A report published last month by the National Audit Office about the working processes of the Ministry of Defense said there were errors in the formalization of goods purchases, advance payments and inventory reporting.

On Monday, the ministry will present the Riigikogu National Defense Committee with an overview of the steps taken to address the highlighted shortcomings.

Kaimo Kuusk, the MOD's secretary general, reassured taxpayers that the ministry has a "solid overview" of critical reserves such as weapons and ammunition.

"We take the observations and recommendations of the National Audit Office extremely seriously and have developed an action plan to address the deficiencies," he said in a statement.

Advance payments

The National Audit Office identified several advance payments in its report.

For example, in March 2024, the Estonian Center for Defense Investment (RKIK) mistakenly paid a supplier U.S. $79.1 million and in July of the same year, an additional U.S. $8.7 million. The supplier returned U.S. $47.8 million, but U.S. $40 million was left to cover future transactions under the same contract for HIMARS from the U.S.

Kuusk said: "With regard to the advance payments made to the U.S. government for the purchase of the critically important HIMARS long-range systems, we have recovered the overpaid sums and retained $40 million to cover future deliveries under the same contract, which in total is part of Estonia's contractual payment obligation anyway."

He added that many defense procurement deals are not feasible without advance payments and that one must also consider how the international arms market operates.

"We have also taken a closer look at the 2018 contract with the government of South Korea for the acquisition of K9 self-propelled howitzers, spare parts, and related services. All payments have been made according to the contract and consistently recorded as expenses in line with deliveries. The current outstanding advance payment is tied to a 2022 decision to order an additional 12 howitzers, which are expected to arrive in Estonia this year and next," the official noted.

A new software system for inventory tracking will be introduced and data exchange, including with the audit office, will be improved.

In addition to reports on weapons and ammunition, the Ministry of Defense leadership will begin receiving quarterly updates on other reserves as well.

--

Follow ERR News on Facebook and Twitter and never miss an update!