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Audit reveals massive violations in Ukraine’s Defense Ministry exceeding $ 251 mn

The audit, part of the routine and standardized process within the Ukrainian government, identified various issues, including ineffective management decisions and asset management risks.
Ukrainian soldiers on the border with Belarus. Photo: Suspilne Lutsk
Audit reveals massive violations in Ukraine’s Defense Ministry exceeding $ 251 mn

An internal audit conducted by Ukraine’s Defense Ministry has uncovered violations totaling over $251 million, Deputy Defense Minister Yurii Dzhygyr told Ukrinform in an interview.

According to the deputy defense minister, internal audit is a routine and standardized process in the Ukrainian government.

“During the audit, violations, ineffective management decisions, and asset management risks totaling over $251 million have been found. In other words, the internal audit has identified alleged negative consequences that require immediate action. The audit’s focus was on preventing breaches.

Notably, some financial compensations and the resolution of most of these violations were addressed directly during the internal audits. By implementing audit recommendations, an economic effect totaling over $37 million has been achieved,” stated Dzhygyr.

Simultaneously, the deputy defense minister emphasized that internal auditing is a routine and standardized process conducted continuously. With the new political leadership under Rustem Umerov, a plan for audits in high-risk areas was approved within the ministry, he added.

As per this plan, the Internal Audit Service completed audits by the end of last year on various processes, including the allocation and disbursement of additional rewards for direct military involvement, procurement of food supplies for soldiers, management of state enterprises, financial and material support for military units, and resource utilization across Ground, Naval, and Air Commands of the Armed Forces.

Simultaneously, the deputy defense minister emphasized that internal auditing is a process that continues systematically. In addition, Dzhygyr noted that all divisions of the Defense Ministry undergo inspections at different times.

“At some point, everyone becomes the subject of an audit. This process isn’t swift. The Defense Ministry is a giant mechanism with numerous structural units. But every few years, at the very least, high-risk areas must come under audit scrutiny, leading to conclusions and appropriate actions.

Regarding these high-risk areas, they have been identified,” emphasized the deputy minister, adding that inefficient use of defense lands, allocation and disbursement of additional rewards for direct military involvement, humanitarian aid, and defense procurements fall within the scope of high-risk sectors.

According to the Deputy Minister of Defense, the audits resulted in law enforcement initiating dozens of criminal investigations.

“In 2023, a total of 204 internal audits were conducted. They revealed resource losses (property, money, equipment, weapons) amounting to over $32 million. As a result of reviewing the audit materials submitted to law enforcement agencies, information on criminal offenses was entered into the Unified Register of Pretrial Investigations – 67 cases; additionally, 79 materials were attached to criminal proceedings.

In the first quarter of 2024, 16 internal audits were completed. They identified resource losses totaling over $45 million. Following the review of audit materials submitted to law enforcement agencies, information on criminal offenses was entered into the Unified Register of Pretrial Investigations – five cases, one pre-trial investigation was initiated in a criminal case, and one criminal proceeding was opened,” said Dzhygyr.

Previously, the Ministry of Defense of Ukraine established a new coordinating advisory body, the Audit Committee, for its Department of Internal Audit. This marks the first time such a body has been formed within the ministry. Comprising auditors from NATO member states, the committee aims to strengthen the internal audit function while also facilitating its further development and expansion.

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