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Latvian auditors: military procurement procedures cumbersome, inefficient

BC, Riga, 01.02.2018.Print version
The Latvian centralized defense procurement system is inefficient and characterized by fragmented responsibilities and insufficient interest in the results, the Latvian State Audit Office concluded after auditing the efficiency of the procurement planning and supply system in the National Armed Forces, informs LETA.

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.






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