Why external audit matters for public debt: What ACU’s “public debt management” audit signals to partners and citizens
In recent days, European institutions have advanced decisions to provide Ukraine with substantial additional financial support for 2026–2027. Such decisions are not only about solidarity. They are also about confidence: confidence that Ukraine’s public finances are managed transparently, risks are understood, and accountability mechanisms work.
This is exactly where the Accounting Chamber of Ukraine (ACU) plays its role.
ACU is not part of debt management – ACU is part of the accountability system
Public debt is managed by the executive branch – primarily by the Ministry of Finance and the Treasury system. The ACU does not manage debt and does not take debt-policy decisions.
ACU’s role is different and essential: it provides independent external audit of whether public debt management is carried out in compliance with legal requirements and recognised good practices. This is how trust is built – through verified information, clear findings, and recommendations that strengthen governance.
What the “Public Debt Management” compliance audit shows
ACU’s compliance audit on “Public Debt Management” assessed whether the responsible institutions carried out their functions in line with national legal requirements and relevant international good-governance recommendations.
The report is particularly important in the current context because state debt has grown significantly since 2022. But the audit is not about “big numbers.” It is about whether the system behind those numbers is robust, transparent, and capable of managing risks.
Among the key messages, the audit highlights that a debt management system becomes credible only when it is supported by:
- consistent medium-term strategic and annual planning;
- clear internal planning of borrowing and cash needs, linked to budget execution;
- measurable debt-risk indicators and regular monitoring;
- transparent and regular reporting on results and risks, available to stakeholders;
- clear allocation of responsibilities and effective coordination.
In short: the audit is not about producing more findings. It is about strengthening a governance framework that is predictable, transparent, and resilient – especially important for a country that will need significant resources for recovery.
Why Latvia’s experience was useful – and why it was shared
When designing reforms, it is helpful to look at a system that has already solved similar institutional questions.
Latvia’s model demonstrates a key principle: debt management should be integrated with cash and liquidity management, and it should sit within a strong Treasury function that also supports disciplined budget execution.
In Latvia, the Treasury is designed as a central institution that combines critical public finance functions. It manages state debt and financial resources alongside budget execution responsibilities, which supports a single, coherent view of state resources. A core design feature is the front–middle–back office model – ensuring clear segregation of roles between execution, risk oversight, and back-office operations. This structure strengthens internal control, supports professional decision-making, and improves transparency of responsibilities.
Another cornerstone is the Single Treasury Account logic: ensuring cash is available “in the right amount at the right time,” and that borrowing and investing decisions are taken in an integrated way rather than in silos. Latvia also demonstrates the value of structured coordination mechanisms that connect debt management decisions with daily liquidity management.
This is precisely why such experience is relevant to Ukraine: not to copy another country’s model, but to see how coherent institutional choices create stability, clarity, and trust over time.
A short personal note
I know this model not only from documentation, but also from the long institutional work behind it. Latvia’s modern Treasury architecture began to be built in the early 1990s, and over time the system matured into a disciplined framework where debt management, liquidity, and budget execution are treated as parts of one mechanism – supported by strong internal controls, clear separation of roles (front–middle–back office), and transparent reporting.
This is why, within EU4PFM support, we deliberately created opportunities for Ukrainian stakeholders to discuss debt management governance with Latvian counterparts: not to present “one right answer,” but to share practical lessons and institutional design choices that help build sustainable systems.
Why this matters now
Today, Ukraine benefits from exceptional support because the war imposes extraordinary costs. But we all share the same hope: the war will end, and Ukraine will enter a phase of large-scale recovery and investment. That future will require not only funding, but confidence – confidence that public finance decisions are well governed, transparent, and independently audited.
In that sense, ACU’s compliance audit on public debt management is more than a report. It is a concrete step in strengthening the credibility of Ukraine’s public financial governance – towards citizens, Parliament, and international partners.
Inguna Sudraba
Team-Lead of EU4PFM Component 5