Estonian cabinet to address defence accounting confusion

Estonian Prime Minister Kristen Michal has convened a government cabinet meeting for early Thursday to discuss accounting problems in the defence sector, ERR reported. He said he would ask the National Audit Office to provide an overview of the issue.

Michal said he expected Defence Minister Hanno Pevkur, Chief of the Defence Forces Andrus Merilo, State Defence Investment Centre Director Elmar Vaher and Defence Ministry Chancellor Kaimo Kuuse to present a concrete action plan for resolving the problems quickly.

“People in Estonia need confidence that every euro invested in the defence sector goes towards defending Estonia,” Michal said.

An audit of the state’s consolidated annual report published last week found numerous serious problems in the activities of institutions within the Defence Ministry’s administrative area. The National Audit Office said the problems increased the risk of misuse of state funds and property.

The audit found that defence-related stockpiles had been recorded incorrectly. The National Audit Office issued a qualified remark concerning the accuracy of the Defence Ministry’s administrative area inventory balance, valued at 1.2 billion euros.

Because of significant shortcomings in the accounting of Defence Forces’ stockpiles, it is unclear which stocks are recorded on the balance sheet, and in what quantities and values. It is also unclear which stocks have been left out without justification.

Last Friday, Pevkur said the National Audit Office’s recommendation to temporarily transfer responsibility for managing Defence Forces’ assets to the Defence Ministry was correct and that the ministry would implement it.