The Accounting Chamber has uncovered a failure in the Ukrainian Armed Forces’ logistics procurement: billions in prepayments, empty warehouses, and an army living at its own expense

The Accounting Chamber of Ukraine has carried out an audit of defense procurements for logistical support of the Armed Forces of Ukraine in 2024. The audit revealed serious problems.

The results of the inspection were reported on the website of the Accounting Chamber.

The audit concerned the activities of the Ministry of Defense and the state enterprise “State Rear Operator” (SRO). Its goal was to determine how well the enterprise’s procurements comply with legal and regulatory requirements.

The audit found that the updated rear procurement model introduced in 2024—under which the Ministry of Defense shapes policy and controls quality, while the SRO carries out the purchases—has shortcomings and has not delivered the desired results. The Ministry of Defense failed to ensure an optimal distribution of procurement functions between its departments and the state contracting service. Because of ad hoc staffing decisions, spending on the maintenance of units involved in logistical support increased by 35 million UAH.

Overall administrative costs in this area rose to 285 million UAH (5.83 million euros), which is 3.4 times more than in 2023.

A lack of funds and inefficient use of available funds were revealed.

The budget allocates only 44.5% of the required amount for food and clothing supplies, and 73% for fuel.

The army partially consumed its reserves, while 400 million UAH (8.18 million euros) remained unused.

More than 11 billion UAH transferred to the SRO as prepayments did not ensure timely deliveries:

• Products worth 10 billion UAH (204.6 million euros) were not delivered on time;

• 800 million UAH (16.37 million euros) were returned to the budget;

• 31 million UAH (634,300 euros) turned into overdue receivables.

Auditors also found that although the SRO carried out 95% of its procurements through the electronic system, due to violations and errors in the tender documentation, 100 lots (7.2% of those announced) were challenged and canceled, and 216 lots (15.5%) were deemed unsuccessful due to lack of bids.

Transparency of procurement did not guarantee the selection of reliable suppliers: in 60% of the 718 contracts, delivery volumes or deadlines were changed to terms less favorable to the state. Forty contracts were terminated.

Suppliers whose delivery deadlines were extended avoided liability and the payment of penalties for late or improper performance. Due to improper application of bank guarantees, the budget failed to receive about 2 billion UAH (40.9 million euros) in accrued fines.

Cases of unjustified price increases totaling almost 98 million UAH (2 million euros) were identified.

Finally, a survey of 25,000 service members, conducted by the Accounting Chamber together with the Ministry of Defense, showed that the quality of logistical support remains a painful issue for the army. Most often, soldiers reported problems with the wear and quality of equipment, monotonous food, and disruptions in fuel supplies.

Only a quarter of survey participants are satisfied with the equipment received from the state; 60% said they are forced to buy gear with their own money; more than half expressed dissatisfaction with food quality; 26% noted fuel shortages in their units.

The report will be sent to the Verkhovna Rada, the relevant parliamentary committee, the Cabinet of Ministers, the President, and the Office of the Prosecutor General.