Audit of State Reserve Agency reveals total theft, losses – Economy Ministry

Ukraine's Ministry for Development of Economy, Trade and Agriculture says an audit of the State Reserve Agency conducted by the State Audit Service has confirmed millions of hryvnias in losses, the theft of thousands of tonnes of stocks, the presence of overdue products in warehouses worth hundreds of millions of U.S. dollars, and financial fraud.

Read alsoPACE calls on Ukraine to restore e-declarations of assets"Half-empty warehouses, the disappearance of thousands of tonnes of stocks, overdue food products worth hundreds of millions of hryvnias, the enterprises' catastrophic technical condition, economic turmoil, and multimillion-dollar financial fraud – these are just some of the main points from the State Audit Service's conclusion," the ministry's press service said on its website on November 5.

In particular, the audit revealed overdue grain worth UAH 35.5 million (US$1.3 million), which cannot be used even for feed.

There was also a shortage of grain worth UAH 27.9 million (US$983,780) at only one of the State Audit Service's enterprises.

Inspections of food storage facilities identified goods whose expiration dates have long been over.

"There are overdue goods worth over UAH 100 million [US$3.5 million] that can only be disposed of. The enterprises also have overdue non-food products worth UAH 200 million [US$7 million]," the report said.

The violations in the financial and economic activities of the State Reserve's enterprises in monetary terms amounted to UAH 31.4 million (US$1.2 million), while that of the State Reserve's management totaled UAH 1.7 million (US$59.944).

The audits also found violations of the law in public procurement, when contracts failed to be concluded officially.

The audit materials were transferred to the National Anti-corruption Bureau of Ukraine (NABU), the SBU Security Service of Ukraine, and the National Police.

Ukraine's State Reserve Agency

The State Reserve Agency of Ukraine is a central executive agency subordinate to the Cabinet of Ministers. The state reserve system is a group of enterprises and organizations whose task is to organize the storage of food, energy materials, industrial and other types of goods in case of state emergencies.

Previous developments

• In June 2020, an audit revealed a shortage of grain in the warehouses of one of the State Reserve's structures in the amount of more than UAH 800 million, or US$28.2 million.
• On October 20, 2020, during his annual address on the internal and external situation of Ukraine in parliament, President Volodymyr Zelensky said that the Cabinet should present the National Economic Strategy of Ukraine until 2030, as well as results of an audit of economic management.
• On November 6, 2020, while reporting on findings of the audit of the domestic economy and the vectors of economic development until 2030 Prime Minister Denys Shmyhal said his government would present the National Economic Strategy of Ukraine until 2030 in the first quarter of 2021.