Within the framework of the reform of specialised senior secondary education, approaches to the internal organisation of the educational process are undergoing significant changes. This is not about the formal structure of classes, but about creating real opportunities. The financial autonomy of general secondary education institutions is not merely a new term in legislation, but a real change in approaches to the management of education at the community level. The intention is for schools to finally become real actors in financial relations: to plan every hryvnia independently, manage their budgets flexibly, enter into contracts, and bear real responsibility for these actions. Without financial independence, any other form of autonomy – academic, staffing, organisational – remains nothing more than nice words on paper. The introduction of financial autonomy also provides an opportunity for the head of a department or education authority in a community (although we do not usually have “pure” education departments) to finally focus on their own strategic role: coordination, methodological support, development of the network of schools, – rather than wasting time on signing every minor contract or agreeing on schools’ current repair needs.
Legal framework: What is enshrined and where
The right of educational institutions to financial autonomy is enshrined in two fundamental laws. Articles 23–25 of the Law of Ukraine “On Education” No. 2145-VIII dated 5 September 2017 explicitly establish the right of institutions to managerial, organisational, financial, and personnel autonomy. Each educational institution, as a legal entity, has its own charter and independently manages its material and technical resources and financial resources. The founder provides funding but does not interfere in the daily management of finances – the institution itself manages funds within the budget, plans expenditure, keeps accounts and prepares financial statements. Article 25 of the same Law provides for the possibility of attracting other sources of funding not prohibited by law — such as grants, charitable donations, fees for services, and so on.
The mechanism of financial operations is set out in greater detail in the Law of Ukraine “On Comprehensive General Secondary Education”. Article 59 of this Law specifies that general secondary education institutions, which have the status of a legal entity, conduct financial and administrative activities in line with the Budget Code of Ukraine (in particular, Articles 22 and 23) and other regulatory acts. This means that a school may independently spend funds within the limits of its approved budget – on staff salaries, teaching materials, energy supplies, routine maintenance, or the development of its educational facilities.
The transitional provisions of the same Law (paragraph 5.1 of Section X) set a key deadline: by 1 September 2027, the founders are required to amend the charters of all subordinate institutions to bring them into line with the principles of autonomy. The updated charters must enshrine the institution’s status as a legal entity, specify that it is a lower-level budget fund administrator (in compliance with Article 22 of the Budget Code of Ukraine), and set out how it conducts its accounting — either independently or through a centralised accounting department. This change marks the start of the practical implementation of the financial autonomy of an educational institution — not through slogans, but through a specific decision enshrined in the charter.
What the principal receives: from requests to decisions
When a school becomes an independent administrator of lower-level budget funds, the principal is given real levers of control – the right to make financial decisions independently, without the founder’s approval, in five key areas.
Structure. The principal may independently determine the institution’s internal organisational structure and staffing levels – not based on outdated templates, but in line with actual teaching and administrative needs.
Personnel motivation. The principal determines additional payments and allowances, awards bonuses to teaching and support staff, and provides financial assistance – within the limits of the approved wage fund, but without the need for excessive approval procedures.
Infrastructure. The school can independently fund routine repairs to premises and buildings, without having to wait months for a decision from the education authority. A swift response to real needs – rather than a series of approvals.
Development. The principal allocates funds for the professional development of teaching staff to those programmes and courses that the staff really need, rather than just those imposed from above.
Procurement. The school enters into supply contracts and civil law agreements directly – purchasing what is necessary for the educational process and the children’s safety without unnecessary intermediaries.
Important to remember: even if the institution is served by a centralised accounting department, it is obliged to draw up and implement its own budget. This is required by paragraph 3 of the Procedure, approved by Resolution No. 228 of the Cabinet of Ministers of Ukraine dated 28 February 2002. The budget is drawn up directly at the school and approved by the head of the higher-level authority.
Two options for organising accounting
One of the most important issues during the transition phase is choosing the form of accounting. According to the Model Regulations on the Accounting Service of a Budgetary Institution, the community can choose one of two legitimate approaches.
