How ARMA Officials Lost UAH 6 Billion.
The head of the Accounting Chamber congratulated the head of the Asset Recovery and Management Agency on the New Year
On December 25, 2024, the head of the Accounting Chamber, Olha Pishchanska, congratulated the head of the Asset Recovery and Management Agency, Olena Duma, on the New Year, placing under the tree a devastating Audit Report on the results of her management of seized assets.
Such managerial fiasco from Duma was not even expected by her fiercest supporters.
Here’s what the auditors found (brief points):
The Accounting Chamber conducted an audit only of asset management functions (accounting, evaluation, management) and did not investigate issues of their identification and search, international cooperation, the quality of maintaining the Register of Seized Assets, etc.;
The audit was planned for 2022, 2023, and the first half of 2024, but actually contains current data as of the end of December 2024, thus covering 1.5 years of Olena Duma's leadership;
The report of the Accounting Chamber showed that all annual external audits of ARMA's activities conducted by private audit firms in previous years are worthless;
Judges issued 1,195 decisions to transfer assets to the Agency's management, of which the latter executed only 684 decisions, with a total asset value of over UAH 51.5 billion, and the auditors found no reasonable explanations for the inaction regarding the remaining decisions;
However, even with the 684 accepted decisions, things are not smooth, as ARMA acted only on 135 decisions, while 549 decisions have been collecting dust on the shelves of bureaucrats' offices for years;
The auditors established that ARMA considers 135 out of 684 decisions accepted for management because no acceptance-transfer acts are signed for the 549 decisions, and essentially no assets are taken into management. Meanwhile, judges and prosecutors believe that all 1,195 decisions must be executed by the Agency;
In general, together with this, the Office of the Prosecutor General, which logically should summarize information regarding the activities of all its prosecutors, believes that 190 decisions are with ARMA. The auditors did not clarify the reasons for this chaos and focused on analyzing the Agency's activities;
Representatives of the Accounting Chamber randomly selected 40 decisions, from those minimally successfully executed by ARMA, analyzed them, and concluded that the execution rate is: 75% of decisions for managing funds; 50% of decisions for the sale of assets; 4.5% of decisions for asset management under contracts. Thus, the Agency knows how to handle money in the bank well and partially sells something. However, over eight years of activity, ARMA has not learned how to organize asset management under contracts;
During the audit period, the Agency concluded and manages assets only under 27 contracts, of which 42% of managers do not contribute anything to the State Budget;
According to ARMA, in the period from 2022 to the first half of 2024, managers paid UAH 297.2 million to the State Budget, however, according to the State Treasury Service, such revenues amounted to UAH 433 million. The deviation of UAH 135.7 million is in favor of the state, but auditors were alarmed by the fact that the Agency does not control or know how much money the managers transfer to the State Treasury;
Asset accounting worth billions of hryvnias is conducted without reflection in accounting and managerial accounting registers, the Register of Seized Assets does not contain complete and reliable information, neither about the value nor about the characteristics of the assets, which raises doubts about the reliability of data on their evaluation and preservation condition, as ARMA periodically states in the media;
In 2020, the Ministry of Finance provided the Agency with recommendations for the proper organization of asset accounting. Over four years, ARMA did nothing. When the Accounting Chamber completed the audit, Olena Duma was embarrassed and in December 2024 issued an order for the regulation and proper organization of such accounting, as the Ministry of Finance requested four years ago;
In general, the auditors concluded that the organizational and managerial decisions of the Agency are disorganized and inconsistent, which is why over the past three years, 549 out of 684 decisions regarding assets worth over UAH 39.4 billion have not been executed, and additional financial resources amounting to over UAH 6 billion have not been used to strengthen economic security and support the country's defense capability;
The auditors also found that the value of the assets sold by ARMA, including in 2024, is always on average 20% lower than their estimated value, which, in turn, is significantly lower than the market value. For example, in April 2024, the Agency sold 1.5 tons of drained gas for UAH 50 million, the market value of which was UAH 65.2 million. The difference of UAH 14.4 million became a loss for the state;
Comparing data from managerial accounting and certain accounting documents, the auditors found inconsistencies amounting to UAH 15.5 million, which somehow disappeared in 2024 in the data about the amounts received by ARMA from asset sales;
The auditors established the absence of clear and transparent competitive selections of appraisers and managers, as well as a standard form of asset management contracts and a list of expenses related to their management. In fact, all managers work under different conditions, as they agree or 'resolve';
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