Estonian defense bodies acknowledge accounting problems, but no one plans to resign

The National Audit Office's latest audit of Estonia's consolidated annual report has, for the second consecutive year, identified significant problems in the defense sector's financial management, affecting the Ministry of Defense, the Estonian Center for Defense Investments (RKIK) and the Estonian Defense Forces (EDF).

As early as July 2024, the Audit Office warned the ministry's then permanent secretary about disorganized working procedures at RKIK and EDF, including a large volume of uninventoried assets. This year's audit found errors in documenting goods purchases, advance payments and inventory accounting. A previous audit also flagged a case where €9.6 million in advance payments had accumulated with one supplier since 2018, effectively serving as an interest-free loan funded by taxpayers.

This year's report additionally revealed that the ministry had taken on commitments outside the state budget, with the Audit Office warning the state could ultimately need to cover up to €70 million in off-budget costs. Permanent Secretary Kaimo Kuusk said the risk stems from a supplier failing to meet its obligations, a matter now in litigation. Former Defense Minister Urmas Reinsalu accused the ministry of breaking its earlier promise to avoid such expenses.

RKIK head Elmar Vaher acknowledged that some documents were unsigned or signed without proper authorization, but insisted no money or goods had actually gone missing — the issue, he said, lies in paperwork rather than deliveries. EDF logistics chief Col. Valdo Veski said this year's audit found no problems with the Defense Forces' own asset accounting, though he noted a €1.2 billion accounting gap that emerged after an earlier exemption from recording monetary values expired at the end of 2025.

Despite the recurring criticism, neither Kuusk, Vaher nor Veski see grounds for resignation, while all say efforts are underway to fix the underlying procedures.