The armed conflict has resulted in the formation of a debt of UAH 1.3 billion on the payment of pensions in Luhansk and Donetsk regions, Head of the State Treasury Service of Ukraine Tetiana Sliuz has said.

"Pensions in Luhansk and Donetsk regions are not transferred in full," she said at a press conference on Thursday.

Commenting on the scale of the problem she said that the monthly sum of pensions paid in Ukraine totals around UAH 20.8 billion.

Sliuz said that the half of treasury divisions in the region is not operating.

"In general, we have 74 territorial treasury divisions on the territory of the two regions. Unfortunately, 36 of them are not operating," she said.

In general, a total of 632 treasury divisions are operating in Ukraine, including the central office and territorial divisions: over 15,000 employees work in the system (not taking into account Crimea).

She also said that due to problems with communications from August 4, 2013 treasury divisions in Luhansk region cannot settle payments even on those territories which are under control of Ukrainian authorities.

"From Monday we cannot transfer money in those districts which Ukrainian authorities control… We fully depend on Ukrtelecom," she said.

Sliuz also said that next week the results of the work on the partial movement of treasury divisions from the counterterrorist operation zone to other territorial divisions will be announced.

She said that the fullness of the fulfillment of liabilities by treasury mainly depends on the general situation in the economy.

"The situation with public finances is tense: we cannot settle all the budget liabilities under the unprotected categories of expenses in full," she said regarding the shortfall of UAH 16 billion of revenues for the national budget in January-July 2014.

She said that the worsening of the situation at enterprises in Luhansk and Donetsk regions affects some companies in other regions.

"In May the shortage was slightly over UAH 400 million [in Luhansk and Donetsk regions], and in June and July – slightly over UAH 1 billion," she said.

Sliuz said that growth in medium-term debt of local budgets to the single treasury account causes alarm. The debt has reached UAH 9.5 billion.

She also said that there are difficulties with the efficient settling of payments under court rulings: UAH 76 million is planned in the budget for the said purpose in 2014, but 23,000 execution letters worth UAH 530 million have been submitted.

The head of the state treasury service said that the debt of the Pension Fund under treasury loans has narrowed by UAH 2 billion since early 2014, to UAH 47 billion.

Sliuz commented on the accusations regarding spending of funds under the Kyoto protocol.

"These were only political repressions towards the political rival: [Viktor] Yanukovych [former president] against Yulia Tymoshenko [former prime minister and head of the Batkivschyna party]," she said.

"The criminal case against Yulia [Tymoshenko] was closed due to absence of corpus delicti," she said.

Sliuz said that officials involved in the fabrication of accusations on the use of funds received under Kyoto protocol are to be punished.