As part of the Transparency Ranking of 100 Cities, the Transparent Cities program examined how transparent local governments are in managing budgets and procurement. The findings showed that none of the 100 cities studied achieved the maximum score in this area. Vinnytsia demonstrated the highest level of transparency. Kyiv, Mykolaiv, and Chernivtsi shared second place.

The Budget and Procurement area serves as a litmus test for how local self-government bodies manage community resources. This is where it becomes clear whether local authorities disclose how they spend funds, ensure transparency and competition in tenders, and allow residents to influence budget priorities. In peacetime, budget and procurement transparency is the foundation of citizens’ trust in authorities. During wartime, it becomes even more critical, as community safety, survival, and recovery often depend on it. Conversely, non-transparent procedures in this area not only damage a city’s reputation but can also undermine cooperation with international partners and donors.

Despite its critical importance, the level of transparency in the Budget and Procurement area in 2024 reached only 39.6%, placing it fourth among the seven areas of municipal governance studied. At the same time, cities performed best in the Openness area (52.9%). This shows that while most cities actively publish basic information, transparency diminishes when it comes to planning or spending community funds. This problem is systemic for many municipalities.

Leaders vs. outsiders in budget and procurement transparency

In 2024, none of the 100 Ukrainian cities achieved maximum transparency in the Budget and Procurement area*. Moreover, 79 municipalities failed to meet even half of the criteria. Vinnytsia achieved the best result — 82.4% compliance. Second place went to three cities — Kyiv, Mykolaiv, and Chernivtsi, each with 67.6%. Lutsk and Mukachevo shared third place with 64.7% each.

On the opposite end of the spectrum were Novoiavorivsk (8.8%), Svitlovodsk (11.8%), and Pryluky (14.7%). Such low levels of openness in budget matters undermine public trust and may indicate risks of misuse or inefficient use of community resources.

What have cities done well?

Despite the overall low level of transparency in the Budget and Procurement area, some aspects were handled relatively well. Ukrainian cities performed best with the basic elements of budget transparency: 86 out of 100 published interim quarterly, semi-annual, and annual reports on budget execution.

At the same time, 66 cities fully ensured sufficient competition in procurement — an established best practice of municipal governance, while another 28 achieved it partially. Even during wartime, local governments strive to uphold the principles of open competition. Transparent and efficient procurement procedures not only enable the rational use of budget funds but also strengthen public and donor trust.

Sixty-one city councils also recognized the importance of engaging with investors and building a reputation as reliable and open partners for business, especially crucial in the post-war period when investment will drive recovery. These municipalities either published an up-to-date city investment profile or maintained a dedicated investor section on their official websites. However, 39 cities did not demonstrate sufficient openness toward investors, which may hinder their future economic activity and recovery processes.

Weaknesses in budget transparency

Only 5 out of 100 cities — Vinnytsia, Dnipro, Mykolaiv, Mukachevo, and Sheptytskyi — approved a unified methodology for analyzing construction costs. This methodology should have addressed wartime realities, when material prices fluctuate, and risks of inflated estimates grow. Instead, 95 cities failed to introduce a systematic approach to controlling budget expenditures in construction.

Meanwhile, 87 cities did not hold open budget hearings in 2023. Only 5 cities organized an open event with timely announcements, live online streaming, and published minutes — Vinnytsia, Mykolaiv, Khmelnytskyi, Chernivtsi, and Mukachevo. Another 7 held hearings but did not fully comply with the requirements (Dnipro, Zaporizhzhia, Kalush, Lviv, Myrhorod, Slavuta, and Chortkiv). The lack of open budget discussions in most cities means that residents have little access to shaping local spending priorities — and, therefore, little ability to influence decisions that directly affect their lives. This gap between authorities and citizens not only reduces trust but also undermines the transparency and effectiveness of budgetary decisions.

Only one-third of the cities studied had an internal control and audit body. Sixty-seven municipalities lacked such an institution altogether, including several large cities. Without an internal audit, councils lack self-monitoring tools and fail to identify abuses early. Still, four cities — Kyiv, Kolomyia, Lutsk, and Stryi — demonstrated successful practices that could serve as examples for others.

In addition, 72 city councils out of 100 did not publish the structure of their departments, enterprises, and institutions along with their USREOU codes. This information is essential for residents to see how departments spend their tax money and how councils manage municipal property through privatization and leasing. By withholding it, most cities essentially obscured the chain of budget fund managers, preventing effective public oversight. However, eight councils set a worthy example — Vinnytsia, Dnipro, Kyiv, Korosten, Kremenchuk, Lviv, Mykolaiv, and Mukachevo.

Recommendations for city councils 

Publish detailed structures of council departments (e.g., divisions, directorates), indicating which are budget holders. Link this to information about municipal enterprises and institutions under the council’s authority, and provide their USREOU codes. 

• Engage citizens in budgeting by timely announcing and conducting open budget hearings. This procedure is an important aspect of the council's accountability to citizens. Even under martial law, hearings can be held online, provided that the public has the opportunity to attend, ask questions, and submit proposals.
• Develop a methodology for analyzing or monitoring construction material prices to ensure transparency in procurement related to reconstruction. Procurement contracts for repair, new construction, reconstruction, restoration, or major repair must include documents containing information about material prices. 
• Establish an independent body for internal control and auditing of city council divisions, and ensure the publication of inspection results. Sharing the results will help build public confidence in local authorities and ensure control over the effectiveness of the city council's work and the use of budget funds.

For publishing budget holder structures, Kyiv and Mykolaiv provide strong examples. For open budget hearings, Mukachevo (announcement, live-stream, minutes) stands out. In developing a methodology for monitoring construction material prices, Sheptytskyi offers the most relevant example. For sharing information on the work of internal control and audit bodies, Kyiv (regulations, reports) and Kolomyia (regulations, reports) serve as best practices.

The Budget and Procurement area remains one of the key priorities for strengthening municipal transparency. The 2024 results (39.6% transparency) highlight both positive developments and deep systemic gaps. Transparent management of public finances is not only a requirement of good governance and European integration but also a vital condition for trust, efficiency, and resilience of cities, especially in wartime. Therefore, city councils should give priority attention to improving transparency in this area and implement the recommendations outlined above.

*The Budget and Procurement area was assessed by program analysts using 10 criteria, including: reporting by local self-government bodies on budget execution; publication of semi-annual and quarterly (interim) budget execution reports; holding open budget hearings; the city council’s consideration of the mayor’s annual report on the implementation of state regulatory policy by executive bodies; the existence of an internal control and audit body for council departments and publication of its findings; adoption of a unified methodology or procedure for monitoring construction material prices; and other related indicators.