In fact, the National Audit Office's audit of the state's consolidated annual report, published Friday, was in many ways a continuation of previous years' findings.

In July 2024, the National Audit Office sent a letter to Kusti Salm, then permanent secretary of the Ministry of Defense, stressing that the working procedures of the Estonian Center for Defense Investments (RKIK) and the Estonian Defense Forces (EDF) needed to be put in order. It also noted that the volume of assets that had not been inventoried remained high.

The audit uncovered errors in documenting purchases of goods, advance payments and the accounting of inventories.

In last year's audit, the National Audit Office also highlighted several problems in the defense sector.

At the time, the National Audit Office said shortcomings in the working procedures of the Estonian Center for Defense Investments and the Estonian Defense Forces affected the accounting of assets, expenses and receivables, both in financial accounts and in budget execution. Problems with working procedures dating back to previous years remained unresolved, while the sharp increase in the amount of money available to the defense sector was also increasing risks, some of which had already materialized.

According to the audit, for example, an advance payment balance of €9.6 million had accumulated in one supplier's account since 2018, effectively functioning as a long-term interest-free loan at the expense of Estonian taxpayers.

Over the years, RKIK had continued to order goods from the supplier but had for several years failed to use the option of offsetting new orders against the advance payment.

This year's report, meanwhile, highlighted that the Ministry of Defense had taken on commitments not included in the state budget. The National Audit Office found that the state may have to cover €70 million in off-budget expenditure.

Ministry of Defense Permanent Secretary Kaimo Kuusk said the potential expense stems from a supplier failing to fulfill its obligations, with the ministry now involved in litigation with the company. It remains unclear, however, whether the risk will materialize.

Former Defense Minister and chair of the Riigikogu State Budget Control Select Committee Urmas Reinsalu (Isamaa) said the Ministry of Defense had explicitly promised not to incur such expenses again and that the ministry had therefore simply lied.

Kuusk responded: "We'll put it right. The explanatory memorandum should have described this hypothetical risk."

For the second year in a row, however, the question has arisen: Who is responsible, if anyone?

Defense Minister Hanno Pevkur (Reform) did not answer calls from ERR, but Kuusk confirmed that the permanent secretary is responsible for the ministry's finances. Kuusk did not, however, see grounds for resigning.

"We have actually been taking a comprehensive look at the entire area of government since July. As for the action plan that was put in place last year, I am not satisfied with the pace at which we moved forward with it. It has [now] become much more concrete and thorough, with specific people and deadlines. It's not enough just to set a final deadline — that's something I've learned over the course of my career as a civil servant," he said.

All sides admit problems

In addition to the Ministry of Defense, the audit highlighted issues at two bodies within the ministry's area of responsibility: the Estonian Center for Defense Investments and the Estonian Defense Forces.

RKIK was criticized, for example, because some documents had not been signed or had been signed by people who lacked the necessary authorization. Elmar Vaher, head of the agency, also acknowledged that not all risks had been documented when using foreign funding. The issue is particularly significant because all of this is accompanied by a high risk of corruption.

In an interview with Eesti Ekspress in June, Vaher, who took up the post in January, acknowledged that he did not know the state of corruption at RKIK. What is the situation now?

"I know what we have done and what we have failed to do. As of today, my assessment is that no crime has been committed here. Could this inaction create corruption risks? Then yes, any kind of disorder is a corruption risk and I consider mitigating those risks to be one of my biggest tasks at RKIK," he said, without directly answering the question.

Vaher described the absence of required signatures on documents as "a minor oversight." But when tens or hundreds of millions of euros are involved, does that not seem to downplay the issue?

"The National Audit Office is not saying that money has disappeared or that the goods aren't there. The National Audit Office is saying that the paperwork was completed incorrectly. I am convinced that all the deliveries that were made are there," Vaher said, adding that the process for recording assets itself needs to be clarified.

Col. Valdo Veski, head of the EDF Headquarters' Logistics Department, or J4, began instead by expressing satisfaction that this year's audit had found no problems with the Defense Forces' assets or their accounting.

Until 2025, the Defense Forces had an exemption under which all equipment had to be recorded item by item, but did not have to be assigned a monetary value. That exemption ceased to apply at the end of 2025, resulting in an accounting gap of €1.2 billion.

"When goods arrive, their prices come with them. In most cases — 95 percent — that's fine. With certain deliveries — and this is also where we have an issue with the National Audit Office — prices are not provided. In more complex procurements where we buy weapons systems, pricing has to be done later and that raises the question of how those items should be recorded, specifically from the financial accounting perspective."

Veski said the problems may partly be a legacy of past practices, while another issue is hiring auditors, as recruiting someone to the Defense Forces can take four to eight months.

The colonel does not expect any major changes to be made in response to the National Audit Office's feedback, nor does he expect the risk of corruption to increase.

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