NYT gains access to audits of Ukraine’s defense procurement system: $1.2 billion lost in 2024 alone

Ukraine’s military procurement system is described in confidential audits as riddled with mismanagement, while companies under criminal investigation continued to receive government contracts. Documents obtained by The New York Times cover 2024 and 2025 and point to failures in how weapons suppliers were selected and monitored.

Seven of the country’s 10 largest military contractors obtained new orders despite investigations into fraud, failure to honor earlier agreements, or the arrest of company executives on corruption charges. Auditors found 18 firms that signed contracts despite not completing previous deals. Six of them had failed to fulfill a single contract.

The documents estimate that Ukraine lost about $1.2 billion in 2024 because of fraud, waste and poor management. Around $126 million was lost when officials bypassed cheaper bids and overpaid for weapons. Auditors also said contracts were awarded without legal justification. Companies secured deals without showing that they could deliver the weapons, and in some cases lacked licenses to supply them.

The report highlights the case of Pavlohrad Chemical Plant, which supplied the army with 233,000 unusable mortar rounds. Many had defective fuses or gunpowder. The company’s chief, Leonid Shyman, was arrested and charged with fraud involving about $68 million, the estimated cost of inspecting and replacing tens of thousands of defective rounds. Auditors said the plant initially claimed it lacked the production capacity for the order, then confirmed its capacity again without explanation. They found no evidence that officials had verified whether the factory could fulfill the contract.

Despite the defective deliveries and other investigations, the plant later received more orders from the Ukrainian Defense Procurement Agency, including a contract to supply nearly all artillery shells of the relevant caliber through 2025. The agency’s former director, Arsen Zhumadilov, who resigned in August, declined to comment, according to the article.

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Confidential analyses conducted by the State Audit Service and the internal audit department of the Ministry of Defense reveal that the military procurement system is riddled with mismanagement.