National Audit Office highlights shortcomings in defense accounting practices

The National Audit Office has drawn attention to shortcomings in the Ministry of Defense's accounting practices and recommended the secretary general act to ensure work processes are in order.
From September 2023 to June 2024, the National Audit Office conducted audits on the Ministry of Defense's working practices. The auditors examined the inventories of the Estonian Defense Forces (EDF), checking the accounting processes and implementation of the state budget.
In July 2024, the National Audit Office sent a letter to Kusti Salm, who at the time was secretary general of the Ministry of Defense, emphasizing that the work processes of the Center for Defense Investments (RKIK) and the EDF needed to be reorganized. The letter also pointed out that the volume of uninventoried assets was still large.
The audit revealed errors in the formalization of goods purchases, advance payments and inventory reporting.
According to the National Audit Office, last year there was already a risk that the goods received were not being correctly recorded in the warehouse accounts and no overview of which goods had not arrived existed. The National Audit Office also pointed out a similar problem two years ago.
Shortcomings were also found in the source documents of purchase transactions and in finding some documents. The audit additionally revealed cases where the content of transactions could not be sufficiently explained.
In the process of conducting the audit, it became apparent that the Center for Defense Investment had accepted and recorded in its accounts goods that did not actually meet the agreed conditions and could not be used without additional work.
The report revealed that there had also been issues with accounting in the defense sector in previous years.
According to the auditors, in 2023, the Estonian Defense Forces (EDF) failed to inventory fixed assets totaling €40 million. In 2022, the amount was €100 million.
The National Audit Office also drew attention to confusion in the reporting of aid granted to Ukraine in 2022–2023.
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Editor: Michael Cole, Valner Väino