The first option is to have its own accounting department. The school includes the position of accountant directly in its staffing table. This provides full control over the accounts and maximum operational independence, but at the same time places full responsibility on the institution for the accuracy and timeliness of its reporting.
The second option is an agreement with the centralised accounting department (CAD). An agreement is concluded between the school and the CAD, under which the CAD keeps the accounts, prepares financial statements, monitors compliance with budgetary legislation, and provides methodological support. At the same time – and this is of fundamental importance – the school remains the administrator of lower-level funds, retaining its own budget and its own accounts with the State Treasury Service of Ukraine. Such an agreement is signed on an entirely free-of-charge basis. The CAD acts as a service partner for the school, rather than a body to which the school is financially accountable. It does not make decisions on the expenditure of funds nor does it impose any financial penalties on the school.
It should also be taken into account that, in compliance with Order No. 758 of the Ministry of Finance of Ukraine, when working with the CED, all of the institution’s financial documents must be signed twice.
The first signature is exclusively that of the school principal. The principal is responsible for deciding how funds are spent and bears personal responsibility for this before the law and the community.
The second signature is by the chief accountant of the CED. Their role is to verify the source documents and confirm that the transaction complies with state standards and budgetary legislation. This is not a blocking mechanism, but a safeguard: it protects the principal from technical errors.
Now some words about the agreement with the centralised accounting department itself: to ensure that the partnership between the school and the CAD is reliable and does not give rise to misunderstandings, the service agreement needs to clearly set out several key elements; however, the most important of these – apart from those specified in the Regulations on the Centralised Accounting Department of a Budgetary Institution – is a specific clause stating that all services are provided to the educational institution free of charge, without any hidden fees or charges.
Legal assignment of property: usufruct rights
In compliance with Article 31 of the Law of Ukraine “On Comprehensive General Secondary Education”, the local council, as the founder, must ensure the proper legal assignment of property to the institution – so that the school is the full owner within its own premises.
The decision of a local council session requires the use of legally precise wording: “To establish a right of usufruct over municipal property…” Any other expressions – “to transfer property”, “to record on the balance sheet”, “to grant for use” – are incorrect and may cause problems during audits. This wording is required by Part 2 of Article 60-1 of the Law of Ukraine “On Local Self-Government in Ukraine” and paragraph 4 of Resolution No. 1103 of the Cabinet of Ministers of Ukraine.
The full wording in the council’s decision:
“To establish a right of usufruct over municipal property for ___ (full name of the educational institution, EDRPOU code: ___), hereinafter referred to as the “Usufructuary”, in respect of the property: ____ (hereinafter referred to as the “property”)”
The decision should also specify the period for which the property is allocated to the school – either indefinitely or for five years – as well as a provision concerning the recording of this property on the institution’s balance sheet.
All these changes have to be reflected in the new School Charter: this sets out the status of the school as a lower-level administrator of budget funds, the existence of its own balance sheet and the method of record-keeping. The right to manage the funds, however, remains exclusively with the principal.
Public procurement: who is responsible and how
With the transition to autonomous funding, an educational institution becomes an independent contracting authority for public procurement. The Law of Ukraine “On Public Procurement” No. 922-VIII dated 25 December 2015 (Article 11) requires every contracting authority that manages budgetary funds to appoint an authorised person responsible for organising tender procedures. To do this, there are two legitimate options: to appoint an existing member of staff (for example, an accountant or deputy school principal) as the authorised person, provided they have the relevant training, or to introduce a separate position of “public procurement specialist” into the establishment table. Even if the accounts are managed by the Centralised Accounting Department, the authorised person for public procurement must be on the staff of the educational institution itself; however, as a solution when there are many such institutions, I would suggest employing one person on a 0.25 salary rate to cover four or six schools, which would enable significant cost savings. Please note that such a person cannot be an employee of the Central Accounting Department.
Step-by-step algorithm for the transition
Step 1. Legal audit of the charter. The community, together with the school principal, checks whether the charter stipulates that the school is a legal entity; what form of accounting is used; and that the institution is a lower-level budget administrator and has the right to independently draw up and implement its budget. If such provisions are absent, the charter needs to be amended. Without this step, autonomy is not legally possible.
