Kristaps SOMS is a consultant with the planning unit the De­part­ment of Policy Coordination of the State Chan­ce­llery of the Re­pub­lic of Latvia, an expert of the project „Technical Support to Public Sector Reforms in Ukraine”, and an expert on functio­nal reviews in the Republic of Latvia. He provides expert support to the Center for Adap­ta­tion of the Civil Service to the Standards of the Euro­pean Union in carrying out a functional review of the authorities working in the sphere of social protection. The purpose of the review is to improve the system of social service provision.

—     Mr. Soms, please tell us what are the functions of your department, its role in the State Chancellery and in the process of reforming the state machinery?

The Department of Policy Coordination has several spheres of activity. First of all, human resources development, in other words, human resources po­licy and everything related to that. In particular, we closely cooperate with the Ministry of Finance and other ministries.

The second sphere is coordination of public policy. We are a central link coordinating everything related to policy documents. We analyze how the system functions: how a document enters the system, its place in the system, the essence of a document, whether it is needed, whether it solves a problem that has been already addressed, whether it is a new global policy and whether it necessarily proposes appropriate actions.

A third general activity sphere is that we are among the departments assisting the Prime Minister in his work. This includes execution of his special commissions, analysis of information for the public sector, etc. Implementation of a functional review is now an urgent issue in Latvia, and it is carried out in Ukraine as well. We have economic problems, and we have a clear intention to review what the state does and whether it acts properly. In the conditions of reduced budgetary allocations, it is extremely important to focus the state’s attention on the execution of priority functions.

A functional review was previously carried out in Latvia. The first attempt was undertaken at the end of the 90s with the support of the World Bank. This issue has subsequently been repeatedly discussed, with a series of relevant measures taken. Now we are dealing with this issue again. We have analyzed our own experience, the problems encoun­tered and the experience of other countries, namely in Russia and those states where we have participated in functional reviews as experts. On the basis of those conclusions, a new system and approach to functional reviews have been introduced. This approach was approved by the Government in late January 2009, with an audit initiated in March. 

—     To what extent does the system of functional review in Latvia differ from the one used in Ukraine?

Generally, the core of functional reviews is the same. The main principles are invariable — excessive/duplicate functions and institutions are examined. For instance, if one or similar functions (accounting, IT-in­fra­struc­ture) are executed in several bodies, obviously, they can be combined without considerable damage to their performance. On the whole, one should focus on the functions that can be maximally centralized. The question is whether each small institution requires its own bookkeeping system or separate system of administration, or whether these functions should be centralized or delegated to the private sector.

We are now going through an intense decentralization process. Many public functions can be performed by the private sector more effectively and cost effectively, and we tried to incorporate these observations into the methodology of the functional review.During the functional review, not only the place of each function, but also the authority where it should be performed is examined.

We are reviewing several options on how a function can be perfomed. First, one should look how a particular function is implemented and where it can be centralized or decentralized (delegated to the regions) in the public system or into the private sector. Second, the innovation is that we consider whether a certain function is ultimately needed. It may have become redundant because the total number of functions has grown in recent decades without analyzing whether existing functions were needed and economically justified. For example, it might be more rational to let control functions be self-regulated, where market mechanisms work. Such functions will be removed from the list of public functions. Third, we consider whether a particular function can be delegated to the private sector or to the local level. For instance, a private medical organization certifies doctors. Such functions may be detected in the process of a functional review and revised.

 —     Functional reviews have been repeatedly implemented in Latvia. To what extent did they facilitate administrative reform and improve the quality of public administration?

 How can this be assessed?Regrettably, it is hard to give an unequivocal assessment. There is no doubt that functional reviews were an important step in the implementation of public administration reforms. For example, the first functional review helped to reduce the number of ministries. That was a transition from the Soviet administration style to a democratic one, and functio­nal reviews played an important role in this process. This was an instrument for the implementation of necessary changes.During the assessment, it was also necessary to take into account other factors, such as accession to the Euro­pean Union. In Latvia, there was a need to adopt EU standards, and, therefore, the state system and the functions performed by the state had to be adjust­ed to EU standards. New functions, in particular, those related to EU foundations or to other requirements related to quality control emerged. In other words, a functional review served as only one com­ponent of public administration reform. The whole complex of factors should be taken into account.

—     In your opinion, to what extent will the completed functional review promote administrative reform in Ukraine?

The work that has been accomplished is very considerable progress. Experts have highly praised the new ideas that have been brought forward from the review as they are very progressive and meet the standarts of the advanced world. A functional review provides a basis for justifying: why we do what we do and what advantages we have, and generally facilitates the removal of redundant functions. I do not claim that this instrument should be universally applied, but it gives answers to many questions and helps to look at the system as a whole.

 —     How will the completed functional review pro­mote the decentralization of public administration?

It cannot be said that a specific function should be centralized or delegated to regions or the private sector. There is a need to look from the point of view of the system and its general functioning. To some extent, the review was an attempt to look for functions that could be delegated to the regions. Experts gave their opinions on which functions could be delegated and which should not.

Centralization is essential when a function is related to a large number of consumers. Lets consider the function of price regulation. If we delegate price regulation to each department these departments will set theire own norms — thus establieshing a barrier when there are various requirements in different places. Such functions should remain at the central level, creating the same framework for all institutions. In the process of a functional review, we look from various angles, analyze from different starting points, and then one can tell that the function, for example, is too centralized, that it should be moved closer to a consumer, etc.

—     How long may implementation take from the results of func­tional reviews, and how strong may the resistance be to that process?

Above all, there should be respective political will. In Latvia, all political decisions are made on the level of the Cabinet of ­Ministers. In other words, the whole process has three components. Initially, an expert assessment is carried out. Its results are forwarded to the commission that includes not only experts, but also senior public servants, state secretaries of ministries, and repre­sentatives of non-governmental organizations, na­me­ly, of the confederation of employers and trade unions. Based upon the results of debates in the commission and discussion with various stakeholders, proposals are introduced to the Government. And then a decision of the Government determines the extent to which results of the accomplished functional review are implemented and which deadlines are set.

It is impossible to complete all our initiatives without a poli­ti­­cal decision because of the resistance on the part of certain mi­­nist­ries and institutions. Therefore, an expert has to give in­de­­pen­dent eva­lua­tion followed by a broader discussion. The Go­­vern­ment’s decision is then made based upon the results — whether to implement or not, or whether it is actual at present day. 

—     In your opinion, what are the prospects for Ukraine?

The documents I used for my expert assessment were adequate, and the ideas expressed in them corresponded to international experience, in particular, to the system of Latvia and European systems. If you manage to implement these recommendations, this would be a consi­derable step ahead for Ukraine. On our part, we are always glad to help you in achieving these goals.