ICT KSCA: history of corruption and abuse
Auditors continue to record facts of abuse in the work of the Department of Information and Communication Technologies (ICT) of the Kyiv City State Administration and three utility companies (KP) subordinate to it – Informatics, GIOTs and Kievteleservice. It was found that in 2018-2020 these structures committed financial irregularities in the amount of UAH 274.86 million, which led to the loss of about UAH 61.33 million of the budget. In particular, these enterprises purchased equipment that was then not used in any way, paid their counterparties “extra” remuneration for the services provided, held tenders at inflated prices, did nothing to introduce more than two dozen digital services (for example, paying for food in kindergartens through the “Personal office of a resident of Kiev”), etc. As a result of the audit, 100 recommendations were provided to the violators to eliminate deficiencies, but only two of them were fully taken into account. For example, in the aforementioned department, they “spit” on the requirements to change the management in these checkpoints and bring to justice those responsible for violationsc.
As became known KVrecently the Department of Internal Financial Control and Audit of the Kyiv City State Administration (KSCA) published the results of an unscheduled audit of the performance of the ICT Department of the Kyiv City State Administration and its subordinate utilities “Informatika”, “Kyivteleservice” and “Main Information Object”).
Corresponding audit report No. 070-2-1-04/17 is dated November 29, 2022. On the website of the aforementioned department, this document was published at the end of January of this year – when it became known which comments of the auditors of the capital city state administration were taken into account by the heads of the aforementioned structures, but ignored.
As noted in the report, the relevant department of the KSCA checked whether the officials of the Department of ICT of the KSCA and the CPs subordinate to it complied with the legislation of Ukraine when conducting procurement procedures, when concluding and executing contracts, etc. in the period from January 1, 2018 to December 31, 2020. This audit was carried out from July 2, 2020 to August 13, 2021.
What did the auditors find?
During the audit, the “auditors” found out that during 2018-2020, the ICT Department of the Kyiv City State Administration received funds from the city budget of Kyiv in the amount of UAH 2.4 billion (95% of the appropriations approved by the Kyiv City Council) for the implementation and implementation of activities of a number of city targeted programs. Most of this funding – 2.36 billion hryvnia – the specified department sent to the KP “Informatika”, KP “GIOTs” subordinate to it and the specialized utility company (SKP) “Kyivteleservice”.
Based on the results of the audit, it was found that during 2018-2020, financial violations and shortcomings totaling UAH 274.86 million were committed at these three CPs, of which UAH 61.33 million were violations that led to losses (in including losses incurred as a result of inefficient operations – UAH 38.82 million), UAH 51.08 million – violations with the risk of loss and UAH 162.45 million – violations without the risk of losses.
KP “GIOTs” became a kind of “leader” – the auditors found violations and shortcomings at this enterprise for a total of UAH 187.8 million (UAH 16.28 million – direct losses, UAH 10.46 million – violations with the risk of losses and 161.07 million hryvnia – without the risk of loss). In turn, the management of KP “Informatika” made such “defects” in the amount of 75.01 million hryvnia, but it was this company that “took the palm” in terms of direct losses – their total amount is 39.09 million hryvnia (violations were also made with risk of loss in the amount of UAH 35.5 million and without risk of loss in the amount of UAH 0.4 million). As for the SKP “Kyivteleservice”, at this enterprise the auditors of the KSCA “charged” financial violations and shortcomings in the amount of 12.04 million hryvnias (5.96 million hryvnias – direct losses, 5.11 million hryvnias – with the risk of losses and 0.97 million hryvnia – without the risk of loss).
Thus, according to the auditors, KP Informatika made a number of shortcomings and miscalculations in the implementation of measures to create and implement the software and hardware complex of the Unified Dispatch Center for Monitoring the Operation of Transport and Collecting Information (UDC). The auditors of the Kyiv City State Administration concluded that such “mistakes” had a negative impact on “the functioning of individual components of the automated system” EDC “and led to the emergence of risks regarding inefficient and unnecessary use of budgetary funds.”
For example, as of the audit period, KP Informatika did not use and did not use for its intended purpose the equipment purchased in 2018-2019 to ensure the operation of the EDC hardware and software complex (in particular, 235 units of on-board computers of vehicles and 713 units touchscreen driver terminals) The audit report indicates that all of these electronics were stored in the warehouse of the specified CP, which, in the opinion of the auditors, may indicate that there is no real need for such purchases. These actions of the management of KP Informatics led to the loss of warranty periods for servicing this equipment, the so-called. “diversion of budgetary funds” (that is, spending them not on what the community really needs in a specific period of time. – KV) and the emergence of a risk of inefficient spending by the capital’s treasury in the amount of UAH 20.7 million.
The auditors also found that the Department of ICT of the KSCA and KP “Informatika” did not ensure the effective and efficient use of budgetary funds in the amount of UAH 18.62 million allocated for the purchase and installation of information and reference terminals at tourist sites and routes in Kyiv.
