The Ministry of Defense has implemented the Audit Chamber's recommendations to optimize housing distribution for military personnel.

The Ministry of Defense of Ukraine has optimized the allocation of housing among military personnel, introduced accountability for violations of this process, conducted an inventory of lands used for building housing for the military, and distributed nearly three hundred apartments without owners among the military.

These are the results of implementing the recommendations of the Accounting Chamber, provided following an audit of the efficiency of budget funds allocated to the Ministry of Defense of Ukraine for the construction (purchase) of housing for the Armed Forces of Ukraine in 2020 – 2021.

In accordance with the Ministry of Defense's recommendations, an inventory of lands used by its capital construction departments and state enterprises for building housing for military personnel was carried out – in 2023, 107 plots of land were examined, where construction was organized with the involvement of non-budget funds.

Additionally, the Ministry informed the Accounting Chamber about the results of the inventory of unfinished construction projects: as of January 1, 2024, the Ministry of Defense accounted for 270 such residential facilities with a total value of 849.6 million UAH.

• Three facilities worth 156.1 million UAH were planned to be completed in 2024.
• 83 facilities worth 324.4 million UAH – after the end of martial law.

The Ministry of Defense also informed the Accounting Chamber about the distribution of 285 apartments purchased in 2020 – 2021 as part of investment agreements.

Together with the prosecutor's office, the Ministry conducted claims and litigation work on seven construction contracts, and thanks to court rulings in these cases, contracts with unscrupulous developers were terminated.

The release notes that the implementation of the Accounting Chamber's recommendations also contributed to changes in the system of housing distribution for military personnel. An order dated June 19, 2024, No. 404/nm "On the Approval of Amendments to the Instruction on the Provision of Housing for Military Personnel of the Armed Forces of Ukraine and Their Families" established accountability for officials involved in housing distribution by the apartment-operational bodies for non-compliance with regulatory legal acts regarding the legality of providing housing to military personnel, as well as optimized the process of distributing constructed housing.

During the audit, auditors found that the Ministry of Defense had not ensured effective management of nearly 2.4 billion UAH of budget funds allocated for the construction and purchase of housing for the Armed Forces of Ukraine in 2020-2021. In particular, almost 47% of these funds, amounting to over 1.1 billion UAH, was spent on purchasing commercial housing and compensations, rather than on completing the construction (reconstruction) of residential buildings, which would have been more economically advantageous.

During the audited period, despite the allocation of nearly 350 million UAH for the construction (reconstruction) of housing, not a single habitable house or dormitory was put into operation. Instead of ready housing, the Ministry of Defense received unfinished capital investments, which as of January 1, 2022, amounted to 1.1 billion UAH.

Additionally, a discrepancy was found in the accounting of unfinished capital investments amounting to 65.1 million UAH. This occurred due to a lack of proper communication between structural divisions responsible for organizing housing construction, its financing, accounting, and reporting.

The ineffective control of the Ministry of Defense over the condition of housing facilities by capital construction departments led to court decisions unfavorable to it, repeated revisions of project documentation leading to increased costs, and even to the destruction of unfinished housing.

Auditors established that the apartment-operational bodies and housing commissions ignored the requirements of the Instruction on providing housing for military personnel of the Armed Forces of Ukraine and their families during the distribution of housing. In particular, due to the improper performance of duties by officials of these bodies and the mistakes they made, 285 apartments, for which over 340 million UAH was spent, were not allocated for a long time among military personnel on the housing register.

The Accounting Chamber provided the Ministry of Defense with 11 recommendations aimed at addressing these and other deficiencies.

It is noted that based on the information provided by the entity under review, the Accounting Chamber concluded that all its recommendations had been implemented.