WARSAW, POLAND – This Sunday, the NY Times reported discouraging results from a series of military audits conducted by the State Audit Service of Ukraine and the Ministry of Defense’s (MoD) internal audit department. Earlier this year, the paper received several audits reviewing how the Ukrainian military has been spending money on weapons and ammunition for its war against Russia.
As the two reporters describe in detail, the documents they were able to examine “amount to an autopsy of the weapons-contracting process” in Ukraine since the full-scale Russian invasion in February 2022. And that autopsy provides some disturbing revelations.
Ukraine War TOS-2. Image Credit: X Screenshot.
Sea Baby Drone Ukraine. Image Credit: Creative Commons.
To put it mildly, there has been no shortage of problems with the procurement process at the Ukraine MoD. The dysfunctions revealed in the documents translate into substantial losses for the Ukrainian government.
The article’s authors describe Ukraine’s military procurement process – such as it is – as “notoriously corrupt and mismanaged”. The materials the two reporters examined totaled more than 700 pages of financial tables, which were interspersed with what they found to be “dryly worded critiques”.
These MoD and Armed Forces audit records present a detailed illustration of just how the Ukrainian defense procurement system has, in numerous respects, failed.
Patterns in the Chaos
The confidential reviews conducted jointly by the State Audit Service and the MOD auditing department cover both 2024 and 2025. What they reveal are consistent, relatively unchanging patterns that result in Ukraine seriously overpaying for weapons.
Those with experience working with UkrOboronProm, the Ukraine state-controlled entity responsible for importing and exporting military and dual-use items, have had no end of complaints about the organization’s lack of transparency. There are, as these same persons state, far too many possibilities for those inside the process to engage in corrupt practices.
What complicates matters further is that these practices have become almost institutionalized over a long period. Eliminating them has been an issue that continues to emerge as the war with Russia carries on.
An analysis written not long after Ukraine President Volodymyr Zelenskiy took office explains that “over nearly a decade in existence, Ukroboronprom has botched export deals, driven entrepreneurs to move production outside Ukraine, and kept many potential Western partners away,” both industry executives and analysts say.
One of the most frequently cited practices that provides a clear channel for skimming money off the top of defense procurements is the practice of overpaying. The vehicle for this action is that contracts are being concluded that call for deals to be made with intermediaries rather than purchasing directly from arms manufacturers.
A 2024 report by the State Audit Service severely criticized Ukraine’s dealings with arms dealers. These companies serve as intermediaries and add their own markup of at least 3 percent, sometimes substantially more.
The majority of purchases were made through these intermediaries, which drove up prices and made tens of millions of dollars for the companies acting as these middlemen.
But even though the use of these arms-trading firms received strong criticism, a follow-on audit in early 2025 discovered multiple lucrative contracts still being concluded with traders.
This was the standard procedure, even when the weapons could be procured more directly from manufacturers at a lower cost.
Weak Due Diligence
No small amount of the waste and fraud that was discovered resulted from contracts being awarded to companies that have already failed to deliver on previous purchase orders or, even worse, have been charged with corruption. “This shows a complete failure to conduct proper due diligence, which is sadly not uncommon,” said a director for one US firm that has been working with Ukraine to supply them with vehicles and infantry weapons.
The MoD has also established a Defense Procurement Agency (DPA) intended to eliminate these inefficiencies. The Agency was asked to comment on the NY Times report but declined to do so.
Tamerlan Vahabov, a former adviser to the DPA, told the Times that this kind of overspending and other wasteful procedures have serious consequences. “As a result, we don’t have money to order more weapons,” he said. “And we don’t have the quantity of ammunition we need. And it is a recurring pattern.”
Auditors also found repeated episodes of inflated prices, but no corrective measures were ever taken. The same auditors found that Ukrainian military procurement officials repeatedly paid higher-than-necessary prices for weapons.
For all their thoroughness, these audits fail to explain why companies were repeatedly overcharging or had failed to perform on past procurements, yet nevertheless kept winning new business.
Former Ukrainian officials and experts say that, despite extensive efforts to eliminate it, corruption is to blame for much of this mismanagement and overspending and continues to drive the awarding of contracts to the same bad actors.
About the Author: Reuben F. Johnson
Reuben F. Johnson has thirty-six years of experience analyzing and reporting on foreign weapons systems, defense technologies, and international arms export policy. Johnson is the Korea Fellow at the Casimir Pulaski Foundation. He is also a survivor of the Russian invasion of Ukraine in February 2022. He worked for years in the American defense industry as a foreign technology analyst and later as a consultant for the U.S. Department of Defense, the Departments of the Navy and Air Force, and the governments of the United Kingdom and Australia. In 2022-2023, he won two awards in a row for his defense reporting. He holds a bachelor’s degree from DePauw University and a master’s degree from Miami University in Ohio, specializing in Soviet and Russian studies. He lives in Warsaw.