In particular, according to the auditors, 45 out of 105 information terminals purchased in 2016-2017 were not installed over the next four years, but were stored at PJSC Promsvyaz (the supplier of this equipment) and, accordingly, were not used for the intended purpose. At the same time, the other 60 terminals did not function properly as of the audit period: according to the “auditors”, this equipment was turned off, and in some cases it was not even connected to engineering (power supply) and telecommunications (in particular, there is no connection) . with the Internet) networks. The audit report noted that such problems in the functioning of information terminals are systemic and long-term in nature, because similar shortcomings were identified during preliminary audits in 2018.
In turn, the KP “GIOTs”, according to the auditors, incompletely implemented the task of creating an automated fare collection system (ASOP) in terms of purchasing terminals for the sale of single tickets in 2018-2019 and replenishing the means of paying for travel at the stations of the KP “Kyiv Metro”. “and the premises of the KP” Kievpastrans “.
In particular, during the audit it was found that only 90 such terminals (15% of the total) provide for the possibility of making payments with bank cards. At the same time, during the audit, the auditors became aware that none of all the installed terminals gave change for paying for travel. In this regard, according to the auditors of the Kyiv City State Administration, there is a risk that KP GIOC will have to incur additional costs for the modernization and re-equipment of this equipment.
Moreover, the auditors were also interested in how the mentioned self-service terminals were installed. For example, according to auditors, MKM Service LTD carried out their installation in the lobbies of metro stations without developing working projects. And KP “GIOTs” drew up acts for the provision of these services in an arbitrary form – without taking into account the volumes of materials indicated in the installation diagrams. Such actions of the utility company and its contractor, according to the audit department of the Kyiv City State Administration, created a risk of overestimation of the cost of installation work for a total of UAH 675.93 thousand and led to inefficient use of funds in the amount of UAH 3.5 million, which KP “GIOTs” I had to pay UkrNIIagroproekt LLC for the development of projects for the installation of terminals after their actual installation.
In addition, according to the auditors, the ICT Department of the KSCA and KP GIOTs, as of 2020, did not introduce into commercial operation any of the 25 software products developed or created for budgetary funds in 2015-2018. According to the auditors, this indicates a lack of achievement of the expected result from the use of budgetary funds in the amount of UAH 150.79 million.
For example, residents of the capital did not get the opportunity to use the Video Content Ordering System software module, which should allow individuals to receive recordings from street video surveillance cameras through the Kiev Personal Account information system. This is due to the fact that the Regulations on the Integrated Video Surveillance System of Kyiv did not specify which persons, according to the current legislation, can order such content.
Also, among other things, as of October 2020, the residents of the city could not pay for the meals of their children in kindergartens, replenish their mobile phone account and pay fines for traffic violations, due to the same “Personal account of a Kiev citizen”, although all these services for the people of Kiev were officially introduced. The reason for this problem was more than simple – these electronic services were not connected to the payment system, which should process and conduct the relevant payments.
The Department of Internal Financial Control and Audit of the KSCA found other violations in the work of the KP GIOTs. In particular, the auditors were interested in his cooperation with FC Hertz LLC, a company in Kyiv selling electronic tickets and accepting utility bills and with which the said company has been actively suing over the past few years.
Thus, the auditors found that the SE “GIOTs” did not apply penalties (penalties) to LLC “FC Hertz” for the untimely transfer of funds from the sale of electronic tickets to the accounts of the SE “Kyivpasstrans” and the SE “Kyiv Metro”, although such a “punishment “was stipulated by the terms of the relevant agreement. As a result, according to the auditors, KP “GIOTs” lost the opportunity to receive funds in the form of operating income in the amount of 933.2 thousand hryvnia.
In addition, KP “GIOTs”, according to auditors, counted “extra” remuneration for financial services in the amount of UAH 219.9 thousand to the specified company. As it was found out, the said KP calculated the amount of this award according to the formula “2% of the amount of payments received by OOO FC Hertz”, while the contract stipulated that these percentages should be “deducted” from the amount of payments transferred to the distribution account of the KP” GIOC.
The Department of Internal Financial Control and Audit of the Kyiv City State Administration drew attention to a number of violations in the work of the UPC “Kyivteleservice”. In particular, as it was established, this enterprise did not provide transparent pricing and calculation of the cost of services for the creation of a local area network for health care institutions for a total of UAH 17.56 million, which created the risk of unnecessary spending of budgetary funds. The specified project was implemented for the introduction of electronic medicine in communal medical institutions – it provides for the transfer of paper workflow to electronic form and the provision of service to the people of Kiev.
In addition, the auditors of the Kyiv City State Administration found that the SKP Kyivteleservice, when conducting 12 tenders for the purchase of goods and services for a total of UAH 313.2 million, did not substantiate the expected cost of these purchases (the starting price of the tender). In this regard, according to the auditors, “it is impossible to verify the correctness of the formation of such a value”, which leads to the risk of overpricing.
