60% of servicemen buy equipment at their own expense: audit reveals problems with logistics of the Armed Forces
28 November 2025 13:28
The Accounting Chamber has conducted an audit of compliance with defense procurement in the logistics area of the Armed Forces of Ukraine in 2024.
This was reported by "Komersant Ukrainian" with reference to the press service of the Accounting Chamber.
The audit covered the activities of the Ministry of Defense of Ukraine and the State Enterprise “State Logistics Operator” (SE “DOT”) and aimed to determine whether the procurement processes conducted by SE “DOT” comply with the requirements of regulatory acts.
In general, the audit concluded that the updated model of logistics procurement introduced in 2024 – when the Ministry of Defense forms policy and controls quality, and the SE “DOT” directly conducts the necessary procurement – has the potential for development, but due to systemic shortcomings, it did not deliver the expected result. The separation of functions between the MoD and the enterprise in terms of procurement policy development and implementation remains incomplete.
The MoD has not ensured the optimal distribution of procurement functions between its units and the state customer service. Due to unsystematic personnel decisions, the cost of maintaining the MoD units involved in logistics processes increased by UAH 35 million. Together with the costs of maintaining the SE DOT (UAH 250 million), this led to a total increase in administrative and management costs in the field of logistics procurement by UAH 285 million, which is 3.4 times more than in 2023.
Problems with the allocation of funds and their reserves
In 2024, the Law of Ukraine “On the State Budget of Ukraine for 2024” provided only 44.5% of the required amount for food and clothing for the Armed Forces, and 73% for fuel and lubricants. As a result, the Armed Forces functioned at the expense of partial consumption of stocks. At the same time, UAH 400 million of the budget allocations of the Ministry of Defense remained unused.
More than UAH 11 billion was allocated to the State Enterprise “DOT” as accounts receivable. The prepayment mechanism introduced by the company in the form of a letter of credit guaranteed both payment and delivery of products in accordance with the terms of the contracts, but did not ensure the proper level of their fulfillment. In particular, UAH 10 billion worth of products were not delivered on time, UAH 800 million was returned to the budget, and more than UAH 31 million became overdue receivables.
Shortcomings in procurement
The auditors found that although the SE “DOT” carried out 95% of procurement procedures through the electronic system, ensuring the conditions for a competitive environment, 100 lots (7.2% of the announced ones) were challenged and canceled due to violations and errors in the tender documentation, 216 (15.5%) were recognized as unsuccessful due to the lack of offers.
Transparency of procurement did not guarantee selection of reliable suppliers. Obligations were fulfilled with deviations in terms of quality, volume and timing to the detriment of the state: out of 718 contracts concluded by the SE DOT, 429 (60%) had their deliveries postponed or reduced, and 40 were terminated.
The suppliers who had their delivery dates postponed avoided responsibility and payment of sanctions for late and improper fulfillment of obligations. At the same time, due to ineffective claims and lawsuits and improper use of bank guarantees, the budget lost about UAH 2 billion in accrued penalties.
The procedure for confirming the “urgent need” for procurement is not regulated. The use of procurement without an electronic system to determine such a need resulted in procurement in 21 cases at a cost increased by UAH 395 million and in 11 cases at a cost decreased by UAH 112 million compared to the electronic procurement system.
There were also facts of unlawful increase in the cost of procurement (by almost UAH 98 million), while the List and volume of procurement of defense goods, works and services was changed 48 times during the year and was not fully implemented. This indicates a lack of stable planning, inadequate identification of needs and weak management control. On average, the fulfillment of the List and procurement volumes was 81% for food, 89% for fuel and lubricants, and 69% for 21 items of material property.
The quality control system for logistics supplies did not ensure proper risk management: the quality assurance procedure and risk assessment procedures were not defined, and the work plan for state quality assurance was not approved. Technical specifications remained imperfect, and the plan to update them was not implemented.
Digitalization of logistics support
The digitalization of logistics processes is progressing unevenly: the strategic and operational levels are automated – where needs are planned, budgets are formed and procurement procedures are conducted. However, the tactical level, i.e. the actual accounting of supplies in military units and warehouses, has remained outside the digitalization process due to the lack of approved technical specifications and untimely management decisions. At the same time, this level is critically important, as without digital accounting of actual needs, movement of property, receipt and use of resources, it is impossible to ensure full control of the supply chain and transparency and reliability of data for procurement planning.
A survey of 25 thousand military personnel conducted by the Accounting Chamber jointly with the Ministry of Defense confirmed that the quality of logistics remains a sensitive issue for the army. Most often, the military reported problems with wear and tear and the quality of equipment, monotony of meals and interruptions in fuel supply. Only a quarter of the respondents are satisfied with the equipment received from the state; 60% said they have to buy equipment at their own expense; more than half expressed dissatisfaction with the quality of food; and 26% reported a lack of fuel in their units.
Based on the results of the audit, the Accounting Chamber provided recommendations to the Government, the Ministry of Defense and the State Enterprise “DOT”.
According to Hennadii Plis, a member of the Accounting Chamber, the new model of logistics procurement has potential, but has not yet become the “system without failures” that the army needs. At the same time, the elimination of the identified problems will help to increase the efficiency of the army’s logistics, reduce the risks of corruption in these processes, and strengthen the trust of servicemen in the state and the authority of the Armed Forces.
The report and the decision of the Accounting Chamber will be sent to the Verkhovna Rada of Ukraine, the Verkhovna Rada Committee on National Security, Defense and Intelligence and the objects of control, the decision – to the Cabinet of Ministers of Ukraine, and information on the audit results – to the President of Ukraine and the Prosecutor General’s Office of Ukraine.
