Procurement and Development of Weapons and Military Equipment in 2024–2025: The Accounting Chamber Identified Non-Compliance with Legal Requirements Amounting to Almost UAH 350 Billion

The Accounting Chamber of Ukraine has approved the Report on the results of the compliance audit on the topic “Procurement and Development of Weapons and Military Equipment”. The audit was conducted under the responsibility of Gennadii Plis, Member of the Accounting Chamber of Ukraine.

The objects of the audit were the Ministry of Defence of Ukraine, the General Staff of the Armed Forces of Ukraine, the Administration of the State Border Guard Service of Ukraine, and the State Enterprise “Defence Procurement Agency”. The audit covered 2025 and, with regard to certain issues concerning the implementation of state contracts under which accounts receivable were recorded as of 1 January 2025, also 2024.

Under the conditions of the full-scale war, the proper organisation and implementation of procurement of weapons and military equipment in accordance with the established requirements are of particular importance for ensuring the defence capabilities of the state.

The audit showed that the system of procurement and development of weapons and military equipment (WME) operated under conditions of an unstable regulatory and organisational environment. During the period of martial law, the basic legislative and governmental acts in the field of public and defence procurement were amended a total of 95 times. At the same time, strategic planning for the development of WME and certain mechanisms of state regulation in the field of defence procurement remained insufficiently regulated.

In general, the audit revealed non-compliances at key stages of the procurement cycle – during the determination of needs and planning of financial resources, organisation and conduct of procurement, in particular the procurement of WME at a cost higher than that determined by the List of Defence Procurement, conclusion and implementation of state contracts, quality control of WME, management of advance payments and accounts receivable, as well as protection of the state’s property interests.

The total value of the non-compliances identified by the audit amounted to almost UAH 350 billion.

Defence procurement planning was not sufficiently justified and stable, while competitive mechanisms were applied to a limited extent: more than 90% of procurement amounting to almost UAH 580 billion out of the total amount of UAH 614 billion was carried out without competitive procedures.

The implementation of state contracts was accompanied by deviations in terms of the timing, volumes and quality of supplies. Significant amounts of budget funds transferred as advance payments did not ensure the receipt of the WME stipulated by the contracts within the established time limits. As of 1 January 2026, accounts receivable under state contracts for the development and procurement of WME amounted to UAH 367 billion, of which UAH 66 billion was overdue.

The mechanisms of claims and litigation work and the actual recovery of funds due to the state remained insufficiently effective. The amount by which the courts reduced the penalties claimed for recovery amounted to UAH 5.9 billion (more than 66% of the value of the claims); of the 45 arbitral awards submitted for recognition and enforcement abroad, 42 decisions, or 93%, remained unenforced.

“Each stage of defence procurement – determining the need for weapons and planning financial resources, selecting a procurement procedure, determining its price, concluding and implementing a contract, quality control, managing advance payments and accounts receivable, protecting the state’s property interests, responding to force majeure circumstances – is not a formality and not merely a requirement of the law. Whether the actions and decisions at each of these stages are effective, rational and comply with the applicable requirements determines the main thing: whether the frontline will receive the necessary weapons of proper quality, in the required quantity and on time, and, consequently, whether the lives of our soldiers will be saved,” emphasized Hennadii Plis, Member of the Accounting Chamber of Ukraine responsible for the audit.

At the same time, in response to the problems identified during the audit, in the first half of 2026 overdue accounts receivable were reduced by UAH 62 billion. In addition, more than UAH 100 million of excessively paid funds under a state contract concluded under state guarantees were reimbursed and transferred to the State Budget, and claims and litigation measures were taken against contractors who failed to fulfil their contractual obligations.

Based on the results of the audit, the Accounting Chamber of Ukraine provided recommendations aimed at strengthening strategic and financial planning, improving the regulatory framework for defence procurement and pricing, increasing the justification of the choice of procurement methods, strengthening control over the implementation of state contracts, advance payments and accounts receivable, as well as protecting the state’s property interests.

The Report contains information constituting a state secret and therefore is not subject to publication.

Information on the results of the audit will be sent to the President of Ukraine, the Verkhovna Rada of Ukraine, the Committee of the Verkhovna Rada of Ukraine on National Security, Defence and Intelligence, the Cabinet of Ministers of Ukraine, the National Security and Defence Council of Ukraine, the Office of the Prosecutor

General, the Security Service of Ukraine, and the objects of control, in compliance with the requirements of the legislation on state secrets.