Baker Tilly Ukraine, a Ukrainian accounting firm, has won a Hr 32.5 million ($1.3 million) contract to conduct a comprehensive audit of UkrOboronProm, the state-run defense production giant, according to the latter’s press statement issued on Sept. 5.
The tender has been finished, according to the public e-procurement system ProZorro.
“Two competitors among six biggest global audit companies were admitted to participate in the auction, notably Ernst & Young and Baker Tilly Ukraine,” UkrOboronProm said. “Both of the foremost consulting companies have effective experience of conducting audits for defense enterprises.”
In particular, Baker Tilly Ukraine once held an independent audit of UkrSpentsEksport, an UkrOboronProm’s export affiliate, according to the statement.
The upcoming probe is set to become the first-ever attempt to shed some light into the giant concern’s 130 enterprises, many stained with chronic corruption and inefficiency. After a host of high-profile graft scandals, an Hr 130 million ($5 million) tender “to provide services for conducting strategic, operational, technological, financial, legal, forensic review and due diligence” was announced in ProZorro as far back as in 2017.
Nonetheless, it resulted in nothing and was canceled.
In early 2019, after yet another headline-making defense corruption scandal involving former deputy secretary of Ukraine’s National Security and Defense Council Oleh Hladkovskiy, then-President Petro Poroshenko resumed promising to find an international accounting company and audit the UkrOboronProm, although nothing was effectively done in the following.
The tender was eventually announced only on July 22, after President Volodymyr Zelensky appointed former economy minister Aivaras Abromavicius to chair the UkrOboronProm’s supervisory board.
On Aug. 30, Abromavicius was also authorized to become the UkrOboronProm’s new director-general.
The tender commission selecting the winner was chaired by Abromavicius himself and consulted by Independent Defence Anti-Corruption Committee (NAKO), an independent anti-graft expert community affiliated with Transparency International.
“NAKO was working on advancing this audit for over two years,” Olena Tregub, the NAKO’s Secretary General, told the Kyiv Post. “Without our preparatory work that we did despite the lack of political will of UkrOboronProm leadership during Poroshenko era, it would not be possible to finalize it within only 1.5 months after the change of leadership”
“This is an important victory for the concern,” the statement quotes Abromavicius as saying.
“The previous authorities were gravely exploiting the issue of auditing the UkrOboronProm. In reality, the procurement of audit services was being sabotaged by the previous leadership… Within just a month, it turned out possible to prepare the necessary batch of documents, to hold an auction on Prozorro, and to initiate training an internal team to accompany auditors and organize the process.”
Baker Tilly Ukraine should to start rendering the audit service by the end of 2019, Abromavicius also said, adding that his team “are creating conditions for them.”
Baker Tilly Ukraine presents itself as “an independent Ukrainian company providing services in audit, business consulting, independent valuation and accountancy” as of the national market’s leaders. It exists since April 1999, and is part of Baker Tilly International, a global network of 165 accounting firms active in 141 countries.
With the reference to International Accounting Bulletin, a broadsheet magazine covering accounting services markets, Baker Tilly International presents itself the world’s 8th largest accountancy and business advisory network by combined fee income of its independent members.
