Urmas Reinsalu (Isamaa), chair of the Riigikogu State Budget Control Select Committee, said that last fall he had a very serious discussion with Defense Minister Hanno Pevkur (Reform) and Auditor General Janar Holm on precisely the same issue — what he described as chaos within the Ministry of Defense's area of government.

In its audit of the state's consolidated annual report last fall, the National Audit Office also identified a number of problems with contracts entered into by agencies within the Ministry of Defense's area of government, requiring urgent solutions as the defense budget grows. The audit also encountered serious difficulties in obtaining the necessary information from agencies within the ministry's area of government.

In a new audit published Friday, the National Audit Office highlighted similar problems within the Ministry of Defense's area of government. For example, it said significant shortcomings persist in agencies' internal controls, affecting the accounting of assets, expenses and receivables in both financial accounts and budget execution.

"At the time, assurances were given that these issues would be resolved. It has now emerged that the problems have grown worse. Let's put this into perspective: The National Audit Office says it is unable to assess the accuracy of inventories worth €1.2 billion," Reinsalu said.

According to Reinsalu, the Riigikogu was simply lied to, as the Ministry of Defense assured it last fall that Estonia had not assumed any obligations under agreements to procure equipment on behalf of target countries under European Union defense cooperation. The National Audit Office's report, however, shows that this is not the case and that the state will have to spend €70 million on these commitments.

This means the Ministry of Defense has taken on commitments that are not included in the state budget. "Following that logic, my firm conclusion is that the defense minister should resign," the select committee chair said.

How, then, should the problems in the sector be addressed?

"The National Audit Office points out that, under the current circumstances, an external auditor simply cannot determine the true state of affairs amid this confusion over information. It follows that these issues need to be resolved through management. By management, I mean establishing clear lines of management within the ministry across its entire area of government," Reinsalu said.

Reinsalu said one possible source of the problems in the sector is that the defense minister has "very actively reshuffled the Ministry of Defense's senior leadership."

"The problems have grown worse at a time when we are heading into procurements that will entail billions of euros more in commitments, which are, of course, necessary in the interests of security. We therefore need to make a concerted effort to bring clarity to this chaos," the former defense minister concluded.

Anastassia Kovalenko-Kõlvart (Center Party), chair of the Riigikogu Anti-Corruption Select Committee, announced following the publication of the National Audit Office audit that she will convene an extraordinary committee meeting next Thursday.

"What the National Audit Office revealed today shows large-scale mismanagement and a risk of corruption in the defense sector, to which Estonian taxpayers contribute billions of euros," Kovalenko-Kõlvart said.

"The government raised taxes in the name of increasing defense spending and demanded solidarity and greater contributions from individuals and businesses. But it turns out that we do not even know where the money has gone, what was purchased with it or what inventories we actually have."

The committee chair added that the select committee must determine who is responsible for the mismanagement and why the National Audit Office's repeated warnings and findings failed to prompt a substantive response.

The article was updated to add comments from Anastassia Kovalenko-Kõlvart.

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