A big chunk of the Hr 35 billion ($1.34 billion) allocated to fight COVID-19 has been misappropriated, according to an investigation by the publication Bihus.info.
In March 2020, parliament introduced a bill allowing state and regional authorities to get around transparent procurement rules when buying goods or services to combat the spread of COVID-19. This was meant to speed up local responses to the pandemic.
Many local authorities took advantage of this to make personal purchases like car fuel, food, sports equipment, animal feed and holiday presents. Additionally, suspicious overpayment for medical supplies was commonplace. For example, various institutions bought the same Chinese-made OLV-10 oxygen concentrators for prices ranging from Hr 30,000 to Hr 60,000.
An audit by the State Audit Office found that a total of Hr 407 million ($15.5 million) has been misspent as a result of these violations.
According to Bihus.info, it’s difficult to hold violators responsible. Fines for violating transparent procurement rules don’t exceed Hr 51,000 ($1,947) and overpayment for medical supplies is very difficult to legally prove.
The Verkhovna Rada tried to fix these violations by introducing a law that would create a compromise between simplified procurement for coronavirus-related expenses and ordinary rules for other purchases.
However, this law took a year to put together and ratify and its final version contains exploitable loopholes, according to Bihus.info.
Under the new bill, only medicines, vaccines, medical equipment, and oxygen supply systems are supposed to be exempt from transparent procurement.
But in reality, most purchases can be justified as COVID-related, Ivan Lakhtionov, Director of Innovation Projects Program at Transparency international Ukraine, told Bihus.info.
“They let anyone purchase whatever they please. Anyone that is in any way related to some state-owned enterprise says, ‘I need to buy a car to fight COVID there.’ Technically, it is justified,” Lakhtionov was quoted as saying.
