The multi-level supply and provision system of the National Armed Forces (NAF) devised by the Ministry of Defence (MoD) is complicated and inefficient; the resources required to ensure it is working exceed the gains as the system aims are not achieved and at least LVL 1,227,411 from the state budget have been spent inefficiently, the State Audit Office (SAO) has revealed in the audit.
SAO has discovered that at least LVL 501,577 have been used inefficiently in the process of purchasing minesweeper ships of the National Armed Forces and introducing the new type of field uniform has resulted in an unreasonable cost increase of at least LVL 725,834.
The MoD has failed to develop a common policy in the state military procurement area and efficient military procurement system. For example, although the information about procurement of armament and ammunition of National Armed Forces is considered confidential, the MoD has proposed open tender method to the Cabinet of Ministers for procurement of armament for the National Armed Forces, while the exception provided for in the law has been applied to uniform components, including boots, thus positioning such procurement as essential for protecting state interests.
The facilities offered by the NATO Maintenance and Supply Agency (NAMSA) have not been used for centralised National Armed Forces procurements before 2009.
The MoD has allowed long-term contracts for upgrades of individual troop equipment and armament amounting to at least LVL 46.5 million to be concluded without sufficient substantiation of the required quantities.
The MoD has failed to implement a system for monitoring the NAF capability development projects, resulting in development projects proposed by the National Armed Forces being accepted and long-term liabilities being assumed without sufficient evaluation and establishing national priorities, thus leading to a risk of failure to fulfil financial commitments.
The SAO has notified the law enforcement bodies of the violations discovered during the audit.
The audit “Efficiency and lawfulness of the logistics supply and provision system of the National Armed Forces” was conducted for the period to 30 April 2009.