For example, only under 4 contracts for the purchase of network and computer equipment, auditors recorded overpricing for a total of UAH 5.7 million, which averaged from 20% to 51% of the transaction amount. The auditors also found cases of non-compliance with competition between the bidders organized by the SCE “Kyivteleservice” – we are talking about the lack of proper experience of some participants in the implementation of similar contracts, which, according to the inspectors, created risks of overestimating the market value of the purchase.
Based on the results of these inspections, the Department of Internal Financial Control and Audit of the KSCA provided the ICT Department of the KSCA and the three above-mentioned utilities with 100 recommendations to eliminate the identified violations, of which only 2 recommendations were fully taken into account and one recommendation was taken into account partially.
For example, KP Informatika listened to the recommendation to install 17 units of communication terminals (emergency call buttons) purchased by the company back in 2017 as part of the creation of integrated video surveillance systems in the city of Kyiv and not previously installed. However, the vast majority of the important requirements of the auditors were ignored. Among these are the recommendations of the Department of ICT of the KSCA on considering the issue of changing management at its subordinate utilities; regarding the prosecution of persons guilty of violations identified by auditors, etc.
IKT KSCA. Scandalous background
As KV repeatedly reported, the activities of the ICT Department of the KSCA and the above-mentioned CPs were repeatedly criticized by some deputies of the Kyiv City Council and attracted the attention of law enforcement agencies.
For example, back in October 2018, the Security Service of Ukraine began an investigation into the facts of possible “budget cuts” made by the leadership of the KP “GIOTs”. According to law enforcement officers, in the same year, the said enterprise lost approximately UAH 20.8 million when implementing the “Operational and Dispatch Service of the Housing Stock and Management, Control and Security Systems for Elevator Equipment” complex. Several people were at the epicenter of attention of law enforcement officers at once, including the now ex-director of the KP GIOTs Vitaly Kozubsky and head of the contractor Ukrainian Business Communications LLC Egor Burgomistrenko. Currently, the indictments against the defendants in the proceedings are under consideration by the High Anti-Corruption Court of Ukraine.
Also in October 2019, the SBU opened criminal proceedings on the fact of the possible misappropriation of budgetary funds during the implementation of the management and control system for outdoor lighting networks in Kyiv, which was done by KP Informatika. The investigation preliminary established that during the implementation of this project, among other things, the cost of equipment was overestimated. Also, according to law enforcement officers, in most cases such equipment could not be found, and its use to save money was simply impossible. At the same time, the KSCA could not even roughly explain how these investments pay off and will pay off, and several deputies of the capital city council expressed the opinion that the main goal of this initiative is simply to steal budget money “under the sauce of the so-called “intellectual component”.
Recall that since September 6, 2021, Veronika Malkova has temporarily performed the duties of the director of KP Informatika. In this position, she replaced the same “temporary head” Nikolai Pykhtinwho headed this enterprise in this status since October 9, 2017.
KP “GIOTs” on the rights of “acting director” since July 12, 2020, the first deputy head of this enterprise, Oksana Mysak, has been headed. Before her, from July 13, 2016 to July 12, 2020, the KP GIOTs was headed by the aforementioned Vitaly Kozubsky.
From February 11, 2021, Pavel Chernikov, Deputy Head of this enterprise for legal issues, temporarily performs the duties of the director of the SKP “Kyivteleservice”. During 2018-2020, the management of this enterprise changed four times – it was alternately headed by Sergey Bondarenko (he worked as director for the longest time – from March 2008 to July 2019), Oleg Bakaev, Andrey Pristupa and Oleg Vashchenok.
The Department of ICT of the KSCA, to which the three above-mentioned CPs are subordinate, has been heading since August 27, 2021 Oleg Polovinko (in the collage on the left). From March 3, 2017 to April 29, 2020, this structure was led by the infamous Yuri Nazarov (on the collage on the right), who was “the face of digitalization in Kyiv” and who is associated with the person numerous violations in this area. After his dismissal and before the appointment of Polovinka by the Department of ICT of the KSCA on the rights of “t. and about. Director” led Anna Lisik.
The activities of the ICT Department of the KSCA from April 2, 2021 are controlled by the Deputy Chairman of the KSCA for the exercise of self-governing powers Petr Olenich. During 2018-2020, the work of this structure was alternately controlled by the deputy chairmen of the Kyiv City State Administration Dmitry Davtyan (dismissed from his post on November 29, 2019) and Alexander Gustelev (dismissed on December 1, 2021), First Deputy Chairman of the Kyiv City State Administration Mykola Povoroznik, as well as directly the Chairman of the Kyiv City State Administration Vitaliy Klitschko.
Ivan Kulik, translation Skeleton.Info
DOSSIER: Nikolai Povoroznik: Koreiko from the Kyiv City State Administration, or a modest operator of financial schemes. PART 1
