The Government of Ukraine has responded to scandals involving military expenditures by creating an Audit Council within its Ministry of Defense. Auditors from NATO are on the committee.
The Ministry of Defense of Ukraine has created an Audit Council to address issues regarding ensuring how expenditures are realized. The Ministry announced on April 8 that Minister of Defense of Ukraine Rustem Umerov signed the act creating the unit. The move comes after a series of financial improprieties were uncovered and as the issue of corruption in military spending remains in focus among Ukraine’s donors. The new council includes Ukrainian experts in internal audits as well as members of the International Board of Auditors for NATO (IBAN).
The Audit Council includes:
- François Gauthier, Head of the External Oversight Service at NATO Headquarters (Brussels);
- Joseph Ingignoli, Oversight Program Analyst/Evaluator, Office of the Inspector General, U.S. Department of Defense;
- John Chesshire – Head of Internal Audit JC Audit Training Ltd (Oxford), Member of the International Institute of Internal Auditors;
- Manfred van Kesteren – International Expert on State Internal Financial Control under the EU4PFM Programme in Ukraine;
- Ruslana Rudnytska - a Ukrainian expert under the auspices of the Ministry of Finance of Ukraine and the Accounting Chamber;
- Deputy Minister of Defense Yuriy Dzhyhyr; and
- State Secretary of the Ministry of Defense Liudmyla Darahan.
U.S. Aid tied to oversight
Aid to Ukraine in military, humanitarian assistance, and budget expenditures since the run up to the full-scale invasion by Russia has been accompanied by a continual requirement for oversight and audits. For example, on March 29, 2023, House Foreign Affairs Committee Chairman Michael McCaul opened a committee meeting that included testimony from Inspectors General of the State Department, USAID, and Department of Defense on the transparency & accountability mechanisms for U.S. assistance to Ukraine.
The chairman stated:
“it’s imperative the American people know about the existing accountability mechanisms, including third-party monitors such as Deloitte, and the robust oversight being conducted by Congress, and in particular, this committee...
This is just the first of many hearings and briefings I will hold to ensure the assistance we are providing Ukraine is being used as intended...
As required by law, these funds are only disbursed to the Ukraine following verification that the money is spent on approved items and activities.
All funds also are subject to external third-party monitoring by Deloitte. They are conducting randomized spot checks to verify the use of this assistance.”
NATO IBAN
The International Board of Auditors for NATO was founded in 1953 (NATO itself was founded in 1949). IBAN, as it is called, works to assure contributing NATO member states “that common funds have been properly used for the settlement of authorised expenditures.” While IBAN started as an organ for ensuring correct internal fund use, the increasing complexity of relations with partner countries has required an increasing role for the auditors.