Step 2. Inclusion in the network of budget administrators. The founder includes the institution in the network of lower-level budget administrators in compliance with the requirements of Article 22 of the Budget Code of Ukraine.
Step 3. Opening accounts with the State Treasury. The Treasury opens a registration account for the general fund and special accounts for an institution – for revenues from rent, fee-paying clubs, charitable donations, and international grants. This is what lays the real financial foundation for independence.
Step 4. Drawing up the school’s own budget. The school draws up a budget of revenues and expenditure in compliance with the Procedure for the Preparation, Review, Approval and Key Requirements for the Implementation of Budgets of Budgetary Institutions No. 228 dated 28 February 2002. This document sets out the structure, sources of funding, areas of expenditure, and financial limits for the institution for the year.
Кр Step 5. Selecting an accounting model and signing a contract. The school principal decides whether to employ an accountant on the permanent staff or to enter into a contract with the Central Accounting Department. If the CAD is used, an agreement on accounting services is signed; the CAD issues an order assigning a responsible accountant, and cards bearing the specimen signatures of the school principal and the CAD chief accountant are submitted to the Treasury.
Step 6. Appointment of an authorised person and approval of regulations. The principal appoints an authorised person for public procurement and approves the internal regulations on document flow and the institution’s accounting policy.
The best time for the transition is the start of the new financial year: as it is easier to organise treasury services, launch new tender procedures, and draw up a budget from scratch; the launch on 1 September 2027 will mean that previous tender-based procurements, including energy supplies, must have been completed by 1 September 2027, whilst subsequent procurements will be carried out independently by each school.
Founder’s role: partner, not controller
Under the new system, the founder remains the chief administrator of budgetary funds in compliance with Article 22 of the Budget Code of Ukraine. However, their functions change significantly: they no longer manage daily financial decisions at schools, but instead coordinate, provide methodological support, and control compliance with budgetary legislation.
The financial autonomy of an educational institution does not remove accountability – it delineates responsibilities between levels of management. The institution carries out all financial transactions exclusively within the limits of the approved budget estimate, without exceeding the budgetary allocations or changing the allocation of expenditure without the founder’s approval. Budgetary discipline, transparency, and the targeted use of funds remain mandatory requirements.
Conclusion
The financial autonomy of schools is not a goal in itself, nor is it reform for reform’s sake. Communities that have already gone down this path report the same outcome: principals are beginning to spend more time on pedagogical leadership and less on the bureaucratic approval of minor expenditure. Teachers feel that the principal can finally make decisions here and now, rather than a month after writing to the local education authority. And this changes the atmosphere in the school far more than any methodological document ever could. However, autonomy only works when all elements of the system are implemented simultaneously: an updated charter, a separate budget, accounts opened with the Treasury, a designated public procurement officer in place, and a clear division of responsibilities between the school and the centralised accounting department or the school’s own accounting service. None of these steps is optional or something that can be put off “until later”. Therefore, preparations should not begin at the end – not with signing the agreement with the Central Accounting Department – but at the very beginning: with a legal audit of the charter and the founder’s decision.
Important: the deadline of 1 September 2027 is not a voluntary recommendation, but a legal requirement. Communities that treat it as a mere administrative formality will end up with nothing more than a change to the wording of their charters. Those who approach the transition systematically and well in advance will achieve something else – schools that effectively manage their own resources, take responsibility for them, and have all the necessary legal and organisational tools to do so. There is still time before this deadline to carry out a planned, rather than a rushed, transition. But those who delay risk having to implement the reform under conditions of time and staff shortages.
Share your own experiences in the comments or via private messages – we will publish the most interesting ones here and in the professional community of educators on Facebook.
Read more stories and blogs in the publications on our online resource Education. Experts Comment, created within the framework of DECIDE Project, implemented by a consortium of the NGO DOCCU and PH Zurich with the support of Switzerland.
#madewithswitzerland
