Analytics, Financial Services, Latvia, Legislation, Markets and Companies, Security
International Internet Magazine. Baltic States news & analytics
Friday, 29.03.2024, 11:01
Latvian auditors: military procurement procedures cumbersome, inefficient
The state auditors did not discover any wasteful spending or embezzlement.
"All internal and external regulations have been complied with but there
is a lot of red tape," Ilze
Grinhofa, a member of the Council of the State Audit Office, told the
press.
Until recently, the national defense budget has been suffering from the
shortage of finances which has had negative effects on the development of the
armed forces. Now the National Armed Forces have to boost their capacity
quickly, working in a number of directions.
Predictability of the available financing is crucial in the defense sector
because the measures to build the defense capacity are vast and extend over
many years, the auditors said. If the financing is cut short at some stage of a
development project, the initial outlays might be irrecoverably lost.
For example, a missile system purchased for EUR 4.4 million under the plan
for air defense development launched in 2007 could not be put to use because
there was no money for its technical maintenance.
The State Center for Defense Military Sites and Procurement has failed to
evolve into a defense procurement competency center as most procurement
procedures are still handled by the army units themselves but they lack the
necessary expertise in organization of procurement.
The responsibilities are fragmented, as none of the organizations involved
in the procurement process has full responsibility for the whole process. On
some occasions, the procurement procedure was simply terminated when some
complications arose but this has negative effects on the development of the
National Armed Forces.
The state auditors found that the existing centralized procurement system
was clearly ineffective, as, for example, a request for additional information
in procurement of hand grenade detonators took six months.
May be the defense budget should be larger than 2% of GDP but the planning
must be meticulous anyway, Grinhofa said.
The audit was carried out for the period between January 2014 and June
2017, reviewing 1,000 procurements, and the State Audit Office made 21
recommendations which the Defense Ministry undertook to implement by January
2021. Some of the audit findings are classified.