of Regional Policy Development Platforms (subject to the lifting of the restrictions by the Cabinet of Ministers on conducting public events in connection with the COVID-19 epidemic) - Participation in meetings of the Cabinet of Ministers and Cabinet of Ministers committees (subject to the lifting of the restrictions by the Cabinet of Ministers on conducting public events in connection with the COVID-19 epidemic) - Conducting roundtable discussions with the Verkhovna Rada of Ukraine Committee on Organisation of State Power, Local Self-Government, Regional Development and Urban Development (subject to the lifting of restrictions by the Cabinet of Ministers on conducting public events in connection with the COVID-19 epidemic)

ER 2: Resources under local self-governance authority increased - Continuation of work on NSSR - Supporting pilot communities under the Incubator of Sustainable Communities initiative - Conducting study tours within the framework of the “Itinerary of Successes” nation-wide exchange study tour Project component (subject to the lifting of the restrictions by the Cabinet of Ministers on conducting public events in connection with the COVID-19 epidemic)

ER 3: Capacity of stakeholders increased - Conducting regional legislation application laboratories (subject to the lifting of the restrictions by the Cabinet of Ministers on conducting public events in connection with the COVID-19 epidemic) - Conducting legislation drafting and advocacy laboratories (subject to the lifting of the restrictions by the Cabinet of Ministers on conducting public events in connection with the COVID-19 epidemic) - Preparing information products for media - Dissemination of information messages - Supporting AUC website and web platforms - Collecting success stories and best practices

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ANNEXES

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Annex А

List of PULSE Project events conducted in April – June, 2020

# Date Venue Implementer Event webinar

Topic: "Peculiarities of the 1. April 07, 2020 city of Kyiv IREX/PULSE modern education for active citizens of CTCs: on- line vs. off-line".

Village of Yurivka IREX/PULSE 2. April 09, 2020 Zoom-meeting (Kyiv oblast) webinar Topic: “Metropolitan areas 3. April 14, 2020 City of Kyiv AUC/PULSE as point for economic growth” 4. April 23, 2020 city of Kyiv AUC/PULSE webinar on health care webinar for manages of AUC/PULSE comprehensive educational in cooperation establishments on issues 5. April 24, 2020 city of Dnipro with the related to the implementation Dnipro City of the Law of Ukraine “On Council Completed Comprehensive Secondary Education” webinar Topic: “How libraries unite 6. April 28, 2020 city of Kyiv IREX/PULSE people during the quarantine” Webinar of the AUC 7. April 30, 2020 city of Kyiv AUC/PULSE Education Professional Group event in the Ukrainian Crisis Media Center under the title: 8. May 7, 2929 city of Kyiv AUC/PULSE Health care today: reforms, epidemic, COVID-19, and quarantine”. On-line regional legislation 9. May 19, 2020 city of Sumy AUC/PULSE application laboratory in the Sumy AUC RO Webinar on the topics related 10. May 21, 2020 city of Kyiv IREX/PULSE to the work of youth councils On-line regional legislation 11. May 22, 2020 city of Zaporizzhya AUC/PULSE application laboratory in the Zaporizzhya AUC RO On-line regional legislation 12. May 26, 2020 city of Vinnytsya AUC/PULSE application laboratory in the Vinnytsya AUC RO On-line regional legislation 13. May 26, 2020 city of Chernivtsi AUC/PULSE application laboratory in the Chernivtsi AUC RO 14. May 27, 2020 city of Cherkasy AUC/PULSE On-line regional legislation

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application laboratory in the Cherkasy AUC RO On-line regional legislation 15. May 28, 2020 city of Kherson AUC/PULSE application laboratory in the Kherson AUC RO On-line regional legislation city of 16. May 29, 2020 AUC/PULSE application laboratory in the Severodonetsk Luhansk AUC RO The Project published the 17. Late May, 2020 AUC/PULSE AUC Herald, # 171 On-line regional legislation 18. June 3, 2020 city of Lutsk AUC/PULSE application laboratory in the Volyn AUC RO webinar Topic: "Actualisation of 19. June 04, 2020 city of Kyiv IREX/PULSE youth initiatives in crisis situations". On-line regional legislation 20. June 4, 2020 city of Dnipro AUC/PULSE application laboratory in the Dnipropetrovsk AUC RO Webinar Topic: "Workshop of 21. June 16, 2020 city of Kyiv IREX/PULSE changes: everyone can be a change in the community " AUC/PULSE in cooperation with the web-meeting on the topic: June 16, 2020 Gender “Application of the gender 22. city of Kyiv Oriented oriented approach in the Budgeting in budget process” Ukraine (GOB) On-line regional legislation 23. June 16, 2020 city of Myrnohrad AUC/PULSE application laboratory in the Donetsk AUC RO AUC/PULSE web-meeting on the topic: in cooperation “Application of the gender 24. June 17, 2020 city of Kyiv with the GOB oriented approach in the Project budget process” On-line regional legislation 25. June 17, 2020 city of Cherkasy AUC/PULSE application laboratory in the Cherkasy AUC RO On-line regional legislation 26. June 17, 2020 city of Vinnytsya AUC/PULSE application laboratory in the Vinnytsya AUC RO AUC/PULSE web-meeting on the topic: in cooperation “Application of the gender 27. June 18, 2020 city of Kyiv with the GOB oriented approach in the Project budget process” On-line regional legislation city of Ivano- 28. June 18, 2020 AUC/PULSE application laboratory in the Frankivsk Ivano-Frankivsk AUC RO On-line regional legislation 29. June 18, 2020 city of Odesa AUC/PULSE application laboratory in the

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Odesa AUC RO On-line regional legislation 30. June 23, 2020 city of Sumy AUC/PULSE application laboratory in the Sumy AUC RO webinar dedicated to the new AUC/PULSE regulations for leasing out in cooperation state-owned and with the communally-owned property 31. June 24, 2020 city of Kyiv ProZorro.Sale endorsed by the Resolution s State of the Cabinet of Ministers Enterprise of Ukraine of June 03, 2020 under Registration # 483. On-line regional legislation 32. June 25, 2020 city of Kharkiv AUC/PULSE application laboratory in the Kharkiv AUC RO

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